How do you charge?

[thekm]

the answer is simpler than all this... just charge whatever you can get away with!

[Verfur]

If you do not charge for your time than its a hobby, else charge for the complete job that includes the time to program and set up, clean up and put up. And if the call to run both machines at once to meet a customer set urgancy than the charge for the set up of the second machine pluss a $$ for the shorted time.

Think of it like this you could run two difrent jobs for two difrent customer at the same time with two difrent machines. So you would charge both customers for there
parts, not give one them parts for free.

Machines cost pluss electric and floor space and tooling else every one would have two or three machines themselves.

Always charg fair for all the work you do.

As a boss i had once told me, he could go broke at the lake he would not have to work at going broke.

John

[Chipsfly]

Its about total machine time, one or twenty machines. my answer is 15 hours. sweeping up is not custumers problem. chipsfly

[Frank S]

Even $50 per hour is low. Currently in Florida (near Orlando) the rate is $60 hour. That includes machine time and labor. Material is additional and so is any out of the ordinary tooling. Depending on number run the program belongs to the shop unless on prior agreement. In California, shop time will run more like $100 per hour (higher cost of living and other cost that impact shop operations - environment fees etc.). If you go by a quoted price, then thats it! If the time runs over you adjust by experience. The best way of doing business is to have a written purchase order with all the details spelled out. Money in advance (25%-50%), Balance on delivery, discount if paid within 10 days (2%-5%), full price if paid within 30 days, 1 1/2% per month over 30 days (I'm not a bank, I have people to pay). If you treat your Clients like a businessman should, then they will treat you like a business - regardless of age. Being younger means you just have more to prove like timeliness, responsibility, etc.

Running two machines will double the cost in tooling and consumables. It is fair to charge for rush jobs, or overtime - but the Client must be aware and sign off on the expenditure. Just remember that treating your Clients well will bring the business back. Business goes where it is asked for, and comes back where it is well taken care of (some old time saying - probably screwed it up)

Frank (old geezer machinist)

[Verfur]

I know it seems odd to say the customer pays for the clean up but this is part of the over head unless the guys you got working for you do it for free (off the Clock). This would not show on papper other than time as it is part of the JOB and must be added same as set ups / change outs it may just simply be inbeded in the cost, but it is there.

And Frank is right treat your customers right. set there expectations and beat them. Cause lets face it they have customers to and they add your time to there's and set that expectation and have to meet that.



John

[Frank S]

"The Road of Revenue is strewn with the bodies of Machine Shop Owners" - Frank Sperl
It’s all a state of mind and how you think of your business - because it is YOUR business. In our highly competitive market, we must maintain the edge.
I look at it very simply, if you my machinist don't take enough pride in your work and your work space and machine to keep it clean and well maintained - then you need to find another employer. I'm not a Banker, Baby Sitter, Hand Holder. If you come into my shop as a machinist you are expected to know your trade - otherwise you're an apprentice. I don't hire slobs that can't keep their area clean, I'm not Boyd Coddington that hires guys to take out the trash. I'm more the Paul Sr. on American Chopper, with a twist - I know how to run a machine. I was an Indentured Apprentice at General Electric 30+ years ago. When my guys are not doing something that makes money, they know to grab a broom - its part of the gig. Now a days there are companies that have machine operators that push buttons, and have highly paid people that do setups and proof runs. Not here, you are expected to know how to program, adjust compensation and monitor wear, etc. In other words know your craft, your trade - the day is done when the ship is tight - there is no Mikey to take out the trash.

In our area there are shops that are busy and quoting 6 - 8 weeks before they can get a job in the door. There are shops that have idle machines. What’s the difference? How they treat the Client. I don't have customers; I have Clients. It's all a state of mind. When you run a job shop - that’s all you run - a Job Shop. When you run an enterprise that serves an industry or serves a variety of businesses - that is a successful enterprise. If you work for me and run one machine - you are expected to bring in 120K of work per year, and get your benefits and two weeks vacation. If you contribute more then you get additional schooling in different trades that enhances your value and makes you more money.

So what makes you long term money? When you have Clients that keep coming back, because you are as concerned about making them successful as you are in keeping them as a Client. What makes you money? Having employees that are a part of the family, that goes the extra mile - work that 110%. Employees that have an interest in the shop making money so they have a bright and long-term future. Shops regardless of size need to invest in additional training so employees are not stagnant. They should also have extra activities - Shop Bar-B-Que's for the employees and their families.

