How much do I charge?

[Daniel Ilnicki]

Hi there-
I have spent the last year or so setting up my own shop. Its not very large (900sq ft) but it serves me well. Now I am in the remodeling field, and so Im not always in my shop working. I have alot of friends in the same line of work as myself, and recently they have been asking to borrow the shop to build things. I didnt mind at first, but now its costing me too much money to let them use it for free(ex. electricity, blades and knives, heat etc.)I want to figure out some kind of price I can charge them for using it. Hopefully you can help. Thanks for your time

[Glen Butler]

My father always charged me 10% of the gross value of a project. A little steep IMO, especially when you consider I made nothing on the materials changing hands. I charge customers 7% misc. shop materials: glue, power, blades, nails, screws, etc. If they are making money on said work then by all means, it only fair that you be compensated.

If they are not making money on the work being performed you could charge them the 7-10% according to the value of the materials on site that they are working with. IMHO that is a little messed up and you should just be a pal and make them buy you dinner on occasion.

[brian c miller]

Percent of a project doesn't make sense to me, or materials... Should I really have to pay more to cut up quilted maple wood than regular maple?

Add up all your costs for a month and divide by how many hours you are in the shop...

This clip is amined at how to bid job but you could apply the same logic for shop rate. Make sure to include departion rate on assests, perisable tooling.

Determining a loaded per hour shop cost is simply dividing the number of "billing hours" that you can manage in a year into your yearly expenses. The billing hours can't be 40 hours per week because you need to factor in lost time for administrative work, shop cleanup, holidays, and other non-productive time. In reality, you can probably work on projects about 30 hours of each week and require 10 hours per week for the other necessary business administration functions. However, the "admin" time is factored into the cost per hour of your operation - it's a valid cost of being in business and customers have to cover those costs.When your accountant finalizes your business year you'll have a dollar cost for your operation. The costs include rent, heat, light, payroll, etc, but not building material cost.

When you have a loaded cost per hour for your shop you can price any project by estimating the time it will take to complete, adding the material cost, and finally adding a bottom line profit to each job.With "repeatable" projects such as kitchen cabinet work, you can easily establish a per foot cost, based on your loaded cost calculations. That per foot cost figure will allow you to quickly quote on projects.

[JohnT Fitzgerald]

If they're making money off their work, then it's only fair that you make a profit by being the one to provide a shop they cannot or will not fund. Heat and electricity should be a simple $/hr. As for materials like glue and stuff, they can either chip in a % of your costs or provide their own. They should provide some of their own blades for tools that can be changed easily (e.g. Tablesaw) or pitch in for sharpening.

[Ray Newman]

A friend was once in the similar situation. He decided to charge them enough so they would stop using his shop and tools. It worked as that was his ultimate goal. He said the he wondered why they are in the trade if they can’t afford or will not buy the tools or their shop? To him he didn’t like giving his competitors a free ride.

‘Sorta’ reminds me of a guy who worked for the builder who built the 5 homes where I live. He wanted to use my tools and shop so he could work on the other homes as well as a few other projects.

[Bill HammerII]

Ah the tool borrows and shop take over group.
really there's not a good figure, I draw a loose fuzzy line around where I feel I'm being taken advanage of. I've had folks in the biz borrow a tool make a good profit and returned to me trashed. Shop is off limits unless I invite you, Job sites are different and I'll try to help anyway I can with "co workers". How ever don't grab my freshly sharped chisel to scrap grout off your trowel. That might be a issue

[Glen Butler]

I can agree with the posters that came after me. There does come a point where you feel you are being taken advantage of, and you clearly are at that point. Just cut em off cold turkey. If they are making money off using your shop they should get their own tools. You shouldn't just be covering your costs, you should be making some money on them.

[Dale Lesak]

What kind of insurance do you have? If they come up missing a finger, it may end up being their shop. Dale

[harry strasil]

I ran my own Blacksmith, welding and machine shop for many years, everybody was always trying to be my friend, all they wanted was something done for nothing. So the first time I charged them as I would anyone else, the second and third time too. Then they decided they weren't going to get something from me for nothing and they went away.

Same thing with people/friends wanting to borrow tools, They just didn't want to buy there own when they could use mine for free. My standard procedure in this instance was to set an hourly rate for use, and look up how much the tool cost new and they left a deposit for that much . If they brought it back in good condition they got their deposit back less the rent they accumulated.

I told a few, I make my living with these tools, you just want to borrow them so you don't have to pay me for their use. Don't let the door hit you in the butt when you leave.

[Glen Butler]

Ha, ha. Thankfully I don't have any friends.

[Maurice Ungaro]

A friend was once in the similar situation. He decided to charge them enough so they would stop using his shop and tools. It worked as that was his ultimate goal. He said the he wondered why they are in the trade if they can’t afford or will not buy the tools or their shop?

+1
Additionally, if you would lose a friend over something like you putting your foot down on the shop use issue, then, they weren't really friends, were they?

[Terry Welty]

I agree with Dale... "What kind of insurance do you have?" As an insurance agent (please don't boo). I would think your personal liability insurance would turn their nose up on any claim arising out of an agreement to rent out your shop. Do you have them sign any type of a waiver?

I don't see where there would be any coverage on a commercial policy either, although, if it's not excluded, you may have coverage. Hate to say it, but I would be more worried about a liability law suit vs the cost of supplies.

If it were me, I'd check with your insurance agent first, find out if there would be coverage or if it can be had at an affordable price. If it can be added, include the additional cost in your pricing... if it can't be added affordably, then you have an excellent excuse for keeping them out of your shop. Blame it on the insurance guy!! Everyone else does!

Let me know what you find out,

Terry

[johnny means]

I would charge $50 daily plus require they carry a million insurance policy with me on the policy. If they think that's to much screw em. This would be less than a decent meal, hotel room, or family night at the movies.

[Brian Tymchak]

Do you have them sign any type of a waiver?

+1 on the waiver!! (Actually +5 or +10..) You have no control on whether someone just had a beer, didn't get enough sleep last night, had an argument with their spouse, is in a hurry to meet a deadline. And I would also want some verbage in it to make sure that you have no liability in case someone in your shop causes an injury to someone else in your shop, just in case multiple friends use that shop at the same time. And that they may be liable for damage to the tools and shop itself.

Tough drawing the line on your friends like that but I think you always need to protect yourself.

Brian

[Matt Day]

This can be a touchy subject (and I'm learning about mixing business with friends now as a matter of fact). Just because they are friends doesn't necessarily mean they'll treat the tools like you would, whether it's their intent or they don't know better.

When it comes to my shop though, I don't let anyone use my stationary tools (except the LOML when I'm in there and can help her). I've got too much money invested, I'm too particular about my machine setup, and I don't want to use my valuable shop time to fix a tool or reallign something because somebody else messed it up.

I'll lend out a few construction grade tools (drill, cicular saw, etc) but that's about it.

And if your friends are in the same business, they should have their own tools.

I'd just turn down the idea. Maybe if you had an expensive tool that not everyone has and it would make their lives a lot easier, you could do it and charge them labor for it.

Good luck!