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

[beaudry]

8 hours ago, rockstar.esq said:

On January 13, 2018 at 7:04 PM, beaudry said:

 Plumbers and electricians are somehow in another league altogether, so if that's how you want to spend your work day , go for it.

 

 What I meant is that electricians and plumbers are in early  and all throughout  a building project .

Running hot and cold water, lights  and power are essential components while ironwork , particularly forged ironwork is more of a luxury item  that usually comes at the end of a project when the budget has been pretty much blown out of the water.

There is still a place for it  , but it takes some time and effort to educate the client how it can really add aesthetic value and why it costs what it does.

[rockstar.esq]

2 hours ago, jlpservicesinc said:

I don't agree.  Okay.. Its not an experiment its nearly how all traditional businesses were formed...

I think that would be difficult to prove unless you're talking about the 95% failure rate for new businesses.

2 hours ago, jlpservicesinc said:

Capital?? Whats the investment.. Do you have investment capital???   Success with that model??  While it's a newer model it also has or offers the largest risk.. 

  Your points are well and good and certainly covered all ready and the information you present is by all accounts the same thing that keeps people within a given box.. I'm not saying this to offend. . I'm saying this from the stand point of being and doing and coming up through the ranks..   I fully understand where you are coming from and all the market research..   Some people devote themselves to this type of thing almost as an archivist of sorts.. 

This is pretty incoherent but I think you're mostly frustrated by my contention that thinking things through is superior to just winging it.

 

2 hours ago, jlpservicesinc said:

There are only 2 factors which lead to success from a money stand point..           Supply and demand   or Demand and supply....  LOL..  

That's not even true from the confines of your argument.  

"People really do try to avoid this very simple question "Of what is your shop rate"..   Why is that?"    

Because it's the business equivalent of asking what size shoe you should wear to be an NBA all-star.  The answer doesn't stand on it's own.  That question reveals a fundamental ignorance of business.  I respectfully answered that on my very first reply to this thread where I also answered your shop rate question in detail.

JLP,  you're obviously hard working and skilled.  You've put a lot into your craft and it shows. It seems like you've come across a whole lot of bad business advice that you're repeating.  I never said it was impossible to be a professional blacksmith.  I tried to point out ways to see if a business was viable or not.  In today's economy, very few new businesses are viable.  Maybe you see that as someone telling you what to do.  You could choose to see it as an opportunity awaiting it's time.  You could also choose to see it as an opportunity to network with potential colleagues and clients.

I see a lot  of frustration in your posts as it pertains to business.  I don't think reciting my credentials can add anything to the value of the truth.  I've laid out the why's and wherefores for everything I've recommended.  I've patiently identified how the bad advice you've presented pans out.  

I suspect that you're not where you want to be, and I believe that's partially due to being out of your depth when it comes to business.  With that, I believe I've reached my stop on this particular crazy-train so I'll wish you well.

[Marc1]

To be fair to all sides of the argument, business strategies are like navels ... everyone has one. 

From the little I now about the US, clearly your country is not uniform and each state and within each state each region has different markets and what works for one does not for the other. If there was one simple business strategy proven to work everywhere for everyone, it would probably be etched in stone and set on a pillar in a public place. 

I tried to steer the discussion towards the business of making money. Only because it is a favorite topic of mine. Why some people have difficulties making money and why others find it so easy. It is a line of debate that can become uncomfortable and most people get very defensive, however it can be an area of growth that is neglected in our education and probably the reason fo a lot of failure and frustration.

What is the most efficient vehicle to make money is a different topic altogether. We assume that in a blacksmith forum, the idea is how to make money blacksmithing or at least with some form of metalwork. 

The question is moot in my opinion for the reasons given above. It may work in your corner of the woods but not in mine, so there are no formulas for success. 

In my view from where I sit, one way to make some money with blacksmithing is making artistic work that can be on public display. if you have the connections to sell your artform to councils, state governments or federal government, you have a good chance to make something with your hand that has a lot of added value and cash it in.

Honestly there are easier ways to make money and keep blacksmithing as a hobby. if you need to make the hobby pay its way ... there is always ebay. 

 

 

 

 

[JustAnotherViking]

For a younger person starting out, with no real financial commitments or responsibility (mortgage, children, medial insurance, and other costly dependants), I can understand how a 'strategy' (and I use that term loosely) of trying to make a few things and slowly build it up, may produce viable results over a few years.

