Shop Rates

[Mike OMelia]

I am trying to figure out how to cost stuff. I realize this is a very subjective topic. But, if someone were to ask you to provide wood blanks, 1/8" thick, 8" wide, maybe 2' long and wanted 50 of them, what would you charge per hour? Tools involved: bandsaw, thickness sander, table saw. I am leaving the cost of the wood out of this on purpose... thats just additive. (maple, walnut, cherry)

Thanks

Mike

[Jeff Rowley]

Is this something you do for a living, or something you do on the side because you love woodworking?

If it was a business, pick a reasonable hourly rate and stick to your guns. OTOH, if you have the tools and would be doing some work anyway, and this is just bonus money, maybe price yourself a bit lower so you can get a few more of these 'bonuses'.

I build poker tables. I enjoy it. I have fun doing it, and would probably be doing it even if they weren't for sale. As a result, when I can find someone to pay for one, that's great, I'm getting paid to do something I love anyway.

As a result, when someone asks me how much one costs, I tell them it's real easy. We'll determine what they want, and order the materials. They'll pay for the materials up front. When it's complete they write a second check for the same amount. This flies a bit in the face of conventional wisdom which says to charge 3x the cost of materials, but like I say it's a hobby, not a business.

You need to determine what you want out of this. For some it's a business and you need to price accordingly so that you can pay overhead, taxes, etc. If it's a hobby and it just helps cover the cost of your addiction, that's great too.

[Anthony Whitesell]

On tasks like that, I would charge the cost of a saw blade, a sandpaper wrapping (or two), a table saw blade, plus the wood and ~$10-$15 per hour for my time and electricity. This way a get a little something for my time, and I'm not out anything that "gets used up" in the process.

[Adam Cavaliere]

Do you include finishing in that cost? That can be a pretty big undertaking (for a small amount of money) when considering the amount of time finishing can take.

Adam

[Mike OMelia]

No finishing costs. Just thin, wood blanks.

[David DeCristoforo]

My first question would be "How flat do they need to be?" Because you know that if you are resawing 1/8" slices, they are going to want to warp. As to how much you should charge, this is an age old question that each person has to answer for themselves. Obviously you have to charge at least enough to cover the materials cost, the cost of "consumables" and your operating costs. After that you have to decide how much you want or need to earn. Loving your work is fine but you cannot work for love unless you have another source of income.

[Mike OMelia]

I build guitars... eventually to sell. And I have a day job.

I think I will use the 1x materials cost and see how that compares.

[Larry Edgerton]

Shop time is $45 Hr. Period.

[travis howe]

I'm not "in business" but just tossing out some initial thoughts on this.

Would it not be better to treat, tool usage, wear and tear, and other materials as soft costs to get a general idea of what it costs you to do this outside of your time. Then figure out what your time is worth in general sence in terms of hobby or not, difficulty of project, etc to determine an overall hard cost to bill? I'm challenged with giving anyone a pure hourly rate because if I spend more money on better and faster tools then I'm loosing money right?

[Adam Cavaliere]

I wish I could say what my time was worth when figuring in my hourly costs for projects, but my rate is way too high to put against a woodworking project. The reason for this is that it is my profession that I would be figuring out my hourly rate against and that is much different from a hobby.

Now if this was professionally, then obviously you need to figure out how much you need to live comfortably, but I know that wasn't in the scope of the question as this seems to be more of a "hobby rate", rather than a professional rate.

[William OConnell]

55$ a man hour. Often I have more than one of us working on a project when it makes sense. Like one guy catching 14' long stock out of the tablesaw. or one guy sanding while the other does whatever.Its just 58 an hour period. Its non negotiable. I usually just price jobs its better for me actually.
Buy the book "Pricing your work" its insiteful. If you do this for a hobby which so many here do and you charge its no longer a hobby but a job. From what ive read here over the years its a job that pays below minimum wage for most hobbiests.

[Karl Brogger]

I do $50/hr for shop time, $30/hr in the field. Material and hardware is marked up %50. And I'm probably on the cheap end of the spectrum around here for marking things up, about on par with everyone else for shop rates.

