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Suzuki4evr

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#1
Hallo members.

I know most of the members do all of this just for fun and to keep away under their wives feet,but some of us also need to make money doing what we like doing.

My question to you is, how do you bill your customers? Bill per hour or per job or a combination? Because sometimes a per hour rate seems a bit much on SOME jobs and other times it is the other way around. What are your thoughts. .......just for interest sake?
 

pacifica

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#2
people like billing per job since it is a set amount. Of course you need to know how much to bill to make money on the job.
 

Cooter Brown

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#3
Machining jobs start at $75 minimum and TIG welding is $5 a tack $5 an inch, but I dont have a CNC...... yet!
 

francist

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#4
Both ways.

I used to do a job (piece work) that was repetitive and largely the same within certain variations of size, material, etc. It came around again and again, and I had it down to a fine line within a few minutes per piece. For that job I billed by the quarter hour, and both I and the customer were happy.

On other things, especially things I'd never done before, I would bill a flat rate for what I expected it should cost if the customer had gone to another place. I recognized that my machines were not all production machines and therefore I would not be able to do it as fast as a production shop. I also recognized that there may be a learning curve to what I was doing, so I allowed for some 'what the heck?' time. And finally, I always kept in mind that I was not having to pay shop overhead, and that whatever I was making was basically keeping me in tools and equipment. My day job paid for all my other regular living.

This may not be your exact situation, and I'm sure there are those that may feel I sold myself short. And maybe I did. But I liked the work, wanted the challenges and the experiences, and I think the customer appreciated my honesty. It worked for a long time, and probably still would if I cared to still do it.

-frank
 

magicniner

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#5
I've just developed a feel for how long stuff takes and generally price the job, I've been machining for some while now though ;-)
 

Ulma Doctor

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#6
if i bill a customer- it's $85/hr + materials, flat rate
if it's by the piece, i generally sell if for around double what you could buy it at a store, if it were to exist.
for example, i make small custom bushings for food processing conveyors.
the bushings are not offered in custom OD's by any factory that i'm aware of.
a standard OD bushing may cost about $6, but if i have to make it it will cost the customer $13.50 each
i dial in a turret lathe and make 30 or 40 of them in a couple hours (30 pieces x $13.50 = $405 :grin: )

the customers are stoked because it save them extensive repairs and downtime-
i'm stoked because i get to play with my turret lathe and get paid having fun!!! :grin:
 

P. Waller

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#7
Hallo members.

I know most of the members do all of this just for fun and to keep away under their wives feet,but some of us also need to make money doing what we like doing.

My question to you is, how do you bill your customers? Bill per hour or per job or a combination? Because sometimes a per hour rate seems a bit much on SOME jobs and other times it is the other way around. What are your thoughts. .......just for interest sake?
Location is often plays an important role in the cost of such work, if you are located in an area with a good deal of manufacturing there will be many large and small businesses that feed off of the manufacturers, the market sets the price. If you live in rural Nebraska and the nearest machine shop is 150 miles away charge whatever you can get.
 

dulltool17

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#8
Since I do this for fun, If I agree to make something for someone, I just ask them to cover the material. The machining I do for my own entertainment.
I made a ramrod with detachable ends that doubles as a cleaning rod for a muzzle loading carbine I sold to a fellow at work. $50 of brass.
I made a set of surf rod holders for my boss. He furnished the materials.
I've made a number of tools for my product assembly (real job) cell. As the Manufacturing Engineer, crazy ideas frequently come to mind. Company-furnished material used. I get to be creative, make improvements and someone else foots the bill..
 

JimDawson

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#9
I normally bill by the job at $80 - $150 / hr rate depending on the machine. But some jobs just aren't worth that kind of money, so I just bill what the job is worth. There are a lot of factors that go into calculating the worth of a job. When does the customer need it, who is the customer, is this for commercial use or just somebody that needs it for personal use. Large corporations get charged full price, a mom and pop shop maybe not so much. If I'm doing something for the neighbors then I might do it for a cheeseburger. :)
 

Bob Korves

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#10
I am a hobby machinist, pure and simple. I have turned down quite a few paying projects, simply because I would rather be working on my own projects. Still, if I was to do paying work, it would likely be $X for the work, $2X if you watch, $3X if you help...
 

