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torker
08-09-2008, 08:51 AM
Hey guys! I'm in a bit of a quandry here.
As you know, I added an ironworker to my fleet of toys.
Yesterday I finally got to try it out on a bigger job...the type I actually bought it for.
Shearing off 34 5"X5"X1/4" base plates...then punching four 9/16" holes in each plate.
This used to take "about" one hour to saw all the plates (includes setup,remove burrs, clean up,a bit for blade usage etc.)
The holes..if everything went right..about 1 minute each to drill... 148 holes.. about 2 1/2 hours.
3 1/2 hours total.
NOW..with the ironworker..I had everything done in one hour.
This saved the guy 2 1/2 hours of shop rate....WOW!
But hang on.. I just dropped a big chunk of money on this thing...it's going to use up punches, dies and shear blades...I'm not sure yet how fast.
Here's where I'm a bit confused...if I buy a new machine that gives me a new service to offer or whatever...that just expands the capabilities of my shop and the shop rate pretty much stays the same...although it has been creeping up a bit.
This ironworker...it's obviously made a HUGE difference to a job I've been doing for quite some time. I don't think I should pass the entire 2 1/2 hour savings on to the customer... but in this case I'm not sure...would I charge more per hour for ironworker usage.. or split the difference between using it vs doing it the old way?
I'm trying to be fair to the customer...trying to stay up or maybe slightly ahead of my competition... but at the same time, I have to pay for the ironworker.
You guys have any thoughts on this???
Thanks!
Russ

torker
08-09-2008, 09:03 AM
OK..I don't know if that came across right. I've never added a machine to the shop that changed one part of a job so much. This is "almost" like going from a manual mill to a cnc mill. I've never done that...
I've run ironworkers lots...but never had to keep track of the difference...who cared...it was all just marked down on the time slip at the end of the day...but now I'm the business owner...looking for any advantage I can find.
I do know how part of this works at a couple places I used to work...we used to mark out and centerpunch every blinkin hole...then punch them. I've taken a few minutes to build some jigs and just run them through. I am far more efficient than the last place I worked. They would never let me take the time to fix up their buggered table on the punch so we could use jigs.
THAT kind of frustration is what led me to starting my own shop.

jimmstruk
08-09-2008, 09:11 AM
Torker, you got a problem. In the auto and truck repair business there is a flat rate book to give a guide as to how long a certain operation should take. I am shure that lots of machining jobs can be bid closely ahead of actually performing the job, but non standard stuff needs to be time and material. But you are right in wanting to stay competitive as some one else might be looking for that type of work too. You are right about equipment purchase and upkeep and the consumable items being costly. Sometimes its best to let other shops work cheap, then you buy their equipment at their bankrupt auction! Tough choices. JIM

QSIMDO
08-09-2008, 09:17 AM
Would your customer have been happy with the job at the old rate?
If so, I think the efficiency should go to you.
HOW you do the job is up to you, as long as your customers are happy with the cost, quality, delivery, etc.
Just compare what you're doing to other technologies available, like if there was water jet cutting in your area and make sure to be competitive on that front.

mochinist
08-09-2008, 09:20 AM
You earned 2 1/2 hours extra for yourself, give the guy an hour break off what you used to charge and use the extra profit to pay off the machine. Everyone should be happy, and if not they can go buy their own iron worker.

rockrat
08-09-2008, 09:30 AM
Any time that we (a machine shop I once worked at ) would find ways to make parts faster on a recurring job, we kept the profit. Part of running a business and spending your time and money to run a product faster, is trying to find efficiencies and keep that profit.

Once your profit margin rises on that job, enjoy it for a while. I dont know how your customer is but one of the places that we did work for would occasionally ask us to requote things. They would tell us "You run this part all the time and we are sure that you have found ways to make things run easier so we want to see a 5-7% savings". So, by finding faster methods, riding the extra profit margin out over time, we could re-negotiate jobs if it was requested and/or if we chose to. Or, send the profit to the bank to pay off the machine.

As for new jobs that you will use the machine on, you have to decide how your going to set a rate on it. Remember, you have to pay this thing off, pay for the electric it uses, punches, dies and you gotta eat. Thats the goal.

