Pay Rates for employees. New to Expert.

[michiganbuck]

For what reason was 3 weeks of parts not inspected before the 3 week mark??

The owner, the inspector and the boss were all too busy to pay attention to the business..

Should have had a $100 an hour guy if running the whole shebang.

 

[William Payne]

This thread has made me think about the different people I have met over the years in various different types of businesses.

I in my personal life am a minimal debt guy. I don't have a credit card or any personal loans only a mortgage. If you can do that in a business setting I say great, awesome, go for it. However for the time that debt is necessary have a plan to pay it off as that is going to play a big part in your profits because your profit percentage per job will go up as your payments go down and eventually are paid off. The guy with no debt is going to be better off than the guy with debt (machine payments for example). Obviously for most normal people machine payments are needed but have a way to pay it off as soon as you can.

Another interesting scenario I personally saw was where a guy had all the awesome toys and a race car and all the flash but spending money on the business was a big problem for him, he would spend thousands on his personal life but spending dollars on a small tool for his business was a struggle. In fact that gentleman wound up selling his business to another gentleman who turned it into a very successful company, it was a difference in mindsets, the new owner wound up owning many businesses but he was all about taking a short term loss to have a long term gain.

I also vividly remember a guy who was honest about wanting to retire a millionaire successful business owner, but when it came time to buying new equipment he was always hesitant due to cost. Which is smart to be careful with your spending don't be stupid and spend money you can't afford. But when you are complaining about not having money to do something but drive a brand new truck and have all kinds of recreational toys maybe its time to look at where your money is going.

I know some wealthy people and sure they may have a nice house or a nice vehicle but most of the wealthiest I know live very modestly and don't really show off. They played the long term gain with multi year plans.

I would love my own business and am working towards one day doing that but for me I have to know that the ROI is going to be there when I make an investment in something.

 

[Hillside Fab]

...

I would love my own business and am working towards one day doing that but for me I have to know that the ROI is going to be there when I make an investment in something.

Nothing is sure in life. As you already know, limit your personal expenses. Figure out what you think you want to do.

Find a cheap, and expandable, place to put some used machines and get your name out there. Dont quit your day job until you cant keep up. Dont make scrap, dont miss too many deadlines, communicate like a normal human, and buy better equipment when you cant keep up.

It definitely helps to own skates and make friends with the local crane guys in this line of work.

Also be flexible, what you start out planning to do and where you end up in 3 or 5 years will probably be a lot different.

 

[Hillside Fab]

It has been a thought of mine for awhile. There is a reason I haven't done it. Mainly I just don't have the capital. I know there are many successful entrepreneurs who have started out in this same way, though. I have met a lot of them. But we don't need to go into a discussion on global economic trade policies necessarily.

There was another comment earlier in the thread that was basically saying "I wonder if these owners need to look at the viability of their business if they cannot afford it" and I would have to agree with that. Just like many of the small businesses (non mfg) out there need to look at their viability as a business to see if their business model can sustain the level of labor they need to keep the business functioning. A non mfg trinket shop might necessarily need to raise their prices across the board over time. It happens all the time! The big players are doing it in food - shrinkflation. You buy a bag of chips that used to have 12oz at $3. Now they are selling a 10oz bag of chips for $3. Same price, lower cost of goods. It is shady but it is happening.

If a company is say, quoting jobs at a shop rate of $75, is there any reason that that shop could not begin ramping up their shop rate over a period of say, 6 months or a year? Go from 75, 78, 83, 85? In a period of 6 months that owner is generating 13% more revenue by increasing their shop rate a small amount.

Look, I don't have all the answers and I certainly this is an unprecedented time in the markets as a whole. I am not an MBA. Labor is shifting and the economy is moving under foot every day. But one thing I am certain of - wages are not going to go down. Wages are going to continue trending up from here until the end of time, as they always have done. The shrewd business owner will need to adapt to those changing conditions if they expect to sustain the business. Does that mean investing in automation? Probably yes. Investing in modern technologies? Definitely yes.

The OP said that he wasted 3 fucking weeks of production which was all scrap because of a poor hiring decision. The general consensus across the board here is that he/she need to pay more for talent. Which one is more expensive...paying a fair wage for talent, or constantly scrapping weeks of production because you can't trust your guys? I don't want to shit all over OP but he/she posted it in a public forum. For what reason was 3 weeks of parts not inspected before the 3 week mark?? That goes back to the running of a business and that type of scrapping is not a sustainable business model.