Mark Needham

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#11
ever had a bill from a Lawyer/Solicitor. There is always the last item....
Sundries. Paper, Ink, Coffee,Postage. $10.00
then, there is this..

“Charge ’em for the lice, extra for the mice
Two percent for looking in the mirror twice
Here a little slice, there a little cut
Three percent for sleeping with the window shut
When it comes to fixing prices
There are a lot of tricks I knows
How it all increases, all them bits and pieces

Jesus! It’s amazing how it grows!” "
 

mmcmdl

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#12
Location is often plays an important role in the cost of such work, if you are located in an area with a good deal of manufacturing there will be many large and small businesses that feed off of the manufacturers, the market sets the price. If you live in rural Nebraska and the nearest machine shop is 150 miles away charge whatever you can get.

This sums it up perfectly . The job has a price and if you're not willing to it for that price , someone else will . If my customer has a line down that's costing him 10 grand an hour , charge him accordingly . If it's someones personal job and he's not in a hurry , do the same . I always provided 24 hr turnaround time that the larger shops couldn't provide and I was always busy . Over time , you'll get the hang of how bad somebody needs or wants their parts .

Not sure how it is these days , but years back , invoices to larger companies from smaller companies such as mine were always put on the back burner . 30 days turned into 60 days , 60 to 120 , to never , etc . That is why I no longer do business with them and if I do something for someone , it's cash in hand . If not , go somewhere else . :)

And just FYI , my manufacturing plant moved out to rural Nebraska 2 years ago . :grin:
 

Mitch Alsup

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#13
One thing to remember is to include the time to clean the shop back to where it was before the job started.
 

Boswell

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#14
No one has mentioned tolerances. I would think that a job with low tolerances would be faster and thus you would charge less than a job with very tight tolerances. Also quantity should play a part. If you only make one, then you have to recover all the costs in a single part and there is no "learning curve". If your order is for 100 of something, it makes sense to spend a little time working out efficiency angles such as making a Jig to hold the parts so you don't have to indicate each one or just the fact that you you can expect to be faster on the 100th part compared to the first part.
 

Winegrower

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#15
If I tried to charge for this stuff I would lose interest pretty quickly.
I admire those who can actually make money at this.
 

P. Waller

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#16
No one has mentioned tolerances. I would think that a job with low tolerances would be faster and thus you would charge less than a job with very tight tolerances. Also quantity should play a part. If you only make one, then you have to recover all the costs in a single part and there is no "learning curve". If your order is for 100 of something, it makes sense to spend a little time working out efficiency angles such as making a Jig to hold the parts so you don't have to indicate each one or just the fact that you you can expect to be faster on the 100th part compared to the first part.
This is the most obvious conclusion that I have ever come across on a hobby machinists forum, bravo MR Boswell.
If I had charged every single car, motorcycle, antique, RC car/boat/plane, machine tool, woodworking, stamp/coin collecting, gardening, home restoration, architect, inventor, fisherman, cyclist, gardener, lawn care technician, general cheap person enthusiast far more they would have went away quickly, I did not do this quickly enough, lesson learned.
 

westerner

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#17
If I'm doing something for the neighbors then I might do it for a cheeseburger.
This is a great question, and some great responses! I have sidejobbed for decades, and everything said previously has merit! There is no easy, one size fits all, answer to this question. Your individual situation and the degree of primary income derived from this situation will dictate. My rates are:
Some customers get charged the "full bore, grief and aggravation" rate. Some get the "friendly local return customer" rate. Some, I just do the job to get to hang out with them. I have fired customers I simply could not get along with.
Good thing this aint my main line, for surely I would go broke!
 

john.k

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#19
Nowdays,I would think it very wise to charge and pay electronically,and keep all records of your expenses,and be very aware of the procedures for deductions etc...........Its so easy for the IRS to catch up with you,that full compliance is very wise.,including declaring cash income......usually you or your accountant can claim more in deductions that you actually earn,..............now this this advice comes from an old time tax evader,who never got caught,but it will cause difficulties if you want to expand ,or organize finance.....Also ,sooner or later ...someone will drop a dime on you to the tax,state,or county...........so best to know everything before you start.
 

