How Much Per Hour!! (What is you shop rate)..

[jlpservicesinc]

Yes, I've thrown the gauntlet down... I've entered the world of taboo and have started to talk "Blacksmithing shop rate"..     

No one..  I will say it again..  No one wants to talk about shop rate... Either because they are afraid of being judged by others (embarrassed) or it's because they are like, "Oh it's none of your business"

There is so much difference not only in area/location of the USA, but also quality of work,  person is part time,  a hobbiest, a professional, retired with full income.. 

Small shop, no shop, lean to. large shop,  rich, poor, etc, etc, etc..   

Truth is in 38 years of doing this it is in large part never talked about and if you ask someone they will get defensive right off the bat...  

So, here we go.. This is a 4 part Q & A..   

"How much do you get for shop rate?"          

"Do you feel it's enough for what you make and the quality of your work?"

"How do you feel your rate compares to other professional people in other trades as well as blacksmithing?"

"Please state where you are in the scope of things..  Hobbyist, part time, full time, retired second income/fun."

Don't be ashamed of what you charge as it's only honest answers that will help other establish a working understand of what really needs to be charged to make a living..   If more people get the facts it will help all to become more competitive across all facets of smithing.. 

 

With this being said.. Keep in mind unless you live at home with your parents or are retired and own your own home and shop.. The fee's or costs associated with  building, coal, propane, electric, retirement, vacation, health care. taxes etc, etc falls onto the smith..  Ouch.. 

 

1990 60.00 + coal+steel+ misc , Full time professional.. 3-4 average jobs per week.. Quoted at 30% +/- with sign off on quote.. Custom orders with no stock list..  It was barely enough per hour to get by..   60.00 was high for the region with the going rate between 35.00 and 50 per hour...
By 2004 I was getting 65.00 per hour + as stated above.. and is when I retired from full time smithing..  

2017 125.00 +coal+ steel+ misc..   hobbyist,     Price per hour if it were solid would make it a competitive living.( no market for hardware locally anymore)..   This is a sliding scale depending on product and the sales potential behind it.. Demo sales usually a 20% price reduction..     125.00 is on par with other professionals such as oil burner techs,  auto techs.. Some plumber and electrician are getting more per hour and all these guys are getting 150% mark up on parts..  The rate is slightly higher on knives or other cutting tools  as well as any custom forge tools.. 

[Michael Cochran]

As someone who has the desire to make a side business from my hobby this will be a very good topic to follow. Thank you JLP, for starting it. 

[JHCC]

Pure hobbyist, so everything I make, I either keep or give away.

That said, if I do ever decide to try to make a buck at this, I know that I'd better get my skill level and production capacity to the point that I can justify $125/hour. Not there yet.

[BIGGUNDOCTOR]

I am like JHCC in that I keep or give away what I make now. 

This will be interesting because demographics, local income levels, and location will play a big part in shop rates.  May I suggest adding another question? "What is your main product?" because what is made can greatly affect pricing due to perceive value.  Job shop, architectural, restoration items, historical reproductions, art, industrial.....

[ThomasPowers]

They have been discussing this for more than a decade across the street...

[Gergely]

There have been some threads on this sensitive subject, let's hope this time no one takes stating business issues as a personal offense.

All I can do in this is to share my part. I know it will not be very helpful as Hungary is so far far away from anything. But anyway...

I try to get around 12-14$ /hour rate. It does not always occur.

I produce one of a kind items mostly using one of a kind types of stocks. I'm trying to create concepts for small quantity production items that sell well. That way I can get the making process more cost effective. Right now I don't feel my rates are high enough, but I think I need to be more well known to get my prices up. (Also finding the right clientele is the main target of work.)

As far as I know artist blacksmiths in Hungary struggle unless they have market from Western Europe. Bladesmiths do better both in the local and outside market. I have no clue of their rates, no one talks about that and they take questions as offense. Rates of other blue collar trades vary widely geographically (yes, even in the tiny little Hungary  ) I'd say mine is in the lower middle ranks.

