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Getting no where with my my fabricator and need help !!!

jon coleman

Well-Known Member
yup, , i had car built, i did All the nitt picking running around to keep fab dude up to speed, toobing , components, pizza& beer,sorta like always bring your diff guy a clean pumpkin, they like that.
 

Josh 8

Well-Known Member
I missed some thing in my numbers too. It’s called profit. Or margin. At $52.50 this hypothetical shop is eating all the money up at 100% capacity level.

Profit margin needs to be added to this equation. In my book it would need to be at least 33% to make up for slow times. That would kick the shop rate to $70.00 per hour.

And if you think employees are the cheap and easy answer, look into labor laws here in Cali. Work comp sucks and don’t even think you can ask a guy to work over time with out paying him. Its easy to get sued for this. Plus after paying his medical cost since your not going to find a responsible employee that will work with out it. (and the state requires it if you work more that 32 hours a week). Your employee is going to be making more than than the shop owner. And if the shop gets slow, he works first to keep him busy so he won’t quit. Oh yeah. He gets paid first too. Because that’s how responsible business owners do it.

And don’t forget those awful state and federal taxes. Gotta pay them first too. The fines the feds levy are crazy bad for being just one day late on the employee withholding. You don’t even want to know what happen if you get a month or 2 behind. (I have seen guys end up behind bars for this when it gets really bad). You know, income tax, fica, social security, and some other stuff. Yeah, btw, all that stuff does not come out the employees income. It’s called frindge benefits. Typically is about 1/3 more on top of the employees income. The business has to pay that too. Oh yeah. Now the shop owner, lead fab man, lead sales man, and environmental compliance manager and account has to figure payroll with holding too with all his spair time. And don’t for get the permit fees. You have the city, the fire department, the counties b.s. too. Who did your storm water run off plan? Don’t have one? Well there’s a fine for that. And you better hire a consultant to get you up to speed on that. Because now your in the counties radar and they will be back to assess more “fees” to assure public safety.

In the end I don’t thing $70.00 and hour is enough to deal with the bs. And remember. All kinds of guys are working out of there back yard shops trying to be cheap while this guy try’s to do it the honest and responsible way.

Let’s not forget insurance. Garage keeps liability. That cover you when your shop burns or your broken into. Not for your stuff but your customers. Price a policy for a $1m. It’s probably not to bad. Probably a few hundred a month (but where is this coming from?). Better get some personal property insurance in there too to cover your tools while you can. Not much more (more $$$) And while we are at it, have you considered some employee liability insurance? The most common lawsuits today come from your very own employees that you put first and before you. Now the coverage isn’t 100%. But it may limit some exposer in the event of a suit. Since we are talking about lawsites, let look at your employee hand book that deitails how everything is done in the shop. From the earth quake evacuation rally point to how to use a grinder and what clinic to go to if you get something in your eye. Oh, you do not have one? This will probably void your liability policy leaving you personally wide open to litigation.

I could go on. It’s sickeing.
 
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jon coleman

Well-Known Member
and just remember all you successful greedy business owners who Are making it, " you didnt build that company, someone else did", also sounds like running a small business in cali is easy money, as long as a private business savy president gets elected in 2020, like a saunders or a warren, oh man , thats funny?
 

5racer

Well-Known Member
I missed some thing in my numbers too. It’s called profit. Or margin. At $52.50 this hypothetical shop is eating all the money up at 100% capacity level.

Profit margin needs to be added to this equation. In my book it would need to be at least 33% to make up for slow times. That would kick the shop rate to $70.00 per hour.

And if you think employees are the cheap and easy answer, look into labor laws here in Cali. Work comp sucks and don’t even think you can ask a guy to work over time with out paying him. Its easy to get sued for this. Plus after paying his medical cost since your not going to find a responsible employee that will work with out it. (and the state requires it if you work more that 32 hours a week). Your employee is going to be making more than than the shop owner. And if the shop gets slow, he works first to keep him busy so he won’t quit. Oh yeah. He gets paid first too. Because that’s how responsible business owners do it.

And don’t forget those awful state and federal taxes. Gotta pay them first too. The fines the feds levy are crazy bad for being just one day late on the employee withholding. You don’t even want to know what happen if you get a month or 2 behind. (I have seen guys end up behind bars for this when it gets really bad). You know, income tax, fica, social security, and some other stuff. Yeah, btw, all that stuff does not come out the employees income. It’s called frindge benefits. Typically is about 1/3 more on top of the employees income. The business has to pay that too. Oh yeah. Now the shop owner, lead fab man, lead sales man, and environmental compliance manager and account has to figure payroll with holding too with all his spair time. And don’t for get the permit fees. You have the city, the fire department, the counties b.s. too. Who did your storm water run off plan? Don’t have one? Well there’s a fine for that. And you better hire a consultant to get you up to speed on that. Because now your in the counties radar and they will be back to assess more “fees” to assure public safety.

In the end I don’t thing $70.00 and hour is enough to deal with the bs. And remember. All kinds of guys are working out of there back yard shops trying to be cheap while this guy try’s to do it the honest and responsible way.

Let’s not forget insurance. Garage keeps liability. That cover you when your shop burns or your broken into. Not for your stuff but your customers. Price a policy for a $1m. It’s probably not to bad. Probably a few hundred a month (but where is this coming from?). Better get some personal property insurance in there too to cover your tools while you can. Not much more (more $$$) And while we are at it, have you considered some employee liability insurance? The most common lawsuits today come from your very own employees that you put first and before you. Now the coverage isn’t 100%. But it may limit some exposer in the event of a suit. Since we are talking about lawsites, let look at your employee hand book that deitails how everything is done in the shop. From the earth quake evacuation rally point to how to use a grinder and what clinic to go to if you get something in your eye. Oh, you do not have one? This will probably void your liability policy leaving you personally wide open to litigation.

I could go on. It’s sickeing.


you nailed it spot on ,we will see more and more fab shops leaving calif ,pretty soon it will be homeless and hollywood in ca
 

43mod

Well-Known Member
Your hours are totally flawed. 60 hr week minimum 80 is better. Have to be there before and after employees and customers so you cannactually get something done.
 

Josh 8

Well-Known Member
Your hours are totally flawed. 60 hr week minimum 80 is better. Have to be there before and after employees and customers so you cannactually get something done.
Of course. But your not getting paid for all those hours. Best you can collect on is 8 a day.
 

Big Whitey

Well-Known Member
I feel bad for the OP, sounds like he ended up in a shop at the bottom of josh8 mathematics list. I’m in the middle of a new class 5 U build and am paying the extras simply because I suck at fab and want it all done right the first time. I don’t think his labor rate is all that bad considering his knowledge and experience building great cars. (That’s my commercial for Penhall fab). He manages to get work done on my project as well as others, just a matter of putting time in where it’s needed. Yes bad idea to pay it all up front, been there myself and I feel like a dips$&t each time I trust a new person and get burned, if you contact him and he is leaving Tuesday, show up Monday, you have the rite to see your money anytime you want to, during working hours of course, don’t be rude just look at it mention not much is happening and ask in person about timing, also you get to see what is being put before yours and how much comes in and rolls out before your project get time put in, the more he knows you are going to show , hopefully he will get the clue you want it sooner than later. I agree don’t let him feel you abandoned it. Txt is great, best for back up but there is little to compare with random drop in’s. Good luck.
 
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