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The Business of Knife Making A forum dedicated to all aspects of running, managing and legal operational issues relating to the custom knife making and custom knife selling industry.

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  #1  
Old 03-28-2003, 08:28 AM
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Ed Caffrey Ed Caffrey is offline
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Figuring your shop rate???

Told ya I was gona wear this place out! OK, let's talk about shop rates, hourly rates, job rates.....whatever you want to call them. Being that I've been full time military for all these years, I've always done those "little favors" for people who would show up at the shop.......sharpening, little welding jobs, and other "stuff". What I found was that a minor "favor" would often turn into a major task (hours) when the person(s) would say, "Can you do this too?" It's tough to do, but once I retire and go full time, I've decided that whenever someone wants a "favor", they are going to have to understand that the shop has become my business, and my plan is to charge an hourly shop rate for those "little jobs" that do not directly involve making knives. Right now the figure I come up with is $35 per hour, with a one hour minimun for things such as small welding jobs/repairs, and anything that involves repair on knives that I've not produced. What are your thoughts on that?


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Last edited by Ed Caffrey; 03-28-2003 at 08:30 AM.
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Old 03-28-2003, 09:48 AM
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hammerdownnow hammerdownnow is offline
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Ed, Sounds like a good deal. Trying to find someone who is willing to do "little" things is next to impossible. I think you are still doing favors by even offering this service at any price. Time is money.


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Old 03-28-2003, 10:21 AM
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Ed,

I come up with a higher number. By talking to the local SCORE representative who is a retired bookeeper for small businesses he suggested the following:

Determine what hourly wage you feel you should get. Multiply that rate by three.

For example:

Hourly rate is $20
Therfore the shop rate is $60 and is broken down this way.

$20 for salery
$20 for expenses (electric, rent, phone, etc...)
$20 to put back into the business (save for new tools, tax returns, office equipment, ect...)

At $35 you would be cheating yourself.

Also, most of the people asking a "Favor" probably know you could make a lot more than $35/hr by making knives and they are hurting you business by taking you away from that.

I charge $60 now and nobody complains. They sometimes do not have me do the job, but usually they are happy with that as long as they know you will do the job as fast as you can do it and meet the quality expected.


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Old 03-28-2003, 12:32 PM
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Ed,

This is a time sheet that I made for my job record.

I work to the quarter hour. On the right side of the sheet is room for notations on what process was performed. I want to separate "actual" time engraving from the other tasks such as making transfers, holding fixtures, wrapping packages, etc.
The pertinent customer info. is noted on the top of the sheet, ( no little slips of paper to get lost!).
By making good notes, I can get a better picture of what percentage of my time is devoted to other operations.
The real benefit is when it comes time to quote new jobs. I know that by averaging similar jobs, I'm able to give an accurate price quote and not worry about losing my shirt!

Tim
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Old 03-28-2003, 12:43 PM
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hammerdown you hit the nail on the head. Time is money. For anybody who is a full-time professional every minute counts.
One of my biggest "bugs" is when knifemakers, especially, amateurs/hobbiests make those statements like "Well it really isn't work since I do it while watching TV (or some such blather) so I don't charge extra." (I hear this a lot with makers when it comes to making sheaths anyway.)

In fact a quick question- How many of you "throw" in a sheath with your knives rather than viewing it as part of your package. I'm curious because over the years I've seen a lot of crap sheaths, sorry - don't know how else to say it, that went with some very nice knives, even from some top makers. It's my considered opinion that a good knife is deserving of a good sheath and when done right the whole thing becomes an enhanced package and you can subsequently charge more.

Back to Ed's question - Bob's got it right in so far as how/what to charge. I was a small business consultant/bookkeeper for 17 years and the standard has been 2.5 to 3 times the going wage rate for the type of work, for the area. Since I work from home and don't have real high overhead I use 2.5 for myself. My rate is $50.00 an hour but I do charge a 1/2 hour minimum rather than a one hour.
For whining or complaining I get $100.00 an hour with a one hour minimum . Thats what the professional counselors ask for...