And yeah, I'm a beginner as a full timer. Trying to get known, trying to find territories in the craft that can be mined successfully, trying to do something different that others do around here. I have very-very much to learn about keeping a business, and thinking like some kind of businessman  I like this craft very deeply but I know it won't be enough if I can't pull my things and myself together. 

Right now my main "production line" is small items that sell at craft fairs. Also doing smaller or larger commission stuff. Sometimes agricultural things come in, where hot work and welding meets and no one else can have it done.

Bests to all:

Gergely

 

 

 

[jlpservicesinc]

10 hours ago, Michael Cochran said:

As someone who has the desire to make a side business from my hobby this will be a very good topic to follow. Thank you JLP, for starting it. 

@Michael Cochran What would be you desired per hour rate?   What do you figure you would need to survive daily, weekly or monthly..  Shop rate is not always as simple when you consider the costs of living..  Do you want to take a vacation? New car or truck perhaps or a new piece of shop equipment? 

10 hours ago, JHCC said:

Pure hobbyist, so everything I make, I either keep or give away.

That said, if I do ever decide to try to make a buck at this, I know that I'd better get my skill level and production capacity to the point that I can justify $125/hour. Not there yet.

125.00 would be by most standards today extreme though I do know a guy who gets more than that, but he specializes in Bronze work and his month bronze bill far exceeds my yearly income..  75 per hour for a well put together and skilled person is possible in MA..  But, this would also bring in other facets like electric arc welding and such.. to also stay competiive.. 

9 hours ago, BIGGUNDOCTOR said:

I am like JHCC in that I keep or give away what I make now. 

This will be interesting because demographics, local income levels, and location will play a big part in shop rates.  May I suggest adding another question? "What is your main product?" because what is made can greatly affect pricing due to perceive value.  Job shop, architectural, restoration items, historical reproductions, art, industrial.....

For sure..  Even though from what I have seen unless in extremely poor places the differences are getting narrower.. And lets face it    15.00 in one place can be like 100.00 in another.. 

8 hours ago, ThomasPowers said:

They have been discussing this for more than a decade across the street...

Lot longer than that..   I started talking about it back in the 90's but no one would really address any of it..  Guilds were a way not only to share knowledge but also to encourage a more even rate for different areas to boost jobs across the guild more evenly.. 

You've been at this awhile.. Do you not sell anything?   

8 hours ago, Gergely said:

There have been some threads on this sensitive subject, let's hope this time no one takes stating business issues as a personal offense.

All I can do in this is to share my part. I know it will not be very helpful as Hungary is so far far away from anything. But anyway...

Thanks for giving honest to goodness answers.. This is exactly what this thread needs to be of any use..    Sounds like you are in the same boat as far as information and trade secrets..

Do you figure in your expenses as far as fuel and such or do you do just the flat shop rate?  

One of my good friends tried to talk me out of being a blacksmith and just going into knife production full time..    I was still perfecting my craft so told him no..   I understand now it would have probably been a better living as back then the market for blades hand forged was growing at a decent rate and the wage was decent..  

The Colonial hardware scene in MA, USA on the other hand is pretty much non existent which is my background and if there is work no one wants to pay anything for it..  

It sounds like you are creating a market for your wares and looking for the places to fit in with sales.      it took me about 8 years of full time smithing before i started to get known in circles outside about 50miles radius so I ended up producing works for Boston and a few other larger towns..   

Keep it up and thanks again for sharing..   

[Jim Coke]

Greetings all,

         LOL .....  When I had my full time blacksmith shop of 17 years I had my hourly shop rate posted in clear view,..  Many times while accepting a new job I would quote the approximate hours and material it would take to complete the work.. I would glance up at the shop rate sign and the customer would do the head math.  Many times husbands would accompany their wives to make sure they were getting the best deal .  I wood look over my safety glasses and utter  “ JUST THINK OF MY WORK AS LARGE JEWLERY”.. I must have been doing something right because when I retired I was 10 months behind.  Another thing if someone comes to your studio and states that I only want something simple.. Show them the door..   Quality work deserves fair pay..