Yep - there is a lot to running a shop, even more to running a business. Excuse me if I waxed poetic - but now a days we all need to be reminded that we are our own masters of our destiny. We all need to be reminded that being a Machinist is a time honored Trade. Machinists are the second oldest profession in the world (in my view) and the oldest was created to keep us happy. If it weren’t for Machinist you wouldn't have the stuff around you. The computer monitor that was molded, the circuitry that was made. This whole world revolves around Machinist and their trade. You can not touch one item in your whole world that isn't a product or by-product of a skilled Machinist.
When people ask me what I do, I don't hesitate telling them that I'm a Machinist. After all we help Businesses (companies) succeed.

Before you even ask if we have women in our shop, yes we do. We have a preference for women welders. Why? We have found that over time women take welding as artistry not a job. Women seem to have something to prove and the last thing that they welded is validation of their trade, their skill. So we have women TIG welding and stick welding. Guys that weld adopt a “good enough” attitude and then product suffers. So how do women get a job TIG welding in our shop? We test them. First is TIG welding a stack of aluminum cans. Second is TIG welding our product and have it pass hydrostatic testing.

Frank

[lumberjack_jeff]

When I run equipment (a tractor, in my case) , I charge what my time is worth + the cost of consumables (fuel, regular maintenance) + overhead + debt service (if any) + the hourly value of the equpment's economically productive lifespan. A tool that is useful for 1000 hours that was originally worth $100,000 costs its owner $100 per hour to run.

[project5k]

in my small business, i charge 3x whatever it costs me to do a job... if im going to use $10 worth of consumables, then i charge $30, and my time dont come cheap either.. i charge $100/hr design and then $50/hr production.. the materials i quote at 1.5x cost for standard raw materials... and then i charge a stock/fetch fee, so im not going to get the materails for free either.. if its standard steel, or something like 6061alum, then i charge $20 above the 1.5x materials cost, i gotta pay for the gas to go get it, dont i?
the way i figure it, i need to make enough money on each job/part, to afford to make 2 more of the same.. that way if business is good, im allways doubling up... if i have a repeat customer, then i will generally go 1:1 on materials + the $20, and if someone brings me a design, then i charge $50 for design proofing. but thats just me, i do lots of onexie twozie parts... so my setup takes time, if someone wanted 100 of something then the price per part would go down.....

[thekm]

in my small business, i charge 3x whatever it costs me to do a job... if im going to use $10 worth of consumables, then i charge $30, and my time dont come cheap either.. i charge $100/hr design and then $50/hr production.. the materials i quote at 1.5x cost for standard raw materials... and then i charge a stock/fetch fee, so im not going to get the materails for free either.. if its standard steel, or something like 6061alum, then i charge $20 above the 1.5x materials cost, i gotta pay for the gas to go get it, dont i?
the way i figure it, i need to make enough money on each job/part, to afford to make 2 more of the same.. that way if business is good, im allways doubling up... if i have a repeat customer, then i will generally go 1:1 on materials + the $20, and if someone brings me a design, then i charge $50 for design proofing. but thats just me, i do lots of onexie twozie parts... so my setup takes time, if someone wanted 100 of something then the price per part would go down.....

so your clients are obviously after the penny-pinching budget experience...

[refills]

Go with the Market price.

Know that your minimum is 8 hours + the overhead of two production machines

[Frank S]

Around here that might work once and then we would never see that Client again. Our Clients are smart enough to price out materials and know what the costs are going in, that's why they are in business. We also get our materials deliveried and we have accts with the major material suppliers. We make a minor amount by paying up front for the materials or within their "Good Client" time line usually 10 days. We never nickle dime our Clients because we want them back plus more business. If you are so expensive that you affect your Clients base cost for their product then you are going to make them non-competitive in todays market place. Then again I want the 100, 1000, and 10,000 part runs. I want the lights out, load the Auto Bar Loader and run business that pays for the machines. I can check on the machines using the Internet and remote cameras. You have to have the Technology edge to run and survive.

We used to farm out the excess to other shops, but found that they were pumping the price with the little add on's. Well when times get tough for them, they will wonder where we are with work for them. Machine payments are hard to make when the sugar daddies are gone. Around here shop owners talk to each other because we serve different markets, its bad business to screw over another shop owner. They get black listed for farm out work.

[dannystooblue]

I believe that the machine should have a rate for the amount of time running, and the man a rate for the time supervising the machine. Thus 50/hr for each machine, and 30/hr for the man, leaving 50*7+30*7 for the 7 hours ran. If the man is not needed then the overhead is down. Maybe these numbers would not be realistic, but you get the idea.

[gearsoup]

subcribes.....

[Tooler]

I would charge total contact time..and never discount labor!!!

