Hello everyone,
I’ve been making sawdust for a while now and have created many projects primarily for my family’s own personal needs but through the years I’ve been taking on projects for others that’s wanted a specific project built.
I usually charge people for the shops time $25-$30/hour plus materials. My question to all of you is what do all of you charge for building projects.
I’m sure this topic has probably came up before in the past but since I’m pretty computer illiterate I don’t know how to find it.
sincerely
Jim at Clark Customs
Replies
Jim,
I recommend getting a copy of the December 2006 issue of Woodwork magazine. This has an excellent article titled "Estimating for Furnituremakers". This article deals with estimating to provide fixed price bids which may or may not be what you intend but, it does have a good listing of the considerations. It should still be on the shelves but if not, there are books for pricing your work.
Many woodworkers look at this as a hobby and not a business. Hence, if they charge $25/hr they think that is what they are making. Nothing could be further from reality. The following items need to be incorporated into your shop hourly rate: 1) cost of your shop space, 2) electricity, 3) machinery, 4) tools and sharpening services, 5) insurance (especially liability that protects you from what you sell), 6) profit, etc. The other portion is what you either want or need to earn as a wage and that is soley dependent on you and the area you live in. Don't forget to include those pesky taxes we have to pay. Up until spring of this year, my wife and I operated a sewing machine shop and I did the repairs. Based on the number of machines I typcially repaired in a given year, my overhead was just under $20 per machine. This included training, tools, rent (prorated for the amount of space the service shop occupied), electricity, insurance, etc. This amount was in essence my cost for putting a machine on the service bench and before I even looked at it. Whether you realize it or not, you have the same situation in your shop.
I don't do woodworking for hire because there are way too many cabinetmakers in my area that are willing to work for $10/hr. Of course there is a lot of shoddy work as a result but, since I live in the heart of Walmart country, this is seems to be what people will accept. In my area, there is little appreciation for the quality of a piece, only the price. So, I choose not to participate.
Steve
A couple of years ago, on a different forum, a post (which I wished I'd saved) summed it up, paraphrasing:There are a great many folks tinkering about in their shops creating what has become surplus stuff to be disposed of. Either hobbyist or retired, their time is their own, their expenses are not calculated, and as long as they have some money to offset their material costs and help out with tool purchases, they are happy. These people undercut the professional, with real expenses, trying to make a living and wish these people would just stay home.---My grandfather was a truck farmer until he was in his late 80s. My father told me a story once about a guy at the farmer's market that sold stuff cheap. My grandfather asked him some day how he could sell so cheap and he responded that he was making money. My grandfather proceeded to ask him how much he spent for his baskets, his plants, his expenses to grow, harvest and get to market. The guy was sort of bewildered, pointed to his cash box and said, "How can I not be making money, look at all that money in the cash box!"
<These people undercut the professional>This is so true -- in any profession. I think that in the case of the hobbyist or retired guy, most probably aren't even aware of the problems they cause for the professional.
The central FL shop where I work bills labor in the $50/hr range.
-Paul
Jim
Season's greetings. This is a topic discussed here quite frequently. As another post indicated, the article by Richard Jones, a frequent flyer here, in Woodwork magazine will give you some terrific insight into the process of pricing your work. I enjoyed his article tremendously. Even though I use a different process for calculating my costs and customer prices, I found that I pretty much came up with a similar end result as using his method.
At $25 to $30 per hour, you are not covering your costs of operating, unless you have one lightbulb lit, no power tools running, and no heat required. By the time you take into consideration all the factors of running a business, you'll find that $45 to $60 per hour and UP is more like reality.
That being said, it all depends on what your goals are. Like yet another poster stated, some just want to make enough on a project to pay for their next new tool. Competition is the way of the world, and I've never had a problem competing against someone who charges quite a bit less for their work. If the quality of your work is high, and your integrity as a business person strong, after building up a client base, you can charge what you want. It all takes time. I sell quality to new customers, not price. Repeat customers are back because they loved your work the 1st, 2nd, 3rd, etc.... time around.
Happy Holidays!
Jeff
Jeff, nice of you and Steve to give my verbal diarrheoa a bit of a plug. There certainly are different ways of estimating. I find it interesting that your method came up with similar figures to my method for pricing.
It just goes to prove that old maxim that there's always more than one way to skin a cat. Slainte.Richard Jones Furniture
Hey, credit where credit is due! Your article was good, and full of good information for newbies trying to figure out what to charge. If everybody reads it and learns around Chicago, I'll have to really cut those dovetails fast to make a buck! Ha!
Happy Holidays,
Jeff
I agree with Jeff - great job on the article. I have seen your well thought out posts in the past and I didn't even make the connection that you had written the article until this thread.