Forge on and make beautiful things.  And get well paid for what you do. 

Jim

[Michael Cochran]

43 minutes ago, jlpservicesinc said:

Michael Cochran What would be you desired per hour rate?   What do you figure you would need to survive daily, weekly or monthly..  Shop rate is not always as simple when you consider the costs of living..  Do you want to take a vacation? New car or truck perhaps or a new piece of shop equipment? 

As I said, I’m thinkin go about a side business. My day job pays the bills and gives a little wiggle room but not much more. That said when I do get vacation time I get to stay home simply because there isn’t enough money to go anywhere. I know that I’d like to make an extra $300 each week so that I had money for various things (vacation, retirement, new tools home and vehicles over time). Most weeks I can realistically spend 20 hours in the shop without too much trouble which would make the hourly about $15. That sounds like good money for most of the immediate area. Where I live you can work fast food, gas station, grocery store, or a few smaller manufacturing places. Where I work the starting pay is $10/hr for unskilled people so I don’t feel $15 is too far out of the realm of reality. 

You've definitely got my gears turning. I’m going to need to do some thinking and planning before I start but I’m still working that way. 

Just a quick disclaimer, I’m not by any means a professional or ever a great smith my any means. I would have to do some more research before I could come up with a good number. I also need to up my game before I could make it profitable to be running a business. 

[jlpservicesinc]

3 hours ago, Jim Coke said:

Greetings all,

         LOL .....  When I had my full time blacksmith shop of 17 years I had my hourly shop rate posted in clear view,..  Many times while accepting a new job I would quote the approximate hours and material it would take to complete the work.

Well, @Jim Coke..   I do appreciate you sharing some of your history but a little more detail like what was the shop rate about what time frame..  Were you comparable to others in the area?  Were you happy with the rate at the time?  All these things play into how one feels about a job.  did you have a stock list or did you do custom orders? 

When I quite I was a month behind as I was so burnt out I only worked in the shop when forced into it..  Thanks again..   

[Charles R. Stevens]

Even poor welders charge more than $15hr. Don’t under sell your self.

[Rashelle]

"How much do you get for shop rate?" 

When I sell stuff/services my pricing rate reflects a minimum of $250.00   a day. Depending if needed I will up front say why and charge more. Such as extra expenses or difficulty, or I flat out would prefer not to do it. I'm either selling small stuff and or knives that I already want to do. Occasionally I'll take commissions for things that intrigue me or otherwise catch my interest.    

"Do you feel it's enough for what you make and the quality of your work?"

For now it fits.

"How do you feel your rate compares to other professional people in other trades as well as blacksmithing?"

I'm on the low end at the moment.

"Please state where you are in the scope of things..  Hobbyist, part time, full time, retired second income/fun."

Full time blacksmith and bladesmith instructor. With that said I can not go into my rates with my employer. The above rates are for my it catches my interest I want to do it stuff, but I do not have to take commissions.

[jlpservicesinc]

Just now, Charles R. Stevens said:

Even poor welders charge more than $15hr. Don’t under sell your self.

Try to remember it could be a regional price type thing..   Ideally getting a better view of what is being charged regionally, skill set wise, etc, etc, etc.. would really help out others looking for the info.. 

I've had a few projects in the early days where I wish I made 15.00 per hour....  I still get a welding job once in awhile that comes back to bite me especially when " It's an easy job" for a friend or such..

Charles do you sell any of your wares?

[swedefiddle]

Good Morning,

If you charge a fair wage and do fair work, you will stay busy. You can adjust the door rate depending on what the market will bare. If your price is too high, you may not have the work. Charging a little less and staying busy, trumps not working. It is easy to adjust your rate after you have a following. There will always someone who complains about the rate, but they like your work. You have to turn a deaf ear to these people and stay busy enough. Only YOU can tell what is fair for your own area and clientele.

Don't forget about your silent costs. Extra Insurance, upkeep on equipment, update Tooling, wear & tear on your body, etc.