In reality this often isn't the case. What happens during your startup if you have an accident and can't work for a week. What if that become a month? What if your car breaks down and it's your only way of getting to clients? What if you've invested all your time in a commission and the customer doesn't pay at the end... you've turned down other work, and now you have nothing.

You need some form of start up capital to see you through any rough times and unforeseen issues.

Unless you're fortunate enough to inherit, or save the capital you need to get going, you are going to need a proper business plan, backed by market research to get a business loan.
I'm not saying you need to employ a top research firm, and sink all your capital into this, but you will need some form of credible research.

 

Some people hit it lucky and find a market (hammers were given as an example). To the outsider this looks like the person just stumbled across this and were 'lucky'

In reality, if you dig a little deeper, there is a lot of time (and money) invested behind the scenes in marketing, research, advertising, and other hidden costs. It's not just a one man (or woman) shop striking gold by accident. They have a team behind them. Researchers, marketers, accountants, and so on... not to mention all the failed ideas.

[jeremy k]

Starting a 1 person blacksmithing business,  - Capital investment - that is every hour of thinking and every $ that goes into that starting at the very first thought of doing it. Your time is worth something - your time learning/practicing is the investment - lets put a $$ amount on that - does one ever recoup that? by charging a flat rate(usually barely covers the current working expenses and a wage for that person). One actually has to make more than what you think to cover replacement equipment / tools( normal wear and tear). I agree the actual charged wage is not universal for all areas of this world due to many factors.

What I think would be a more relevant question would be - How can we train people to understand that as a craft person with a very high learning curve of learning (blacksmithing), that our time is very well worth other major professions. Even more so when one gets to the crossroads of hobby/part time to going in full tilt, because by then you will have realized how much tooling and yes more equipment is needed. All this does take time and money - That is the "investment" Have I paid for my investment - over the 30 years of metal working - most likely not but I consider that the cost of doing what I love to do - work with metal. I have expanded my capabilities thru tooling and equipment over the years so in that I can do more of a variety of blacksmithing - its a forever learning occupation.

Thank you all for your replies to this thread - I have found it very interesting.

[Jim Coke]

Greetings,

           A friend once told me the way to be a millionaire in the blacksmith trade is to start out your business with 2 million and sure enough at the end of the year you will be “A” millionaire.  Keep it simple and profitable. 

Forge on and make beautiful things 

Jim

[Al Stephens]

Hello All. To add to my post of several days ago, I thought I would put out some "historical" facts about my blacksmith journey. Perhaps they will help someone starting out, with the thought of making smithing a "occupation."  I began as a volunteer, hobbyist. I studied, watched, ask questions, listened to answers, and practiced, practiced, practiced. At that point I had worked as a machinist, and mechanic, for about 15 years. I decided I wanted to forge for a living, and wound up accepting a job forging for someone else , which I did for almost 13 years. One of my mentors called one day and offered me his "production" line, so he could go into semiretirement to pursue his art work. The offer he made me was good enough that I felt I would always wonder about it, if I didn't try. For 4  LONG years, I kept my full time job, while building up my business. Then the day came that I had to make a choice, because  I couldn't continue to do both. Since then I have worked for my self, and have continued to make my mentors line, my own. I believe I have been successful.

I don't have any formal higher education. My work day usually starts not long after I wake up, and some days last past when I should be asleep.  I have almost alway used the ideals I was raised on,"If you can't pay for it, you don't need it" to guide me. I've alway kept very careful records, so I know what will sell, and what won't. So when I have the opportunity, I do make up stock. I have been fortunate, to meet many very smart, talented, intelligent, creative people, that have been willing to share their experience with me. I try to pay that help back, by passing it on to others, in as much as my limited ability will allow. I also have had the honor to have my work sold by many wonderful people across the country, without them I would have never made it.

As the old song says,"What a long strange trip it's been"  Al

[jlpservicesinc]

I deleted a whole post I was going to put as I to find I am just spinning my wheels..        

 

As it stands right now.. There is basically an  tie between:

1, Having researched a market and then devising a plan for a full time blacksmithing shop   (still don't understand) Or 2.  then supply and demand based on work performed and sales/purchases = growth and  equipment and experience gained over time..

