View Full Version : Shop Rates

03-24-2005, 09:02 PM
Is there a flat rate manual like for auto repair, for machine shops. I need help to estimate turning boring milling,edm, grinding ,etc work. Thanks

03-24-2005, 09:25 PM
Here is a relevant thread prom the PM site:


03-24-2005, 09:34 PM
Generally, most shops bill their time at 50-75dollars an hour.


This Old Shed (http://http:thisoldshed.tripod.com)

03-24-2005, 09:37 PM
Maybe,I figure my time,tools and materials and then add another%15.
Then I tell the customer that on one-offs straight T&M is cheaper than my fixed price,works for me.

A man walking down the street is stopped by another man in a streched limo.

The window rolls down and the man sees that it is his old friend from highschool in the limo.

He asks him what he did to get rich since the last time they seen each other he was broke.

He said"simple,I buy and sell things.I by them,mark them up 10% and sell them"
His friend says"man,you made it on 10%?"

He says"Ya,I buy something for $100,mark it up 10% and sell it for a $1,000" http://bbs.homeshopmachinist.net//biggrin.gif http://bbs.homeshopmachinist.net//biggrin.gif

[This message has been edited by wierdscience (edited 03-24-2005).]

03-24-2005, 10:10 PM

If you survey a number of shops in your area you'll have a good idea of the going rate. I always try to charge by the hour + materials and give an estimate as a range of cost($150-$200 for example). This verbal estimate is essential since you want no surprises when the customer pays.

If forced to quote a job, I guesstimate the number of hours, add material & double the number. Works surprisingly well since I underestimate so badly.

My material quotes are good only until 5:00 pm the day of the quote. My steel supplier will not guarantee any longer than that & neither can I. Whenever a job involves substantial material cost the customer pays that cost in advance. Customers ALWAYS pick up jobs that they've already paid a portion of.

My shop rates are slightly higher than average for my area, about 10% or so. I don't want to be know as the low-priced place to go. Neither do I want to drive business away.

You'll soon figure out who you want to work with and who you need to fire. Hope this helps.

Barry Milton

03-24-2005, 10:24 PM
"I guesstimate the number of hours, add material & double the number"

That's my method too! I have a saying I use quite often... "It's a 20 minute job, should take about an hour"

03-24-2005, 10:32 PM
The correct way is to know what your costs are & how long these operations will take on your equipment with the tools you have to work with. Guesstimating is a sure fire way to go broke. That's how the rookies do it & a big % go broke after 6 months. Do it right & monitor your time so you can see if your too high or low & then adjust as you go. If your quotes are 30% too low adjust your next quote by 30% & watch. Doubling the cost of material doesn't make sense - how much work needs to be done is more important then material cost.
There is a scientific way that alot of engineers use to quote parts & add inefficiencies to see what an assembly will cost to make & then mark up the price to sell. Know your costs before you start.

03-24-2005, 11:23 PM
"Doubling the cost of material doesn't make sense - how much work needs to be done is more important then material cost."

In some cases this may be correct, especially those involving minimal quantities of material and large amounts of labor. In many other situatuions it works really well.

Yesterday a customer needed two chain sprokets, four feet of chain & three ball-bearing pillow blocks with 1 11/16" bore. One sprocket had to be bored to 1 11/16".

My materials cost $187. Charge to customer was $374 (normal retail markup, and exactly the amount he would have paid from Grainger. Grainger's catalog is wonderful to keep on the bench..............)

Thirty minutes labor to set up & bore the sproket added $25. In this case and many others, especially when working with stainless steels or aluminum alloys, the small amount of work that is done is far less important than the cost of materials.

03-24-2005, 11:26 PM
Another mistake many folks make on forcasting large jobs is using an 8-hr day or 40-hr week. Seldom will you be 100% productive. I don't mean when you estimate a job. This is when you say a job will be complete--Ready for pickup/delivery.

In my industry, about 5 hours per day is all you get as far as production. The rest of the time might be getting tools ready, cleaning tools, setup, suit-up (paint), color matching, meetings, phone calls, coffee breaks, parts inventory and other duties.

Even the best shops can't hit 70% productivity. Bear this in mind when you "schedule" your "esitmate".