Neil

[Jim Coke]

Greetings JLP.

         My shop rate was 65.00 per hour... I did mostly custom work . Railings, wine gates, wedding arches, lighting, fence work , sculptures, furniture, kitchen hoods, etc etc . I also had in my studio items for sale , Pot racks tables, sculptures and such. I never tried selling my iron at  art fairs because it seemed like a dead looser. I did also a lot of consirvitor work on damaged antique items . I had extensive equipment which allowed me to do things other shops just could not handle. A good customer base takes time and doing quality work pays off in the long run. My suggestion for getting started is to invest in good equipment , do quality work at a fair price.

Jim

[Charles R. Stevens]

I don’t sell my work to often, tho accasinaly somthing shows up that a couple of my welder buddies can’t fix. I have a coat load of hours owed buy them, if I need specialty stuff welded I give them a call and either drop it off or they come buy.

My shop rate to build and repair driving carts is $60 an hour, and about what I charge for forge work. This is estimated time not clock time. To put that in perspective mechanic and weld shops charge $80-125 an hour in Oklahoma but as my insurance and subsistence is paid buy SSA and I work to my schedule and not to client deadlines I am comfortable. If I have to spin up B’ugly, leave the comfort of my own bathroom and coffee pot then I charge $1.50 a mile. My welder buddies still make bank to hire me out as I cost less than the gas to run a rosebud 

 

[ThomasPowers]

yup I have been at it a while; but I made a decision to keep it a hobby and so run my smithy at a dead loss.  I saw what making a job of it can do to you when I spent a year apprenticed to a sword maker; that and getting married & having kids made me appreciate a good paying job with benefits.  I like being able to turn down too little money with nary a qualm or being able to donate items to things I like without having to worry about the bottom line.  I teach a get them hooked class for way too little as payback/payforward.

Even when I sell stuff I have found I have a limit on how much I'll mark it up for resale, I'm happy with my profit and the buyers are usually extremely happy.  I guess it runs in the family.  My Grandfather had a Farm implement dealership and in the 50's when there was a drought he refused to foreclose on a lot of accounts in arrears saying that if he took their tractors back how could they ever be expected to make a crop and pay on the debt... 

[Glenn]

 Federal Minimum Wage

The current US federal minimum wage is $7.25 per hour, and has not increased since July 2009. However, some states, cities and counties have a higher minimum wage rate. When the state, city or county minimum wage rate is higher than the federal rate, employers are required to pay workers the higher amount. 

On September 15, 2017, the Department of Labor published a notice in the Federal Register to announce that, beginning January 1, 2018, the Executive Order 13658 minimum wage rate is increased to $10.35 per hour (82 FR 43408). This Executive Order minimum wage rate generally must be paid to workers performing work on or in connection with covered federal contracts. Additionally, beginning January 1, 2018, tipped employees performing work on or in connection with covered contracts generally must be paid a minimum cash wage of $7.25 per hour. 

Let us do a little math. There are 2080 work hours in a year (8 hours a day, 5 days a week). For easy numbers, let us give you 80 hours or 2 weeks unpaid leave, and round the hours down to 2000. You have some skills so let us bump your pay up to $10.00 per hour for easy numbers, which would be $20.000 per year. From that amount you pay taxes and a whole bunch of other stuff before you even see your pay check from a day job.

As a blacksmith, why would you expect to get paid less than flipping burgers, or other minimum wage jobs?

Whether you produce any products this month, or not, you have rent, electric, water, sewer, phone, internet fees, taxes, fees, and that list just goes on and on. All this must be paid if you do not open the shop, produce one S hook or a major project. You then have expenses such as steel, fuel, consumables, related to how much product you produce. Next add the cost of your equipment, the anvil, vise, work table, grinder, drill, hammer(s), power hammer, and what ever you use to fill the shop. Throw in the money needed to replace things that ware out, and any new, or new to you equipment, that you need or want. Add in what ever we forgot to list, such as your accountant and the extra fees he charges to do your taxes.