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Old 03-28-2003, 06:25 PM
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Quote:
For whining or complaining I get $100.00 an hour with a one hour minimum . Thats what the professional counselors ask for...
and $150/hr if the customer wants to "help"


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Old 03-28-2003, 06:32 PM
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Wayne you hit the nail on the head!


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Old 03-28-2003, 11:47 PM
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Shop Rates...

Thanks for the input fellas! I've always been lousy at figuring what my time is worth.......

Ya know, the more I think about it, the more I like the way you've suggested on how to arrive at a "Shop Rate". Knowing these folks around my part of the world, they will leave me alone (the "favor" folks) when I tell them my new shop rate!


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Old 03-29-2003, 01:52 AM
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Ed
Good to see you back. They gave some good advice. Bob was right on the money on the figures.


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Old 03-30-2003, 10:03 PM
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Question And now the problem comes around:)

Ok... how do I figure this out. First off all of what has been said makes COMPLETE sense to me. Ok... so here is the problem. I am still learning. The time it would take me to make a knife would be much longer then other people because of the learning curve. So... how would you figure an hour rate? I have been putting in my business plan a rate by job... is this good to start with... or is there a better way to do this....

Michael


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What.... just take some metal, grind away anything that does not look like a knife and there you are. Whats the problem now?
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  #11  
Old 05-15-2003, 03:06 PM
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ED:
I figure we are both in fairly rural communities, where there isnt a welding shop, or a place to get mower blades resharpened, Im not a professional welder by any stretch, but what Ive found with the "Favor" thing is that If you make it too easy and cheaper than driving to the nearest "Pro" shop, you will spend all your time doing the "Favor" things full time. I think the $60 price is right in line. If they dont like my price, they can either outfit their own shop, or drive the extra 40 miles.

Mike


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Old 07-11-2003, 06:39 AM
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Very sound advice here, but I'm in the quandary that Michael is in.
I have been a locksmith for over 23 years and learned pretty early on not to do anything for free. The freebies are usually more trouble and end up costing me. Even for family and close friends I do a small mark-up on parts and charge my benchwork fee or a least a good meal. This is my profession. I charge a 'trip charge' and an hourly fee (1 hour minimum) which is right up there with some of your rates at 52.50. This is more than most locksmiths charge, but then again I have more skill and experience than many. I get it too and stay busy!
Now, I'm just getting into knife making and am doing kits and handling pre-made blades. It's a hobby for now and I'm definitely amateur.
I had a neighbor stop by yesterday to see what I was up to. He wanted to buy one of the knives I was working on. I put this issue off by telling him that these were just practice, but that I would be happy to make him one in the future. This was partly because, like I said, I'm amateur (and it shows) and partly because I didn't want to part with it.
When I think I'm getting pretty good at it I'll check back with my neighbor and make one to order, then I'll charge a good price. Actually, I'll probably make two so I can keep one. After that my status (so to speak) will have changed and I'll get what I think my knives and I are worth.
Kevin


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  #13  
Old 07-11-2003, 11:18 AM
Pinoyknife Pinoyknife is offline
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Soo i see that i am not the Only locksmith here , i think of a " Poster " i saw some year's ago that read something like Hourly rate is xx dollar's per hour add xx dollars more per hour if you have worked on it xx more if you watch and xx more if you help . Thought it was good then as now , i have a Problem figuring out what to charge as well since as a Locksmith i am one of the Higher / Better ones for my area my Hourly is $ 75.00 for "Normal " work , More for High security stuff. So i have no Idea what to charge for the knives i make if i priced them at my " Normal " rates no one could possibly afford them . so i try to price them somewhere in the middle , as i am not yet full time .
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  #14  
Old 07-11-2003, 09:48 PM
KDF KDF is offline
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Hey Pinoyknife. Good to meet you.
I remember that 'poster' too. LOL
It was one of those pull-out signs in Locksmith Ledger:

Lock Repair - $15
If You Watch - $25
If You Help - $35
If You Worked On It First - $50

I guess I should have said "more than most locksmiths in my area (Houston, Texas) charge...". Those in smaller towns charge half what I do. I wonder what NYC locksmiths charge???

Kevin


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Last edited by KDF; 07-12-2003 at 05:04 AM.
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