Oh boy, a new project!

Where do ya actually start to build a business? the short answer is in your mind. You create a concept, maybe something like this. I have skills and tools, hmm... I can sell my services. Every now and then someone shows up with something they need welded or fixed and I end up helping them for a little bit of my time if it is a complex project, but allot of the favors I perform are of the $20.00 bill variety because friends help friend any ways in most cases.

Now lets assume you've done your home work, learned and mastered the skills of your trade but now you wish to start on the next level. You want to build your business to be at self sustaining levels, more money coming in than going out.

You need to have some basic job estimating skills, mix in a little bit of negotiation skills,with a thorough understanding of the customers desires,in order to become competitive. This is what I will discuss Today.

Way back when This business just started I too struggled with what is a good price to charge for my services! My very first job went something like this, You purchase the materials needed for the project, I will do what it takes to get it done for Monday. That's what I said that Thursday afternoon prior.

Friday morning, I Fuel up the truck and hook up the trailer to fetch the prepaid resources, in this case 25- 1 1/2" X 1 1/2" angle iron 3/16 " and bring it to my shop. Turned out the truck blew the L. front break line thanks to Wisconsin's infamous road salt on that trip.
So by the afternoon of the first day I was down $25 for gas and another $25 for break line & fluid, hmm. rough start hey?
I still had to cut the steel for 28 custom dimensions for every cabinet in the factory, about half way through that the band saw broke the blade and I could not get a another until Ace Hardware opened the next morning at 8:00 AM.
With my band saw being down and me in a time crunch, I dig out the De Walt grinder with a 7" flush cut cut off wheel and start the notching operation which needed to be done prior to welding.

Trust me when I tell you an artist is his own worst critic, Not every single cut was as accurate as the band saw cuts but in my case they were close enough to fall with in tolerance. The industry standard is usually +/- 1/16" which equates to 1/8" maximum discrepancy allowance. Say when you measure for square, 1 dimension is 35 1/2" and the other is 35 5/8" It passes by industry standards, whew! It only takes one piece to throw your dimensions of a little, Accuracy at the band saw goes a long way in the uniformity of the product.

When I turned off the lights in the shop for the night, is was about 11:30 pm, I had 7 of the 28 custom pedestals complete. My plan originally, was to have it all cut to length and half of the notching complete. Total time spent that day 16 hours of my time! hmm... digging out that grinder and forging ahead where I could definitely paid off!

Saturday's start time was delayed until the band saw blades were delivered via my wife's weekly grocery run, but went on without any incident and good progress was achieved because while I had down time I fixed the breaks that morning and I still had 10 tacked up and ready to weld up on Sunday. When the project was complete I had invested close to 53+ hours of my time that weekend, and $90.00 of my money to complete the job.

How do you reconcile the cost of creating your own job? hmm.. that's what I thought too. You see I had this concept developed from my experience with seeing how other entrepreneurs charged for their services. The general theme of what I have been told is the the cost of the materials x 2 should equal your pay from which you cover your expenses.

I've got to tell you, I ran the numbers and weigh them against my time and then it hits me like a brick in the head. I had been thinking like a factory welder. I needed to think like a factory owner. Time management of all the processes involved must be considered. Trust me on this one. The fact that You can take the raw materials and perform every single operation involved to create your project that you intend to sell for a profit must include a good solid estimate of time required.

On this first job, I broke it down like this, My target price per pedestal was around $50.00 a piece roughly double the cost of materials and managed to squeeze my wages into that window. I charged the company for my labor and resources at a rate of $27.50 a piece for 28, custom pieces which worked out to roughly $13 70 /hr but I picked up a $20.00 delivery fee and now I charge a modest $35.00 consultation fee to sweeten the pie a little bit.
I would not weld in a factory for that little, but the feeling of cutting your teeth in your own business and being your own boss is priceless, and drives me forward! In Wisconsin, law mandates that you must provide your customer a written job estimate, hmm ... makes sense if you want to become a professional.

In future posts I will discuss the Job estimate in a little more detail.