Downtime such as talking to a customer, changing belts on a grinder, bringing fuel inside to the forge, making a steel run to town, a fuel run, sweeping the floor, and etc. Add in finishing time, packaging time, delivery time either to the post office or directly to the client, and drive time and time for installation of the product on the clients site. If you do a demo add that time away from the shop.  That is a long list once you start thinking about it and the down time COST you money, because it is non-production time.

We have not mentioned the cost of burn ointment, band-aids, the visit to the emergency room for any injuries, or a hospital visit for overnight or major injuries. Be sure and count this as downtime.

All this money has to come from somewhere and it is NOT from the $20,000 paycheck you earn from working. This are costs that you need to cover over and above your hourly earnings.

As a hobby blacksmith, you invest part of the income from your day job into the hobby. As a retired, or doing it for the fun blacksmith, you invest part of the income from your day job, retirement, or other income source, into your hobby.  As a part time blacksmith you invest part of the income from your day job into the part time business. As a full time blacksmith, it is a business and you know what the expenses of running a shop add up to because your accountant needs that list to do your tax return.

The bottom line is the money must come from somewhere, your day job, your spouses day job, your retirement income, somewhere. Make a list and keep track of everything for a month. That is all expenses, all income, all time, split into all the time the lights were on in the shop, and all the time you are doing business paperwork. Also record all production time split into hammer time, and work related non-hammer time, such as cleaning, painting, packaging, installation time, etc. 

All this is your COST. If you want to make any profit, add that to the total. (grin)

When you get the totals at the end of the month you will find that it is NOT what you expected.  This leads you to the realization that sometimes it is more cost effective to say no, hand someone a $20 bill so there are no hard feelings, and walk away.

 

[Al Stephens]

Hello, JLP. My shop rate is $45. This is the figure I use when I am pricing a new product. This includes time, material, ect. I believe this is fair for the quality, style, of my work. if I do custom, or repair work, that is where it starts, then everything is added on. In recent years if approached by unknown contact, I have set a $200 non refundable fee, paid upfront for me to consider job. This really cuts down on silly, "Can you do this" stuff. That fee is modified if they provide detailed, dimensioned drawings. I am a full time smith, and I'm probably on  the low end of trades in the area.  My work is sold wholesale, and I work on a first come first serve basis, most of the time I have to schedule work ahead of time.  I do not do retail shows. 

I must also add, I own my home, shop, all equipment, vehicles, and all my bills are paid in full at the end of each month. My wife works another job( in addition to all she does for me), and our health insurance is provided by her employer.

I am very thankful, and content, to be able to work, how, when, on  what, and as much as I want.  Al  

[Michael Cochran]

13 hours ago, Charles R. Stevens said:

Even poor welders charge more than $15hr. Don’t under sell your self.

You’re right Charles. I was only referring to what I’d like to have extra which translated to $15/hr. In all reality it would be higher if I factored in other things like consumables and various fees and taxes associated with a business and income. It was a bad number and will be addressed before i have it set in stone. I imagine my number should be similar to PVF after I do all the proper planning. Even though my immediate area isn’t all that high class there are multiple markets within a couple hours that would buy high end products. Those are the markets that would allow for a higher income potential and would skew my sales results if I could tap into them. I do have contacts in custom home building I could call on and work out a few pieces to be installed which would be good at gettin my name out there. Once I have my remaining ducks in a row I’ll be calling on those people and see where that leads. 

[jlpservicesinc]

14 hours ago, swedefiddle said:

Good Morning,

If you charge a fair wage and do fair work, you will stay busy. You can adjust the door rate depending on what the market will bare. If your price is too high, you may not have the work. Charging a little less and staying busy, trumps not working. It is easy to adjust your rate after you have a following. There will always someone who complains about the rate, but they like your work. You have to turn a deaf ear to these people and stay busy enough. Only YOU can tell what is fair for your own area and clientele.

Don't forget about your silent costs. Extra Insurance, upkeep on equipment, update Tooling, wear & tear on your body, etc.

