Figuring labor costs
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- Blast
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Figuring labor costs
Ok, I'm starting to do work estimates for bids for small projects, the first is a hanging sign mount. The usual fun scroll work, punched and drifted holes, some welding, making a few chain links, riveted eye bolts, closed s hooks. The hardest part is putting a number to my time. For this one I went with 20/hr for 8 hours work. I think a premium for hand made items like this would be appropriate but I'll throw that into my next bid. Scarcity if the skill set also comes into play as well a reputation of the Craftsman. Any suggestions as how to estimate it?
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Re: Figuring labor costs
When I was doing metal fab, it was $90hr labour. Material and any finishing at cost, then total the labour/materials etc and add 35% for mild steel, 50% for stainless
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Re: Figuring labor costs
This is a tough one. If you put a fair price on your labour, the price gets really high and might scare off customers. I know several people that sell handmade items and they have to barely charge over the cost of materials to be competitive. Have you looked on Etsy to see how much something similar sells for?Blast wrote: ↑Sun Aug 14, 2022 6:52 pm Ok, I'm starting to do work estimates for bids for small projects, the first is a hanging sign mount. The usual fun scroll work, punched and drifted holes, some welding, making a few chain links, riveted eye bolts, closed s hooks. The hardest part is putting a number to my time. For this one I went with 20/hr for 8 hours work. I think a premium for hand made items like this would be appropriate but I'll throw that into my next bid. Scarcity if the skill set also comes into play as well a reputation of the Craftsman. Any suggestions as how to estimate it?
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Re: Figuring labor costs
$20 an hour seems awfully low. Unless you really love the work you at least want to make it worth your while. I'd research some similar items and go from there. Factor in the uniqueness if any (add more), similarities to other items (add less). Is this just a side project to kill time and make a bit of fun money or are you looking to actually make it a legit profit enterprise? If its just to get some extra spending cash and kill time then just charge what you need to cover expenses and a touch of your time. If its going to be your only source of income that changes things a bit.
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Re: Figuring labor costs
i have bid construction work most of my life. Everything from runways and dams to driveways and sidewalks. One thing that I have learned is that you can estimate labor on large items. Using wages and productions and come up with pretty precise estimates of what it will cost to do something. But when it comes to small jobs, say "adjusting the height of a manhole". Which might take 2 guys a few hours and some supplies, you just can't calculate the cost. When items get small, you just have to go with your gut on what is a fair price for the labor. After a bit of time you will begin to know exactly what it is costing.Blast wrote: ↑Sun Aug 14, 2022 6:52 pm Ok, I'm starting to do work estimates for bids for small projects, the first is a hanging sign mount. The usual fun scroll work, punched and drifted holes, some welding, making a few chain links, riveted eye bolts, closed s hooks. The hardest part is putting a number to my time. For this one I went with 20/hr for 8 hours work. I think a premium for hand made items like this would be appropriate but I'll throw that into my next bid. Scarcity if the skill set also comes into play as well a reputation of the Craftsman. Any suggestions as how to estimate it?
If it helps, break your day into pieces. Say half days and full days. And either use a half day of wage or a full day of wage. and go from there. If you can make 3 a day, then use 1/3 days. etc. at least then you know you are breaking even if you hit your target of making 2 a day or 3 a day. No matter how many hours that day takes.
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Re: Figuring labor costs
My wife has two Etsy shops. It is crazy how much prices can vary on similar items. A lot of it will depend on what the local market can bare. If your work is an absolute piece of art but their is a crappy, lower price alternative, the crappy one will outsell you until the word gets out on the difference in quality. Do some research on similar items but it will boil down to the PDOOMA approach to pricing. If you haven’t heard of the PDOOMA approach, it stands for Pulled Directly Out Of My Ass.JCW wrote: ↑Sun Aug 14, 2022 7:17 pmThis is a tough one. If you put a fair price on your labour, the price gets really high and might scare off customers. I know several people that sell handmade items and they have to barely charge over the cost of materials to be competitive. Have you looked on Etsy to see how much something similar sells for?Blast wrote: ↑Sun Aug 14, 2022 6:52 pm Ok, I'm starting to do work estimates for bids for small projects, the first is a hanging sign mount. The usual fun scroll work, punched and drifted holes, some welding, making a few chain links, riveted eye bolts, closed s hooks. The hardest part is putting a number to my time. For this one I went with 20/hr for 8 hours work. I think a premium for hand made items like this would be appropriate but I'll throw that into my next bid. Scarcity if the skill set also comes into play as well a reputation of the Craftsman. Any suggestions as how to estimate it?
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Re: Figuring labor costs
Well, I got the commission, then he bought another piece from me and is likely going to buy since if the steel roses too. As I get busier the v price of labor will have to increase as my time gets tighter.
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Re: Figuring labor costs
Yes. That's exactly how it works. Don't worry too much in the beginning. Your workload will begin to dictate your prices. In the beginning its better to be under priced than over. As long as you aren't committing to a lot of products at those prices.
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Re: Figuring labor costs
I hang signs for a living. 20 is too lowBlast wrote: ↑Sun Aug 14, 2022 6:52 pm Ok, I'm starting to do work estimates for bids for small projects, the first is a hanging sign mount. The usual fun scroll work, punched and drifted holes, some welding, making a few chain links, riveted eye bolts, closed s hooks. The hardest part is putting a number to my time. For this one I went with 20/hr for 8 hours work. I think a premium for hand made items like this would be appropriate but I'll throw that into my next bid. Scarcity if the skill set also comes into play as well a reputation of the Craftsman. Any suggestions as how to estimate it?
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