   Again the running or starting of a blacksmithing shop should really be a different thread as this was not the goal of this thread.. The original goal was to see the potential or possibility of what might be charged based on input from all levels of paid smiths..  Hobbyist, part time, full time, etc, etc..

There seems to be a huge disconnect between what the reality of a shop a full time blacksmith shop with profits is and what modern businesses are based on.. 

While they do overlap and share some basic tenants..   I don't know one blacksmith who has ever looked or had researched what market share will offer the best reward for time put in..  LOL..     100% of the blacksmiths I know..  Chose blacksmithing as a side line because they thought it was neat or cool..  This lead exactly to the mode/model  of growth I have all ready time and time again pointed out.. 

@rockstar.esq  if this is how you ran or run your blacksmithing business more power to you..   You don't agree with my point of view.. That's ok.. I've shared the reason why I don't fully agree with your point of view in regards to starting a blacksmithing shop.. 

If you really feel your way works the best, please, please..    Help me understand why your way would be correct or the more correct way??  I must have completely missed something...

 

I've been called different, weird, difficult, stubborn as well as a whole bunch of other things..  To me these are all labels I am very proud of..       I do not follow status quo..  Never have..  Never will..  But I am also very open to learn from someone if they can present something that is fitting for a given outcome or desire..


There is a difference between looking at a valid business with an established clientele and work/sales force and then doing research from an investors or entrepreneurs side or view point.. then I can see your post as being valid..

Just watch the "Shark tank"..        LOL..  

Maybe Alec did spend time researching the market potential of rounding hammers..   LOL.. I doubt it as it seemed to me.. He just forged a few.. Got a few questions, then started teaching..  

Never said hard work was not part of his equation..     Lots of Alec Steele fans and not meaning to upset any of you guys.. He does great work and has promoted blacksmithing to new levels. This is fantastic..  And yes "He works Very hard and has worked very hard to get where he is"..  

 

26 minutes ago, PVF Al said:

Hello All. To add to my post of several days ago, I thought I would put out some "historical" facts about my blacksmith journey. Perhaps they will help someone starting out, with the thought of making smithing a "occupation."  I began as a volunteer, hobbyist. I studied, watched, ask questions, listened to answers, and practiced, practiced, practiced. At that point I had worked as a machinist, and mechanic, for about 15 years. I decided I wanted to forge for a living, and wound up accepting a job forging for someone else , which I did for almost 13 years. One of my mentors called one day and offered me his "production" line, so he could go into semiretirement to pursue his art work. The offer he made me was good enough that I felt I would always wonder about it, if I didn't try. For 4  LONG years, I kept my full time job, while building up my business. Then the day came that I had to make a choice, because  I couldn't continue to do both. Since then I have worked for my self, and have continued to make my mentors line, my own. I believe I have been successful.

I don't have any formal higher education. My work day usually starts not long after I wake up, and some days last past when I should be asleep.  I have almost alway used the ideals I was raised on,"If you can't pay for it, you don't need it" to guide me. I've alway kept very careful records, so I know what will sell, and what won't. So when I have the opportunity, I do make up stock. I have been fortunate, to meet many very smart, talented, intelligent, creative people, that have been willing to share their experience with me. I try to pay that help back, by passing it on to others, in as much as my limited ability will allow. I also have had the honor to have my work sold by many wonderful people across the country, without them I would have never made it.

As the old song says,"What a long strange trip it's been"  Al

Excellent post.. Thank you..

[jlpservicesinc]

6 hours ago, jeremy k said:

Starting a 1 person blacksmithing business,  - Capital investment - that is every hour of thinking and every $ that goes into that starting at the very first thought of doing it. Your time is worth something - your time learning/practicing is the investment - lets put a $$ amount on that - does one ever recoup that? by charging a flat rate(usually barely covers the current working expenses and a wage for that person). One actually has to make more than what you think to cover replacement equipment / tools( normal wear and tear). I agree the actual charged wage is not universal for all areas of this world due to many factors.

What I think would be a more relevant question would be - How can we train people to understand that as a craft person with a very high learning curve of learning (blacksmithing), that our time is very well worth other major professions. Even more so when one gets to the crossroads of hobby/part time to going in full tilt, because by then you will have realized how much tooling and yes more equipment is needed. All this does take time and money - That is the "investment" Have I paid for my investment - over the 30 years of metal working - most likely not but I consider that the cost of doing what I love to do - work with metal. I have expanded my capabilities thru tooling and equipment over the years so in that I can do more of a variety of blacksmithing - its a forever learning occupation.

