Shop On Retainer
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  1. #1
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    Default Shop On Retainer

    Looking for some advice:

    I recently sold my company a few months ago. I didn't sell my machine shop or cam software. The company that bought my business still wants to retain some use of my shop so we can produce prototypes.

    We have a retainer dollar per month, which is fair.

    I'm trying to put a price per minute together on use of my Haas CNC, 120Watt C02 laser, and support equipment. My shop is very well set up for prototyping with lots of maerials, probing on machine, and a good amount of equipment.

    How would you financially structure this?

    Thanks,

    Tim

  2. #2
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    Wouldn't it be the same $100/hr for the CNC, $25 per hour for the laser (or whatever is fair) plus whatever your design time is worth (assuming you aren't employed by the purchaser) plus materials as it would be for a job shop?

  3. #3
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    OP: what is your understanding of what the retainer is for? This could be very important in figuring what you charge in addition to the retainer fee.

  4. Likes extropic, Limy Sami, digger doug liked this post
  5. #4
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    Quote Originally Posted by Red James View Post
    OP: what is your understanding of what the retainer is for? This could be very important in figuring what you charge in addition to the retainer fee.
    ^^Totally agree.

    Achieving, and documenting, a common understanding of the customer's expectations is the first priority.

    After you both agree on what they get for the fee, it should be relatively easy to calculate.

  6. #5
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    I agree with those advising caution, ...........retainers can be tricky to say the least, right from the off both parties must know what EXACTLY is expected of them, and then either agree to it or walk away.

    IM(painful)E .retainers can end up thinking / believing they own retainees, think along the lines of treating them like employees??

    Obviously price comes in to it, ....but in this world you need to know what is being provided for a given sum.

  7. #6
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    Important to have agreement on what they're buying, and what you're selling. Is it priority scheduling of their work? Certain dollars per month for certain hours per month, payable whether or not they bring you work? Or is it a promise you'll take their calls? Can your other customers/projects tolerate being bumped in favor of the retainer work?

    For the pricing, it's worth a look at what other similar shops in the area are charging. Topic that influence that base/market price are the benefits 'institutional knowledge' -- having you continue working on projects/concepts that you have in the past --and the somewhat implicit confidentiality factor. Benefits for you are a continued special relationship, (especially important if you happen to be carrying a note whose payment is linked to the company's continued performance) and the fact that you don't have to go out and sell to fill that shop time.

    Putting a sunset on the arrangement may also be wise.

    Chip

  8. #7
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    The shop I work for has a customer that rents part of the shop for $X a month and has an office in our shop, and one of their minions on hand. In addition to running work orders through the normal shop process, they have a "monthly" job number that gets used for quick prototypes and the random 5 to 30 min jobs that pop up on occasion. Im currently working on jobs for them in the 7000 range of our shops job tracking system, the monthly number is still in the 4000's. Dunno if this would work out for you, but it works nice for us...
    Fun example of how it works out; I recently got to make their minion help out on one of their jobs because it was a super rush, and of course he got to do the part that I didnt want to do...


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