Now for the warning, be careful how you quote new jobs for that machine with the same customer. If they look at the old job, they will want to know why there is a difference. This is where your "used car salesman" senses should kick in and youll have to find a way to sooth it all over. But you should already know this........ :D

rock~

torker
08-09-2008, 09:30 AM
Jim..good point about the flat rate thing.. I wish this was that easy.
Len...that's the part that bugs me...he was happy to pay what I was charging him. The problem was...we had to work our tails off to do it as fast and as cheap as we could. You drill 150 holes as fast as you can go on a manual drill press..you are wore out after that. Even a small screw up meant a money loss.
The ironworker is a piece of cake! But is it fair that I charge him the extra 2 1/2 hours?? Doesn't seem right to me... maybe that's why I don't have a summer cottage out at the lake:(
LOL! At this time last year..all this was so simple.. I had a new 255 amp mig machine, a torch and a couple grinders. $55 an hour.
All my other stuff was in storage or was in the moving process.
Then I got the tig machine moved up...I have to charge more for tig because the gas costs alone on them are huge..
I've added so much equipment in a short time...I'm a bit frazzled...how the heck did it grow so fast ...lol!

torker
08-09-2008, 09:34 AM
You earned 2 1/2 hours extra for yourself, give the guy an hour break off what you used to charge and use the extra profit to pay off the machine. Everyone should be happy, and if not they can go buy their own iron worker.
mo...that's about how I had it figured.
But rock brings up a good point about quoting new work... I just don't want to be sticking my foot in my own mouth here.

mochinist
08-09-2008, 09:46 AM
mo...that's about how I had it figured.
But rock brings up a good point about quoting new work... I just don't want to be sticking my foot in my own mouth here.Figure a higher shop rate for the punch press and quote accordingly. My manual rate is $65/hour and $80/hour for cnc work. There are jobs that I could do manually or cnc, but take half the time on the cnc.

Ries
08-09-2008, 09:56 AM
This is why I havent charged by the hour in over 20 years.
Too much can go wrong, and people get way too literal about the hourly thing.

I think its much better to bid a job, and charge by the job.

Yes, you run the risk of losing money. But that risk is inherent in being a business owner, and is balanced by the risk of making money.
And, after losing money a couple of times, especially a serious chunk, you get a lot better at not doing it, or else you should be an employee, not an employer.

$55 an hour is only $440 a day for an 8 hour day.
Now I dont know about you, but I can only get maybe 2/3 of my time actually spent on billable hours- there is always material to order, phones to answer, broken machines to fix, stuff to move around, and just general maintenance of the shop.
Realistically, in a one man shop, you figure 50% of your time is billable.
With employees, you get back up to 80% or so, but no employee ever made actually works on billable stuff every minute.

So that means $55 an hour is more like $300 or so a day.

Then you gotta figure your actual shop overhead- rent (which is paid to somebody- if you own the building, then it ought to be paid to you) utilities, insurance, consumables (there are always consumables that cannot be billed to any specific job- but they still cost money. Sandpaper, drill bits, welding gas, grinder wheels)
On top of that, your machines cost you something. They arent free, even if you paid cash. They wear out, they need new parts, stuff breaks. You have to factor in this amount always, because you cant charge the guy for a new motor on the ironworker just because it burns out on his job- every job has to pay a bit towards the inevitable entropy.
And yes, the more machines you have, the more you need to charge every hour to pay for em.

You cant charge the same amount per hour as a guy who has a Lincoln ranger in the back of his pickup, and two harbor freight grinders.
You gotta charge more.
But you also deliver a whole lot more. Your plates are square, the right size, with the right size holes in em, in the right places, welded properly, and square and true.

Your skill is worth something, but so is your investment.

Only you can figure what your actual hourly cost is, but what ever it is, you ought to throw in, on top of costs, the amount of paying someone as good as yourself, and then, ON TOP OF THAT- PROFIT!

You need to make maybe 10% on top of everything else.