Thank you all for your replies to this thread - I have found it very interesting.

This is what i have found over the years..      " If you make it look easy it must be"..           If you are very good and proficient with you work;;;    " It must be easy"..  Education of the client is one of the toughest jobs you will ever encounter..

When I looked up my journals and the spring lock was only 1.5hrs.. I nearly pooped my pants as today that would be 2-2.5hrs to make.. Maybe even 3hrs..

The investment in your skill set will always pay you back..  It is the reason you can take on the jobs you will take on.. Learning is an every day part at the forge and anvil.. Continuing education if you will..

It's the stuff behind the scenes that can come back to bite you.   Accounting, paper work, leases, etc, etc..  

I think there is also a miss understanding of what "flat rate" is...      @jeremy k flat rate is the ideal rate once you take into consideration  all of your debt related to the shop with profit added into the mix as pay for labor..

With any business someone works for an hourly rate or $ per hour. Salary= hourly rate with non paid overtime..    A blacksmithing shop since the sole proprietor of the shop takes care of everything all the duties fall onto him/her..   Ideally the rate should offer you what you desire for a pay (payroll) per hour when finished with you forgings which includes all the other expenses as well..  Do you want to get 65.00 per hour for your self or your personal pay??     What does it cost to run and own/lease the shop area? Retirement, etc, etc, etc.. 

 

[jeremy k]

Jennifer - you are correct - I was just trying to say that people don't charge what they should to cover those expenses. This is mainly I believe because there are so many circumstances, such as retired from their life supporting job and just wanting something to do even if they only barely cover costs of blacksmithing, and many other scenarios.

[BIGGUNDOCTOR]

   I went with the start small and grow as the business grew with my machine and fab shop. My partner and I were 24 and 25 when we opened in 1987 with a 1,000 sqft job shop. The next year we took over the bay next door, then the year after that we moved to a 4,000 sqft shop. Every piece of equipment was paid for with cash. We never took out a loan, or leased any equipment. I was hitting machine shop auctions and buying for an average of 10 cents on the dollar of new. WIth any craft as a business I would do it the same way. You could get a fat loan, and dump it into the best equipment out there, then you need to make that payment every month, and that adds a lot of stress to a person. When all you have to do is cover rent and utilities it goes a lot easier.

 

   I don't hear people talking about their latest forged item they bought..new I Phone  yes, but not any forged items. Forged items will be a tough sell in some areas and with the whole smithing craze there are a ton of wannbees out in the marketplace hawking their wares.  I saw a show years ago about a guy who makes entry gates for large estates, and he charges $50,000-$100,000 per gate. With a niche market you can make money smithing. One professional smith commented on another forum how he made a million dollars with his forging over the last 40 years......that is $25,000 a year on average or $12 per hour. A friend's kid bought a 3D printer and then looked around for something to make. He ended up settling on cookie cutters. As business picked up he added more printers. 5 years later he has 125 printers, a CNC turn and mill center 30 employees and will do seven figure profit this year. Not bad for a 30 year old guy. So, both routes will work. Have the skills and build the reputation, and find a market and jump in. Timing is also a factor. The kid with the 3D printer caught the fidget spinner train exactly at the right time. He sold $180,000 worth in 2 months when he was getting $20 each, now they are at the dollar stores. I saw a guy take a simple request for an edge burnisher to go in a Dremel tool for leather working and turn it into around $25,000 (1,000 burnishers) over the next year.  The guy who made the first replacement shifter bushings for Saturns ($15) did well because he was the only source -GM wants to sell you the whole cable assembly for $120+ and if you own a stick shift Saturn you WILL be replacing that busing sooner or later. Now there are several options on the market. 

  If I was going to sell as a hobbyist I would say a minimum of $25 per hr. Which is on the high end for wages down this way. Too much higher and the locals wouldn't be able to afford it. Now living just outside of Fabulous Las Vegas Nevada has some advantages when looking for higher end clients. 

[jlpservicesinc]

8 hours ago, JustAnotherViking said:

For a younger person starting out, with no real financial commitments or responsibility (mortgage, children, medial insurance, and other costly dependants), I can understand how a 'strategy' (and I use that term loosely) of trying to make a few things and slowly build it up, may produce viable results over a few years.