I mostly agree with you. Only took issue with the part that we should all charge whatever we want to. Most owners/salesmen are already quoting as high as they can and still get the work.

 

[chuckg7442]

This thread has made me think about the different people I have met over the years in various different types of businesses.

I in my personal life am a minimal debt guy. I don't have a credit card or any personal loans only a mortgage. If you can do that in a business setting I say great, awesome, go for it. However for the time that debt is necessary have a plan to pay it off as that is going to play a big part in your profits because your profit percentage per job will go up as your payments go down and eventually are paid off. The guy with no debt is going to be better off than the guy with debt (machine payments for example). Obviously for most normal people machine payments are needed but have a way to pay it off as soon as you can.

Another interesting scenario I personally saw was where a guy had all the awesome toys and a race car and all the flash but spending money on the business was a big problem for him, he would spend thousands on his personal life but spending dollars on a small tool for his business was a struggle. In fact that gentleman wound up selling his business to another gentleman who turned it into a very successful company, it was a difference in mindsets, the new owner wound up owning many businesses but he was all about taking a short term loss to have a long term gain.

I also vividly remember a guy who was honest about wanting to retire a millionaire successful business owner, but when it came time to buying new equipment he was always hesitant due to cost. Which is smart to be careful with your spending don't be stupid and spend money you can't afford. But when you are complaining about not having money to do something but drive a brand new truck and have all kinds of recreational toys maybe its time to look at where your money is going.

I know some wealthy people and sure they may have a nice house or a nice vehicle but most of the wealthiest I know live very modestly and don't really show off. They played the long term gain with multi year plans.

I would love my own business and am working towards one day doing that but for me I have to know that the ROI is going to be there when I make an investment in something.

I believe that mindset has a lot to do with a business succeeding or failing, not to say money isn't a factor. It takes money to make money.

 

[CITIZEN F16]

If a company is say, quoting jobs at a shop rate of $75, is there any reason that that shop could not begin ramping up their shop rate over a period of say, 6 months or a year? Go from 75, 78, 83, 85? In a period of 6 months that owner is generating 13% more revenue by increasing their shop rate a small amount.

Since the OP can't practice this because he doesn't have a shop, 10 select people should try this and get back to us, after a 6 month test. If even one person has success I would be shocked. A customer who has a frequently repeating order showing price increases will blow a gasket.

 

[Trueturning]

Medical device manufacturing is one of the few maker industries left that still operates in a fantasy world.

$1,000 for one bone screw, give me a break.

Open the floodgates to 3rd world competition in medical manufacturing (they are closed, due to safety, FDA, quality, blah-blah) and you would start to see the prices of the products made in this industry nosedive, just like many other industries in the U.S. over the last 30 years.

ToolCat

There are very good reasons for that. These places if they survive and thrive pay better than other shops. Too since it is for the medical profession there is a serious mindset and a aversion to mistakes and expensive errors.

I know of some in business for years in different areas and they do not sub parts out that I know of ever. They even heat treat their own parts. That is because they want quality and they control it themselves doing better work on their own stuff than a outside vendor would most likely care to do.

 

[michiganbuck]

OT: The $1000 bone screw? is that price including installation, room with a view, the high cost of professional workers (Doctors and the like) use time if expensive machines...and meals?

 

[Trueturning]

Nothing is sure in life. As you already know, limit your personal expenses. Figure out what you think you want to do.

Find a cheap, and expandable, place to put some used machines and get your name out there. Dont quit your day job until you cant keep up. Dont make scrap, dont miss too many deadlines, communicate like a normal human, and buy better equipment when you cant keep up.

It definitely helps to own skates and make friends with the local crane guys in this line of work.

Also be flexible, what you start out planning to do and where you end up in 3 or 5 years will probably be a lot different.

Realize before all the investment and hard work exactly what the cost of this can be vs another effort. There are a fair amount of people who have done exactly this and so there is competition. There could be very heavy competition. So just a consideration if someone wants to do whatever then they likely are good craftsmen and know how to get the work done just fine. There is familiarity and proven skills-hopefully.

 

[mhajicek]

OT: The $1000 bone screw? is that price including installation, room with a view, the high cost of professional workers (Doctors and the like) use time if expensive machines...and meals?

