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Thread: "New" Contractor Welder Looking for Advice on Quoting Services

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    "New" Contractor Welder Looking for Advice on Quoting Services

    As the title states, I am soon to be venturing into the world of self-employment (part-time, anyways, won't be quitting my day job anytime soon). I've posted an ad on craigslist listing my qualifications (3 yrs certified stick/MiG/FCAW, welding mostly in pressure vessel fab shops), offering to perform odd jobs for those interested and have been surprised at how quickly requests have been coming in. While I feel fully confident in my ability to perform the tasks, and have the necessary equipment to do so, I have never been in the business of...being in business for myself and as such am clueless in regards to how I ought to go about quoting prices for the jobs to be performed in such a way as to be fair to the customer and still make a profit.

    As an example, one of my jobs coming up will be to build a farmer two 4'x10'x2' ramps to sheds, along with other miscellaneous projects. I'm going to be building these out of 1/4" 2x2 steel angle and a 1/4" piece of sheet metal (I recommended expanded metal to significantly reduce pricing but the customer is more concerned about aesthetics). I will be tack-welding with 6011 and welding up with 7018 (as I'm currently limited to a TiG/Stick welder currently and figure the 6011 is a cheaper option than running Argon for simple tacks/stringer beads). Some limited dirt/masonry work will need to be done by myself as well, prior to installment.

    My plan, thus far, was to build the design in solidworks, create a list of materials necessary (metals, filler material, grinding discs, etc.) for construction, and deliver an invoice to the customer, as he has agreed to pay for the building materials up front, and labor costs upon completion (I believe this to be a good business model, but please inform me if I'm wrong). My difficulty comes in deciding just how to go about quoting for labor/incurred expenses: Are there different rates for residential/industrial customers? Would $30/hr be a reasonable rate for basic stick welding fabrication? Should I be charging a separate rate for performing dirt/construction work? What is a good percentage surcharge to apply to building materials for the cost of acquisition/transportation, if any?

    All in all, I honestly enjoy welding sufficiently that I'm not overly concerned with making too great a profit at this time, but would like to begin to learn the answers to these basic questions now, so that in the future, should opportunity present itself, I might be at least somewhat more prepared to transition into working for myself full time as a fabricator.

    Any advice, be it specific answers, or general wisdom is much appreciated, and I thank you beforehand for taking the time to view and respond to my posting.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by michahsimmons View Post
    As the title states, I am soon to be venturing into the world of self-employment (part-time, anyways, won't be quitting my day job anytime soon). I've posted an ad on craigslist listing my qualifications (3 yrs certified stick/MiG/FCAW, welding mostly in pressure vessel fab shops), offering to perform odd jobs for those interested and have been surprised at how quickly requests have been coming in. While I feel fully confident in my ability to perform the tasks, and have the necessary equipment to do so, I have never been in the business of...being in business for myself and as such am clueless in regards to how I ought to go about quoting prices for the jobs to be performed in such a way as to be fair to the customer and still make a profit.

    As an example, one of my jobs coming up will be to build a farmer two 4'x10'x2' ramps to sheds, along with other miscellaneous projects. I'm going to be building these out of 1/4" 2x2 steel angle and a 1/4" piece of sheet metal (I recommended expanded metal to significantly reduce pricing but the customer is more concerned about aesthetics). I will be tack-welding with 6011 and welding up with 7018 (as I'm currently limited to a TiG/Stick welder currently and figure the 6011 is a cheaper option than running Argon for simple tacks/stringer beads). Some limited dirt/masonry work will need to be done by myself as well, prior to installment.

    My plan, thus far, was to build the design in solidworks, create a list of materials necessary (metals, filler material, grinding discs, etc.) for construction, and deliver an invoice to the customer, as he has agreed to pay for the building materials up front, and labor costs upon completion (I believe this to be a good business model, but please inform me if I'm wrong). My difficulty comes in deciding just how to go about quoting for labor/incurred expenses: Are there different rates for residential/industrial customers? Would $30/hr be a reasonable rate for basic stick welding fabrication? Should I be charging a separate rate for performing dirt/construction work? What is a good percentage surcharge to apply to building materials for the cost of acquisition/transportation, if any?

