Pricing my work?

[Jay Allen]

I'm sure that it is simply a mental issue on my part, but I have always had problems with putting a price on "extra" work that I do for my employers (or others).
Occasionally I do some custom machine work (metal) or some wood turning that we are not equipped for at the shop where I work. Sometimes there is a set price that they are "offering", especially if that is all there is to it. Other times it is just a small part of a larger job, so there is no specific price associated with these "parts", just the unit as a whole.

The most recent job involved turning several very large replicas of golf Tees used as trim on a bar at a local restaurant and some small metal spacers for the same job.
I logged my hours, which were evenings during the weeks that I was also working over-time at work, I calculated the time at my regular OT rate. It all adds up to a pretty hefty sum of money...thus my problem.
I have not yet submitted a bill for this, because of my issues, I have no idea what my boss's reaction would be....he my have no problem at all?
I am not trying to gouge anyone, but I am not trying to give my work away either. The price I have in mind is fair and legit and no one else in the shop has the equipment, ability, or willingness to do it.
My problem lies in the fact that I would never pay anyone to do things like this. I have learned a lot of different skills for this very reason, so I have trouble seeing the "value"

Opinions, comments, kicks in the....welcome.

[Will Boulware]

You did the work, you did it right, and you should be paid for it. They asked you to do it because nobody else there could/would, so charge a fair price and collect.

[Ryan Hellmer]

I agree. I think that your OT rate is a great starting point. If the boss or customer balks, you could back down a little (say your usual hourly rate) if you want. Otherwise, tell them to go find someone else for it. Skills/education have value, demand that value.

Ryan

P.S. I agree that I would never pay someone to do the work that I can, plumbers charging $90 bucks an hour?! no thanks.

[Bob Riefer]

I don't think you should back down from the OT rate personally. You worked on your own time, and put wear and tear on your own equipment. Fair is fair - if you'd been doing the same work at your employer's place, the OT would be acceptable. There's no difference in my mind (and I suspect your boss will feel the same)

[Trevor Remster]

Here are some points to consider. Will you get a 1099 for this work(you'll have to pay all the taxes on this amount)? Your boss will probably still have to show this labor on his books, and not have a proof of insurance from you, so he will have to pay worker's comp & liability insurance on this amount. Have you ever mentioned wanting extra side work to your boss? If so, he may assume you need extra money and thinks he is doing you a favor.

Under normal situations, if I were to sub work out to an employee like this I would say your overtime rate would be about right. I'll eat the insurance and taxes which still saves me money from seeking an outside source for the work. And I would feel like the employee is getting overtime rate, but tax-free. That would seem like a win-win. If this work eats up tooling, or requires excessive additional work hours, then I would be happy to bump it up accordingly.

[Jay Allen]

Good point, as it is this is being done like I sold him materials. I am not turning in a bill showing "hours", just finished parts. So in my thinking, it would be no different than if I was selling him tools/equipment. How or where I "acquired" these goods does not matter.

[Andrew Pitonyak]

The reasons to charge have already been stated, so I will not dwell on those. I will, however, mention that there are many reasons to not charge what your time is really worth.

Is it something that you do for fun and you are using this to fund your hobby and you want the work to learn something new, it may be worth it to charge less, especially if there is a possibility that a tough stance would prevent work in the future. Are things tight at work and you need a reason to stand out?

At the end of the day, only you can decide what part is important to you.


Depending on the job (and my own whimsical decisions) I have gone both ways..... Sometimes I help out, sometimes not.

[Trevor Remster]

"How or where I "acquired" these goods does not matter"

Correct. If you are ok with the total price being derived from your actual time spent x your overtime rate I bet your boss will be too. Unless you get just plain greedy, or were woefully inefficient, I can't image this work being done cheaper by outsourcing. And if I'm the boss, I would rather have the money go to a loyal employee.

[keith micinski]

What ever you do I would make a decision one way or the other before it goes any farther. The longer it goes the more trouble it will bring. I think you should be fairly compensated for your work.

[Andrew Pitonyak]

I just realized what is really bothering me about the situation. The issue is that you are performing work without clear expectations on cost. The only time I "hire" someone without even a remote idea as to final cost is when I have a medical procedure performed (next time when you go in for surgery ask them to provide a ball park estimate or quote on the work before you sign the paperwork stating that you will be fully liable for the bill.... I did this once and they could not even fathom an order of magnitude guess).

The stress seems to be that you tracked your hours and wowser, that took a long time to do, so much time that...

