By Missourian
Date 02-11-2008 17:19
Edited 02-11-2008 21:16
Me and a buddy are contemplating opening up a welding shop of our own. Our hope is to do contract welding work for larger companies. We're also bouncing around the idea of making/marketing some of our own product(s) to help supplement our business income while we're getting our contracts lined up. We'd take walk-ins and repairs at first to keep us busy, but that isn't necessarily what we want to do long term. We're currently researching everything we can, and are trying to come up with an industry to focus on. We were looking strongly at the farming industry, as there's plenty of welding to be done there. We're just wondering if that industry isn't already tied up too much. Is there room for any more competition on troughs, hay bail rings, and such? Would we have a market? We've also looked into the hunting industry. We've considered making tree stands, deer feeders and such, but again, is there room for more competition? We'd like to come up with a niche market where we don't have much competition, but the more we dig the more we're realizing that that is going to be hard to find. I don't expect anyone to give up their business plan, but we would greatly appreciate any ideas, comments, or constructive criticism. Right now we're just bouncing around ideas, but this is something we are serious about. Any help or comments would be appreciated. Thanks, Adam
Location is a big thing to think about and that will also determine what kind of market you may want to get into and how much competition there is for it. As for deer stands and other personel products, advertising and how cheap you can make it comes into play there. If you can sell your stands cheaper then any other competitor and have the quality documentation and reputation to back it, you can make a killing selling your stuff on e-bay or to big time stores like Bass-pro or something.
something you could consider is working as a sub-contractor. you could get in on some structural or pipe jobs where the contractor who actually put in a bid on the job is in a bind. since there is a shortage of good welders and fitters there are lots of companies who have to turn down contracts just because they don't have the manpower. or they accept the contract and find that they're in over their heads and need to get bailed out. as long as you can produce work that meets the client's expectations and you can meet deadlines, lots of companies would welcome you.
Plumbing and HVAC Mechanical contractors are often an untapped resource for welders, I know they pulled me thru when the patch dried up. If your interested, a foreman in the shop just received a patent for an ATV accessory and is looking for a manufacturer/fabricator. PM or email if interested.
We've been doing the things that you mentioned for about 5 years, and here is my experience:
Farming: It's good work, however there is no farmer that doesn't have a welder and will repair something 10 times before they call someone in. Most of them think they are welders so it's hard to convince them that you are a professional and your work will hold up. Most of the farming stuff we do is cast and aluminum because they are not easy to do with a buzz box.
Tree Stands: Look at your local hunting shop and look at the Bass Pro/ Cabelas catalogs and see how cheep that stuff is. It's hard to compete with the prices. Our labor is worth more than the price of those things. You really have to build a lot of them with fixtures, and do it fast to make any money. Also, your liability insurance might not cover these types of fabrications.
Walk in Repairs: This is ok if you have good advertising. This kind of work is only good during the summer months for us, since people are outside using their lawn and garden equipment during these times. It almost turns off from November until late March.
Contract Work: This is the best way to stay consistently working. Get in with some shops in your area, and try to get some of the smaller stuff that they don't want to do. Also, contract with some structural companies because they almost always need good welders. Most of the time you will have to show a Workers Comp cert to go onto any job site.
County Government Work: This one turned into something big for us this year. Get with your local county DOT or Drain Commission and offer up your services. They are building roads and plowing/ salting snow, and they are hard on equipment. If you do good work and stand behind it, they will use you on a regular basis.
Good Luck, hope things work out for you.
Mark
Adam
I have a small part time welding shop in East Tn. and I get alot of stuff that isn't worth welding,in that,it would be more cost effective to replace the part (Lawn Mowers,plumbing fittings,motorcycle casings)than to actually weld it.Also,I get alot of people wanting me to weld trailer hitches,and tractor trailors,and I usually don't for the simple fact of liability.
You can make good money if you put in the time and effort (I should put it more),and its seems to be feast or famine,and since I have an actual 40 hour job,I don't sweat it much.
You might want to get a tax attorney to make sure your legal in respect to workmans comp,payroll taxes,entertainment tax,and equipement tax.
Good luck,
Ringo
A few words of advice from someone who had a succesful shop and sold it for a steady paycheck and less stress.