In reality this often isn't the case. What happens during your startup if you have an accident and can't work for a week. What if that become a month? What if your car breaks down and it's your only way of getting to clients? What if you've invested all your time in a commission and the customer doesn't pay at the end... you've turned down other work, and now you have nothing.

This is called being self employed..   If you are self employed and do not have self employment insurance (which is tough to get paid from anyhow) it does not matter what job you have if you can not work..  Being self employed you can't call in and say.. I'm not coming in today..   You don't show up.. You don't get paid..   

it's how it has always worked..   Ideally if taking the long road as I have pointed out.  A person will all ready have an understanding of this factor and if able to make a tidy bit on the side as part time would be putting money into an account for such things..

8 hours ago, JustAnotherViking said:

 

Unless you're fortunate enough to inherit, or save the capital you need to get going, you are going to need a proper business plan, backed by market research to get a business loan.
I'm not saying you need to employ a top research firm, and sink all your capital into this, but you will need some form of credible research.

If you are totally starting out cold. This is true..  I actually did this back in the 80's and was told to pick another job, or automate,, etc, etc.

8 hours ago, JustAnotherViking said:

 

Some people hit it lucky and find a market (hammers were given as an example). To the outsider this looks like the person just stumbled across this and were 'lucky'

In reality, if you dig a little deeper, there is a lot of time (and money) invested behind the scenes in marketing, research, advertising, and other hidden costs. It's not just a one man (or woman) shop striking gold by accident. They have a team behind them. Researchers, marketers, accountants, and so on... not to mention all the failed ideas.

I didn't say he got lucky.. I said he created his own market and demand created, a void thus a need to increase production. (this was lucky)..   I've seen tons of hammers made.. What does this rounding hammer have that all the others don't???   The person behind the hammer making the videos to promote such product, thus creating the demand..  

 

In What blacksmithing shop have you found this to be true??   If you know of any blacksmiths shops that have done this which is an old shop.. Please let me know..
 

[jeremy k]

I think Brian Brazeal, along with Uri Hofi were a few that started the hammer craze -- Alec(learned from Brian) and many others have just been making hammers that in some cases, use the same forging process, looks and even stampings to help them sell.

As Jennifer has done and has done well - made videos showing how to do forgings - I have not decided to spend the time and money on the equipment involved in doing how to videos as much as some day I'd like to. Another one of those "Investment things"

[jlpservicesinc]

4 minutes ago, jeremy k said:

I think Brian Brazeal, along with Uri Hofi were a few that started the hammer craze -- Alec(learned from Brian) and many others have just been making hammers that in some cases, use the same forging process, looks and even stampings to help them sell.

yup.. Sorry but these guys were mentioned awhile back in this thread..

[gmbobnick]

Blacksmithing is an archaic industry dwarfed by technology.  However it survives as an art instead of an industry.  A blacksmithing business model - based on costs and production rate - just doesn't work.

 

While industry profits by decreasing the inputs and increasing the output, art is just the opposite...its path to profit is where input is increased and output is decreased, so long as there is demand.

 

...so back to work getting better at the art.

 

 

[Marc1]

Absolutely agree!

A brief history of "our" smithy story. My father owned an antique shop. A customer came in with a photo of a forged bed head and asked if he could find something like it. My father told her he would research it. He went out to find a blacksmith with the talent to make it. Found and old italian smith who made it for him. He paid 100 for it and sold it for 1000. Soon he hired a shop and a few blacksmith to work for him and started to make things for his antique shop. By far the beds were the most sought after item and the shop started a craze that lasted two decades. The scarcity of real blacksmith that could see the difference between a forged scroll and a piece of steel contorted by a machine kept the business going for a very long time and the copycat, way back in the distance. 

Can this business strategy be reproduced today? Sure, if you can reproduce all the circumstances it will work ... therefore the answer in most cases will be no. Our profit margin in those days was astronomical. Material was dirt cheap, wages just as cheap, and no competition meant we could charge what we wanted. 1000% profit margin was the normand we employed the few true artist blacksmith still alive in the region. I started to work in the smithy at age 15 half true the busy times. When I turned 25 two of the old masters had passed away, a third had retired due to ill health and I got married and moved out to pursue other interest. There has never been any other shop able or willing to make anything similar to what we did. It was the sixties and seventies.  