If you bid by the job, there will be jobs that are tight, that you dont make much on, but other jobs that you make a decent profit on- and these balance out. If you are worried about being "fair"- worry about being fair to yourself, first.
Not that I recommend screwing anybody over- but, honestly, if you upped your charge for these plates, the guy would still probably be getting a better product, cheaper, than shipping em in from Vancouver, right?

ptjw7uk
08-09-2008, 10:04 AM
Torker,
I think you are going about this the wrong way, think of your machine improvements as an extra worker. in that 2 of you coould do the work in about half the time but you then have 2 wages to pay so the new machines are only saving you time not the job. You also have to remember that you are only saving maoney when you have recooped the machines cost then you could reduce the charges but then the machines could be wore out (as you will be) It is a vicious circle as far as machines overheads are concerned a simple job that ends up breaking a component will cost you money and customer will not pick up the tab.
If I was you I would only discount a little if you feel the need always remember that if the iron worker breaks you would have to do the lot by hand with the reduced payment!!
I think it is OK to help someone out on the odd occasion but you have a business to run and you get nowt for owt in this world!!(Apart from those on this forum)

peter

torker
08-09-2008, 10:49 AM
You guys! Thanks a bunch! mo.. I think that's what I have to do...charge a certain $$ per hour for the ironworker. That's the only way to stay consistant.
Ries...Thanks for the business lesson! I appreciate your experience!
Peter...That's the stuff I'm trying to think of here...the future.. machine wear etc.
Thanks again everyone!
Russ

loose nut
08-09-2008, 11:13 AM
We had a guy who had an old water well drilling rig in the area, he had enough work to keep him busy and made a decent living at it.

Along comes a salesman who sells him a new drilling rig because "it can drill a hole 3 times as fast and therefore you can drill 3 time the number of wells and make a lot more money". Six months later the guy was out of business.

There wasn't 3 times as many wells that needed drilled, the people that wanted wells drilled were not going to pay more to have wells drilled with the new machine so he had to keep his prices in line with other drillers. He was unable to keep up the payments on the new rig and went bankrupt.

The moral of the story is:

Buying a new piece of machinery isn't necessarily a good idea, you have to be sure it will be able to pay for it's self. If you had the money available to buy it and can wait for the payback it will be a good buy in the long run but expensive equipment especially bought on the "cuff" can suck the life out of a business. Your job "price" has to be in line with the competition regardless of the "cost" or else, customers don't care that you have to pay for the new iron worker, that's your problem not there's but as long as your "price" is competitive then charge as much as you can. How you do the job, whether you shear or saw is your business.

Circlip
08-09-2008, 12:08 PM
Another one from this side of the pond Russ. When I obtained an iron worker for the firm I worked for, an hourly rate was set on the machine in line with what others have already said on the forum. You've only locked onto the increase in efficiency that you've acheived, DON'T forget depreciation of the plant. You obviously saw the need for the machine to increase throughput in your shop, and your customer would have reason to complain if you charged him the cost of it, but he's happy to pay what you've quoted for the job at the time (probably not, but yours was the best deal on price and QUALITY) so this time you came out above the line, good on yer, but we both know that sometimes you have to scratch to get up to it.
Once had to buy a machine just to do a job for a customer, but the long term supply allowed us to amortise the cost over a five year period, and over here, the new to replace time for tax purposes was five years.
Make hay while the sun shines cos it's a cold winter.
Regards Ian.

Scishopguy
08-09-2008, 12:56 PM
Torker...if the guy was satisfied paying for the job at the old rate then you have no obligation to tell him you are doing it faster now. An old friend who ran a successful one man shop once told me that you bid a job by estimating the time involved, the cost of materials, and then doubling it. Sometimes you make money and other times things break or you make a mistake and have to order more material. It all comes out in the wash, hopefully with a little profit each time.

enjoy the ironworker

jimmstruk
08-09-2008, 01:03 PM
One other thought,, your customer should appreciate the way you can turn out a new batch of pieces in less time, reducing his need for a large inventory, or a quicker delivery time to his customer. Turn around tme is worth a lot too. JIM

mochinist
08-09-2008, 02:51 PM
Torker...if the guy was satisfied paying for the job at the old rate then you have no obligation to tell him you are doing it faster now. An old friend who ran a successful one man shop once told me that you bid a job by estimating the time involved, the cost of materials, and then doubling it. Sometimes you make money and other times things break or you make a mistake and have to order more material. It all comes out in the wash, hopefully with a little profit each time.

enjoy the ironworkerDefinitely no obligation to tell him, but if he can lower the customers price a little and still make a nice profit it will usually do nothing but help. People talk and word of mouth can be huge for business, little things like that get people talking.

