prototype work rates.

my question is this: what is the rate fore such work. (see details below)

well. I have been trying to start a small business. I finally landed a sort of open ended contract and for the last 4 months have been designing and prototyping some microscope stages in my home shop.

they consist of a 6061 t6 block with a 2 bored holes and 2 t slots and 2 dovetails to mount it on a base plate and a movable side attachment, all nonmagnetic 18-8 m4x.7 hardware. lots of slots, holes, countersinks etc.. +/1 .005" most features except mating dovetails .002" blablabla.... (I also have designed it cad and created drawings. I'll try to post a pic)

anyway, they take around 25 hours to complete. would be faster certianly in a production environment with fixtures, but these are one-offs with on the fly design changes etc.

I feel justified in charging $60. am I out or line? which way?

Thanks, Dan


--the last thread I started has a flaming folder, gee I wonder if I can do it again?
/kidding

WHAT???? You're working for less than three dollars per hour? I can't get my grass cut for that. Do you do windows?

60 an hour man. 1500 each.

the go in a 1.5 million dollar microscope.

ds,

My dentist charges $900 an hour, but if I charge $50 my customers become upset. Go figure. Labor rates and cost of living here are getting farther and farther apart. Wonder where it will lead. My guess is to get into making things that are truely needed by the living, regardless of the economy. (food industry, medical, dental,optical even making (gross) undertaking tools.) Auto shops here seem to be making more money than machine shops because the auto shops are needed and the machine shops are not. Ordinary tax people working out of their house here get $150/hour. Key industries seem to be not hurting at all. Gotta get my spread sheet out.

TMD

Oh thank God. I thought my dyslexia was showin up again. $60 an hour they are still getting off easy.

Well the short answer is, your customer is getting a good deal.
I am guessing you are lowering your shop rate...kinda "betting on the come"

I charge around 50-60 per hr. for manual work. The variance is because I like working for some poeple, and doing their projects, and some I don't. They get a higher price.

For cnc time including progrqmming and setup, I charge between $65-75 per hr.
Same reasoning applies to the per hr. variance.

For design time including AutoCad, Solid Modeling, and the requisite a$$ scratching time I charge $100 per hr. That is if I am even THINKING about thier project, or just doing research. (just like a lawer)

Best of luck on your new buisness,
Doug

ah, well I don't have a "shop rate" really. but I heard 55-65 somewhere as a general ballpark manual work rate.

I make 30 with decent benefits all day long modeling stuff, on the companies computers, space and electricity. I work in the contract engineering field and my time usually gets billed around 55-60/hr to the customer.

so I figured 60, on my own time, in my own house, with my own tools would make me happy. for now. I only have around 8000 in tooling and machines. I intend to use the proceeds from this job to upgrade the toy lathe, and perhaps even the old enco 9x42 mill.

(I also do paintball gun modification work. usually for much less. that's how I got started learning. those customers don't have very deep pockets, and there is a lot of cut rate competetion.)

Around here shops are charging $35-40 an hour. The local auto shop is $60 and diesel mechanic is around $80. At least these guys have a building and tools. I had a couple drywall contractors come out to look at 2 rooms. They wanted between $900-$1100 for 8 hours work and I bought materials. All they supplied was a warm body, a sharp knife, and a hammer. Did the job myself.

Had a landscaper come through with a job. Told him $35 an hour COD. Threw a fit about the price. But he charges $50 an hour to mow.I am sure that big mowers are expensive but I have a bigger truck than him and I am absolutly sure my 10EE cost more than his John Deere.

AS for your rate it is hard to say without knowing the part of the country your in but I doubt very much your out of line, at least not much.

everybody should have a ddr (drop dead rate) below which one doesn't go. Know yours in advance. Also, I would conisder how much time the job should take in a real machineshop environment and make some concessions to price if my equipment isn't what it should be, but never below the ddr.

Mebfab;

"Had a landscaper come through with a job. Told him $35 an hour COD. Threw a fit about the price. But he charges $50 an hour to mow...." ha ha ha! Yes! you hit it!

I like the kids who pay $85 for a case of paint balls. shoot them all in one afternoon with a $1000 pb gun. then want you to make a part for $10 an hour.