In my experience, it's $6k for a complete set with several screws, a bone plate, and instrumentation, some of which is single use, the rest needs to be resterilized and reinspected.

 

[kustomizingkid]

Everyone here bitches about the race to the bottom with the left side of the their mouth and then out the right side are crying about the actual cost to profitably manufacture medical parts. The irony.

 

[jccaclimber]

Everyone here bitches about the race to the bottom with the left side of the their mouth and then out the right side are crying about the actual cost to profitably manufacture medical parts. The irony.

It goes really nicely with complaining that you can’t make any money working as a machinist while grumbling about how much you have to pay employees.

 

[kustomizingkid]

It goes really nicely with complaining that you can’t make any money working as a machinist while grumbling about how much you have to pay employees.

A little surf and turf is nice... drown the whole thing in melted butter.

 

[Hillside Fab]

Realize before all the investment and hard work exactly what the cost of this can be vs another effort. There are a fair amount of people who have done exactly this and so there is competition. There could be very heavy competition. So just a consideration if someone wants to do whatever then they likely are good craftsmen and know how to get the work done just fine. There is familiarity and proven skills-hopefully.

I'm not sure what your point is? Lease new stuff and pray you can actually generate sales? Hotdog cart? This has been discussed 1000 times on here. The two guys I was responding to, one lacked funding, the other lacked confidence. You can wait forever to try something when the time is perfect (it never is), or start iterating now.

If you dont want to work 16hr days for months on end, dont start a new business.

 

[LatheLizard]

A cheap employee leeching time and productivity off the shop costs more than an expensive badass in my opinion.

 

[Big B]

Medical device manufacturing is one of the few maker industries left that still operates in a fantasy world.

$1,000 for one bone screw, give me a break.

Open the floodgates to 3rd world competition in medical manufacturing (they are closed, due to safety, FDA, quality, blah-blah) and you would start to see the prices of the products made in this industry nosedive, just like many other industries in the U.S. over the last 30 years.

ToolCat

I think screws are only $900 each. The medical community uses pins and pins probably cost more. At least that's what they called them on the two occasions that I've had the misfortune of having them invade my body.
They have threads and a drive socket but they call them pins.

 

[Big B]

Most medical devices are over engineered and have ridiculous tolerances, even where completely unnecessary, and that drives prices. I only have one medical customer, very small, wish I had more.

I was doing some work for a medical manufacturer a few years ago. Everything had to be either stainless steel or anodized aluminum. They didn't mind paying the long dollar either. I was deep into a big job and they called and asked me when I could make some aluminum parts and I told then that it would be at least a couple of weeks. They said mark them up from my normal rate to whatever I needed to make them go to the head of the line. I shot them a price and they said go ahead. I made about $350/hour on that job. It was only a few hours work but I shorted me of sleep and I don't like working when I'm overly tired.

They eventually bought a few machines and hired a maintenance guy that knew how to run them and the party was over.

 

[Trueturning]

I'm not sure what your point is? Lease new stuff and pray you can actually generate sales? Hotdog cart? This has been discussed 1000 times on here. The two guys I was responding to, one lacked funding, the other lacked confidence. You can wait forever to try something when the time is perfect (it never is), or start iterating now.

If you dont want to work 16hr days for months on end, dont start a new business.

Shouldn’t a person weigh other opportunities before they spend their money or borrow it from someone?

That is all I am saying.

Opportunity cost is a point in itself.

Working long hours of 16 hour days are not to great for the circle of life balance. Neither is working a night shift. There are considerations always. No one has to believe that and they should do what they want.

Just points to consider or not.

 

[Hillside Fab]

Shouldn’t a person weigh other opportunities before they spend their money or borrow it from someone?

That is all I am saying.

Opportunity cost is a point in itself.

Working long hours of 16 hour days are not to great for the circle of life balance. Neither is working a night shift. There are considerations always. No one has to believe that and they should do what they want.

Just points to consider or not.

That's essentially the hotdog cart argument.

Believe whatever you want, but the reality is that at some point in owning a business, especially a new one, there are going to be huge demands on your time if you want to succeed.

 

[michiganbuck]

I think screws are only $900 each. The medical community uses pins and pins probably cost more. At least that's what they called them on the two occasions that I've had the misfortune of having them invade my body.
They have threads and a drive socket but they call them pins.

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