Starting a Wedling Biz-Need Advice/Info

[Strange246]

I'm starting my own welding business, first a little info about me, I've been welding for 17 years, started in a vocational highschool, then I went on to specialize in production work, always in a fab shop setting, specializing in Mig & Tig, precision sheetmetal work, tank building...I can stick but I'm a little rusty, I got out of the fab shops about 10 years ago, a good job came along in another field that was too good to pass up for my family (great pay & benefits) I still work for said company but I'm wanting to start my own welding/fab shop and be my own boss, it's starting off part time out of my own garage until (hopefully) I get enough business to go fulltime and take an early retirement at my current job. I have a 250amp Mig and a Miller Syncrowave 200 to start off with machine wise, of course I have a cutting torch and all the grinders and hand tools etc I need, I'm planning to add a machine to the back of my truck if I get enough interest in on-site work.

That being said what I dont know and need help with is the business side of things, I've never had to price out a job, again all my experience was working for someone, as a "cog in the wheel" if you will, now I've got an offer to do some work for a gentleman, and I'm not sure how to price it, I know obviously I have to figure out and call for pricing on the required steel for the job, but how do I account for gas, mig wire, grinding wheels etc? Break each item down to exact unit cost? Say grinding wheels, I buy in 25 pc boxes, divide the box price by 25 and go with that? What about gas and wire?

I know my labor cost I have to figure in too, any ideas what I should shoot for there? How does one find out what going rate is in my area? I'm in southern NH

Thanks for any help you guys can offer.

Ryan

[Hotfoot]

You are going to have to put down each and every penny of cost...and don't forget insurance if you are starting to "do things" for others. Once they pay, they expect you to liable for the performance of whatever you touched....and if it grows just enough, your Homeowners Insurance will probably crap out on you once they know what's going on in that garage (like it would for most of us!)...and if it grows much at all, there are Deed Restrictions and Zoning to consider, along with Business license, state and federal tax regulations, etc....just stuff every business must deal with..Just go into it with your eyes wide open!

The luxury of pulling a paycheck from somebody else is...you don't have to screw with any of that stuff...too many employees neglect to consider what a boss/owner has to go through just to be able to print that check!

[calweld]

As Hotfoot said, you absolutely HAVE to know what it costs you to operate, and you need to figure in all your costs,,,,, including variable costs, fixed costs, and "hidden" costs,,,,,, but you also have to get a handle on what the going rate is in your area,,,,, the difference, is, hopefully,,,, called "profit". Bad word in a lot of circles,,,,, but here, in my world, it's what I live on, that's how I make a living. A little "market research" is in order here, gotta position yourself correctly .....

[usmcpop]

Never mind your labor cost - it is just one more line item. As mentioned, you do need to be able to figure out all your costs. However, as a 1-man operation, you will need to make a bit more per hour than an outfit that has a dozen grunts who are willing to work a little cheaper. The boss man has to do a lot of stuff that doesn't contribute to arc-on time.

I would suggest you investigate local conditions and the competition first. Are there a lot of welding companies? Do they drive big flashy rigs or are they schlepping around in old rickety trucks, struggling for a job? Do you have a specialty? What differentiates you? Are you better/faster/cheaper/more available nights and weekends?

You might try to connect with someone from a local community college welding program and see if you can get some free advice. As for business, there should be some free local resources from SCORE, who can scare the socks off of you about the ins and outs of small business. http://www.score-manchester.org/ Get in touch with them and get your toes wet.

[ZnUSA]

NOt sure how you would acount for mig wire and gas. Seing you don't know how much you will use for each and every job. You could go with a percentage basis like auto shops do with their disposial fee. What I do know is its hard to get established in an market as weak as this one. You are right to start part time and ween yourself off of the payrole fo ryour current boss. Also remember you should show a loss on paper anyways for the first 2-4 years of starting a new business. Hope this helps good luck with you new career.

[Strange246]

Thanks guys, much appreciated!