    All in all, I honestly enjoy welding sufficiently that I'm not overly concerned with making too great a profit at this time, but would like to begin to learn the answers to these basic questions now, so that in the future, should opportunity present itself, I might be at least somewhat more prepared to transition into working for myself full time as a fabricator.

    Any advice, be it specific answers, or general wisdom is much appreciated, and I thank you beforehand for taking the time to view and respond to my posting.
    Your going to want to get a business license and insurance. I carry 10 million in liability for the work i do
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Thanks for that tip. I should have stated I've already contacted the county clerk where I live and have been assured there are not business permits or licenses required for private contract workers, so long as I am not employing any individuals besides myself. One of the few areas where Texas laws seem to actually be preferable...

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Craigslist customers are annoying. Ive tryed it and it pretty much isnt worth my time.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by outdoort View Post
    Craigslist customers are annoying. Ive tryed it and it pretty much isnt worth my time.
    Are they simply not aware of the average costs of metal construction, or not reliable in terms of payment, or...? Aside from Craigslist, I plan on taking a trip to all(most anyways, there are probably a hundred in my area) of the smaller fab shops in the area, and submit a welding coupon (was thinking a cube, welded partially with mig/stick/tig) and a card offering to weld any overflow work they might have, just need to weld the coupons.

    The main thing is, I don't want to move back into welding full time in another person's fab shop and I don't have the necessary infrastructure at the moment to do this type of work full time on my own, so I felt a few jobs from Craigslist might serve to whet my beak so to speak, and get me started on learning how to deal with customers (tbh, the more difficult they are to deal with now, when I can rely on my day job, the better experience I think I'll gain).

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by michahsimmons View Post
    A I have never been in the business of...being in business for myself and as such am clueless in regards to how I ought to go about quoting prices for the jobs to be performed in such a way as to be fair to the customer and still make a profit.

    Many businesses fail not because the people can't do the work, it's because they can't run a business. Biggest thing is to track costs, ALL your costs. I see plenty of guys do side work and think they are making money because someone hands them cash, and it covers the main materials and some left over. In reality they missed a lot of consumables, fuel, and other costs and actually lost money.

    Big items are easy to track. few ever forget to bill for steel or rods. It's grinding disks, fasteners, mig tips, welding gas, fuel for the truck, insurance, permits and licenses and so on that get forgotten. Also if you use "left over" materials, don't forget to bill for them, even if you may have been paid for them before. If you don't, eventually you'll screw yourself if you use the old job to help set the price for the new one.

    I'd suggest you get a program like Quickbooks etc to help track costs and help keep records of what you did and what it cost to do it. ANYTHING business related gets inputted into the program. It doesn't matter if it's $1.50 worth of bolts or a can of spray paint, or it's a new tip for the OA torch, steel, rods, an insurance payment or your phone... The more you track, the better an idea you will have of what everything is actually costing you.

    Also do yourself a favor and find a good accountant. A wise person once told me a good accountant is one who finds enough savings at tax time to cover their bill and then some. He can tell you what you can or can not, claim as a write off and so on. Don't be at all surprised if in the beginning and maybe for a few years, you run in the red. Many costs such as insurance cost the same whether you are doing this full time or part time. The big difference is FT, you get to spread those costs out over more jobs than you do part time. $2000 or $3000 a year in insurance is a big nut to chew on if you only do a few dozen side jobs. Up side is you may be able to use that loss to offset taxes from your other job, so you still may come out ahead in the long run.
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by DSW View Post
    Many businesses fail not because the people can't do the work, it's because they can't run a business. Biggest thing is to track costs, ALL your costs. I see plenty of guys do side work and think they are making money because someone hands them cash, and it covers the main materials and some left over. In reality they missed a lot of consumables, fuel, and other costs and actually lost money.