Neil

@swedefiddle This is where this thread can really help out as it can establish a pricing range that is in check /area for a given local..    What is your door rate?  

This point about not charging enough and staying busy vs charging a fair wage and not having any work..       One of the things that needs to be determined is it viable to even start a blacksmithing business?      If you start out and find you aren't getting any orders it does not mean you are charging to much.. It can mean there is no demand for the work you are producing..  

Product purchases are strictly related to the customer desiring to purchase the items..  Market appeal and purchasing power becomes the driving force to expand or even go into business to begin with...    While this is much truer in the old days before the internet..  Today you can reach a market around the globe..   This is where a pricing structure and price point can be set as long as you generate a high quality product and it is competively priced against the market share..

What do you get for shop rate???  again the premise is to show what different locations can expect and this can determine what the going rate is...  Also, if everybody agrees on a certain price point  it can lead to higher wages for all..

14 hours ago, Jim Coke said:

Greetings JLP.

         My shop rate was 65.00 per hour... I did mostly custom work . Railings, wine gates, wedding arches, lighting, fence work , sculptures, furniture, kitchen hoods, etc etc . I also had in my studio items for sale , Pot racks tables, sculptures and such. I never tried selling my iron at  art fairs because it seemed like a dead looser. I did also a lot of consirvitor work on damaged antique items . I had extensive equipment which allowed me to do things other shops just could not handle. A good customer base takes time and doing quality work pays off in the long run. My suggestion for getting started is to invest in good equipment , do quality work at a fair price.

Jim

@Jim Coke Thanks for posting it up..  It's what will make this thread useful..    What was the time frame?  Last year,  5 years ago etc, etc, etc.  Today??

13 hours ago, ThomasPowers said:

yup I have been at it a while; but I made a decision to keep it a hobby and so run my smithy at a dead loss.  I saw what making a job of it can do to you when I spent a year apprenticed to a sword maker; that and getting married & having kids made me appreciate a good paying job with benefits.  I like being able to turn down too little money with nary a qualm or being able to donate items to things I like without having to worry about the bottom line.  I teach a get them hooked class for way too little as payback/payforward.

Even when I sell stuff I have found I have a limit on how much I'll mark it up for resale, I'm happy with my profit and the buyers are usually extremely happy.  I guess it runs in the family.  My Grandfather had a Farm implement dealership and in the 50's when there was a drought he refused to foreclose on a lot of accounts in arrears saying that if he took their tractors back how could they ever be expected to make a crop and pay on the debt... 

I hear you on this one.. Makes it a lot simpler...  But, if you do sell something.. What is the rate you try to achieve?  

You come from a smart family.. Good genes..       It's good advice..       Today all this time later.. It is amazing how things still hold fairly true as it did back in the 90's..   I had a lot of clients again who wanted hardware..   The only problem is.. The carpenters had been there. The electricians had been there..  Pretty much every contractor had been there before the people finally came down to hardware..   At this point as most know they had over spent as every thing costs more than originally expected.. 

So this put me into a precarious position...  Basically having to educate the customer as to why my hardware was better vs Acorn or HD items (not all customers but there is a wide demographics that want real hardware) and even if they knew the difference they had a budget in mind based on what was selling at the stores or online.. 

This was the double edged dagger..   I had to be competitive but also keep the hardware made to my standards...   Anyhow, I lost out..

2 hours ago, PVF Al said:

Hello, JLP. My shop rate is $45. This is the figure I use when I am pricing a new product. This includes time, material, ect. I believe this is fair for the quality, style, of my work. if I do custom, or repair work, that is where it starts, then everything is added on. In recent years if approached by unknown contact, I have set a $200 non refundable fee, paid upfront for me to consider job. This really cuts down on silly, "Can you do this" stuff. That fee is modified if they provide detailed, dimensioned drawings. I am a full time smith, and I'm probably on  the low end of trades in the area.  My work is sold wholesale, and I work on a first come first serve basis, most of the time I have to schedule work ahead of time.  I do not do retail shows. 

