Formula for pricing?

[Metriccar]

I need to price a 48" disc with cutouts in the middle. This is my first custom job opportunity. I need to come up with pricing. I figure it's maybe 5-10 minutes of cutting, plus $40 worth of metal. I would take off dross and sand both sides. That's what would take the time. It may be about 30-40 minutes at least. I purchased a burnisher actually and haven't used it yet. So the finish time may actually go down.

I was thinking just doubling the cost of the material, or $80. It seems a little low though.

When I first started I would lose money because I was getting very bad yield, but at least it was generating some cash. Now I'm starting to get to the point where I have to decide how profitable my jobs should be, what the market will bear, and what a fair and competitive deal is. But for one thing I'm worried I'll just wear my machinery out before I can recover costs if I do things too slim.

$40 for 30-40 minutes of work is good to me but doesn't account for my capital investment I made.

I'm new to this gig but I'm not new to industrial sales. I know generally you look at the customer and the opportunity. If for example a small manufacturing company came to me, I'm sure I'd quote him a better deal than, say, some individual trying to get a custom piece built so he can het his old vacuum cleaner up and running again for his house.

[muzza]

What about the design time and also your time to talk with the customer about the job. If it's material held in stock you should be getting a mark up on that, if you have to pick it up that takes time too. You should also be getting not only a return on your investment but also remuneration towards its upkeep and running costs. And then there's the specialist skills and equipment that makes what you are doing out of reach of the average Joe.

Don't undersell yourself, you'll only set a precedence. There will always be someone who will do the job cheaper. Come up with a price that you will be happy with and see you continue doing what your doing for many years.
Murray

BTW if you use the search function up the top there are a several similar threads including couple of spreadsheets which might help you out.

[CNCCAJUN]

Like Muzza said . . . locate the pricing sheet. It is a very well thought out live Excel Spreadsheet.

As to the burnisher you aquired, which one did you go with?

Metabo or Flex or someone else?

At the price for the media, is it cost effective to use it for clean up?

Steve in Louisiana

[Gamelord]

Couple things to remember as well as above.

Power is very expensive, not only to run 60amps or more to your torch/table, but also to run your grinders, sanders, lights etc...

The more projects you do the more you cut up your table, which will need the slats replaced over time. This cost needs to be included.

Eventually you will screw up a piece or you will end up with a piece your customer refuses to pay for, wasting expenses, your time and material. Those costs need to be realized.

Taxes... sales and income...need I say more.

Your consumables need to be replaced often - another expense that needs to be included.

Your table, torch and tools will wear out over time. The more projects you do, the faster your equipment will be warn out. When it comes time to replace them, will you have the cash from your jobs you did or will you just have to cough it up out of your bank account? Did your previous jobs pay for that new finisher you just bought...or will your next few jobs pay for it...or are you made of money and just buy expensive tools from your money tree?

Thing to remember is that if you aren't interested in making any profits then just cut for cost of material and a couple bucks on the side....or better yet, get rid of the annoying customers and just make projects for yourself. It is a lot more fun and less stressful.

If you do want to cover your costs and expenses (not lose money) and maybe even make a little extra, then you need to charge a fair price for the work, equipment, time, hassle and a little profit for you to live on. If your customer is not willing to pay that then tell them to go away!!! Its not being mean or rude....its just that if you are going to work for free or at your own expense, you may as well just do your own projects!

Food for thought.....

[VSAW]

Generally speaking in manufacturing you need to start pricing at 3 times what the item costs to produce. Then look around at the competition selling the same items and if yours is still too low raise it a little at a time until sales stabilize. Remember uncle sam is getting almost a third, materials, labor, electricity, consumables, shop rent etc etc should all add up to one third. If you go with double the price you are pretty much working for peanuts and putting wear on your machine and using up time for nothing.

[Metriccar]

Thanks, I'll try the spreadsheet.

As for the burnisher I bought a Metabo and got it just in time for my biggest job yet, my most important one. And I will say this, I am embarrassed for what I was making before I used the burnisher now. There simply isn't a comparison between burnishing and moving a 4 1/2" angle grinder back and forth with a flap disc on it.
I'm only using the burnisher as a final step after the metal has been cleaned as much as possible. Not dross removal. In fact it makes a poor dross remover. What it does is highlight dross that I missed. So by the time I'm done, I have an excellent finish. Way better than what I had before.