 

[JNewman]

Rockstar you are repeating the business school mantra of doing market research then producing what the market needs.  What you are failing to see is .  that this is exactly what JLP and others are advocating doing.  Making a couple of items part time and seeing if they sell and at at what price they will sell at is market research.    Blacksmithing is different than a business where you have to make very dedicated expensive tooling to make a widget and needing to know if it will sell.  As well it does not account for new markets created by marketing various ways. 

I often hear the buzzword "market research" without a real definition of the term.  What people say they will buy and what they actually will buy are often very different things.  When I made my first swage block pattern I made the block I wanted.  I was showing it to people at a blacksmith association meeting and a person mentioned they would really like a small swage block around 6"x6" ,  there was another person who agreed enthusiastically.   I have sold over 1000  6x6" swage  blocks by now however those 2 people have never purchased one despite asking if I could make one that size. 

[rockstar.esq]

5 hours ago, jlpservicesinc said:

@rockstar.esq  if this is how you ran or run your blacksmithing business more power to you..   You don't agree with my point of view.. That's ok.. I've shared the reason why I don't fully agree with your point of view in regards to starting a blacksmithing shop.. 

If you really feel your way works the best, please, please..    Help me understand why your way would be correct or the more correct way??  I must have completely missed something...

JLP, 

If I had to guess I'd suggest that you misunderstand the economic law of supply and demand.  That's not "modern" business thinking, nor is it blacksmith specific.  Just like gravity, it applies to you whether you understand it or not.

The advice I recommended is to actually find a viable opportunity to sell to clients where your work/product/skill is in demand before you start a business.  I'm repeating an ancient business approach that reduces risk, increases profitability, reduces work, and yields faster return on investment.  This is commonly referred to as "a business plan".  

Launching a business just hoping that there might, eventually be someone buying what you offer is a gamble.  Just like gambling, that approach has ruined a lot of lives.  If you want to add yours to the list, so be it.  Please for goodness sake don't take others down with you.

1 hour ago, jlpservicesinc said:

I think there is also a miss understanding of what "flat rate" is...      @jeremy k flat rate is the ideal rate once you take into consideration  all of your debt related to the shop with profit added into the mix as pay for labor..

An "ideal" rate that's suitable for all situations is a compromise.  As in, you will severely compromise your ability to survive if you overprice little stuff and underbid big stuff.  Worst of all, you can't tell how far you're off so there's no opportunity to improve.

JLP, you asked me to help you to understand what I'm getting at.  Maybe a different context would help.

Imagine this whole thing as a shop safety issue.  A novice wanders into a shop full of power tools.  They've got stickers, guards, and safety equipment all over them.  It seems sorta obvious where the dangerous bits are.  Does that provide the novice with enough information to avoid hurting themselves?  Can you see how a lifetime of narrowly avoiding injury could instill bad habits?  Would you want someone that dangerous in your shop?

Actually understanding what the machine does, how it works, what it needs, and what you need to operate it safely is all necessary to give that novice a reasonable chance of success.

You are advocating unnecessary and unsafe shortcuts that jeopardize your business.  "Shop rate" comparisons are like asking what species of wood you should use to pin the guard  back on a circular saw.  Sure, there are three fingered "pro's" who will answer you.  That doesn't make it a good idea.

Tossing yourself into a machine you don't understand isn't smart.

 

 

 

[jlpservicesinc]

41 minutes ago, gmbobnick said:

Blacksmithing is an archaic industry dwarfed by technology.  However it survives as an art instead of an industry.  A blacksmithing business model - based on costs and production rate - just doesn't work.

 

While industry profits by decreasing the inputs and increasing the output, art is just the opposite...its path to profit is where input is increased and output is decreased, so long as there is demand.

 

...so back to work getting better at the art.

 

 

Based on cost and production rate...

  If output was based on per item price that was lower than actual cost per hour in all expenses included.. 

   In other words.. I can make 1 nail a minute..  125.00 / 60=2.09 per nail..   I retail them at 2.50 each = 150.00 per hour..   I don't have electricity but say 3.00 per hour, coal 2.50, =144.50..  (if you want to consider wear and tear on the blower and anvil and hammer and hardie and nail header 0.02.. 

Why did I retail them for 2.50 vs 2.10 each..   Market demand..   for nails up to an 8 penny can be as high as 3.00 per nail.. 