[Mike Heidrick]

I am a learning novice.

I am making a commisioned TV stand. 2X materials.

I keep telling myself - $20 an hour for shop time for friends.

Man I have a HARD time charging friends. I just want to help them too much! Mostly because I can and no one else they know does this type of work (should add the words for free at the end of the last sentance).

How do you charge friends????

[Rick Fisher]

Charge what the market will bear. If you dont, you wont be succesful.

This is the most common problem with small business. Being a good woodworker doesnt mean being a good businessman.

There is an popular expression; take 10 really good businessmen and tell them to become contractors, 9 will succeed. Take 10 really good carpenters and tell them to become contractors, 1 will succeed.

How much would it cost for this fella to get the same materials elsewhere? Charge a bit more than that and deliver good product, on time.

[Rick Lucrezi]

I just finished a side job that turned out to pay 3 times what my day job pays. A friend is a sales person who turned me on to a business for extra cash. It has potential to to be big. I looked at the competition and agreed to match their rate. Truth be told I did not think I would make much. I reinvented the wheel and found a way to make the stuff pretty quick. I could have lowered my price after the fact and still made out ok. Then I asked my self why? Why shouldn't I profit from my time and experience. My ability to solve a problem and the tools I invest in are worth something. Its a far cry from these clowns making a million a year, and I sleep good at night.

[Rick Fisher]

Good attitude Rick. :)

Part of the problem is realizing that what you do is special. Most people cannot take a few pieces of wood and build something they really want. They have no idea.

To them, its special.

A big part of success is picking your customer. If you do business with people that begrudge you making a dollar, you likely wont.

[Jack Briggs]

$55/hour.


Cheers,

[Ben Abate]

I am a learning novice.

I am making a commisioned TV stand. 2X materials.

I keep telling myself - $20 an hour for shop time for friends.

Man I have a HARD time charging friends. I just want to help them too much! Mostly because I can and no one else they know does this type of work (should add the words for free at the end of the last sentance).

How do you charge friends????


MIke,

I agree, I have a hard time charging friends. And I usually don't. Here is my newest dilemma. I am going to retire in 3 months after 32 plus years, I 'm only in my early 50's and want to do some commision work at my leisure. But I know I will have friends wanting kitchens and what ever made now since they know I'm retired. On two occasions I have had friends say to others that I know that I am too expensive.... Both times I charged them $5.00 per hour and that is the truth. One I built a roll top desk for and the other I built 3 passage doors and a mantle for a fire place. He was upset because this was for a job he was doing for someone else and I guess he didn't make enough on it. I charged him $900.00 for the 3 Oak doors with jambs and a large fire place mantle.

I would rather work for people I don't know, getting back to the original post. I charge $20.00 to $25.00 for shop time now....

Ben

[Loren Hedahl]

A good way to determine what you should charge is to have your car serviced, have your roof and gutters cleaned, have your . . . . . .

Then is someone challenges a charge, just tell them "Shucks, I paid more than that to have my gutters cleaned!"

[Chip Lindley]

I am comfortable charging $25/hour for small jobs like this. Lets say it takes you 8 hours to make 50 blanks. Thats $200 / 50 = $4 per blank. (kinda cheap for a guitar blank!! Double the price! $8 x 4 blanks = $32 for a set (one guitar) Still pretty cheap!! $8 x 50 = $400. ($50/hour)

Stewart-McDonald sells a set of 2 sitka spruce AAAA guitar blanks for $67.31. 2 AAA blanks, $38.46. You are less than half their mid price using my figures. Still feel comfortable makng $25/hour?

[David Keller NC]

Mike - Your profile does not note your location. As I'm sure you're aware, location definitely factors into a shop rate. Manhattan will bear a far higher rate than Edenton, NC.

Based on what your project is, I would tell your potential customer that you will do the job on a cost plus basis. Generally, that means you will charge him for the raw wood (+ 20% for picking it, transporting it and storing it), plus your time. The inherent waste in re-sawing, planing and jointing gets factored in because you're charging him based on the original rough sawn lumber.