    Big items are easy to track. few ever forget to bill for steel or rods. It's grinding disks, fasteners, mig tips, welding gas, fuel for the truck, insurance, permits and licenses and so on that get forgotten. Also if you use "left over" materials, don't forget to bill for them, even if you may have been paid for them before. If you don't, eventually you'll screw yourself if you use the old job to help set the price for the new one.

    I'd suggest you get a program like Quickbooks etc to help track costs and help keep records of what you did and what it cost to do it. ANYTHING business related gets inputted into the program. It doesn't matter if it's $1.50 worth of bolts or a can of spray paint, or it's a new tip for the OA torch, steel, rods, an insurance payment or your phone... The more you track, the better an idea you will have of what everything is actually costing you.

    Also do yourself a favor and find a good accountant. A wise person once told me a good accountant is one who finds enough savings at tax time to cover their bill and then some. He can tell you what you can or can not, claim as a write off and so on. Don't be at all surprised if in the beginning and maybe for a few years, you run in the red. Many costs such as insurance cost the same whether you are doing this full time or part time. The big difference is FT, you get to spread those costs out over more jobs than you do part time. $2000 or $3000 a year in insurance is a big nut to chew on if you only do a few dozen side jobs. Up side is you may be able to use that loss to offset taxes from your other job, so you still may come out ahead in the long run.
    Thank you for the wisdom, definitely something to get right from the beginning and something I'll be doing my best to adhere to (actually downloading quickbooks as we speak to hopefully begin tracking expenses/building my first invoice). Also, as suggested, I'll be looking into sitting down with an accountant to discuss in more detail my as-of-now limited business plan and what I might need to make it tenable. While I understand that many lessons learned in life come from failure, hopefully with advice like yours I can pull through this learning process with bruises rather than broken bones...

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    I'm in the beginning stages of doing the same thing you are. Currently fielding quotes for a surety bond and liability insurance, and procuring equipment. I'll be following this thread as I'm in search of the same information. I have a decent grasp on the business aspect, but the actual quoting of jobs is the piece I'm still trying to nail down.

    Jody, from Welding Tips & Tricks, has the most succinct advice I've heard so far regarding quoting jobs. I don't know how well it works in the real world, but it's the best I have to go on right now.

    He says to figure $1.00 per inch of weld deposited, plus $1.00 per tack weld, and then add 10%. You would probably be safe by applying this method to a job or two, and making adjustments as necessary.

    Speaking from experience, I wouldn't charge by the hour if you can avoid it, and the reason is simple. You're potentially leaving money on the table, and also risking frustrating your client. If it's your first time doing a particular project, it might take you longer to figure it out and get in to a rhythm. If the job takes you 10 hours to complete, then maybe you made $350 if you are charging $35 an hour. Now, the client may feel that's a fair price for the work he got done, or maybe he feels that you were milking it and it took way too long. Now, suppose he's a repeat customer with periodic work that's basically the same. After you've done it for him five times, it no longer takes 10 hours to complete. Now, you can do it in 6. If you charge him the same $35 an hour, you've effectively reduced your hourly wage because you're doing the same work, but in 4 hours less time. Now you only made $210 on that job instead of $350. But you can't really up your prices on your client either to compensate, because he'll probably be upset that you're suddenly raising your rates on something that you've done for him multiple times.

    By setting a flat rate, it keeps your customers at bay and it also allows you to dictate your hourly wage. You have MUCH more control over how much money you make. If you charge $1000 for a given job and you knock it out in one long day, then you made $100 an hour and the customer is happy for the work they got done for $1000. On the other hand, if you stand around hemming and hawing at the job all morning, it might take you two days to finish it. In this scenario, you will have reduced your hourly rate to only $50.

    The problem with an hourly wage is that you are placing a cap on your earning potential. No matter what you do, there are only a certain number of hours in the day during which you can be productive and effective in your work. So you're always going to make the same amount no matter what you do.

    By charging a set rate per job, you're in control. The more experience you get under your belt, the faster you get at everything you're doing. As you start finishing jobs in less time, you can pack more work in to the same number of working hours, thus effectively increasing your pay rate.