03-25-2005, 01:29 AM
You know, for me Ken brings up a good point (not as funny as weirds) that kills me from time to time. I have a lot of experience in shops etc. I know how long (roughly) it should take me to do a job at someone elses shop. What buggers me is I often forget to add in MY cleanup time, bookwork, etc. this easily turns an 8 hour day into 10 hours or more.
I really don't agree with toolsrul. There is NO way that you know how to figure every job. I've worked with some really savvy engineers and estimators and they all screw up from time to time. If your jobs are in a small envelope maybe. But in a "do all" job shop you don't know what the variables may be.
I do a lot of machine/heavy equipment repair and can say from experience that you better not get too cocky cuz it'll bite you in the ass.
Right now I'm in the midst of changing main pins and bushings in a bunch of dump trucks for a cement/gravel company. I looked at most of them, told the guy 7 to 8 hrs per. I was laughing because I knew I could do them in about 4 hours each. Then I met up with "Truckzilla"! Two days and I still haven't got it. Have to use two rosebuds to heat up the ears, have to try to remove horrible rusted bolts to move all the wiring so the rosebuds can do their job, have to put the truck all back together cuz they need it the next day, blew the seals out of a 50 ton portapower trying to push the pins out, a chunk of burning grease flew back three feet and burned the airlines....etc. etc. This job turned into a "by the hour deal"
You WIL screw up estimating unless you are 400 years old and have done everything at least once! http://bbs.homeshopmachinist.net//biggrin.gif

03-25-2005, 02:34 AM
The best money making tool in shop is a couple of cheap $6.oo stop watches from a discount store.Click it on when you start the job,click it off for interuptions,breaks,etc,and when your done cleaning up AND doing the paper work.Its amazing how that 20 min. job actually takes 35 min. Sounds ruthless but time is money and adjustments can be made to make it a fair price.Ever get a bill from a lawyer??

03-25-2005, 05:29 AM
To track how long I am at a job I use this small program:


It has a place to put notes etc for each job.

[This message has been edited by motorworks (edited 03-25-2005).]

03-25-2005, 07:33 AM
you have to charge for the time spent cleaning up after the job is done too. i do a lot of large weld jobs and clean up can take an hour or 2. and be carefull of steel prices they are going no where but up. charge the current price even if you had it laying around or a year or it was free. it will cost you to replace it.

03-25-2005, 08:54 AM
I used to keep an old time clock handy for keeping time.I gave each job and customer a card.

I would punch in and out as needed and never talled it up until the cleanup was done.
I always got a good figure out of it and the shop was kept clean.

Don't have one where I work now,but I am looking for one.

Oh,BTW,on tooling,especially inserts I charge per cutting edge used.Also if I pay $10 for an insert I charge $20,this way I have extra money to expand my collection.

It doesn't show much on the customers bill,maybe 5-10 dollars in a $100 and I may not use up an insert or even one corner,but it helps cushion the wallet for those time when you eat inserts right an left.

Also remember to charge for things like WD-40,rags even hand cleaner.

Oh,and industry pays more always.Remember,
you are fixing thier machine,you only have one chance to make a profit.Everytime they turn the machine on they make money and you don't.

Then there is the old saying"if you are getting every job you bid on ,then you are bidding too cheap"

[This message has been edited by wierdscience (edited 03-25-2005).]

03-25-2005, 09:05 AM
Good idea, wierd...

I figure my overtime rate for most work and my Sunday (double time) rate for the rest. Plus material.

Andy Pullen

03-25-2005, 09:47 AM
My favorite customer said, "You have to charge enough today to pay the bills, make a profit & be in business tomorrow"

I recently billed his company $500 for master mold work. He used "my molds" to have his casting dies built. Spent nearly $100,000 on the dies.

You rarely ever charge too much, but it sure is easy to charge too little.

Barry Milton

Jeff Rininger
03-25-2005, 12:33 PM
I have this rate sign in my shop:


Cecil Walker
03-25-2005, 02:34 PM
We have a labor rate of $55.00/hr, workorder is assigned to the job, clock on/off. A 2% of total labor is charged for accessories (oil dry, towells, etc) as a seperate line item. Technician gets a commission of 2% of total labor billed up to 60% efficiency, 60-65% effic. gets 3%, 65-70% effic gets 4%, above 71% effic gets 5%, anyway you get the picture. Most people are in the 60-65% efficiency as Ken states. Do not expect 70% plus efficiency except in rare cases. Materials and outsourced work is charged as a seperate line item with a 35% Gross Margin (divide cost by .65) DO NOT multiply by 1.35 this will only give a 25% Gross Margin. That's how we do it, works for us, maybe not for others. Just thought I would put my .02 in on this one.

