How to charge for shopbot jobs?

[Call-Tech]

Now that I have decided to order my shopbot. I have begun to think about how much to charge for doing work for others in my area. Can I get some feedback on how everyone is charging for cad, cutting of customer supplied files etc..

PS. Thanks Gary for letting me come look at your shopbot.

[dmdraper]

There are probably several strategies, but one I have seen (and use myself) uses a flat rate machine time charge, for example $100.00/hour. The log files that the Shopbot generates can be used to determine actual cutting time (during an "air cut") so it becomes a simple rate x time calculation. An Excel spreadsheet is a great way to automate all this.

Another thing to consider... don't give away design time. Charge for estimates and if the cusotmer decides to hire you, subtract what they have paid up front for the design/NC file generation. You might think this would drive away potential business, but you'd be suprised.

Dave D.

[carl]

Fred
You must be bad with names
my name is Carl

[elcruisr]

We charge for Cad time, any special jigging or setup, runtime and tooling. All is done at an hourly rate and we mark up our tooling a standard percent. I do have some large accounts that get a standard setup and cad fee irregardless of time. This simplifies our dealings with them and we get so much business from them that it all works out.

Eric

[superior]

Fred: We have discussed the hourly rate at both my camps here in Oklahoma, and seem to consistently come up with $60/65 per hour. Like all the above posts have indicated, that does not include all the prep work, nor materials. I personally charge $65.00 per hour of actual cut time. And, like Eric, we do take special care of our special ongoing customers. I will note we do not use our SB all that much. I am trying to develop some special jobs for it, but my nose is too close to the grindstone to see anything else. The opportunity is there, just too busy to look for it. My bad.
Like David and Eric noted above, there are numerous factors to consider, too numerous to get into here. Just be certain you charge enough to cover all expenses, including your pay check from the job.
Good luck, and as you already know, the forum is a great place for good accurate information.
Doug

[paco]

Hi all!

I've read (and learn) from this forum about this topic; thanks to all for sharing about a such delicate subject.

I'd be curious to learn more about the charge difference for one man shop about CAD/CAM vs machining time... personnaly, so far I'm charging about the same for both since, well, I only one so I got to cover for all my buisnees charges alone and can't be at two place at same time...

What do you think about this? What about you?

Thoses who actually run their shop with employee could join in too; they might have relevant infos about it too...

[gerald_d]

Rule no. 1: Charge a customer as much as he is willing to pay.

Formulae are only a guide. You also learn to read your customer - his wishes and his budget. Sometimes you give a huge discount if the customer can introduce you to someone else with a good budget, or if you are short of business. And yes, some guys get charged very inflated prices - typically the one-time visitors who come and shoot movies here.

We do not charge separately for setup/CAD time, or mention hours and price/hour to our customers. We don't want them to check our calculations. We do take time to explain how much work we put into their job, even if they give us a dxf - they must never get the impression that we simply plug their file into our machine. Also, if a customer delivers wood for a $200 job, and we finish cutting it within an hour, we will only call him a couple of hours later to say that the job is finished.

[mikejohn]

If you are in a competitive mass production markey (particularly if you are competing against far eastern imports) you are going to have to pare your charges much more than if you have a niche market with little or no competition.
As Gerald says, in the end, charge what the market will bear, but keep in mind the value of repeat orders.
..............Mike

[richards]

Being a one-man operation can lead to long hours and low pay - that much I know from running two consecutive businesses for thirty years.

I've found that the most important tool that I have to determine basic pricing is a shreadsheet running a break-even analysis program. Be sure to add in ALL of the overhead costs, not just a desired salary. After all, if you don't charge for it, no one is going to pay for it.

It's also very important to realize that, until your business is thriving, you might only be able to bill 25% of the hours that you actually work. As a one-man opertation, you'll spend a lot of your time acting as a salesman, a pickup/delivery person, a bookkeeper, etc. The hours that you're running the business are usually hours that take away from production.

Be realistic on how much you can do in a day. Just because the Shopbot can cut a file in 15 minutes doesn't mean that you can cut that file four times an hour. When you're fixturing material or cleaning up after the previous sheet, or moving sheets of material out of the way, the Shopbot will probably be sitting idle.

Also, don't try to compete with the local Home Depot. Instead of imitating the products that are sold by the boxcar load, try to add value by adding features that can only be done efficiently with a CNC router. (Anybody with a cabinet saw and strong back can greatly outproduce a CNC router if all you're doing is straight line cuts that can easily be done on a table saw.)

As for design time, I use two different methods. If the project is a one-shot with no repeat business, I charge the same rate for programming that I charge for cutting. On the other hand, if the project is going to be a repeat type job, I bill the job at a set price per sheet of material WITH A MINIMUM NUMBER OF SHEETS. That way, a less than honest customer isn't going to stick me for a lot of unbilled programming to get a 'sample' and then disapear.

[mikejohn]

Mike
Please allow me to highlight what you have said above,an absolute truth "don't try to compete with the local Home Depot. Instead of imitating the products that are sold by the boxcar load, try to add value by adding features that can only be done efficiently with a CNC router.
Try, wherever you can to 'personalise' the item your selling, making it a one-off.
.........Mike