    Essentially, an hourly wage means you're being paid for your time, while a custom quote per job means your client is paying for the work that's actually getting done. Both tend to end up happier when they bill for, and pay for, the work they want done.
    Last edited by Hillbilly Welder; 06-12-2016 at 08:20 PM.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    You are in an excellent position. You are showing that you are smart enough to know you don't know and are willing to ask. It will be impossible for you to stick to one method when quoting. Some jobs need to be bid hourly and some need to be bid by the job. Keep in mind that there is lots you don't know and when bidding by the job you can get stuck with normal and reasonable expenses you should have known about. Cost of materials might change, we write into the contract that variances larger than 5% "may" be charged to the customer. Then we tell the customer when it costs more and don't charge him. Customer Service. Bidding by the hour means travel time, prep time (we call it mobilization) and don't forget the costs not directly associated with doing the work. This is where your accountant is invaluable, start with the list of deductions he or she wants you to claim, that's stuff like a cell phone, business cards, charges to open a bank account etc. You have to pay for all of it so you need to pass it on to your customer. Another wise word you need to heed, get insurance based on what you do. Like others have said, shop it around, some insurance sales people will sell you the world if they see a chance and neglect to sell you what you really need. You're in a great spot because you can take your time and say no whenever you want, jumping in full time often leaves you doing things you really don't want to do. Your idea of overflow welding at anothers shop can work and you can extend it to rig welders around you. They often get jobs that are too big for them alone and if you can work out a deal, a fair deal, you'll find it very worthwhile. I have a very good friend who is "in" with two small excavators and he stays busy resurfacing buckets and repairing in addition to his regular job. He has a deal worked out with another welder who is full time and if they need something right away the other guy goes and takes care of it. My buddy bills them and as far as they are concerned my buddy did the work. Take your time and ask questions. See if there are some classes at the local colleges about business. Find a LWS who is willing to work with you and form a relationship with them. They might be willing to let others people know about you. Work hard, be fair, treat others well, turn the other cheek when they aren't nice, keep asking questions and you'll have them knocking down the door.
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by Hillbilly Welder View Post
    I'm in the beginning stages of doing the same thing you are. Currently fielding quotes for a surety bond and liability insurance, and procuring equipment. I'll be following this thread as I'm in search of the same information. I have a decent grasp on the business aspect, but the actual quoting of jobs is the piece I'm still trying to nail down.

    Jody, from Welding Tips & Tricks, has the most succinct advice I've heard so far regarding quoting jobs. I don't know how well it works in the real world, but it's the best I have to go on right now.

    He says to figure $1.00 per inch of weld deposited, plus $1.00 per tack weld, and then add 10%. You would probably be safe by applying this method to a job or two, and making adjustments as necessary.

    Speaking from experience, I wouldn't charge by the hour if you can avoid it, and the reason is simple. You're potentially leaving money on the table, and also risking frustrating your client. If it's your first time doing a particular project, it might take you longer to figure it out and get in to a rhythm. If the job takes you 10 hours to complete, then maybe you made $350 if you are charging $35 an hour. Now, the client may feel that's a fair price for the work he got done, or maybe he feels that you were milking it and it took way too long. Now, suppose he's a repeat customer with periodic work that's basically the same. After you've done it for him five times, it no longer takes 10 hours to complete. Now, you can do it in 6. If you charge him the same $35 an hour, you've effectively reduced your hourly wage because you're doing the same work, but in 4 hours less time. Now you only made $210 on that job instead of $350. But you can't really up your prices on your client either to compensate, because he'll probably be upset that you're suddenly raising your rates on something that you've done for him multiple times.

    By setting a flat rate, it keeps your customers at bay and it also allows you to dictate your hourly wage. You have MUCH more control over how much money you make. If you charge $1000 for a given job and you knock it out in one long day, then you made $100 an hour and the customer is happy for the work they got done for $1000. On the other hand, if you stand around hemming and hawing at the job all morning, it might take you two days to finish it. In this scenario, you will have reduced your hourly rate to only $50.