I must also add, I own my home, shop, all equipment, vehicles, and all my bills are paid in full at the end of each month. My wife works another job( in addition to all she does for me), and our health insurance is provided by her employer.

I am very thankful, and content, to be able to work, how, when, on  what, and as much as I want.  Al  

Perfect post on this subject..  More like these are appreciated.. Thanks so much..   

I get a 75.00 design fee now if I need to go to the customers house.. This fee is applied to the net price when finished as a credit..

[Jim Coke]

Greetings JLP,

        I closed my shop 7 years ago and retired..  I moved up to northern Michigan but still keep quite active in Blacksmithing. I have 2 blacksmith shops , a welding shop , a sheet metal shop , and a line shaft shop. I enjoy teaching both beginners and advanced Smith’s our trade.  I do this on a appointment basis at no cost.. My way of passing it on.  I get a lot of Smith’s wanting to learn fly press and treadle hammer techniques and tooling..  As far as charging for design at the customers home yes I added it to the final bill.. What I did do which I thought was quite unique  was to take photos of their home where the project was and superimpose my designed work on the picture so the customer could see exactly what it would look like when finished.. It sure saved a lot of back and forth time. 

Forge on and make beautiful things 

Jim

[ausfire]

Hi JLP, and thank you for an interesting thread.

I have been a bit reluctant to comment on this topic because there are so many variables involved. Our situations are all so different and there is a vast array of factors that influence what we charge for our work.

The major factor of course is whether you engage in blacksmithing for a living, as a sideline business or purely as a hobby. If you need to sell your work to pay the bills, your rate is going to be different from someone who doesn't. As a schoolteacher, my blacksmithing was just a hobby and most of what I made was kept or given away. Since retiring from teaching, the blacksmithing has become more of an occupation in conjunction with the curatorship of our museum. 

I am fortunate in that my production costs are quite low, as the forge is part of a historic village complex and I don't have the overheads associated with a normal business. I also have the luxury of a captive audience each day.

I generally make things that show a variety of techniques (except forge welding which I am not good at), that don't take too long and that maintain the visitors' interest. As any one who does demos will know, people do like to buy things they see made.

Now, as for pricing, I find an hourly rate is difficult because I spend a fair bit of time explaining and talking (too much sometimes). I base pricing on how long it takes to make a standard object. I sell a bull's head camp oven lifter at say $55 and they take pretty much exactly an hour of demo time. Everything else, bottle openers, key chains, wall hooks, etc are priced in comparison to the time taken for the lifters. For example, most bottle openers take about half an hour (depending on how fancy the handles are) so they sell at $25.

I know this doesn't really address your questions about hourly rate, JLP, but just added my two cents worth.

 

[Charles R. Stevens]

Jlp, I know you can relate to hoofcare, were your accountant tells you you are charging 1/2 what you need to and then have customers tell you that “so and so” charges 1/2 what you do. My response is to go have so and so do it, I will be here when he doesn’t return your calls or hurts your horse. I have also told folks I would work as a door greater at Walmart, before I charged less. 

Not only do you have to eat, you have to pay all your overhead. In the case of hoof care, it includes the cost of operating my vehicle ( .50 a mile) rasps ($1.25 a horse) nippers ( $.25 a horse) risk as well as wear and tear on your body. Shoeing has higher overhead, shoes, nailes, fuel, wear and tear on the forge). 

As a business profit is not the same as labor, profit is on top of labor. Labor, profit and overhead are all important.

Labor includes living wage, medical insurance, disability insurance, vacation and retirement.

profit is the percentage of your business that makes it attractive to some one else who would buy it. This is the money you would reinvest as well as the money you would live on if you hired the labor. 

Overhead is the cost of materials, consumables, wear and tear on tools and equipment as well as the cost of liability and asset insurance, shop mortgages, shop maintenance, startup loans, as well as assorted taxes and fees. 