That said, I fully understand how you get to that point. My pride prevents me mentioning why.

[Jay Allen]

It is actually not a serious amount of time, actually very fair. It comes out to be very close to what I "threw-out" as a guess from the begining. After I got past the "unknown" part of the job, it was not that bad. It's just that it was never "agreed".

[Andrew Gibson]

I kinda skimmed the responses thus far.
My opinion is that you are a sub contractor this job and the work you do in your own shop. You therefore are entitled to to contractor rates, which are most likely much higher then your O/T rates.
My friend is In IT. Hes says that they bill between $150 and $200 an hour, he sees maybe $30 of that. If he worked after hours privately he could easily demand the same amount his company charges.

I think your standard overtime rate is a bit low... I would be thinking more like double overtime. considering the wear and tear on your machinery and tooling, and the personal health risks... however small or insignificant they me seem. Don't undersell yourself.

[Chip Lindley]

I'm sure that it is simply a mental issue on my part, but I have always had problems with putting a price on "extra" work that I do for my employers (or others)...

...The most recent job involved turning several very large replicas of golf Tees used as trim on a bar at a local restaurant and some small metal spacers for the same job.

I logged my hours, which were evenings during the weeks that I was also working over-time at work, I calculated the time at my regular OT rate. It all adds up to a pretty hefty sum of money...thus my problem.

...The price I have in mind is fair and legit and no one else in the shop has the equipment, ability, or willingness to do it.


The Boss asked for this work to be done. You are due your OT time spent on the project, as the bare minimum. But, that only covers your time, not your particular expertise. No doubt the Boss will either sell your custom golf tees to the restaurant owner, OR he will provide them gratis, adding "good will" on his books. Either way, he will profit.

I believe you have considered your "bill" very carefully. Do not hesitate to hand it to the Boss. If he complains, just say you are at "work" here, your "hobby" starts when you are off his clock. Decline any future custom work unless there is a clear understanding up front of what payment to you will be made. Remind the boss that "custom work" often requires research & development time. Nothing is cut and dried.

['Jacques Malan']

I saved this from a forum ( I think Metalmeet) a long time ago, and it seems sensible way of looking at it.



1. "I've adopted the "Truth in Shaping" cost accounting method. (Developed by me, of course)

If someone wants something, tell them that your hourly rate is (Whatever). And you bill by the hour. Take your normal hourly rate at your job, then add for time & a half AS A MINIMUM! You wouldn't work overtime at your job for less, right? If they have a problem with it, dont get upset. Just simply state that this project takes you away from your projects and family just like overtime pulls them away from their family. Why should you work for them for less?

Tell them you will scrap a piece and start over, if you feel it is inadequate. And that is part of the costs. You bill for exactly what you did, and no more. Leave the scrap piece , so the customer can see it. Explain to them why it was scrapped. And tell them you want to do the best possible job you can.

If they want it done, they will gladly pay. If they don't, you have time for your stuff.

If someone wants to argue the bill, stand your ground. Afterall, you are not billing them for the tools you are using, the shop heat, time chasing materials. All those costs add up to. If doing it as a business, you would have to charge a much higher shop rate (after having your head examined)."
2. "If you decide to give a price, make it worth your time. The amount of time it would take someone else to do it has no bearing on the value of your time. You are giving up your time with your family and your projects, and you will never get that back. As far as learning at their expense, everyone does. Anyone that does any project will learn something from it, no matter how small it is. They can always do it themselves and learn a lot more, for a lot more money.

If you really don't want to do the job, tell them to go somewhere else.

Aaron"

[Jay Allen]

It's way too late to turn down the job, they are finished and installed.

They are solid Poplar 32" long, 7" diameter and the subject of another post about "splitting" something this large. I turned the heads and shanks seperately, routed a groove in the backs for a spline to assemble them. There are a total of 6 units, 4 split in half and 2 as 3/4 to fit outside corners. I don't have any installed pics yet, but here is one still on the lathe.

[Brian W Evans]

Jay,

I'm in the camp that says charge more than your OT rate. As has been pointed out, you are absorbing wear and tear on machines and tools, electricity and heating/cooling, etc. These are things your boss recoups from his customers and so should you. Additionally, you took some risk here. I'm not sure that you would have been covered by worker's comp if you had gotten injured working for your boss at home. If something had happened to your home or shop as a result of this work (e.g. a fire), would your homeowner's insurance have covered it if they found out you were working on a project for your job? As someone else pointed out, these risks might have been small but they were real and, in business, people get compensated for absorbing risk.