Newbie- whats the average hourly rate

[mls]

Hi I have a small shop with a few manual machines and a 2006 haas vf3 I only work part time as I have a full time job as a cnc programmer / setup person (pa) if it matters. My work always always trys to get me to take work home to do usually 1 to 15 pcs they only pay $30 hr and dont pay for any program time and not much for set up either. I say no I sould just stay here and make them I would make more on overtime.

Bottom line I dont run my machine for that, my rate is $50 hr cnc time plus setup and program time.

Is this unreasonable my $50 hr???????

They do find people to make parts for this price I usually have to fix them /deburr them or something (parts are never to print in some way)

At $30 hr how would you ever make it buy new equipment tools wages insurance my thought is you have to invest back into your buisness to grow my name is on every part I make (I take pride in what I do) at this $30 you would have to give up quality some where to make it I think

Sorry for the rambling Thank you for any input you have Mike

[Night_train]

our shop charges $65 hr. but location would play a big part of that.

[HuFlungDung]

Tell 'em "An electrician makes $40 /hr with only a $500 toolbelt. For my investment, I reckon $50 (or whatever) an hour will suit me. No way am I busting my hump so some a-hole can mark what I do up by 100% and still look good".

[keithorr]

Also consider that if the company wants to write off the $30/hr as a business expense, you will probably get a 1099misc which entitles you to pay your own social security/medicare and income tax. Depending on your state taxes, the total due april 15th could be 47 cents on the dollar. Break and endmill and you're working for free. Yay!

[Donkey Hotey]

Originally Posted by mls Is this unreasonable my $50 hr???????

Yes, you're unreasonable. You're giving away your time. I won't turn mine on for less than $100/hr + cutters & materials.

Look at it this way: at $30/hour, if you have $100K in equipment and tooling, and cutters & electricity were free, you'd have to work full-time, for 20 months for nothing, just to pay it off. Does that seem reasonable to you? If it seems reasonable to your boss, you should find another boss.

If he wants to pay $50/hour for all of your time at home (setup & programming included) maybe that would be a bit more reasonable. I doubt you'd be covered under his worker's comp if you took that work home. I doubt he'd pay for a crash. You're putting hours on your machine for nothing.

The only compromise I might make is if you guys build parts that have long run-times and he's going to pay you for lights-out running (plus setup). If you can take a job home, turn on the machine, run it overnight and make $300-500, it might be worth it--but that's borderline.

Well, Geof Darwin should be checking in from the Galapagos Islands any time now.

[pjensen]

If this isn't what you're doing already, try fixed pricing jobs when a customer can't get over the hourly rate. Estimate the job time based on a higher hourly rate (to cover your added risk) and then offer to do the job at that fixed price. Don't tell what hourly rate you used to come up with the price.

This works especially with companies that have a "policy" about hourly rates. You'll often make more money this way too, if you're reasonably good at estimating your work time.

Good luck!

-Peter

[Geof]

Originally Posted by Donkey Hotey Yes, you're unreasonable. You're giving away your time. I won't turn mine on for less than $100/hr + cutters & materials. Well, Geof Darwin should be checking in from the Galapagos Islands any time now.

I love the last comment, you are going to give me an even more inflated sense of myself. (If that is possible )

Don't sell yourself too low; $50 per hour is almost certainly too low, closer to the $100 mark is better.

Do some calculations:

How much would you have to pay yourself as an employee?

How much extra do you have to pay as an employer?

Pretend you are renting space for a workshop; how much would that cost?

What is the cost for the electricity, heat, telephone, etc?

Pretend you have to budget to replace your machine in five years time; how much do you have to put aside every month to manage this?

You need to figure everything out on an hourly basis and make the assumption that only 60% of your hours are going to be billable. You will probably come up with an hourly rate between $75 and $125, that is what you should aim for.

I have said it before: it is better to have a reputation as the guy who charges a lot but really does a good job, not be known as the cheapo guy.

[AMCTony]

THIS IS B.S!!! $50 / hr is way too low. Similar to what Hu said, I can buy a $2000 welder and make $60-$70 / hr. with no questions asked all day long. Last time I checked my tooling for my mill alone cost much more than the welder. $75-$125 is a good starting point. $60 / hr. is fine for charity work for someone you feel sorry for. Remember that this hourly rate covers machine time, Setup time, AND programing time. I had to have an engineer design a sub-assembly for us on a job we were doing. My customer was friends with this specific engineer and wanted him to do the design instead of us BC he was buddies or comfortable or whatever. Not a problem however, His price was $80 / hr. to do the job. Make drawings only. BTW, this was cheap. I was given a set price only on the job and I knew this engineer as well so he told me his hourly. My advice is use your hourly only to figure out a set unit price. This is how you make the big bucks. If you estimate 2 hours and get it done in 1 then you got something going. Just dont screw up. I am sure that I speak for everyone here when I say that we have all messed up quoting a job at some point and ate crap, and learned from it. This happens. Also, If these parts that you are doing are of the nature of "we need that yesterday for the love of God help me!!!" type of deal, then several hundred dollars per hour is cheap. I have done this type of deal in the past, quoted a set price and made near $1000 / hour. And yes, this customer loves me to death and keeps comming back for more. When their factory is down and it costs them 2 and 3 and easily 10 thousand / hour, this is cheap to get them back in business right now. This is what the late nights are for. One more thing, In the past when I quoted jobs too cheap the customer went elsewhere or was a total PITA. Real people like to buy something and be charged. Other that believe they are entitled to everything are not worth your time, shop time or personal.

I rest my case.

[littlerob]

The part of this that I don't understand is, why are you not being paid for programming and little for set up? Programming is set up. And you should be getting paid for 100% for that."

Another couple questions, how badly do you need the work? Is your machinery sitting or running deciding whether or not you make your house payment? Is there other work to be had that pays better?

[mls]

yes I do have other work I was just posting my issue with my work and trying to figure out what other people were charging or they have had this thing happen to and how they resolved it


thankyou everyone Mike

[littlerob]

I think (big mistake) you should not be asking any less than 100$ per hour if you have other work, JMO

Robert

[Rocko1]

mls, are they paying you as a contractor when using your machine? If so the comment about the 1099 will come into play. Also the biggest mistake you made was letting your current employer know that you had a VF3 at home. I would imagine they will put the squeeze on you in order to take advantage of you, which it seems that way already. How are you suppose to work 8 hours at work then what 4-8 hrs at home on your VF3?