[JohnF]

What I always did was treat each machine as 1/2 a man, myself also. So, based on your rate and senario, I figured $25.00 an hour for each "unit". That gives you a $50hr rate on 1 machine and operator and $25.hr on the 2nd machine. Programming I found I actually had to throw in for free to get the jobs.

YMMV

JohnF

[handlewanker]

14!!!!!!!!, and I thought child labour was only prevalent in the third world. What happened to enjoying life while you're young?
OK, so I'm casting a critical eye on a lucrative (for a likely lad that is still getting pocket money, maybe?) money making opportunity, that will age you before you come of age and ruin your health before you are old enough to know what work is.
In my wildest imagination I could not envisage a 14 year old competing in the metal working industry, unless his father is standing next to him and doing all the work and he only pushes the red button when the green light flashes.
However, if we have a budding engineer of 14 years with 20 years experiance who is capable of pricing a job down so low to win against all contenders then he will know what it is to cut corners, use the right machinery for the right job and where to buy the materials at the right price, and that does not include being able to converse with a customer who wants the job yesterday and expects to pay for it in three months time, oh yeah and also in the process be able to interpret a customer's drawings to determine wether the job can be done, or "redesigned" to make it profitable.
In addition to that he must also "from experiance" know when to walk away from a job and when to run.
I really think that this is just an excercise for a school project and as such has no meaning in the real world.
My father started work at the age of 14 at Woolwich Arsenal as a machinist, but that was in 1916 and he was one of 9 children.
Not knowing his personal means, how would a 14 year old have access to several machines, and the knowledge to use them. When did he start?
Ian.

[handlewanker]

Hi, FrankS put it in a nutshell. If you overcost a job then you'll get the "don't phone us we'll phone you" response.
I did sub-contract work in the early 90's, working in the garage after regular work hours and on weekends, and to compete against the other guys was a miracle of achievement.
I was lucky with a project at my workplace, that turned into a personal issue, and in the process led to me inventing a modification to a machine and so a business was born.
Even at that lower level of the engineering environmental strata there was still a stiff competitive neighbourhood.
If you overpriced the job, it didn't materialise, and if you under priced the work to ensure that you and not someone else got the job then you worked for peanuts.
One thing I never entertained and that was a huge capital outlay for minimal returns. Such as a job quoted at $10,000 requiring $8000 of outgoings. The upfront cost was just too much to outlay for a subcontract that would only get paid two months later.
When you start to get into the higher volume jobs then the playing field just gets bumpier as you come up against the bigger capacity shops.
Ian.

[henryblowery]

Wow handlewanker, I've already said this is a hypothetical question.

"What happened to enjoying life while you're young?"

I do enjoy this....why do you think I get up early to come to this site? Why do you think I got a job working 15-20 hours a week so I can pay for this hobby?

Right now I have a mini mill(that's a HF mini mill not a Hass) and a 6" atlas lathe......when I've learned the basics on them(heck I'm still working on squaring bar stock ) I plan on selling them and upgrading.

Here's my list of equipment I hope to have before I move out.

A vertical knee mill
A large bench top CNC mill

A large metal turning lathe (around 15x40)
A 12" CNC lathe

A Hydraulic press

Surface grinder

A Oxy acetylene, stick, MIG, TIG, and spot welder.

Assorted hand tools and small power tools(grinder,
dremil tool and the like)

A large (60 gal.) air compresser and bead blaster
and stuff to blue, parkerize, and anodize.

Do I have all these tools and the ability to use them? No, but I would like to eventually. There's no big industrial machines on that list. I just want to play around in the shop, and possibly do some small parts runs.

Gray

[handlewanker]

Hi Grey, I think you are way ahead of yourself. I admire your spirit and think you will go far, but in post #1 the question was about how much to charge.
This is really taking the hypothetical to the outer limits of your imagination.
At this moment in time you are just starting to "turn on the machine" and have a lot to learn.
This is good, but job costing is something that I would not think you would have any use for. It's like advanced marathon training for a toddler.
I have just been looking at your list of machinery. What exactly are you going to make?
listing the tooling before the product is daft.
A hobby shop will not pay any serious money, and those that tell you otherwise are dreaming.
If you are intending to make a definite product, then the tool requirements will determine which machinery you will invest your money on.
Before we dwell on the hypothetical costing could we have a hypothetical product and a machinery list to achieve production, also an envisaged production run, and if your tooling is going to be done "in house" or outsourced.
If this sounds too much of a bore and not much fun, then welcome to the real world, where crusts of bread on the table soon become a reality.
Ian.

[ImanCarrot]

Also:
Tooling (recurring and non- recurring)
Insurance (or cash ex works)- some of my jobs cost a lot,
Carriage,
Then add 25% to delivery times and costs cos it always takes longer than you think!