P. Waller

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#20
And $4X if you worked on it before:big grin:
10 X if they insist on watching. 20 X more if they insist on HELPING and do not understand what go away means.
A humorous anecdote, on a Saturday, (Never Leave The Door Open On A Saturday) this is when the hobbyists (by hobbyists I do not mean hobby machinists but every hobby including every cheap bugger that thinks that they can fix their 30 year old Maytag washer) and cheap people prowl about.
The shop owner left the door unlocked and lo and behold some guy walked in with fairly detailed drawings for a lathe part, 1 part only.
Steel
The Shop Owner shows me the drawing and asks how long will it take, I tell him that we have the 2"+ material in stock and the part is 2" max diameter x 3" long so 3 hours max.
The customer was not buying $12.00 worth of material.
I brought the material says he, it was a nasty rusty 5" diameter X 5" long piece of unknown steel.
He did not understand that turning a 5" diameter blank to less then 2" would take a good deal of time even using a CNC lathe not including drilling, boring and threading a hole in the center an a few other features.
My employer told him to go away. Which I found nice after 30 years of dealing with these people when I owned my own shop.
 

Suzuki4evr

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#21
10 X if they insist on watching. 20 X more if they insist on HELPING and do not understand what go away means.
A humorous anecdote, on a Saturday, (Never Leave The Door Open On A Saturday) this is when the hobbyists (by hobbyists I do not mean hobby machinists but every hobby including every cheap bugger that thinks that they can fix their 30 year old Maytag washer) and cheap people prowl about.
The shop owner left the door unlocked and lo and behold some guy walked in with fairly detailed drawings for a lathe part, 1 part only.
Steel
The Shop Owner shows me the drawing and asks how long will it take, I tell him that we have the 2"+ material in stock and the part is 2" max diameter x 3" long so 3 hours max.
The customer was not buying $12.00 worth of material.
I brought the material says he, it was a nasty rusty 5" diameter X 5" long piece of unknown steel.
He did not understand that turning a 5" diameter blank to less then 2" would take a good deal of time even using a CNC lathe not including drilling, boring and threading a hole in the center an a few other features.
My employer told him to go away. Which I found nice after 30 years of dealing with these people when I owned my own shop.
I tell the I don't know what material it is and won't use it,because I don't know how hard it is. If they like it,there is the door (polite as possible off corse ).
 

RJSakowski

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#23
Charging time and materials would seem to be the most fair way to bill, especially on one off jobs. There are some considerations however. In my experience, the first part takes twice as long as the second part and maybe three times as long as the third. There is no comparison, efficiency wise, of a large part done on a 6" lathe and and on a 15" lathe. IMO, it would be unfair to the customer to bill at the same hourly rate. Hourly rates are often assigned to machines because in a production shop, an idle machine isn't earning money. The objective is to keep the machines running as close as possible to full time operation. A large VMC might command a hourly rate in the hundreds of dollars while the small manual lathe only in the tens of dollars. Materials should be billed at a rate comparable to the cost of replacement rather than the actual cost. Most production shops stock materials in bulk in order to have stock on hand and to take advantage of volume pricing. I would think it reasonable to bill the customer what it would cost ordering the necessary material from McMaster Carr or Online Metals Don't forget to add in wear and tear on tooling. For off the wall jobs that require some experimentation or additional preparation to fulfill, that would be a legit add on. Finally, would be the "need it yesterday" jobs. Of the customer expects you to wirk through the night to meet his need, he should also expect to pay for that additional service.

As for my own situation, I am not expecting to make money from any jobs. I retired from working five years ago and do not feel compelled to re-engage. I will do jobs for friends and neighbors. When they ask me how much, I tell them,"you can't afford to pay my rate, so no charge. Pass the favor on to the next person." I look at it as building my credit so if there is a time when I need a favor from them, I don't feel guilty about asking. The exception is if there is a significant amount of materials required, I would ask them to either provide them or pay for the materials.