Scishopguy
08-09-2008, 03:00 PM
True enough, Mo. If the time element is enough of an improvement it would not hurt to split the difference. I once worked for a greedy old fart that got a job to make a certain type of washer on his screw machine. He turned around and found a source for them commercially for about 10% of his cost to make. He bought them and repackaged, still charging his original estimate. What screwed him up was one of the shipping newbies forgot to repackage a shipment and the jig was up. Customer must have been POed because they never got any business from him again. ;) You have to use your good judgement, I guess.

Swarf&Sparks
08-09-2008, 03:22 PM
Hell Russ, ya got a adding machine, ya should be able to work it out!

Err, oops, shoulda read the post :o

Sorry bro, couldn't resist it :D

dp
08-09-2008, 05:38 PM
What would you charge if you had always had this current capability? I think you're making an unnecessary translation. Your time and equipment is worth something, but not worth something relative to how things were. The precedent you set was to charge by the hour and there's probably no reason to change that but your rates should always reflect your labor cost and your business costs.

The odd part of that is that business costs are frequently not reflected in hourly rates with any degree of accuracy. You need to know how much your machines cost you to own on a per-hour basis and you need to know how much your time costs on a per-hour basis. When that is known you can decide what your profit margin should be and calculate your rates.

Charging one rate for lathe time, another for welding, and another for milling is tedious. You have one shop and it has one cost to own (ignoring possible payments on equipment that will go away at some point). If you add a machine your shop your costs go up by some amount and that should be reflected in the price you charge for the job.

Time * expenses + materials + markup = billed amount.

Expenses (per hour) would include heat, rent, expendables, water, power, interest on loans, wages (including yours), insurance, fees, retirement set-asides, and any expenses overlooked. These are fixed costs that need to be included in your billable rate. It's been mentioned, but one cost that is overlooked is time not spent on billable activities and it can be very expensive.

So in other words you first need to see what your business costs per hour before you can decide what to charge per hour.

davidh
08-09-2008, 05:49 PM
Any time that we (a machine shop I once worked at ) would find ways to make parts faster on a recurring job, we kept the profit. Part of running a business and spending your time and money to run a product faster, is trying to find efficiencies and keep that profit.

Once your profit margin rises on that job, enjoy it for a while. I dont know how your customer is but one of the places that we did work for would occasionally ask us to requote things. They would tell us "You run this part all the time and we are sure that you have found ways to make things run easier so we want to see a 5-7% savings". So, by finding faster methods, riding the extra profit margin out over time, we could re-negotiate jobs if it was requested and/or if we chose to. Or, send the profit to the bank to pay off the machine.

As for new jobs that you will use the machine on, you have to decide how your going to set a rate on it. Remember, you have to pay this thing off, pay for the electric it uses, punches, dies and you gotta eat. Thats the goal.

Now for the warning, be careful how you quote new jobs for that machine with the same customer. If they look at the old job, they will want to know why there is a difference. This is where your "used car salesman" senses should kick in and youll have to find a way to sooth it all over. But you should already know this........ :D

rock~

as a small business owner i gotta pretty much agree here. you have to realize that your Competition has already established how much you must charge for your work. if you are able to make it faster / cheaper, the gain is suppose to be yours. after, the customer did not buy the faster machine. . . . . davidh (the old guy)

oldtiffie
08-09-2008, 10:12 PM
Torker...if the guy was satisfied paying for the job at the old rate then you have no obligation to tell him you are doing it faster now. An old friend who ran a successful one man shop once told me that you bid a job by estimating the time involved, the cost of materials, and then doubling it. Sometimes you make money and other times things break or you make a mistake and have to order more material. It all comes out in the wash, hopefully with a little profit each time.

enjoy the ironworker


Definitely no obligation to tell him, but if he can lower the customers price a little and still make a nice profit it will usually do nothing but help. People talk and word of mouth can be huge for business, little things like that get people talking.

Thanks mochinist - good points.

The general rule is "charge what-ever the market will bear".

Nobody needs nor should see either what you have in your shop nor the way you price/cost processes and materials.

I never asked for nor did or would I provide a detailed account nor a break-down of estimates/costing - that can give an enormous advantage to some one who can read and interpret those figures.