    The problem with an hourly wage is that you are placing a cap on your earning potential. No matter what you do, there are only a certain number of hours in the day during which you can be productive and effective in your work. So you're always going to make the same amount no matter what you do.

    By charging a set rate per job, you're in control. The more experience you get under your belt, the faster you get at everything you're doing. As you start finishing jobs in less time, you can pack more work in to the same number of working hours, thus effectively increasing your pay rate.

    Essentially, an hourly wage means you're being paid for your time, while a custom quote per job means your client is paying for the work that's actually getting done. Both tend to end up happier when they bill for, and pay for, the work they want done.
    Great advice on the quoting method, something I will definitely be implementing; it will be interesting to hone in on a figure that is fair and practical. Good to know there are others dealing with the same questions; you'll be in my prayers for success (so long as you don't come to Longview, TX as a competitor!

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by acx780 View Post
    You are in an excellent position. You are showing that you are smart enough to know you don't know and are willing to ask. It will be impossible for you to stick to one method when quoting. Some jobs need to be bid hourly and some need to be bid by the job. Keep in mind that there is lots you don't know and when bidding by the job you can get stuck with normal and reasonable expenses you should have known about. Cost of materials might change, we write into the contract that variances larger than 5% "may" be charged to the customer. Then we tell the customer when it costs more and don't charge him. Customer Service. Bidding by the hour means travel time, prep time (we call it mobilization) and don't forget the costs not directly associated with doing the work. This is where your accountant is invaluable, start with the list of deductions he or she wants you to claim, that's stuff like a cell phone, business cards, charges to open a bank account etc. You have to pay for all of it so you need to pass it on to your customer. Another wise word you need to heed, get insurance based on what you do. Like others have said, shop it around, some insurance sales people will sell you the world if they see a chance and neglect to sell you what you really need. You're in a great spot because you can take your time and say no whenever you want, jumping in full time often leaves you doing things you really don't want to do. Your idea of overflow welding at anothers shop can work and you can extend it to rig welders around you. They often get jobs that are too big for them alone and if you can work out a deal, a fair deal, you'll find it very worthwhile. I have a very good friend who is "in" with two small excavators and he stays busy resurfacing buckets and repairing in addition to his regular job. He has a deal worked out with another welder who is full time and if they need something right away the other guy goes and takes care of it. My buddy bills them and as far as they are concerned my buddy did the work. Take your time and ask questions. See if there are some classes at the local colleges about business. Find a LWS who is willing to work with you and form a relationship with them. They might be willing to let others people know about you. Work hard, be fair, treat others well, turn the other cheek when they aren't nice, keep asking questions and you'll have them knocking down the door.
    I can't say thank you enough for the advice. Great idea regarding the LWS; I have several close acquaintances by now and I'm sure they're likely to be invaluable. I'll also be certain to, as you had mentioned, look into some introductory business classes to hopefully close the gap of ignorance just a bit further. All the advice so far is a decent amount to mull over, I'll be reading over it a few more times to better help develop my short/long term plans and will be posting questions as they come up.

    Also, anyone else in my situation, such as Hillbilly Welder, are more than welcome to place any questions they might have, as I'm sure there are plenty of questions I might not even think to ask.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Charge more per hour

    Account for the overhead time, ordering materials, drawing the design, driving, and so on.

    My plan, thus far, was to build the design in solidworks, create a list of materials necessary (metals, filler material, grinding discs, etc.) for construction, and deliver an invoice to the customer, as he has agreed to pay for the building materials up front, and labor costs upon completion

    That information is yours, not the customers.
    All they need is final estimate price, payment schedule, start and completion dates.

    Build profit margin and error margin into the materials cost.



    Cost accounting is what you need.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Never give out drawings, material take offs etc without money changing hands. I've seen it way too many times where people want a drawing to see what something looks like, then you never see them again. Later you find out they took your work and either did it themselves, or used your work to find a lower bidder. You either want to be paid for your time to do the drawings, or you want a deposit to do the job.