Steve
<These people undercut the professional>
I think there is alot of truth to this statement. But concider this... A large shop at a rate of $50 and hr. can usually out produce a small shop when I look at hourly production per woodworker. The small shop often doesn't have panel sanders/panel saws, cnc machines, ect, or the oportunity to get volume materal discounts... The bottom line is it can take longer for some small shops to produce the same work, and it might be at a higher material cost.
I'm have a small (Part time) shop. I find my shop rates (which are lower than $50/hr but much higher than $10 /hr) only make me competative with the larger full time shops.
If a small shop charges about the same amount for the same product but gets a lower shop rate.. Is that undercutting?
<If a small shop charges about the same amount for the same product but gets a lower shop rate.. Is that undercutting?>No, that's called efficiency (or lack thereof). Balancing labor, work methods, material and capital.
I agree. Not everyone can or wishes to work in a shop with high production tools. So if you charge about the same prices for the same products, a lower shop rate isn't undercutting.
What I have heard time and again is if you're not charging $50/hr you are hurting the industry. Might I say, If you're selling products well below the industry average price range, you're hurting the industry...
>What I have heard time and again is if you're not charging $50/hr you are hurting the industry. Might I say, If you're selling products well below the industry average price range, you're hurting the industry...
I would probably go a little further and state that if you're selling products well below the industry average price range, you're hurting yourself.
Steve
I don't know where you're located, but it is a significant factor in that labor rates vary across the country. And also between highly urban versus rural areas. I took my cue from labor rates at millwork shops in the Twin Cities, close to where I am. They're in the $40-50 range depending on thre type of work. I also look at the complexity of the job - for instance I'm now quoting on building simple trestle table type base for an IKEA table top. I also know they paid about $100 for the top, so I have to keep that in mind, and it won't price it at a rate that fits more complex stuff like a dresser for instance.
After I calculate a number for a job I always step back and take a final look at the job as a unit. AND...do I want/need this work right now?
"I also know they paid about $100 for the top, so I have to keep that in mind, and it won't price it at a rate that fits more complex stuff like a dresser for instance."
I think that's one of the biggest mistakes that most self employeed make. If your rate is $40/hr then you should charged that rate no matter the job. After all if you weren't waseting time on that job you could be spending your time on a job that does justify your rate. No matter what the job your overhead is the same, your taxes are the same, and your required profit is the same.
I'm retired now, but when I was in business, I had to walk away from jobs I couldn't make any money on. After all my family is what I had to worry about not someone else who wanted a gimmie price.
Jack
There are alot of factors that come into play when figuring out what to charge as your hourly rate. But you have to remember that people are paying for a skill that they do not have. The best advise that I heard is look at what your local mechanics are charging and you should be somewhere around there. They charge around 60-80 an hour. Than you should be around that.
when I start my business I will start charging around 50 -60 an hour. BUt I know that as I get more efficent att building something, the less time that it takes does not mean that I charge less. So if a the first table you build take 100 hours and you charge 5000 for it. The second table that only takes 70 hours to build you still charge 5000 for that one also, if not more.
http://www.kalafinefurniture.blogspot.com
Thank you everyone,As always you've all been very helpful and all of you are a great wealth of information, Again thank you and I hope all of you and your families a safe and happy holiday season
SincerelyJim at Clark Customs
Where do you find mechanics that charge $50 an hour? I'm in CT and finding even an $80 per hour shop rate is darned near impossible.
When looking at mechanics, (which I was one for a long time before going into education) I was in a shop that charged $59 per flat rate hour, but the mechanic (technician) only got $17.50 of that for the work. The students that I am training now expect to get a starting pay of from $12 to $18 per flat rate hour depending on where in the country they end up. Independent mechanics charge a near what dealers charge but have lots of overhead to pay for, so when looking at that industry many folks really have no idea what the guy is actually taking home. When I do woodworking for someone I consider the same kind of things. How much does my shop cost to open the doors and how much per hour does it take to pay the bills and allow me to take something home to feed the family with.
Copier repairmen routinely charge $100 per hour where I live and collect every penny - even independents working out of their own trucks.
I happen to believe a custom furnituremaker ought to make at least as much per hour as a copier repairman. Most don't and usually because they simply don't 'ask' for it by building such a rate, or its equivalent, into their bids.
VT,
I'm sure that the copier repairman falls into the same category as the HVAC trade, they are in and out, the cabinet maker or carpenter are there for the complete job. While the copier repairman might charge $100.00 per hour, I doubt he will be on the clock for an eight hour day, sometimes yes but most of the time he will be in and out IMO.
Saw
Good question Jim, and a lot of good answers, however I rarely have ever been asked for my shop rates, if ever. Usually my clients prefer a firm price for the completed piece. Thats when the ouiji board and crystal ball come in handy. Seriously though I try to get what the market will bear. The market is driven by s+p and the rest is pretty much self explained. It helps when you have an est. name, product, or rep. Then your selling or creating a demand against a shrinking supply and your prices should reflect that. The exceptin is field work on installs on some jobs my clients prefer to be billed by the hour.
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