In the end, each individual has to decide for himself what is fair. If you are undercharging, you won't stay in business very long. If you are overcharging, customers will gradually drift away. A few years back, our company was dealing with a startup job shop. The owner didn't have much in the way of equipment and so lower operating costs and his rates were on the low side. He also took on jobs that other shops deemed too small to bother with. This would have been ten years ago. The last few times that I have stopped in, his business has been growing by better than 50% aq year. He now has three VMC's and a CNC lathe, as well as a number of manual machines and this last year, opened a second shop in California in addition to the Wisconsin operation. He took a calculated risk in pricing attrasctively and taking on jobs that weren't that profitable to build a loyal clientele base which has served him well.
 

Bob Korves

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#24
Charging time and materials would seem to be the most fair way to bill, especially on one off jobs. There are some considerations however. In my experience, the first part takes twice as long as the second part and maybe three times as long as the third. There is no comparison, efficiency wise, of a large part done on a 6" lathe and and on a 15" lathe. IMO, it would be unfair to the customer to bill at the same hourly rate. Hourly rates are often assigned to machines because in a production shop, an idle machine isn't earning money. The objective is to keep the machines running as close as possible to full time operation. A large VMC might command a hourly rate in the hundreds of dollars while the small manual lathe only in the tens of dollars. Materials should be billed at a rate comparable to the cost of replacement rather than the actual cost. Most production shops stock materials in bulk in order to have stock on hand and to take advantage of volume pricing. I would think it reasonable to bill the customer what it would cost ordering the necessary material from McMaster Carr or Online Metals Don't forget to add in wear and tear on tooling. For off the wall jobs that require some experimentation or additional preparation to fulfill, that would be a legit add on. Finally, would be the "need it yesterday" jobs. Of the customer expects you to wirk through the night to meet his need, he should also expect to pay for that additional service.

As for my own situation, I am not expecting to make money from any jobs. I retired from working five years ago and do not feel compelled to re-engage. I will do jobs for friends and neighbors. When they ask me how much, I tell them,"you can't afford to pay my rate, so no charge. Pass the favor on to the next person." I look at it as building my credit so if there is a time when I need a favor from them, I don't feel guilty about asking. The exception is if there is a significant amount of materials required, I would ask them to either provide them or pay for the materials.

In the end, each individual has to decide for himself what is fair. If you are undercharging, you won't stay in business very long. If you are overcharging, customers will gradually drift away. A few years back, our company was dealing with a startup job shop. The owner didn't have much in the way of equipment and so lower operating costs and his rates were on the low side. He also took on jobs that other shops deemed too small to bother with. This would have been ten years ago. The last few times that I have stopped in, his business has been growing by better than 50% aq year. He now has three VMC's and a CNC lathe, as well as a number of manual machines and this last year, opened a second shop in California in addition to the Wisconsin operation. He took a calculated risk in pricing attrasctively and taking on jobs that weren't that profitable to build a loyal clientele base which has served him well.
Excellent post, RJ!
 

samthedog

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#25
I take on jobs and normally calculate based as such:

- Material cost (includes time to order, pick up and any taxes and freight charges. Also applies if I am using off-cuts or scrap)
- 1.5 X estimated hours X hourly rate (I also add the time it takes for the customer to explain what they want)
- Cutting tool wear (about 15% - 30% depending on the size of the job)

I also add to the cost if the job is after hours and double time on a Sunday. My hourly rate has the wear of the machines / lubricants calculated into it and the electricity cost as well.

This prices me on the high end of one-off jobs but these are normally the ones they can't get anyone to do because the big shops are not interested. The last job I did was a prototype sensor mount for a venturi flow meter and I charged that out at $175 an hour because it was needed next day and I had to work on it after hours. It took me 4 hours total as it had a difficult set up. In the end I billed the customer for $750 because it also included materials. The customer was overjoyed as their old supplier would need a 2 month lead time to slot the work in-between production runs. They were able to demonstrate their prototype to the customer next day so they were very pleased.

The thing is that I don't run a shop to make money as I have an engineering company for that. This puts me in a position to only take jobs that either pay very well or I find interesting. I also do freebies for folks who can't afford to pay and need some help so it's not always strictly business.

Paul.
 

Janderso

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#26
I am a hobby machinist, pure and simple. I have turned down quite a few paying projects, simply because I would rather be working on my own projects. Still, if I was to do paying work, it would likely be $X for the work, $2X if you watch, $3X if you help...
We have a similar rate at our shop!
Some mechanics over the years just stop working if a customer decides to watch.
 
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