I like how you can buy sunglasses for 100. woopee. but a lawnmower, with all it's parts and machnining can be bought for 100.

/rant. I'm done.

you made my day.

I was talking about the machine shop rate dilema with another shop the other day. I can understand a Doctor or other skilled tradesman charging a high hourly rate. But many of the skilled trades charge 2-3X as much as a machine shop. Some of them are capitol intensive but not as much as a machine shop. Plus the education and training involved in a machine shop.

Also, I would conisder how much time the job should take in a real machineshop environment and make some concessions to price if my equipment isn't what it should be

Exactly what I was thinking!

Think Snow Eh!
Ox

Hi Dan;

Working out of my garage, if a customer knows what they want, has prints and material I'll work for $35/hr. If I have to figure out what the customer wants, I charge $40/hr. There is no quoting either all time and material. I keep track of time and invoice accordingly.

I figure my rate is dirt cheap but for now I'm having fun earning beer money and
jetski fuel. Also, my overhead is near "0".

When I retire in 21 months (or get fired before) I plan to run my garage shop on a full-time basis. The increased service should justify raising rates to $40 or $45/hr. It all depends on how much the phone rings.
Jim



[This message has been edited by JimGlass (edited 11-01-2003).]

Well Doug;

The effectiveness of a machine shop has little to do with size and capital investment. Efficiencey is most important and that lies with how well the shop owner knows how to use what he has.

My shop is 12 x 24 and attached to a 24 x 24 garage. It is well lighted, heated, cooled, dehmidified and very well organized. I don't have every tool there is but I know how to use what I have. I can make complex setups in a matter of minutes partly because everything is a few steps away.

Customers see this efficient little machine shop that has almost no overhead and one person to deal with, me, the owner. Lots of "bang" for the buck. I have between
10 and 12k invested. My limitations are mostly in size of work. I have no lifting equipment. I think small machine shops with low overhead have potential in the future. A small shop has service and a level of teamwork a larger shop often will not have.
Jim




[This message has been edited by JimGlass (edited 11-01-2003).]

[This message has been edited by JimGlass (edited 11-01-2003).]

I agree with Jim G. One of the advantages that some of us one man, semi-hobby shops provide is actually listening to the customer. And keeping them out of trouble. While i've never come close to $60/hr for machine work, generally get about half that; but that is not really much discount on a "real" shop around here these days on a per job basis. I won't take on something i can't do reasonably efficiently and have sent some decent jobs to other shops that had more practical equipment for doing them. But there is a lot of low tolerance work as well as gizmo & tool making, and production machine modification and maintenance that can pay pretty well if you serve people who need the devices to make money. Frequently the most critical need is not which guy has the best machine and the fastest time on it; but the one who can visualize the entire problem, future ramifications and maintenance issues, and provide a solution that does not lead to other problems down the line.

Absolutely no intention of suggesting that most machine shops don't do the same. But the approach is different. Traditionally, shops are geared to getting the work on a machine and getting it done, despite having a high built in OH factor for office staff, etc, as well anyway. I can take the time they've already spent as non-producing staff labor overhead, and use it to do some design, hand holding, and "engineering". The mind set is "If I take this job on, can i realistically solve the (big picture) problem and make a fair return."

More frequently, I think the potential customer meets a mindset that is "You don't have enough information, so we can't do that because it would eat up too much time." Or often even worse, "don't worry, we'll throw it on the grinder and have you out the door for a couple hundred bucks" without stopping to understand that the person who thinks he needs a part ground may (as a recent example) really need something in his machine aligned. Grinding the supposedly defective part (actually, grinding the suposedly "obvious" surface of the genuinely defectively made part) would have made the machine run worse. Both by creating an out of balance situation, as well as building in a bias in alignment that would cause other problems, most likely without even solving the immediate ones. Not to mention that another replacement part from Germany would then have cost a couple thou$and.

Perhaps my intended summary is that it does not matter what equipment is in your shop or what the shop looks like if you match it effectively to the work you accept; and provide, overall, efficient _solutions_ to your particular customers, as opposed to just efficient machine times.