As you found out the hard way recently, having key members of staff - you, the Gurl and perhaps your wife - have a serious problem that puts you/them off work you have a serious hole in your income and out-put.

I always stuck with the Trade when we were running a very successful Building Design service/business. If a Builder etc. wanted a job done I would always tell them that I would deal with the owner and bill the owner who could provide the plans and specifications etc. to the Builder. We had quite a few Builders come in to get advice (free) about problems and options. It worked very well. We were only asked to quote on a fixed price twice. We worked on getting the job done and then seeing what it cost (was worth!!). We were asked for indicative costs which was fair enough. "Bottom (price) feeders" rarely came here as the word had "got around". Just about all our work was return and referral business. But then the market was flooded with people who had a computer and a CAD system and worked for very little - just to "get a start". It was a race to the bottom as many were desperate and trying to get cash-flow to satisfy their banks and lenders. So we "pulled the pin" as we'd done very well. Needless to say everybody was into this "get it cheaper and sort it out later" bit and a lot "went under". We were offered some very good money to get back into it but we were satisfied and had retired and didn't need the hassle.

If people have been satisfied with the prices you charged previously and the competition isn't breathing down your neck and you have plenty of work and regular customers - charge the same as you did before you got the machine/iron-worker.

Getting an order is one thing, but getting it paid on time, in full may be another. You are providing credit to every customer whose order you accept as I'd guess your terms of trade might be payable in full within 14 or 30 days. You still have to pay your trade suppliers else your credit and material from there will dry up as they have businesses to run as well.

With material prices fluctuating/increasing as they are, its a whole lot of lost profit with delayed payments as any material billed but not paid at the "old" price has to be replenished with new at "new" prices.

There is no profit until the payments are in the bank and all your costs to others for input into that job are paid.

Establishing and re-establishing the credit-worthiness of potential customers is a must - I will bet that your bank and suppliers keep a good eye on yours.

Your skills, "name" and "word" are your biggest assets.

There will come a time when you have to "cut back" or retire and perhaps sell your tools or business. You will be relying on what-ever you have to keep you going through your retirement. All retirements are not voluntary.

Get it while you can.

Have a word with a good Accountant.

Have a "Plan B" - and "C" etc.

bobw53
08-09-2008, 11:14 PM
My two cents, Torker, you made an investment in your shop to make YOURSELF money, not to make your customer money. Keep the same price.

"What the market will bear" is good advice, no sense in beating yourself up trying to make less money.

wierdscience
08-09-2008, 11:26 PM
Russ,we don't do flat rate on jobs involving punching,shearing,forming or sawing.Those parts of the job are figured on a per piece rate for the operation.

Punching we figure $3.00/hole,sawing we figure on crossection $1.50/square inch angle shearing $1.50 to 4" $4.00 4"-8" Layout is figured at the shop rate and is in addition to the per piece charge.

If there are a lot of holes the same size(100+)then tooling cost is added.For our machine a round hole punch and die set costs $32.00.

As an example last week I did 50 10x10 x 5/8" base plates four 13/16" holes in each. $467.50 sawing $300.00 punching + $32.00 tooling=$799.50 less materials total time 6hrs.Works out to $16.00 each which is cheaper than anyone else can do it drilling or plasma.

If I had charged shop rate it would have been only $360.00 + tooling,see the difference?Normally my cut of the shop rate is $30/hr,doing it this way my cuts goes to $45/hr me like:D

Along the way over the years I learned a few tricks.

It's cheaper and easier to make base plates chopping flatbar than burning plate.

Saw flats stacked four thick on edge,punch holes while the saw is working on the next set.

Make a masking plate for layout,this way you only layout once and every plate is just like the last and done much quicker.Hang it on a nail in the shop and use it next time;)

Now,if the customer does the layout and the cutting,then the hole punching cost goes down to $2.00hole,our machine can do four a minute comfortably,but 2 a minute is taking it easy.$4.00/minute = $240/hr,pure gravey.

With that in mind lots of smaller fab shops use us for hole punching and angle shearing.Once or twice a month we get 2-300 holes to punch,nice extra spending money.

(edited for brain fart)

Dawai
08-10-2008, 09:19 AM
Been charging one man for my time, anothers time for my machines. 2X labor rate.