I also agree  "Art" can generate a huge pricing increase vs practical items..  

 

Sadly for me.. I've always been about stuff that is used vs looked at..   

@Marc1 Blacksmithing used to be very lucrative in certain markets.. 

7 minutes ago, rockstar.esq said:

JLP, 

If I had to guess I'd suggest that you misunderstand the economic law of supply and demand.  That's not "modern" business thinking, nor is it blacksmith specific.  Just like gravity, it applies to you whether you understand it or not.

The advice I recommended is to actually find a viable opportunity to sell to clients where your work/product/skill is in demand before you start a business.  I'm repeating an ancient business approach that reduces risk, increases profitability, reduces work, and yields faster return on investment.  This is commonly referred to as "a business plan".  

Launching a business just hoping that there might, eventually be someone buying what you offer is a gamble.  Just like gambling, that approach has ruined a lot of lives.  If you want to add yours to the list, so be it.  Please for goodness sake don't take others down with you.

An "ideal" rate that's suitable for all situations is a compromise.  As in, you will severely compromise your ability to survive if you overprice little stuff and underbid big stuff.  Worst of all, you can't tell how far you're off so there's no opportunity to improve.

JLP, you asked me to help you to understand what I'm getting at.  Maybe a different context would help.

Imagine this whole thing as a shop safety issue.  A novice wanders into a shop full of power tools.  They've got stickers, guards, and safety equipment all over them.  It seems sorta obvious where the dangerous bits are.  Does that provide the novice with enough information to avoid hurting themselves?  Can you see how a lifetime of narrowly avoiding injury could instill bad habits?  Would you want someone that dangerous in your shop?

Actually understanding what the machine does, how it works, what it needs, and what you need to operate it safely is all necessary to give that novice a reasonable chance of success.

You are advocating unnecessary and unsafe shortcuts that jeopardize your business.  "Shop rate" comparisons are like asking what species of wood you should use to pin the guard  back on a circular saw.  Sure, there are three fingered "pro's" who will answer you.  That doesn't make it a good idea.

Tossing yourself into a machine you don't understand isn't smart.

 

 

 

 

So you are going to say I have supply and demand all wrong??   Sounds pretty simple unless you don't want it to be. I could get out my economics strategy for global dominance but I think I can pass on that one.. 

Demand : someone wants something..       Supply:  Someone has what you want and is willing to give it or sell it to you..     simple..     Really..    Unless you don't want it to be.. 

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supply and demand definition

In classical economic theory, the relation between these two factors determines the price of a commodity. This relationship is thought to be the driving force in a free market. As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down. Modern economic theory proposes that many other factors affect price, including government regulations, monopolies, and modern techniques of marketing and advertising.

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And we as blacksmiths unless we trade in commodities which is a very tricky market such as wheat or corn or pig bellies or steel. It's not part of the business plan.. 

The market share of MFG's doesn't exist within 50miles of me so I am the only MFG.. No competition..  yeah, good for me.. LOL..  I can ask the price I want if the demand is high enough.. 

This is not rocket or brain surgery.. Most  people here who are looking at blacksmithing as a business are not 15 or 18 or 25 years old.. Most have had jobs for a very long time or even ran successful businesses all ready..    And if they are younger fella's there is a ton more help which abounds on the net. or in small community centers or Small business centers..  Or colleges and even some high schools will offer help if you go and ask.  These people love that.. 

This kind of thinking would keep so many people from pursuing a career choice based on desire vs only finding something that is profitable..  (Do what you love and the money will follow) is a great book..  

Thanks again..  If I were looking at buying a factory that produces water facets. Or looking at starting a new tempered glass factory, or yogurt shop or something like that.. Then I would certainly approach it your way.. 

But anytime you start to take into consideration items made by hand, be it paintings, pottery, wood work, cabinetry,  Bows, etc, etc.  I think there is a much wider variable which a lot of people who are strictly hooked on numbers can not fathom.. 

Again thanks..  I do appreciate the time you took to write everything..    Best to you..  Jennifer

[JNewman]

I do tend to quote a significant part of my work using an hourly rate but as much as possible I try to use Grant Sarver's philosophy on pricing.  He laid it put a couple of times here and over at the NWBA website quite a few years ago.   Using this when possible  has helped me make really good money on occasion and saved my bacon on others when I used it but thought I could do a job faster.