03-25-2005, 06:14 PM
<font face="Verdana, Arial" size="2">Ever get a bill from a lawyer?? </font>

LOL... Now that you mention it ya. A lot of years ago but for reasons I won't mention. Every phone call I made to my lawyer to complain about a specific charge that I thought frivilous, was charged back to me as "account review". http://bbs.homeshopmachinist.net//frown.gif ...*&^#)*#@& !!!!!

It all came out in the end ok and we "settled" on the final bill. Needless to say, I never had dealings with him again.

03-25-2005, 06:53 PM
Cecil's right about GROSS Margin, However; there's different ways to compute a markup. PROFIT Margin is what most use (as seen in the above answers) and is less reliable or "profitable" than using Gross Margin. But GM can only be known AFTER you know your Cost Of Goods Sold. Many use a ratio, as Cecil does, to estimate or cover an expectation for GM.

Gross Margin = Revenue - COGS

Using a Profit Margin calc is easier but most fail to include the correct markup to make the sale profitable. If you're a company, 35% will put you out of business. If you have an extreamly low overhead, you might make a few bucks.

03-25-2005, 07:12 PM
Wow im amazed at that sprocket quote. I just machining a sprocket. I bored out the centre bore and machined a five bolt hole pattern and had it done in like twenty minutes. I charged him twenty dollars and I thought that was fair. I find overcharging is just being greedy and no repeat customers. Oh Well the business world is tough.

03-26-2005, 12:40 AM

Let's do the math.

You said you "had it done in like twenty minutes. I charged him twenty dollars and I thought that was fair." That works out to $1.00/minute or $60.00/hour.

I said "Thirty minutes labor to set up & bore the sproket added $25." That figures out to about $.83/minute or $50/hour. I also cross-drilled the sproket but forgot to mention that.

Looks like you overcharged your customer. Good for you! I need to raise my rates...

03-26-2005, 07:05 PM
Doesn't look like an overcharge to me. Don't you have a minimum or setup fee?

I generally have a 15min setup fee (setup/take down) for minimum labor. On some of the heavier equipment like the frame machine, it's 30 minutes. Then there's damage access that could add another 30 to 60 minutes. I could be up to 1 1/2 hours and not layed a wrench or tool to a car for "repairs". After that, a frame pull might take 10 minutes... If that. I'd go broke if I charged 10 minutes labor for pulling a frame.

It's the same for painting. There's a setup charge built into the "first panel". The setup is usually about 30% of the time to paint the panel.

For a short job or one-off, there's nothing wrong with a minimum charge or setup fee. From the time a customer hands you a part until you hand it back might be 30 minutes. You can't charge him $2 for drilling a couple of holes if it took 30 minutes of your time.

03-27-2005, 01:34 AM
.........I know this is all about a REAL business with overhead and stuff and that's not me. I apologize ahead of time for being OT. But I do do things for pay with my lathe. Mainly gun related doo-dads. Not so much gunsmithing. Mainly I hollowpoint bullet moulds, make size dies and push through size dies, swage dies, top punches and other odds and ends.

To me it's all fun and I did do some small little deals for friends for free, and even supplied the material. They said thanks, and I knew they were grateful, as would I have been. There was also some value in it for me in the learning and doing(only had my lathe 16 mos). I did have a couple who came back wanting more complicated stuff done and except for one guy, asked what I'd charge. The one seemed a bit put out that I wanted to charge him something (my material again too). He got over it.

For the most part it has been very good and the ego boost from compliments is almost worth it too! However what I go by is what something costs retail, and I really don't or can't charge my time as due to my newness they'd be penalized, which isn't their fault.

One friend made arrangements to bring his part over as he wanted to see it done, and was fascinated by the process and tools required to make it. With all the BS, it only took 3 hours for a 20 minute operation! I broke out a couple catalogs and I think I have him convinced he needs one of those little 7" lathes http://bbs.homeshopmachinist.net//biggrin.gif. I clamped my 3/8 VS drill motor in the bench vise and showed him how I'd made a firing pin for a Remingtom rolling block with it and a file.

One other good thing is that the other day I got to wave 3 checks totaling $180 under the wife's nose http://bbs.homeshopmachinist.net//tongue.gif. It's nice when your hobby can generate a bit of untaxed income! She'd still do terrible things to me if a mill appeared in the garage!


03-27-2005, 02:36 AM

Sounds like you're on the way to being "in business" (paid, that is).

As long as the quality of your work is good, you should charge the same as anyone else. Just don't charge by the hour, charge by the job. I never charge a customer for my ignorance, just for the amount of time the job should take.

Get the mill, your wife will eventually speak to you again!

Barry Milton