Ryan

[CarmenElectrode]

Not sure where you're located, but you may want to look into if there is a Small Business Development Center in your area...

http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html

It's a program of the US Government to assist small businesses. In the San Diego area, for example, you can access business consultants, and they hold workshops (usually for a nominal fee) on things like marketing and accounting... it's a terrific program.

Good luck.

[Hell on wheels]

I started my welding business about 2 1/2 years ago (Nov. 2006). It's been tough so far but I'm still digging.
Some advice I can give you:

1.Keep your customers happy and by that I mean meet or exceed their expectations.Always do a good job.It's easier to keep your current customers coming back then it is to go out and find new ones.

2.Be diverse. Be capable of doing multiple different jobs not just be able to weld different metals. For example: I use to work for a trailer dealer not only did we do welding repairs on trailers we also did mechanical repairs fix the lights,brakes,wheel bearings,etc.. So when I started my welding business not only did I offer welding as a service but trailer repair too.
I mean you don't have to do this its just my opinion that the more jobs your capable of doing the more work you can take on.

3. Show up on time. Customers of mine have thanked me in the past for showing up on time and being there when I said I would be there. If someone calls you and asks you to do some work for them,be there at the time you say your gonna be there. Don't tell them "Yea I be there tommorow morning at 8am" and then never show up.

4.Make contacts around town. The more the better get to know the people at scrap yards,metal suppliers,welding supplies stores, anybody who has anything to do with the kinda work your doing they will be helpful.

Best of luck to you!

Dan

[CF1975]

Congrats! I wish you the best in your venture. I have been in business for myself doing mobile welding for the past year. Most of my business is agricultural and logging equipment repair, and all of the advice already posted is excellent, so I won't repeat it. I will say that while I am generally very friendly in my personal and business dealings, I have found that I have to be firm occasionally. Most folks are reasonable, but you may run into the odd customer that will take advantage of you if you let them. Also, do you have a SCORE chapter locally? It is a counseling service for small businesses to offer advice on starting and running a business. They have been indispensable for me, and are always willing to answer any questions I may have. The link is http://www.score.org/index.html
Again, best of luck and keep us posted on your success.

[BryanDowdy]

The way it works here is you charge a hourly rate witch covers labor and you consumables (wire/rods, gas, grinding wheels, blades, etc). I have two rates: shop & mobile. Mobile is 10.00 higher a hour. Both have a 2 hour min but I sometime have to bend that rule in the shop on dumb little jobs. With mobile time starts when I leave the shop and stops when I start winding up my leads.

I mark up the material for the job 20%-30% just depending on the circumstance. That covers your time to pickup the materials plus you always need to make a profit off materials, its not like the customer is taking the time to go get it and have the knowledge to know what they need.

As far as insurance I only have liability while on-site. It covers me if something was to happen during the welding/fab. But once I leave or the customer leaves with the product there is no insurance. So dont fab something you do not have confidence in or knowledge how to make. You can get insurance that will cover a finished product, but you are talking about the difference in the 400.00 a year for liability and thousands of dollars a year for finished product. Also a extra precaution is to run your business a LLC, it will make it much harder for someone to sue you for more than what is in your business. On the same note write off everything you can and pretty much everything can be turned into a write off. Find your self a good CPA.

[BryanDowdy]

One more thing on rates. Call around and find out what other guys are charging and will give you a idea where to start. I am not to cheapest or highest where I am. Do not try to be the cheapest, their will ALWAYS be someone willing to do a job cheaper. If you put 110% into your work and always make sure your customer is happy then tell them that when they say some other guy is cheaper. He is prob cheaper because he will cut corners and wont care if the customer is happy.

On bidding on jobs they way I do it is figure materials, any special equipment you will need, and then the time it will take you to do it. Take your figured time and multiply it by your hr rate and then add a percent. You should always aim for making more when doing a job for a fixed amount. Also never QUOTE a job always ESTIMATE the job. You never know when you will run into some unforeseen problem and depending on the problem it could eat up all your profit so you will need to talk with the customer and explain the situation.