   Anyone who has a business has had the jobs where things went wrong and or we underquoted  and ended up making less than minimum wage and even lost money if you have employees doing the work.  If you can have some jobs where you make hundreds per hour they help you survive another day.  It would be nice if they could all be the gravy jobs. 

While I was finding this thread I found this other post that was interesting as well re business. https://www.iforgeiron.com/topic/12686-i-often-buy-machines-with-no-clear-idea-how-ill-use-them/

 

[basher]

One mistake I see people do when working out their shop rates is to assume they are doing productive paying work  for 8 hours a day or for 5 days a week...The other is to limit yourself to a survival wage. I was certainly guilty of this for a long time. As a skilled individual you need to be able to generate a "good" living, craftsmen have a habit of keeping them selves poor.

 I tend to work on a day rate with the idea that I need to generate more than that day rate, sometimes a lot more...I work on £500 a day inc VAT (around $700)  for a 9 to 5 day and this is comparable (some a little higher) to the professional American smiths I know and successful professionally in the uk .

In some areas with cheap housing and living it could easily be less in some it would have to be a lot more!

The hourly or day rate is useful so you can judge your time and the worth of your hours or days work against a fixed price point, ie is this worth making. it allows you to find things that match both your market rate and hourly rate.

I have had a little read through this thread. they are some simple facts about most smiths, they are obsessed with what they do...and will happily run non viable businesses for years driven by this passion.

The trick if there is any is to try and make it pay off.

you literally have to forge your own luck!

 

[JustAnotherViking]

"What is a successful business?"

To me, that's what is causing the biggest divide of opinion on this topic.

 

For some, being able to get by, and put food on the table each night may be their vision of success.

For others, it's being able to take an extended holiday at any point of the year, owning your property outright, driving an expensive car, having all your costs covered and not having to worry about saving for a rainy day (perhaps even having employees, or more)

 

Arguing on different approaches to starting a business and how certain methodologies only apply to certain industries still doesn't change the cold hard facts about the extremely high percentage of failed startups... but again, we can likely relate that to your personal opinion of what 'failed' vs 'succeeded' means to you.

[jlpservicesinc]

@JustAnotherViking I totally agree..    This thread is not about starting a business...  It was a thread that I was hoping would explore shop rate, etc, etc.. The first post on this thread said it all with guide lines suggested to follow..  Guess that didn't work..

The threads on IFI have a tendency to drift as the masses elect..    The information pertained to "Starting a business" is lacking in all content and is not a guide to starting a "full time Blacksmithing business"..

Anyhow, it ended up way off topic for what I was hoping would just give others an idea of what potential per hour pricing they could look at to have a ball park..

Really there should be probably 2 other threads on their own..      Maybe''   Starting a full time blacksmithing shop,  steps to success using modern models"..

And maybe " The realities of owning a full time blacksmithing shop in a modern era"..    

Problem is just as this thread  there are a lot of people who started a blacksmithing shop basically as I had said (growing into it), and then found it full time, making money..  Most won't get involved in a thread like this. or those as it becomes to personal for ones comfort.. 

[JustAnotherViking]

Since we can see differing opinions of what a 'successful business' actually is, it should be fairly apparent that trying to figure out an hourly rate is an even more impossible task.

 

Do you have to pay for medical insurance or does your country provide free healthcare?

What is the local housing market like. $200 a month or $2000 a month for rent/mortgage?

Do you have to rent shop space, or do you have space on your own property?

Are you paying more/less than others for fuel based on local availability?

 

It's a bit like trying to answer 'why isn't my metal getting hot enough'.

Hot enough for what?

How are you heating it?

What size is the metal?

What type of metal is it?

 

We could have 30 people trying to directly answer the first question, and giving 50 different answers... all may be valid to their own setup and circumstances, but you can't compare them to give a meaningful conclusion or advice for others to follow.

We would need some sort of universal scale so we can offset the relative living costs... comparing your hourly rate to mine wouldn't work. We'd need to compare yours to your local cost of living, and then the same for mine... that would then make the information more valuable and useful to others in yet another area with yet another local cost of living to compare to.

[jeremy k]

JustAnotherViking  - I think you hit the nail on the head - but - Theres no App for that? - seems like there's an App for everything now days. - Just kidding