    I had a friend who used to do architectural drawings on the side. He got burned a couple of times submitting drawings to the customer for "review" only to never hear from them again and never get paid. He found out that a contractor he knew ended up doing one of the jobs he'd done drawings for. The "client" submitted his working drawings to the township to get the permits needed, but he got zero for his work.

    He later learned to turn off all the dimension layers and to print out the drawings on a "distorted" scale for review ( who uses a 1/13th scale) . That way you really couldn't pull useful data off the drawings submitted.
    .



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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    I am in a similar situation so will follow this thread with interest.

    One thing I have found is that many of my customers like the "detailed billing" that I submit with each invoice. It details every little item I used on the job and the time spent on each part of the project. I also don't have any "markup" on my consumables, I simply charge what it would cost them to buy locally.

    I began this since I was tracking everything I purchased to get an idea of what my costs were anyways. It's been rather educational, one expense that surprised me is my vehicle fuel and maintenance costs.

    It also gives me a record to check when it comes to giving an estimate, rarely are any two jobs the same but if I can reference a past job that is in any way similar it helps to get me in the ball park.

    So far what has worked for me has been to charge a rate of $35 per hour (if they have several days worth of work and I can use their shop), or $50 per hour for short term or portable work. When the going rate locally for a welding truck is $85-100 I have been very busy, so much so that I expect to raise my rates in the next month, just so I can get a day off to work on my truck or mow the lawn.

    One thing to consider is that you need to realize the the tax collector will want his pound of flesh at the end of the year. I have heard many horror stories of fellas who have gone on their own and thought they were doing well until the year end, then realize that the government wants a check for $20k. Keep good records, as much of what you buy is going to be tax deductible, your welding gloves, coveralls, helmet cover lens, boots, safety glasses, etc; these are all expenses that add up. Find an accountant who specializes in small business and set up a good bookkeeping system.

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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by SaskWelder View Post
    So far what has worked for me has been to charge a rate of $35 per hour (if they have several days worth of work and I can use their shop), or $50 per hour for short term or portable work. When the going rate locally for a welding truck is $85-100 I have been very busy, so much so that I expect to raise my rates in the next month, just so I can get a day off to work on my truck or mow the lawn.
    If your rates are $35-50 and standard going rate in your area is $85-100, then you are selling yourself way short or you are missing something big time. Leaving that kind of cash on the table simply doesn't make sense.

    I don't like to mark up materials either as many times it's too easy for clients to compare what I charge to what they can pay themselves and discrepancies can cause issues. However I've found it very hard to account for every nail, screw, piece of sand paper etc used on a job. To cover that I have to have some "fudge" in the billing to account for those expenses. That's part of what many use that mark up for. I usually itemize it as misc if I'm doing a detailed break down, but usually I just list "materials" and wrap that cost in with the rest and round up to the nearest round number. The other thing that often gets missed is time and fuel going to get materials, do estimates etc. That's another reason guys often do a mark up. That allows them to cover all that hard to recover time each job takes.

    It's also very hard to raise your rates later on. Often current customers think you are now trying to rip them off. That can often lead to bitter feelings and can hurt your reputation. Your reputation is often THE most important thing in your business.
    .



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  16. #16
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Do not to figure your shop cost too electric, water and heating or cooling. It might be in the household budget but it still cost you. Since most new owners of a business is at home in their home shop they forget about the cost added there. Equipment cost are not always figured in to a job either for newbies in quotes. Yes have bought and paid for the equipment and at some point you will need to replace it too. Like other have said it's the small things that will make you successful or not. Basically do not forget the pennies looking at the dollars.

    Here is something that sticks in my head. The owner of a company was walking out on the floor of his shop one day. He was watching his employees cleaning up. Has he walked by one of the guys working he noticed that they sweep up some washers on the floor into a dust pan and was head to the trash with it. He stopped the guy before he made it and asked are you going to throw a way your next raise? The guy looked at him funny and answer no. He then asked him to look in the dust pan and said then think about what you are throwing a way. He looked and he saw nothing but thrash. Then the owner took the pan and went through it picked out all the good parts that was dropped that day on the floor to show the guy and said here is your raise going into the trash. This was only a few washers that had fell onto the floor.
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  17. #17
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by DSW View Post
    If your rates are $35-50 and standard going rate in your area is $85-100, then you are selling yourself way short or you are missing something big time. Leaving that kind of cash on the table simply doesn't make sense.