In the US medical insurance is running in the neighborhood of $800 for 60/40 coverage. That alone is $5 an hour... rent or a mortgage $8-15 an hour (low end) $1 an hour for food... that’s just labor expenses.

so as Glenn points out, unless you are subsidizing your blacksmithing from you or your spouses day job or retirement $10-15 an hour anywhere in the US is essentially giving away your work. 

If you can afford to, this is ok as the value of the warm and fuzzy feeling you get if priceless.  

[rockstar.esq]

JLP, in the construction industry there is a reference book written by a company called R.S. Means which compiles annual data from the Western states to generate average material, labor, and equipment costs for every aspect of construction.  I have the 2006 Building Construction Cost Data book open to Construction Specification Institute (CSI) section 5720 Ornamental Handrails and Railings, Hand-forged wrought iron.  The linear foot cost  for material is $86.00, Labor is $25.50- $38.50/ hour and the book has zero equipment costs on this item.  The total before overhead and profit is $111.50 to $121 per linear foot.  The total with overhead and profit runs $138 to $156 per linear foot.

According to the book the productivity is between 8' and 12' per 8 hour day which is also represented as .67' (8 inches) to 1' per hour.

These manuals also provide city cost indexes for the Western United states which modify the average data presented.  For example Anchorage, Alaska in the Metals division shows 126.3 Material, 114.1 for Installation, and 122.8 for total.  This means that Anchorage costs 22.8% more per linear foot than the average for the above handrails.  In contrast, Prescott Arizona has a total modifier of 86.1.  That suggests that prices in Anchorage are 36.8% higher than what they get in Prescott. 

Having shared all of that I feel it's important to caution anyone against taking these figures seriously.  I own this book because it was a required college text book .  I haven't bought current versions because it's not relevant to my work for several reasons.

The first and most significant reason is that prices are more complex than the sum of averages.  Even with the fancy modifiers, the nature of averages is to reduce complex but accurate information into simple but misleading information.  A few significant outliers can skew the average to where it doesn't represent the majority of data points.  JHCC is asking $225 per hour, PVF is asking $45, Charles is asking $60.  The average of those three is $110 which is $125 less than the highest rate, yet it's only $65 more than the lowest rate.  Average wages are only meaningful when the data is so consistent that you don't really need to average them.

The second reason is that contractor pricing is influenced by scale, capacity, and efficiency.  If the year's income depends on a few weeks of work, that work can't be cheap.  Conversely, if competition leads to steady work, the rates will decline.  If buyers only exist at low price-points,  efficiency of scale is necessary to be profitable.  For example, cheap cars come from huge (and expensive) factories.

The third reason is that market pricing is influenced by factors that aren't so easily defined.  Available labor pools, access to equipment, distribution systems, seasonality, weather, politics, competition,  relationships, traditions, regulations and education to name a few.  

All off that is perfectly invisible when looking at  labor and material rates.  If you want a (legal)  profit as a business you have to; work faster, work smarter, sell higher,  buy cheaper, or restrict competitors on the market.

My point is that there are a lot of ingredients involved in the special sauce.  I think working from an hourly rate to making a living is backwards.  What does your product sell for in your market? How consistent are those sales?  We can't create buyers out of thin air. We have to offer a better value from the buyers perspective.  Provided there's a reasonable revenue in the offing, figure out what it takes to make that revenue profitable.  Consistent profit margin is more important to success than the individual composite figures used to get there. 

The hourly-rate comparison is somewhat akin to a competitor asking what color tape they're using on their packages.  Sure, it's part of what makes the operation tick, it's just not particularly useful without a lot of context.  Paying a specific wage doesn't tell you whether they're a global empire worth billions, or a desperate operation headed for bankruptcy.

If you wanted a comparable measure of business viability, annual net profit margin is about as good as it gets.  It's my considered opinion that very few entrepreneurs actively monitor their net profit margins. 

Just for comparison's sake I've heard the national average net profit margin for general contractors reported at 1.4%.  If you can consistently make $1.41 free and clear on a sale of $100, you'd be beating the average net profit margins of an industry producing roughly 6.5% of the US gross domestic product.