IF I had it to over again here is what I would do in order.
#1 Hire a good accountant, the fee he charges will pay for itself in the first month, ask him to take care of your personal finances also.
#2 Only do the welding. Don't spend money on saws, mills, drill etc. Most steel suppliers will cut anything you need to order, punch holes, form, bend whatever. Over time you may want to bring some of these things in house but trust me if I had it to do over I would reduce my capitol expenditures and let someone who has all that stuff do some of my work.
#3 Decide if you will do the actual welding work or hire someone to do it for you. I can tell you that you won't get rich doing the welding yourself, as the owner you need to MAKE money. The act of welding doesn't MAKE money it actually SPENDS money. You make money by bringing work in the door.
A few other words of wisdom. If you don't have the money to operate on for at least one year don't quit your current job. Instead, start your business and hire someone to do all the hard work while you round up accounts. Offer to pay them on a per job basis as a contractor and avoid taxes, workers comp, etc. check with your accountant and attorney on this. Do not pay yourself anything for at least one year. Why? Put the money back into the business while you work your current job and let that money build your business. In a few years not paying yourself will pay off handsomely. Watch out for people who want to take advantage of you. Make sure that every job has a signed contract before you start!!!! Look into keeping an attorney on retainer. He will pay for himself over and over again. Don't buy anything on credit!!! If you can't pay for it up front you shouldn't be doing it!
As for work. There is a ton out there. The company I work for utilizes outside vendors and pays well. We require shops to meet AWS code and our quality standards. Don't be afraid to contact large companies, they usually have work and need people all the time. If you do take on a large outfit make sure you deliver on time 100% of the time and provide the best quality, don't let anything slide. If you do that your business will grow, if not you will fail as your reputation gets damaged.
Stay away from farm stuff, farmers are cheap and don't like to pay! I know I grew up on a farm. Walk in work won't keep your doors open you need to get out and sell yourself! A rule of thumb is for every 100 companies contacted you might see a 1% return. So if you you talk to 100 people per month you might get one job. Of course this will grow as people get to know you but for now keep it in mind.
Owning a shop is hard work and long hours. I sometimes spent 20+ hours per day working for myself. The freedom can be rewarding but you will work harder than you ever have in your life. The hardest work you will do is be a manager, welding is the easy part.
I had a friend that has since died. He was a crusty old jew (he would be proud of that description). He told me one day "Georgie, in my family we always have 3 people in the business. One to see that the work gets done, one to sell and another to make sure there is enough money to run the business." After many years and owning several businesses I see how true that is.
Good luck.
Hi
GOOSE EM's offered some sound advice, its all about the $$.
Fortunately when I changed accountants a while back he advised me to declare my welding "hobbie" as a business as our family needed some write offs. Wow, he is worth his weight in gold.
Just a few thoughts and my exp.
I got away from welding as a career about 10 years ago and got into roadway and bridge construction inspection for PDot. There I learned bean counting. I discovered how the successful low bid contractors succeed and thought I would share some detail, it is so important to be realistic. Track everything, overhead, start up, insurances, utilities, fuel, maint., unpaid travel time, time preparing bids, time billing clients, collections efforts, consumables and actual time on the job. Some of this you will want for your taxes anyway. Set up a spreadsheet for tracking time and costs the review it regularly.
I got serious last Sept. when I was laid off and decided to jump in with both feet. Some might view the other guys in the yellow pages as the competition I didn't. I visited them with my rig and a Bus. card. I asked if they would refer work to me if they were tied up with other clients or if for any reason they didn't want the work. In a days time I made some new friends, found out their current rates, who the good clients were and who does'nt pay thier bills!! I promised to do the best job that I could. In return I would reciprocate.
I had three referals within a month, 2 small jobs and the third I'm still on. A general contractor had some work not covered by subs on a project. They had several questions regarding certifications that I readily handled and even offered to discuss them with the designer/engineer. 2Hrs later I had the work $70/hr+Travel Time. After three days on the job the original Qty of work was doubled.
I'm learning to wear several hats now in addition to a hood!
,,,,, it's about $$$ in your pocket and a happy customer.
GoodLuck
Whiteyford