    I don't like to mark up materials either as many times it's too easy for clients to compare what I charge to what they can pay themselves and discrepancies can cause issues. However I've found it very hard to account for every nail, screw, piece of sand paper etc used on a job. To cover that I have to have some "fudge" in the billing to account for those expenses. That's part of what many use that mark up for. I usually itemize it as misc if I'm doing a detailed break down, but usually I just list "materials" and wrap that cost in with the rest and round up to the nearest round number. The other thing that often gets missed is time and fuel going to get materials, do estimates etc. That's another reason guys often do a mark up. That allows them to cover all that hard to recover time each job takes.

    It's also very hard to raise your rates later on. Often current customers think you are now trying to rip them off. That can often lead to bitter feelings and can hurt your reputation. Your reputation is often THE most important thing in your business.
    Thanks for the advice on starting with long-term rates. I was considering beginning at much lower rates in order to garner more business, but your points to the contrary make sense (for return business customers). I do think I will be offering somewhat lower rates to residential, or other customers I don't expect to have repeat business, though, as most of that type of work (pipe fence, tractor repairs, etc.) is much easier to perform and I'd like to build a reputation of fairness within that social circle, hopefully gaining business from natural networking.

    Just sent out my first estimate for my first contract, based upon the advice given thus far (taking into account minor costs, not being overly detailed in description of costs, etc.). Customer has accepted the cost, and I begin work (mostly just preparing surfaces for placement of fabricated parts) on my first job this coming Thursday.

    On my next weekday off, assuming I've found the time to locate a decent amount, I was planning on visiting the local smaller welding fab shops and offering my services for overflow/contractual business (hopefully securing a source or two of return business, for which I can confidently charge a comparable rate). My only concern is over-extending myself and having to turn down business; has anyone found that doing so has hurt their business in the long run (customers looking elsewhere in the future)?

  18. #18
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by SaskWelder View Post
    One thing to consider is that you need to realize the the tax collector will want his pound of flesh at the end of the year. I have heard many horror stories of fellas who have gone on their own and thought they were doing well until the year end, then realize that the government wants a check for $20k. Keep good records, as much of what you buy is going to be tax deductible, your welding gloves, coveralls, helmet cover lens, boots, safety glasses, etc; these are all expenses that add up. Find an accountant who specializes in small business and set up a good bookkeeping system.
    Thanks for the tip on record-keeping/taxes. I've grown up frugal and as such hate the idea of paying someone else to do work I believe myself capable of, but it seems like taxes/tax deductions are one field I'm not sure I have either the capacity or interest to learn on my own. Hopefully retaining an accountant won't bust the bank too badly... I've been looking at several local small business accountants and have meetings scheduled to discuss costs/services rendered.

  19. #19
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Buy undercutting the going rate what happens is the companies that are doing the work legitly iirc licenced and bonded and what not is drive down what customers expect as a fair rate what you might think is fair with with no overhead will have u kicking yourself later when u have overhead
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  20. #20
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Companies increase cost all the time. Clients should be expecting it. If he's smart, he'll implement small increases every year, overhead or not, while still keeping him competitive in the market. Not to mention, having overhead implies that the company is growing, which by extension means that he is building a larger client list and has more work. A 10% increase on one client will have the same effect on mitigating his overhead as a 1% increase on ten clients.

    There are ways to stay competitive.

  21. #21
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    My undercutting the going rate is temporary and all my clients know it, this encourages them to "get work done before my rates go up".

    In the beginning I would be using half of the farmers tools to do a job so I certainly didn't feel like I could charge the same as what a fully equipped truck would. But that is changing as I slowly get better set up, another week and I expect to have my Ranger 305G going again (run for 9 hrs then realized the motor needed a rebuild). Just got my arc air gouging equipment in the mail and other items are on order.