My machines are old and paid for.

MickeyD
08-10-2008, 10:52 AM
Here is how I look at it. When somebody comes to me with a job that is a couple of pieces, I look at it as an hourly rate plus materials plus consumables to reach a price. This is just the old time and materials game.

When it is a bunch of parts I treat it like production where I do the above to get a rough price, and then try to figure out what I am going to charge per piece based on how much I really want the work and knowing that I will probably get faster on them as I go along. I don't do hourly rates on production parts, just per piece and make sure to cover overhead (like paying for the new ironworker).

Paul Alciatore
08-10-2008, 03:28 PM
I have to confess that I did not read all the responses above so I may be repeating.

Shop rates can and SHOULD include a factor for the equipment used. Each machine has a definite cost in terms of depreciation and upkeep. The depreciation would be based on the original cost and the upkeep would include replacement tooling due to wear. Both are completely legimitate and NORMAL factors when determining hourly rates. And, of course labor and overhead.

Depreciation can be figured by dividing the cost by the expected term or useful life, perhaps five years. And then by the expected usage during each year. So if you expect to use the Iron Worker for 500 hours a year, you would divide the purchase cost by 5 X 500 or 2500 to reach an hourly figure.

Tooling wear can be more difficult and you may have to start with a wild, but educated guess.

Add the labor and overhead and you have a good starting shop rate for Iron Worker jobs. Compare this with the old rate you charged. I would bet that it will be cheaper. If not, you made a bad purchase.

Nothing forces you to go with the exact rate this procedure comes up with. It can be higher. But if lower, you are probably losing money.

As for giving the customer a break, you should definitely consider it. If you charge too much for too long he may look elsewhere and you could lose a good customer. But you deserve increased profit due to your good business decision in purchasing a better tool for the job. I would consider spliting the savings between both of you to be the the best course overall and the numbers should support this.

hardtail
08-10-2008, 09:55 PM
An old trapper was runnin a house of ill repute......Mary Moose Jaw was his long standing girl, trouble was Mary really liked the booze and nonsense and really wasn't into her work all the time.....trapper ran across Saskatoon Suzie that was a clean livin gal and really got into her groove and managed to make satisfied custmers in half the time.

Moral: as long as the customer leaves a little lighter in his shoes for the same monies spent and Suzie is doing double time for the owner......no discounts for product..........

oldtiffie
08-10-2008, 10:04 PM
Thanks hardtail.

I take it that the young lady in question was a "Soft Tail".

That old Trapper would have had his "perks" too no doubt.

And of course, this in not OT as we are discussing productivity, satisfied customers, good profit, employees happy in their work - and just to keep it HSM we are discussing the merits of screwing machines - are we not?

hardtail
08-10-2008, 11:12 PM
Yes OT I can tell the similarities have not been lost in the opposite hemisphere.........LOL

torker
08-11-2008, 12:27 AM
Thanks for all the time you guys took to fill me in. I'm glad to see there are different ways to skin the cat here. I have to read some more of this stuff over again.
Geeze...we run a motel downtown that makes pretty darn good money... employees (usually) 8 people.
That place is so easy to run...keep the rooms clean and painted...plant flowers in the spring and keep the grounds nice...not a lot too, it.
THIS business....totally ,totally different.
I think Ries hit the nail best...it's all the time I spend NOT making money that spurred this purchase to begin with.
BTW.. I didn't mean I bought this machine just for one job or one customer.. I do a lot of this plate work...brackets,plates etc for a lot of different companies etc. I bought it for this type of work.
I'm starting to like the charge per hole or cut.. A punch will only do so many holes before it's wore out...the same as a shear blade.
I still don't know how long they will last so it's a little tough to figure that yet.
I guess I better take some time to figure this all out. Yeesshh...been so busy. Had a portable job today..then back into the shop to work on tanks.
Thanks again guys. I appreciate your input!
Russ