As for media, I can't tell. Like I said I had a large order, biggest one yet, and the roll hung in there just fine, I'm sure it won't get any worse life than a flapper disc.

Since I'm starting up my primary goal is to just get some money generated out of all this stuff I bought. But yes, lowballing only sets a bad precedent.

[storiesnsteel]

I charge 125 bucks for 2x2custom piece and 250 for a 4 ft x 4 ft piece and a whole sheet 500 bucks paint extra it seems to work

[KeeYaw]

Ive down loaded the spread sheet for a pricing reference. The prices on the spread sheet are what shops are charging for Water Jet Cutting in my area. Plasma prices are 1/2 what the spread sheet suggest.

[CNCCAJUN]

Ive down loaded the spread sheet for a pricing reference. The prices on the spread sheet are what shops are charging for Water Jet Cutting in my area. Plasma prices are 1/2 what the spread sheet suggest.

Now granted, I am not yet up and running, so you can take my comments for what you think they may be worth. But dealing with the public & dealing with competition is something I have a lot of experience with. While For the past 20+ years I worked on & off as a industrial designer, many of my years were spent doing both inside & outside industrial sales.

For guys like us our edge is flexibility, creativity & an ownership in the job at hand attitude. The big cutting shops really don't want the business we see as bread & butter. A conservative number of the CNC cutting operations within a 20 mile radius of me would easily exceed a dozen.

You need to visit everyone of these shops, introduce yourself, let them know what you & your shop's capabilities are. I have been to 4 so far. I got one negative, the rest ran from "Halleluiah, can I send all these Buck Mark, Fleur de Lis idiots to you" to "good luck, don't turn anything away to big, I'll cut it for you & we'll both make money"

Most of these large shops don't want the business most of us want, they tolerate it.

My 2 cents . . .
Steve

[beefy]

For guys like us our edge is flexibility, creativity & an ownership in the job at hand attitude. The big cutting shops really don't want the business we see as bread & butter. A conservative number of the CNC cutting operations within a 20 mile radius of me would easily exceed a dozen.

You need to visit everyone of these shops, introduce yourself, let them know what you & your shop's capabilities are. I have been to 4 so far. I got one negative, the rest ran from "Halleluiah, can I send all these Buck Mark, Fleur de Lis idiots to you" to "good luck, don't turn anything away to big, I'll cut it for you & we'll both make money"

Most of these large shops don't want the business most of us want, they tolerate it.

My 2 cents . . .
Steve

Steve,

good info, thanks for that.

I once asked on a forum about approaching engineering shops and asking them for "customers they didn't want" (smaller jobs, etc). The overall response was NEVER ask that. I was told I should only ask to do the work for them and I don't even want to know who the customers are.

Seems your experience is completely opposite. Those bigger cutting shops DO want to lose that "customer" so they don't get their time wasted any more.

Gets hard knowing what to ask sometimes. Was that one negative response treating you like a competitor ?

Keith.

[CNCCAJUN]

Yes, he saw me as a potential threat . . .

I think that once he realized that once I am up and running I may "snipe" little jobs.

Every now and then you will run into people who think that they should get it all.

One thing that drives his cost up is having to pay an employee for ALL the design work required for any job.

Also a shop may want to turn someone away, but are scared to do so because that person may very well work for or be one of his customers or someone he wants to become a customer. No matter how you look at, it an off the street walk in customer for most of these large shops is a disruption. Some guy wanting a small man-cave sign will probably eat up 30 minutes really fast before he realizes that he really doesn't want to spend $150.00+ for a sign that says "BOB'S PLACE. A large cutting operation is just not geared for text & graphics. Me, my only question is "how do you want to attach it or hang it?" Please send your buddies . . .

One guy that has a huge Trump Laser shop told me he tells them:

"My equipment is leased & I pay based on inches cut with a minimum, so I am pretty much locked in to a $200.00 minimum, but I know a guy that has a small plasma table a few miles from here that could help you". When he told me this, it was 7 years ago when I approached him to cut some alligator shaped bottle openers out of stainless steel. He eventually cut them only because he wanted the file.

Steve

Steve

[beefy]

Thanks very much for that info Steve.

I like the ending

Keith.