    The rates in this area had been at a ridiculous level when the price of oil was high and the local potash mine was in the middle of a $1.7 Billion expansion project.

    "I don't get out of bed for less than $150 and hour" was the brag made by one fella, well those days are over and that Hot Shot getting plenty of sleep now. The mine expansion is winding down and the oil patch is just idling along.


    Its back to normal now (whatever "normal" means) so the guys that banked on those high rates are upon some hard times. The rest of us will adjust our rates to keep busy and keep an eye out for used equipment that the hot shots will be selling off for cheap when their alimony and child support is due

  22. #22
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by SaskWelder View Post
    My undercutting the going rate is temporary and all my clients know it, this encourages them to "get work done before my rates go up".

    In the beginning I would be using half of the farmers tools to do a job so I certainly didn't feel like I could charge the same as what a fully equipped truck would. But that is changing as I slowly get better set up, another week and I expect to have my Ranger 305G going again (run for 9 hrs then realized the motor needed a rebuild). Just got my arc air gouging equipment in the mail and other items are on order.

    The rates in this area had been at a ridiculous level when the price of oil was high and the local potash mine was in the middle of a $1.7 Billion expansion project.

    "I don't get out of bed for less than $150 and hour" was the brag made by one fella, well those days are over and that Hot Shot getting plenty of sleep now. The mine expansion is winding down and the oil patch is just idling along.


    Its back to normal now (whatever "normal" means) so the guys that banked on those high rates are upon some hard times. The rest of us will adjust our rates to keep busy and keep an eye out for used equipment that the hot shots will be selling off for cheap when their alimony and child support is due
    I charge $75 an hour base for mobile price per hour goes up from there depending on what it is doing work here in socal. Carry a bond have a business licence i do structural and process piping and odd one off exotic materisl jobs
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  23. #23
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    $30/hr or even 40 is way to cheap if you're running a portable and supplying all the consumables and grinding discs etc. I would bet you make more at your regular job and everything is supplied. You cut rates too much and you pizz off the guys that do it full time. You'll run into cheap people that want a ton of stuff done and then figure they can haggle on the final price no matter what it is. That's another reason for a rate close to what the going rate is. It helps to weed out the dreamers that want their work done for next to nothing. Also don't be afraid to say no to jobs that could be a headache. Getting bonded might not be a bad idea either because then you can take a deposit up front before starting a bigger job.
    Last edited by Welder Dave; 06-14-2016 at 01:47 AM.

  24. #24
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by SaskWelder View Post
    My undercutting the going rate is temporary and all my clients know it, this encourages them to "get work done before my rates go up".

    In the beginning I would be using half of the farmers tools to do a job so I certainly didn't feel like I could charge the same as what a fully equipped truck would. But that is changing as I slowly get better set up, another week and I expect to have my Ranger 305G going again (run for 9 hrs then realized the motor needed a rebuild). Just got my arc air gouging equipment in the mail and other items are on order.

    The rates in this area had been at a ridiculous level when the price of oil was high and the local potash mine was in the middle of a $1.7 Billion expansion project.

    "I don't get out of bed for less than $150 and hour" was the brag made by one fella, well those days are over and that Hot Shot getting plenty of sleep now. The mine expansion is winding down and the oil patch is just idling along.


    Its back to normal now (whatever "normal" means) so the guys that banked on those high rates are upon some hard times. The rest of us will adjust our rates to keep busy and keep an eye out for used equipment that the hot shots will be selling off for cheap when their alimony and child support is due
    Did your 305G get overfilled with gas and flood the carb causing the cylinders to get washed down? It is not uncommon on the new machines.

  25. #25
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    Re: "New" Contractor Welder Looking for Advice on Quoting Services

    Quote Originally Posted by WeldorWes View Post
    Your going to want to get a business license and insurance. I carry 10 million in liability for the work i do
    Police actually set up stings to catch unlicensed contractors on craigslist
    Only in CA.

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