It sounds like Dsergison has this down. The market will inform him if otherwise. If his customer decides that he provides no extra value as a problem solver and the part could be made for nickels on the dollar on someone's machining center for small batch lots, it will happen. If it looks like that could be the case, a pre-emptive action might be to do the programming and planning so as to sub it out to a cnc shop, and keep the contract by drastically reducing the part cost while increasing the actual profit margin.

OTOH, if the part is relatively simple (after one has been made) and D. decides he has a lifetiume gravy train, it is likely someone else will eventually get wind of it and take it away for 1/2 the price unless the relationships are very close.

Darn surprising, too, how often work depends on traditional or close relationships rather than price.

smt

Maybe I'm lucky, or maybe it's a curse to live in an area where most people are not welding and machine work experienced. Most people bring me a job that they could have fixed themselves with their "buzzbox" welder, but they know if they bring it to me first, it will get done right the first time and will be repaired stronger than the original, at less than half of what a dealer would charge them for the part. My regular customers never ask for a quote because they know the value of a job well done. I charge 30$ an hour, while most of the small engine or auto repair shops are at least 45$an hour. The hardest part is putting a value on time spent figuring out why something broke and how it should be re-built to eliminate the weak spot. It is hard to say that in a half hour of thinking, how much is directly related to the job!

When I buy machine shop work I look for a shop who does enough business to be able to eat the job if they mess it up and come through in the end with no whining. I figure I made a mistake when some small shop guy ruins some expensive material and then begs off or goes out of business because he can't afford to do the job over. I like to have a machine shop vendor supply the material so they know where to go when they need more or if they screw up. I supply up front money for the material along with the purchase order when the material cost is over a few thousand dollars or even a few hundred dollars if it is a small shop. I usually buy work on a fixed price turn key basis with a lot price if there is multiple pieces. As long as the fixed price is in line with other bids I am not concerned with the hourly rate. I almost never pay for something on an hourly rate because a slow vendor with inefficient machinery and a poor work plan costs me money with no control.

This post will be a bit long winded. Sorry.

After losing my shirt on some jobs a few years ago, a wise old toolmaker told me that "If you are going to run a business, you have pay yourself first just as you would have to pay your employees". So, by following this advice, you need to figure what your time is worth per hour(what do you need to pay your bills), what your overhead is going to be,ie: the estimated cost of electric, water,& HVAC for your work space, and taking the square footage that you are using at your home and comparing it to the local cost per square foot in the area you live in for industrial/commercial space(you will need this at tax time if they file a 1099). The estimated overhead costs divided by 2080 will give you the hourly burden rate for your overhead. Add to this the amount per hour that you think your time is worth, and this should be your base rate without any mark-up for profit, or tooling and material costs(raw material, secondary outsourced proccesses ie:heat treat etc., packaging and shipping materials). These costs are often overlooked "voice of experiance". If you are totally self- employed, do not forget that you should think about benefits costs as well(remember PAY YOURSELF FIRST). You should have one rate for manual machining, one for CNC machining, and if you are doing large lot production you will need a rate with wiggle room on the now price per piece as opposed to a straight hourly rate.
The things that I learned were, that no matter how low the rate, everyone complains that since you are doing it at home it should be as close to free as possible and if they say that they can buy it for less elsewhere, do not hesitate to tell them to do so, politely of course. I hope this helps. I charge around $45.00 Hr for manual work and $90.00 Hr for CNC. I take food and adult beverages or work in kind as payment for quickie jobs(less than 1/2 hour)for friends and family. If you do it for nothing all the time they will tend to take an unfair advantage after a while and you have to live with family.

[This message has been edited by ARFF79 (edited 11-02-2003).]

Good words, ARFF79.

wow, thanks for the input.

I put alot of time in these things in the planning and designing and I make them very efficiently whith the tools I have. In fact, I consider that to be part of the value. I have taken concepts that would be near impossible to produce and designed the parts such that the can actualy be made reasonably.

60/hr may be high for this manual work, but there is alot of time that I don't keep track of, when I'm lying awake at night or sitting on the pot thinking about how to do it better I also have not actually counted the design time. I suppose it probably is more realistically in the 45 range all together. I need to work on how I tack my time. it's very hard to do.

also, it's ONE STOP SHOPPING design through delivery.

The plan is actually to subcontract the machine work when/if the design goes mainstream.

have fun, make chips.