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Forum topic by Mike Shea posted 2332 days ago 1074 views 1 time favorited 22 replies Add to Favorites Watch
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Mike Shea

152 posts in 2593 days


2332 days ago

Topic tags/keywords: question humor resource

so i just finished my first big job last week. it was a custom built in entertainment center made with cherry. it all went well and he was more than pleased with the outcome. however bfore starting it i was as stressed as can be. seeing as how i run a one man shop. everything was relying on myself. if something went wrong it was nobody’s fault but whos “mine”. i had never bid a job before led alone one of this size, led alone for my girlfriends boss!!! haha. so i called the one person i know to ask him what he would charge for a job similar to the one i was doing. he just couldnt seem to give me a nuber. all i got was you have to know what your times worth. i asked 3 other people and they all gave me the same freakin answer. all i wanted was a ball park estimate. i didnt want to rape the guy for all his money and at the same time i didnt want to be making 25 cents an hour. so i gave him a bid and he accepted.
i would like to know if what i gave as a bid was good or bad. i know it all depends on certain things. i look at this as a learning experience and what i got out of it is pricleless. a line of people down the block waiting for me to make them furniture. i would like to know what you people think about this. from all spectrums of woodworking. hobyist, proffesionals, and mass productionists. what would you charge? then ill tell you what i charged. haha

in my projects section there are a few pictures of the built in entertainment center. it took me roughly 12 days. from start to finish. what would you charge?

-- i can do all things through christ who strengthens me


22 replies so far

View Tim Pursell's profile

Tim Pursell

494 posts in 2381 days


#1 posted 2331 days ago

Pricing is by far the hardest thing woodworkers have to learn. The only way to learn is experience. YOU have to feel comfortable with the price you quote and you nevre will in the begining. Too much? Too little? Only you can decide.

That said, I think you come out a winner if you look at your quote: ”i know it all depends on certain things. i look at this as a learning experience and what i got out of it is pricleless. a line of people down the block waiting for me to make them furniture” There is your “pay” No matter what you charged you come out ahead. How do you feel about what you got in $’s from this job?

I took a weekend seminar on woodworkers pricing their own work & learned there are as many methods of pricing as there are ways to shape a piece of wood. The best peice of advice is do not sell yourself short. Even if you are working out of a basement or garage shop figure on OVERHEAD like you were renting a shop,paying utilities & an assistant. THEN add something for profit——even if it’s 5%. Only then can you consider yourself a buisnessman. The example the instructor used was this: A roofer saw how much his boss made on job after job, so he thought—”I’m not that greedy” so he goes out & gets a job by bidding low. Now he gets more jobs than he can handle so he hires another crew, Still more jobs,Great!. Hires another crew & more equipment—on credit. Now he has to raise his prices to pay for the overhead. Soon he is charging what his old boss is charging & the customers dry up. Why go to some new guy when this one(the old boss) has been in buisness 30 years. Soon the new guy goes bankrupt & has to go to work as a roofer for somebode else.
Somewhere in between is where you have to be. Don’t overcharge(in YOUR mind) in the beginning, but don’t “give” your work away unless there are other intangables such as a learning experience of exposure to more customers. I regularly give some of my items to charitys just to get more exposure to wealthy potential clients. Plus, for me it’s a tax write off!
Good luck!

-- http://www.etsy.com/shop/tpursell?ref=si_shop

View Thos. Angle's profile

Thos. Angle

4435 posts in 2561 days


#2 posted 2331 days ago

I’ve given this formula somewhere else on this forum. Twice, I think. Cost of material plus 1/3 for waste, Time at hourly rate( at $40/ hour yours would $3840). Now add profit, 20-40%. So say your materials were $1000 and it took you 12 days the price tag should be $7617.91. That line of customers might mean you charged too little. You can’t compete with the Chinese made furniture in all the stores, don’t even try.

-- Thos. Angle, Jordan Valley, Oregon

View Woodchuck1957's profile

Woodchuck1957

944 posts in 2363 days


#3 posted 2331 days ago

It’s custom work. Ever see what a custom Harley costs ? Or a custom car ? Don’t short yourself.

View Tony's profile

Tony

978 posts in 2629 days


#4 posted 2331 days ago

This is the most difficult of questions to be answered, hence my plee for help http://lumberjocks.com/topics/2513. At the end of the day were you happy with the money you received for the work. Did it cover your costs. Will you get another order from this customer?

If you are just starting out, then you will have to get known for quality, reliability, fair prices etcetera – 12 days at 8 hours per day = 96 hours + materials and other expences = the rate you should have charged for the job, you do the math.

Another example. If I am building 1 chair for a customer, then this chair may take 40 Hours ($20/hr), so the cost of 1 chair $800. But I can make 10 chairs at the same time, this only takes 80 hours, the cost of the same chair made 10 times $160 each. So if I have to build a single chair, I make a very small profit, I only sell it for maybe $250, but the customer is happy (be sure they know that this is a very special price for them), you get good press, and maybe a follow on order.

Ensure you cover your costs – that is the important thing at the start and do not too ahead of your self with pricing, it is a very competative market out there.

-- Tony - All things are possible, just some things are more difficult than others! - SKYPE: Heron2005 (http://www.poydatjatuolit.fi)

View Bob #2's profile

Bob #2

3808 posts in 2620 days


#5 posted 2331 days ago

I agree with you Tony.
I have done contract work over several years in a non related field.
I was asked continously how much it would cost.
I often had to answer that the first one would be $20,000.00 and the subsequent ones were 50 cents each.
The set up costs for most jobs is quite large but once done, the manufacturing costs are mostly a factor of materials and labour with a markup for the producer.
If you put a value on your shop of say $25,000.00 (for arguments sake) You can quickly determine what it costs to rent a $25,000.00 car for instance for a day.
That’s a constant for you plus training and the usual upgrading of skills etc.
Some jobs like the rungs on the bed you are considering are better subcontracted to a CNC shop allowing you more time to work on the parts you can mill conveniently adn economically in your shop.
In contracting with the public we must consider wether we are acting as a “manufacturer” or as a custom artisan.
There is a world of difference and few if any consumers recognise this.

Cheers
Bob

-- A mind, like a home, is furnished by its owner

View Shopsmithtom's profile

Shopsmithtom

780 posts in 2794 days


#6 posted 2331 days ago

Hi Mike. First, before I started this answer, I’d thought I’d look up just who I was answering. I read your profile & just want to congratulate you on your direction in life. Way to go!

Next, on the pricing. You should start be going back on you last project and try to record everything you remember about what you have in it from wood to finishing materials, to supplies like sandpaper. Also try to figure out just how many hours you actually have in it from design to finish. Also, for future projects, it’s a good idea to make up a “time card” and log in and out. As you do more projects in this way, you’ll begin to know how to estimate you next project from your past experience, but don’t rely on your memory, write it down.

When you estimate your next project, you can refer to your past project sheets to better figure your time. Each additional project and project sheet will get you that much better at estimating
The written records will also do a couple more things for you. First, if you want to turn this into a business, it will get you thinking like a businessman as well as a woodworker (and you NEED to do both to be successful and profitable), and second, if you plan to pay taxes (probably not a bad idea if it becomes a full time thing) you’ll have records that include those all important deductions for expenses.

If you look at the last project, try to put this all together and after deducting all your reasonable expenses, estimate what you made per hour. Then on the next one, you can decide how to adjust your numbers.

There, now that I’ve scared you away from a career in woodworking because you thought it was about woodworking and not about paperwork, try to remember this…paper is really wood, too, it’s just sliced thinner. -SST

-- Accuracy is not in your power tool, it's in you

View Woodchuck1957's profile

Woodchuck1957

944 posts in 2363 days


#7 posted 2331 days ago

Alot has to do with what part of the country you are in also. In North Dakota I can’t expect to charge the same per hour and get it than someone that lives in California or Florida where the cost of liveing is higher. Then theres the factor of efficiency, two seperate shops in the same town in California may produce the same quality, but one may be more efficient than the other. It’s really a tough overall question to ask. As far as trying to makeing a liveing from it, don’t knock yourself out, keep it as a hobby or you’ll be back to drinking and doing drugs again, it’s not worth it. I’m sure I’ll get alot of flack for saying it, but lets be honest, the overall percentage of people that can TRUELY say that they make a RESPECTABLE liveing at it is EXTREMELY LOW. Sure, you may make enough to pay for some of the bills that it takes to live, but remember, when you go it alone there are no bennies such as vacation, sick pay, workmans comp, unemployment, medical insurance, dental insurance, or retirement and you will be putting in some extremely long work weeks that in other jobs you would be geting overtime for. Everyone dreams of being Norm Abrahm, but in this economy and all the imports you have to compete against, the odds are not in your favor. Been there done that, won’t ever do it again.

View teenagewoodworker's profile

teenagewoodworker

2727 posts in 2367 days


#8 posted 2331 days ago

i agree that this is a very unstable question that really requires experience but this is the article on pricing that i recently read in Woodworkers Journal.

find out how much you want to make per hour you want to make 75000 dollars you want to take four weeks of vacation you want to work a 40 hour week you will end up working 1920 hours this year divide 75000 (what you want to make) by 1920 (what you want to work) this gives you what you want to make per hour

multiply what you want to make per hour with how long you worked

add labor to supplies

add 15% for overhead costs

add 10% for profit and expansion of business

this is your price

Again this isn’t based on experience it was just an article i read in Woodworkers Journal. if anyone opposes to this please send me a message saying this so i can dispel this.

View jeffthewoodwacker's profile

jeffthewoodwacker

603 posts in 2403 days


#9 posted 2331 days ago

If you are making one of a kind items you should figure 2 times materials cost (this covers waste, finish products, sandpaper etc) and a minimum of $25.00 per hour labor. Add in your profit margin % which should be at least 20%. For production items the cost will go down as it is more productive to make multiples of each part. Go to local craft fairs, studios and other venues where custom made items are sold and look at their prices. Starting out you have to establish a name for yourself. Don’t price your items to cheap—-if you blow up an expensive router bit, saw blade or have equipment go down your profit margin will erode.

-- Those that say it can't be done should not interrupt those who are doing it.

View dennis mitchell's profile

dennis mitchell

3994 posts in 2913 days


#10 posted 2331 days ago

If this is your first job don’t plan on making journeyman wages. Those wages are figured based on years of experience. You will need quite a few jobs under your belt before you can expect to make the big bucks. If you are priced too high to start…good luck getting work. A job that takes you 10 hours might only take me 4 and if we both are figuring $40.00 an hour…I get the work.

View Woodchuck1957's profile

Woodchuck1957

944 posts in 2363 days


#11 posted 2331 days ago

$25 an hour ? $40 an hour ? I don’t think so. You need alot more than that to stay afloat and pay bennies. And then if your working in someone elses home or jobsite their are more costs involved.

View jeffthewoodwacker's profile

jeffthewoodwacker

603 posts in 2403 days


#12 posted 2331 days ago

If you do work in someone elses home or jobsite make sure that you carry some liability insurance. Last thing you want to happen is to cause some damage and end up paying out of pocket.

-- Those that say it can't be done should not interrupt those who are doing it.

View Mike Shea's profile

Mike Shea

152 posts in 2593 days


#13 posted 2330 days ago

well let me tell you guys i didnt expect so many people to respond to my question and i really apreteate all the input. everyone has a diferent view and i respect everyones answer. although in response to “woodchuck”. i woulkd have to geusse that you did not have a good experience woodworking for a living. and because of that you think that nobody else will. i beg to differ. and by saying that it would make me use drugs and drink again!!!!! you are wrong bud nothing will ever bring be back to that especially the the verry thing that saved me from it, woodworking. and saying that most woodworkers dont make a decent living is false. maybey where you live but were i live in los angeles. you have to remember that most of my work and most of my costumers live in beverly hills, pacific palisades, malibu, and hollywood hills. these people dont even look to see what thiere spending. they will pay anything for a one of a kind piece, beleive me i see it everyday at my other job. woodworkers out here arent dirty rich however they are verry well off and usaully can suport a family of four in the suburbs without a problem. thanks for your imput though

as far as the job i just finished i charged $1,500 dollars for my labor. on top of the 1,000 dollars for materials. as i said before for my first job i didnt care what i charged as long as i could make a name for myself and have a few bucks in my wallet. i do understand however that i should not undercharge my work and i am one of those people that are fearfull to bid to high for fear of what the customer might think. so i am on my third job right now and my time is worth alitle more now than then.

once again thanks guys for all your input. im inside eating on lunch break as we speak and im running out of daylight. so i will chat more about this topic later this evening. i am interested in speaking with most of you who might have more experience than me. not in woodworking speficly but in runing a buiesness its tuffer then i thought but im willing to take the challenge.

talk to you guys later.

-- i can do all things through christ who strengthens me

View jeffthewoodwacker's profile

jeffthewoodwacker

603 posts in 2403 days


#14 posted 2330 days ago

When I went from part time woodworking to full time woodworking I made sure that I had enough disposable income/assets to cover my basic living expenses for two years. I was lucky in that I had established a good clientle will doing woodworking part time and had my work in a few shops. If someone doesn’t like a quote I give them I will invite them out to my shop and discuss what makes a handcrafted item worth the price. Running a woodworking business is a joy and a challenge rolled into a single ball of sawdust. You have to learn how to be productive and meet the needs of your customers

-- Those that say it can't be done should not interrupt those who are doing it.

View Thos. Angle's profile

Thos. Angle

4435 posts in 2561 days


#15 posted 2329 days ago

Mike, you probably did all right for a first time job. As long as you covered the material and got a little something for your time you did alright. There is plenty of time to get the formula down pat. As long as you are not going in the hole you can do this to learn. Just don’t carry it too far and go broke. Good luck and keep your chin up

-- Thos. Angle, Jordan Valley, Oregon

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