As has been mentioned, a pro will charge a minimum of $50 an hour, which covers tooling (wear and tear, sharpening), shop utilities, shop rent/depreciation, bookkeeping, general non-woodworking business duties, etc... All of these are costs that you incur as well, but if your shop is part of your house and you're going to be using it anyway, you may choose not to charge for it - but only on a one-time basis. If this is going to be a continuing series of orders for guitar blanks, you'd be foolish not to charge for overhead.

[Rick Lucrezi]

I know this isn't a reply to the op, but for the folks who mention working for friends. I learned along time ago, in the interest of loosing friends, you really need to state your normal cost and what your discount is. Both my wife and I have our own business, (she is a teacher and is also a professional photographer) we have our normal rate which we tell friends and family, then we have a 15% discount for friends and family. No surprises, no hard feelings. I also learned, and this does apply to the op., that there will "always" be someone willing to do what you do cheaper. You need to look at what your "actual" costs are. If your working in a shop, how much is your power bill a year? How much a year do you spend on tools and maintenance? What are your insurance rates, heat, cooling, ect. Take those costs for the year divide that by 250 work days and that's your cost per work day to pay the bills. Now you need profit, I add 10% to my daily costs. I also want a wage for myself. I pay myself 500 a week. Now I add all those costs up and add my personal profit which is 25%. Here is a sample

$20,000 a year in over head
divide by 250 work days
$80.00 a day overhead
$8.00 for 10% profit on costs
$100.00 a day for my wages
-----------------------------------
Total cost per day is $188.00
add 25% for profit
Total is $235.00 a day or
$30.00 per hour


Every one has there own cost break down, some people don't work 40 hr weeks. The process is the same. If you find that your overhead exceeds your possible income from a rate that you can get in your market area, then its time to rethink a few things.
Hope this helps

[John Brennaman]

If you are doing this for a friend then if you want to, give them a deal. Remember that there are guys out there doing this for a living that can’t afford to cut their prices too low in order to get business. They have mouths to feed and rent to pay. If your work is of good quality then charge appropriately.

[Andy Pratt]

Mike,

One thing to keep in mind with all of this is that a shop rate may help you determine what you eventual price will be, but that doesn't mean you need to price your project for the customer by the hour. I've found that many are very leery about entering into a project with only an estimate from the builder, as we have all been burned by this at one point or another in our lives. Someone quotes an estimate, you hire them, then the project costs considerably more.

For me, I always quote a solid price and unless there is an unforseen and drastic change in materials cost (or the customer changes the project) I don't let that price change. It seems this sits very well with everyone I have worked with before. If you mess up on the price you work for less and less an hour and you quickly get better at judging your time accurately :).

So, I use a shop rate for estimated time + materials cost to arrive at a number, then stick with that number whether it takes me more time or less time to do the project. Others have already mentioned ways to calculate your shop rate, so take your pick of those.

Hope this was helpful,
Andy

[Jim Kountz]

My first question would be "How flat do they need to be?" Because you know that if you are resawing 1/8" slices, they are going to want to warp. As to how much you should charge, this is an age old question that each person has to answer for themselves. Obviously you have to charge at least enough to cover the materials cost, the cost of "consumables" and your operating costs. After that you have to decide how much you want or need to earn. Loving your work is fine but you cannot work for love unless you have another source of income.

Excellent info, hit the nail on the head there David. Its going to vary for each person since no two shops are alike in the respect of overhead and other operating costs. Do the math and try to take it all into account. You may win some/lose some on the first few jobs but after that you will have developed a good system that works for you.

[Mark Bolton]

I think you owe it to yourself to charge a realistic rate whether it is a profession or simply that "you love woodworking". For most on a small scale I personally don't see the difference between the two.

At the very least you have to factor in tooling, equipment replacement costs, and at least some amount for your, and your shops, time. While your per piece price may be more than that of a large production shop, your attention to detail will likely be higher and you will likely deliver a more quality product. So why not charge for it. Its not to say you can be double your nearest competitor but there is no reason not to charge for the product you deliver.

Many who look to woodworking do so because they love to work with wood. That doesnt mean they discount their compensation.

Mark