Mark McGrath
08-11-2008, 04:31 AM
I have run ironworkers for years on low and high volume jobs.I charge by the hit.
On the original part you asked about I would leave the price the same unless you are in danger of loosing the work.Look at it this way,you quoted the job,got it and are getting repeat orders.Why change it?
On a side note,I never purchased standard punches and dies,they are made for fabricators and the clearance between them is for the thickest material that punch can handle.This leaves large burrs on thinner material.I would buy a punch and a die with the clearance specced for the job in hand.For thicker or thinner material I would order a new die with the correct clearance.This results in a clean hole and very little if any distortion.
Over here a standard of the shelf punch and die for a 40T ironworker runs about $34,a custom made punch and die is about $50 and lasts a lot longer.Also keep a tub of oil and a paintbrush at the machine and every now and again give the punch a wipe of oil,it will treble the life of them.
Mark.

dp
08-11-2008, 09:59 AM
I have run ironworkers for years on low and high volume jobs.I charge by the hit.
On the original part you asked about I would leave the price the same unless you are in danger of loosing the work.Look at it this way,you quoted the job,got it and are getting repeat orders.Why change it?

There are embarrassing situations that can arise. If you have been charging by the hour and that shows on the previous 30 invoices as x hours at $x.xx/hour, a repeat job has a repeat pattern the customer is familiar with. So the customer shows up the week after you get your new equipment with the same job and you tell him it will be ready in 45 minutes and 45 minutes later the invoice shows a bill for 3 hours labor at $x.xx/hour. Now what do you do? Well you look like an idiot, or worse, that you presume the customer is an idiot. So you have to change what you are charging for to reflect the current shop equipment. That is Torker's dilemma.

Mark McGrath
08-11-2008, 05:24 PM
"There are embarrassing situations that can arise. If you have been charging by the hour and that shows on the previous 30 invoices as x hours at $x.xx/hour, a repeat job has a repeat pattern the customer is familiar with. So the customer shows up the week after you get your new equipment with the same job and you tell him it will be ready in 45 minutes and 45 minutes later the invoice shows a bill for 3 hours labor at $x.xx/hour. Now what do you do? Well you look like an idiot, or worse, that you presume the customer is an idiot. So you have to change what you are charging for to reflect the current shop equipment. That is Torker's dilemma"

You don`t tell the customer it will be ready in 45 minutes unless you are an idiot and then you deserve all you get.
It`s about return on investment.He has invested money and that has to be recouped.He recoups that money by doing the job in a shorter time.The customer is looking at cost and he has already agreed to that.

Chipslinger
08-11-2008, 06:41 PM
You earned 2 1/2 hours extra for yourself, give the guy an hour break off what you used to charge and use the extra profit to pay off the machine. Everyone should be happy, and if not they can go buy their own iron worker.


That is My vote also. you are in the Biz to make money , not Break even.:D

Mark McGrath
08-11-2008, 07:09 PM
"Originally Posted by mochinist
You earned 2 1/2 hours extra for yourself, give the guy an hour break off what you used to charge and use the extra profit to pay off the machine. Everyone should be happy, and if not they can go buy their own iron worker."

I don`t agree with that either.The whole point of being in business is to make money for YOURSELF.
Anybody,well most people can do a job and make some profit.That is relatively easy.The extremely difficult bit is to price the job for the maximum profit it will stand without the customer feeling ripped off and going somewhere else the next time.If you don`t strive to attain this,you are only playing at business.If you win every job you quote,you are quoting too cheap.
I appreciate in the early days of starting up you have to be cheap to get your nose in the door,but once you have a reputation for service and quality you have to start working on your pricing.Once established you need cash reserves to pay for unexpected breakdowns,hard times etc.The only way to achieve this is to work at increasing profit margins and not be content with working for a wage.

mochinist
08-11-2008, 10:12 PM
I don`t agree with that either.The whole point of being in business is to make money for YOURSELF.
Anybody,well most people can do a job and make some profit.That is relatively easy.The extremely difficult bit is to price the job for the maximum profit it will stand without the customer feeling ripped off and going somewhere else the next time.If you don`t strive to attain this,you are only playing at business.If you win every job you quote,you are quoting too cheap.
I appreciate in the early days of starting up you have to be cheap to get your nose in the door,but once you have a reputation for service and quality you have to start working on your pricing.Once established you need cash reserves to pay for unexpected breakdowns,hard times etc.The only way to achieve this is to work at increasing profit margins and not be content with working for a wage.I agree and try to do everything above and I've lost plenty of quotes:(, the cash reserves are fine also. I still would do what I said above :cool: