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I Forge Iron

What do you hammer?


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Sounds like some are comparing apples and oranges here.

Coming from an industry stand point there`s usually 2 accepted methods that I know of to price work and that`s the bid or estimate/contract approach where you look at a job and say "We can do it for this much" and are held to it.Usually you bid against competition for this type of work although I`ve seen people use a competitor`s estimate as a starting point for you to show him why he should pay more to have you do it.
When doing or bidding this type of work it`s VERY important to record everything in detail so you can both know where you can improve productivity and how much money you "left on the table" to be factored into future bids or return work.State and federal contracts are usually handled this way.With alittle digging you can find out what the budget and other bids were after the fact.

For those uncharted waters that the bid can`t or won`t cover there is always the "Time and material"(T&M) job.You have a shop rate(usually per man,per hour)plus other factors that result in you getting a solid return on your overhead plus profit.T&M jobs need to be tracked and recorded also so the techniques and approaches involved can be improved and applied to future jobs.Specialized skills/equipment=more money.Rented or hired specialized skills/equipment=WAY more money(because of extra time,trouble and responsibility).

There are factors involved for both type of job that need to be addressed as they don`t fall in the "under the hammer" time slot.Admin costs,new tooling or machines,transportation and other off-site costs,subcontracting,skill levels and attrition in employees,The economy,etc are always variables that impact the cost at that particular time and place.

IME,when talking about Art all that goes out the window.Art(and that includes creative ironwork) throws wide the door to the "perceived value" arena and anyone who doesn`t ask "what`s the budget?" is setting themselves up to leave a big chunk of change on the table.
In the past I and others I know have lost jobs by bidding creative work too low,the prospective customer felt we bid it too cheap to take the time to do a proper job.We were looking at art work thru industrial lenses.
I`ve also worked as a craftsman with "conceptual artists" who wanted the lowest bidder within spec so they can put more money in their pocket.

That being said there are exceptions to every rule.We once had to manufacture bearing bosses for a Coast Gaurd cutter stabilizer system because the originals were cast units and made in England.There were none sitting on shelves anywhere in the world and the boat HAD to get done and off the rails.I mentioned in a meeting that we could produce welded steel assemblies that would meet or exceed the iron castings and we were given the thumbs up.
Time and material job(to include making tooling and the learning curve)became the price for follow on units and we became the sole supplier of these highly inflated parts.When I left the yard they were being produced by semi-skilled workers and sold for approx. 10+ times what they cost to produce(I never was able to find out how much they actually sold them for).
Likewise I`ve been on jobs where 2 workers(me being one)were paid the same as 6 because that`s what we had to beat.BTW-The job was bid for 6 guys,14 days.Jude and I did it in six 10 hour days.The reason we got the job and the rate was the other shop couldn`t start it for 3 weeks.We could start tomorrow.

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I'd like to include an angle I don't think has been mentioned yet.

Ponder time.

How much time is spent figuring out how to work the product or make the art. I've had jobs that I have spent many days passively thinking about how I am going to make that particular design work. To me, this is the time least valued and most profitable. How many times has anyone here started a project with a "concept" in mind of the finished result and made it up on the fly? Then to realize you lost your but on it?

I am in the middle stages of putting together a product for the wholesale and retail markets. I suspect I have over 100 hours designing, thinking through and working out the process of this design. How do I charge for that? Then there is Marketing the product, whats that worth?

So far, I've come to this. My projected build time is just under 2 hours. I have built a couple "test" pieces to verify this. Tooling and jigs have taken several hours. I have tracked all the actual times and guessed at the "Ponder Time".

The perceived value is based on what the market will bear (competition with other designs) and the unique quality of my design. Based on these factors and a rule I use for Furniture Making I have priced the item at 3 times what it takes me to make it. This hand made to, so as I bring in faster machines and streamline the production time to where I think I can get it, that multiplier should become 4. This is how I break down the price. 1/3 for labor and materials, this includes shop rate and material markup too. This is a fixed cost with no room for negotiation, It costs what it costs. 1/3 to overhead, this includes upkeep and upgrades to the shop, again, a fixed cost with a small area for negotiation. 1/3 to marketing again, a fixed cost with a small area for negotiation.

As I said, I'm still in the middle stages of putting this together. If any of you guys has an insight or suggestion, I'm all ears!

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I do try to quote based on Grant's percieved value but I find I usually end up quoting a fixed price using an hourly rate to calculate the price. My rate is a sliding scale however depending on how much work I have, how much I want to do the job, risks involved with the job and how quickly the customer pays.

For patternmaking I typically quote at $70/ hour. If a job looks particularly interesting I might quote it a little lower, but if the drawing is crappy or unclear or it is a dirty repair job I will quote it higher. Several times I have gotten jobs even though I was not the lowest price but because I could deliver faster, I have also gotten extra money to change a 2-3 week delivery to a 2 week delivery. I try to give myself a little extra time in my quote but I will often put a note in my reply to call me if my quoted delivery is an issue.

Before I put in the Massey, my typical rate in the blacksmith shop was $75, now that I have the bigger hammer I try to quote at $100 for work in blacksmith shop. Right now I rarely get that rate because I find I am spending a lot of time making tooling. If the tooling is specific for the job I do try to build it into the quote but things like bigger swages spring fullers, spring swages and fixtures for holding tooling to the hammer I don't. As I get repeat work I am finding that I am starting to get the higher shop rate.

When I was still chasing after ornamental work I asked most customers for their budget and never got a reply. One of the reasons I have decided to avoid ornamental work is I have spent way too much time visiting a potential customer getting no input as to what they want, making up several designs and pricing it and then getting no reply or having them go with a cheap fabrication.

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Looks like a previous post went into the great beyond instead of here so I have a reply and a question.

My reply was to Danger`s point about visual references in another post but also hits on something Jnewman said about customer feedback and wants/needs.
When dealing with things like boats,old farm houses and other non-normal things it`s important to make sure your work visually blends with the "big picture".If you build plumb,level and square and your work is the only thing within eye line that IS then it will stand out as something that does NOT belong.Something to keep in mind when pricing is "building to suit" meaning building something to fit in a non-level,plumb,etc setting should be priced higher as it`s more work.
My old co-worker,Hey Jude,used to say"Build to suit or go another route".Sometimes it`s just faster and better to tear it all out and start from new rather than patch or repair.Likewise,if everything else is out of whack then a curving or freeform design may be easier and faster to build than trying to make everything lean in different directions to match surroundings.

The question I have speaks to Jnewman`s post.How many charge for estimates?
When I gave free estimates I was overrun by prospective customers.As soon as I started charging a fee,usually $100 per hour,payable upon arrival then knocked off the bill at the end of the project,my estimating took a nose dive but my work stayed level and profit increased.
More time in the shop as the tire kickers no longer took it up.Productivity and profit went up as I spent far less time dragging info out of the folks I did estimates for and the estimates were for serious people who wanted real work in the near future and had done THEIR homework in order to cut back on my $100 per hour visits.
Try making your shop rate your stated estimate fee and see if it makes a difference.You can always waive it if you feel a need to.

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I never considered giving each machine its own rate. I charge by the hour and find it to generaly be adequate. If a project such as forging 5" round requires 3 people it gets billed for each of their hours. takes longer to soak up heat? Well I am billing by the hour. Now, I currently only have one hammer and no longer run the big beast of a gas forge, so all my work is on the same tools pretty much whether I am forging a tiny coat hook or a 100 ton crane hook. the 500# hammer and big forge would have made those big jobs easier but I dont get into big stuff offten and they seemed like over kill (shop space is limited) When I started I was charging $25 an hour, now I'm up to $100( it has been a while) I figure I get paid for about 1 in 3 hours I spend in the shop which seems pretty average.

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Not sure if you are talking about my work or the idea,

My work, speaks for itself.

The idea can be infectious, building the perception of value in my work to the customer, I believe this is part of the reason I have been successful. When someone actually observes me work on one of my hammers they to understand my drive and ability to transform the material adding value to the once raw material. Most of the time the customer does not view or even comprehend the process but can see the process in the material by the end result, back to my first line “My work speaks for itself.”

I think most people can identify with anyone with passion about his or her work. If someone is digging a hole with a shovel and is passionate, it too can even look like fun? At the very least you don’t mind paying them to do it.


Interesting.... I actually worked on a septic crew when I was young... I really enjoyed it (I know Im strange) But designing the system and building it, running the heavy equipment.. I always thought it was strange that people would pay us a couple hundred bucks an hour to come dig up and destroy there yard and be happy to do so if there ability to go to the bathroom indoors was in jeopardy
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I'd like to include an angle I don't think has been mentioned yet.

Ponder time.

How much time is spent figuring out how to work the product or make the art. I've had jobs that I have spent many days passively thinking about how I am going to make that particular design work. To me, this is the time least valued and most profitable. How many times has anyone here started a project with a "concept" in mind of the finished result and made it up on the fly? Then to realize you lost your but on it?

I am in the middle stages of putting together a product for the wholesale and retail markets. I suspect I have over 100 hours designing, thinking through and working out the process of this design. How do I charge for that? Then there is Marketing the product, whats that worth?

So far, I've come to this. My projected build time is just under 2 hours. I have built a couple "test" pieces to verify this. Tooling and jigs have taken several hours. I have tracked all the actual times and guessed at the "Ponder Time".

The perceived value is based on what the market will bear (competition with other designs) and the unique quality of my design. Based on these factors and a rule I use for Furniture Making I have priced the item at 3 times what it takes me to make it. This hand made to, so as I bring in faster machines and streamline the production time to where I think I can get it, that multiplier should become 4. This is how I break down the price. 1/3 for labor and materials, this includes shop rate and material markup too. This is a fixed cost with no room for negotiation, It costs what it costs. 1/3 to overhead, this includes upkeep and upgrades to the shop, again, a fixed cost with a small area for negotiation. 1/3 to marketing again, a fixed cost with a small area for negotiation.

As I said, I'm still in the middle stages of putting this together. If any of you guys has an insight or suggestion, I'm all ears!


Absolutely.... I figured out quite a while a go that gate latches are a real issue for my bottom line. I have made it a point to custom design a latch and sometimes elaborate mechanisms for every gate I build. I feel its one of the things that really defines a pedestrian gate.... Its hard to come up with an somewhat original latch for every project, and I have had more than one that the gate was built in a day or two but the latch took the rest of the week... and of course the latch is a bit that I always forget to figure into the bid...

One of the things that keeps me motivated though is the fact that I dont worry about the money end of things much (unless there is not enough, then all of a sudden it becomes quite important) I try to keep in mind that reason why I started my own shop was because I wanted to build stuff, not because I wanted to get rich. I quit a fantastic job that paid way more than I deserved because I knew if I had to put 50 hours a week in there I would never be the metal worker I wanted to someday be (that and I hate to sit at a desk, much rather be installing a septic system)

My shop rate is meaningless really.... its about a hundred bucks an hour but when I am charging by the hour I dont keep good track of my time. Its not a good way to run a business but I really have no interest in running a "good" business. What I want to do is work in a well equipped shop on fun stuff. If I end up with enough to pay my mortgage, eat, take my wife out once in a while and buy a new machine on occasion then as far as I am concerned I am doing fine... My system has worked so far and I have yet to give much of a thought to how or why, and as long as people keep showing up with dough wanting me to build stuff I likely wont put any effort into running a better "business" I think I could... but to me it seems to defeat the whole point to going to the shop. When I am fully engaged in a project time has no meaning... I can work 15 hours a day and my only regret is I cant figure out a way to spend 20.

I think the best situation would be that money could be completely removed from the proses
. If I did not feel the pressure of having to come up with the $9500 a month it takes to keep the shop doors open (thats break even, If I want to eat or live someplace other than the shop I actually have to net something) I would have a much diffrent outlook. My dream really is to get to a point where I can spend as much time as I want on a project and then charge what ever I feel like, Rather than being at the mercy of a customer that is worried about how much an hour of my life is worth.

One thing i'll add that I found to be quite helpful..... There are many times that what I build is not worth the amount of money I need to get to build it. I have a job right now that is 56 drawer pulls.... its about $6000 worth of simple repetitive work... you could buy the 56 handles at home depot for maybe $100? But your not buying draw pulls from me, your buying my life for the amount of time required to build them... My life, my time has nothing to do with the value of the object Im working on... That was a hard lesson. I used to feel that if it was less than "worthy" thing that I should charge less (like working on some industrial gizmo) Now I look at my time as my time, I only have so much and If your project is not worth my time its not my responsibility to devalue my time to even the field
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One thing i'll add that I found to be quite helpful..... There are many times that what I build is not worth the amount of money I need to get to build it. I have a job right now that is 56 drawer pulls.... its about $6000 worth of simple repetitive work... you could buy the 56 handles at home depot for maybe $100? But your not buying draw pulls from me, your buying my life for the amount of time required to build them... My life, my time has nothing to do with the value of the object Im working on... That was a hard lesson. I used to feel that if it was less than "worthy" thing that I should charge less (like working on some industrial gizmo) Now I look at my time as my time, I only have so much and If your project is not worth my time its not my responsibility to devalue my time to even the field



Well said!

I don't know how many times I have heard the old " you get to do what you love" yada, yada, yada- Implication is you get to do what you like so you should do it for cheep because your having fun and enjoying yourself. Thats BS! Its still hard work.

As Danger said-
"A mark left in a hot piece of metal?
PRICELESS."

Larry-
It seems you have found a place were price and value have intersected. I'm still working at it.
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I never considered giving each machine its own rate. I charge by the hour and find it to generally be adequate. If a project such as forging 5" round requires 3 people it gets billed for each of their hours. takes longer to soak up heat? Well I am billing by the hour. Now, I currently only have one hammer and no longer run the big beast of a gas forge, so all my work is on the same tools pretty much whether I am forging a tiny coat hook or a 100 ton crane hook. the 500# hammer and big forge would have made those big jobs easier but I dont get into big stuff offten and they seemed like over kill (shop space is limited) When I started I was charging $25 an hour, now I'm up to $100( it has been a while) I figure I get paid for about 1 in 3 hours I spend in the shop which seems pretty average.



I'm responding to this from a production furniture-making background here but I think it applies to all work.
When I learned how to breakdown and bid work, we had a base rate we would bid from then we added the increased capacity of a better machine. In other-words it would take so long to make the part using traditional methods (by hand usually) with the increased production capability of the new machine (CNC for instance), production would increase by X That factor would be added to the base rate. I think this is what drives people to get bigger, faster machines.

I like Dangers comment about $400.00 per hour for hand hammering because it flies in the face of everything I have learned. I find it a great perspective to think about. Sorta like my comment of ponder time.
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Larry,The one thing I think you`re missing is that if you run the business as efficently as possible then it would allow you to do things like get out from underneath some of that overhead.
I know you`re probably looking forward to moving into a new shop that you OWN instead of rent.The only way to make that a reality is to get a handle on the business end of your life.

I can understand your custom latch point of view.You want the latch to be every bit as innovative and have the same level of quality as the gate.SO PUT IT IN THE ESTIMATE!!!
The reality is that if the customer doesn`t appreciate that part of the job enough to pay for it then why are you knocking yourself out to give it to him for free?He pays for the latch or he gets a store bought latch,maybe covered by a hammered plate.
Most customers only care that it opens easily and closes securely.As long as it blends with the gate the rest is lost on them.
If you were paying an employee by the hour and he took 2 days to design and make something that was not part of billable work would you stand for that?If you see your time as being different from that worker`s time then you are looking at things way wrong IMO.

The two things I see that are holding you back are keeping your creativity/quality in check or billable(time/quality management) and your communication problems(both with help and with customers).

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I remember the exact place and time when I decided the path for rest of my life, from then on it was my passion and drive that has allowed me to reach this point. Its not over yet, it may end heroic or tragic but the constant is my insatiable obsession to build stuff. I think my “ponder time” is all the time, building a vision of what work lies ahead or solving the riddle of which way I turn the door knob ever time I enter a room. I’m with Larry on this one, I too really don’t know what I’m doing when running my business, hell I can’t grasp the gist of money. All I know is when the alarm goes off my focus is on how to build it bigger, better and faster, I’m just glad someone recognized my ability and has patronized my endeavors.

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I remember the exact place and time when I decided the path for rest of my life, from then on it was my passion and drive that has allowed me to reach this point. Its not over yet, it may end heroic or tragic but the constant is my insatiable obsession to build stuff. I think my “ponder time” is all the time, building a vision of what work lies ahead or solving the riddle of which way I turn the door knob ever time I enter a room. I’m with Larry on this one, I too really don’t know what I’m doing when running my business, hell I can’t grasp the gist of money. All I know is when the alarm goes off my focus is on how to build it bigger, better and faster, I’m just glad someone recognized my ability and has patronized my endeavors.



Makes sence to me, the only people who can become successful blacksmiths are people that would do the work for free,
before anyone can recognize you have to be worthy of it.

I have worked in metal shops run by business men and they dont work properly, its always a series of complaints to everyone
they scream about numbers and "production"

the best shops are run by tradesmen at least as an employee they know how things work.
plus its pretty hard to know how to quote something properly if you have never done it yourself

some hours you make 10 times the regular amount
many others you lose money or break even

take what you get and make the best of it

around here the shop rate is 90-150 dollars per hour depending on what you are doing
work with stainless is always about 150 a hour

most of the railing/gate places around here are totally out to lunch no work and no money

I am lucky I work in a jobber shop we do everything you can imagine it probley the best way to have a good business
we make railings and gates
do sheet metal with stainless
repair buckets and industrial stuff as make stuff for mills and factory's
we do automotive and marine and make aluminum ramps

I never know what will be in my hands or what material it will be made from
its like the daily lottery in a 3 man shop

I like it alot but its not truly what I would choose to do but I get to do that at home I am building towards it slowly

I need to journeyman in the USA learn more about the craft and slowly build a reputation

right now I do some straight fabrication for people, most people that are wanting to buy from a backyard shop want backyard prices
its all good though it pays for my tools
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We also try to run our blokes on a bonus system, regarding job times. Ie if I come up with a job time of say 1 hour per piece, and our men can produce it in half that time (effectively doing double the work in that time) we will pay them the time that they have saved. All our job cards have the job times on them, sometimes our blokes will earn themselves 10 hours bonus in a day, just by working cleverer rather than harder.

Our oppositions charge out rates for their hammers are (and this is hammer time only, not including grinding, cutting stock, heat treatment, etc)
10cwt hammer $125.00 hour
15cwt hammer $150.00 hour
40cwt hammer $300.00 hour

On their 40 cwt they will normally be able to charge out between 12 to 16 hours a day for an 8 hour days production.

Phil

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When I worked for Ingersol Rand they did what they called time studies.They watched competent workers do jobs and charted how much time it took them to accomplish different tasks.After they had enough data they were able to project the time it should take to do a job safely and to spec.We used to make some pretty good money beating their projected times.

Most mechanics working on both cars and motorcycles follow a flat rate manual(dealers especially do)and beating the flat rate is an excellent way to inflate your paycheck.

Many different trades use some form of this system and it allows workers to control how much they earn which is ALWAYS a powerful motivator.

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Have I told you I’m a hopeless romantic and a bit of a dreamer? I appreciate everyone’s comments in this thread; I think it helps to take stock of your worth, monetarily and spiritually from time to time. I am one man with a fire some iron and a hammer, it all still seems a bit magical to me but in the end the iron doesn’t care and it is just work, back to work.

post-2769-12679669909072_thumb.jpg

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Have I told you I’m a hopeless romantic and a bit of a dreamer? I appreciate everyone’s comments in this thread; I think it helps to take stock of your worth, monetarily and spiritually from time to time. I am one man with a fire some iron and a hammer, it all still seems a bit magical to me but in the end the iron doesn’t care and it is just work, back to work.



iron may not care but your suppliers probably dosmile.gif

Me, my first priority is putting food on the table a roof over the head for the family. Gotta have an eye on the business side of things to do that. Anything over that and being able to do so by playing with my lovely toys tools whilst being my own boss is a luxury I'm always very grateful I can enjoy.
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From a spiritual point of view there is little that rivals going through life with the hands of a craftsman,the eyes of an artist,and the soul of a dreamer.

Survival in the mundane world unfortunately requires that we add the brain of a businessman and as we all know that unfortunately wants to overtake and control everything!

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I have a little problem with flat rates in auto shops. I installed/serviced auto lifts, and all manner of other auto shop equipment. In doing so I talked with a lot of mechanics working for all of the different manufacturers. From their comments Toyota was the only one that was close with the flat rate times to do a job. What that meant was that "shortcuts" were made to get some jobs done in the alloted time. I am not sure if I would want a guy rushing to get my car fixed in a certain amount of time. This is one reason why I do the repair work on my cars.

Another side of this was bidding repair work. At one dealership the service manager would have a repair ticket, for say a transmission job, and say " R&R transmission x hours" then the mechanics would bid lower hours until one of them got the job. The senior guys always got the gravy jobs this way, and stuck the new guys with the crappy paying ones. This is one reason why a lot of mechanics move around from dealership to dealership.

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  • 6 years later...

As a long time business owner. i see so many have great ideas but few realize it takes a lot of sales just to pay over head before you put a penny profit in your wallet.I am not saying do not start but do it part time first till it gets to a point your not making what you can but rememer about eating and overhead.i did what ive said above and it took me 3 years before it started paying me.and as we all know times are hard and my get harder plus art and crafts are the first thing people stop buying when times are hard..just ask any artist about that.

what you charge for your work/skill is anther issue.

something i find very few smiths or others do is set aside some of there knives for the day that they retire or get to old to work or injury for those days will come.it cost $ to live no matter what age you are.so set some items aside for a rainy day. when i started back in the 80's there was so few of us ,now there is mega hundreds or thousands. think twice before you give up a weekly income with ins . 

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A few comments. This has been a worthwhile thread. I once worked with a man whose sideline work was dozer work (he owned it) I asked how he priced his jobs and I got a simple answer. The cheapest part to replace is $10,000. I won't start it for any less. Not many have mentioned amortization.

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