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Shop hourly rate for large horizontal boring mills?

CMI94

Plastic
Joined
Apr 21, 2022
Our shop is struggling lately to charge enough for our work. Insurance has gone through the roof. We don’t want to increase employee pay-in because of how strapped everyone is for money these days. We’ve given everyone a lot of raises over the last few years to retain good guys. We have large horizontal boring mills that cost 1mil to replace, and having to pay guys more, along with everything else going up in cost, our profit margins are way down. We used to figure 85-100/hr for the machines but that doesn’t seem to be cutting it anymore. Some of our customers are complaining about increases, but if we don’t keep bumping prices up we’ll never be able to replace machinery.
 
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My local Ford is $200CAD/hr now.

I don't doubt your overhead alone while running those machines is in the $125/hr range.
To start, figure your cost to run, and triple it.
 
Ok hope 85-100 was the profit per hour, not the hourly rate…

Reminds me of skip the dishes.
People think they are making money until the car reeds maintenance. Then they realize they are behind not ahead.

Machines are not long term equity, they are a depreciating asset. Bill for them or it’s a slow death
 
I wouldn't worry about ever replacing those machines if you already can't get paid enough to run the ones you got.
Make sure your processes are efficient enough and bump the prices to where they need to be, if they complain and keep buying, good, if they complain and find someone else to do it better/cheaper well there's your answer.
 
We have large horizontal boring mills that cost 1mil to replace,
How much competition do you have in your town? Everyone has a Haas VF2 in their garage but HBMs not so much. Competition sets the price--especially for large specialty equipment. Pretty hard to put the parts you make in a USPS flat rate box.
 
Our shop is struggling lately to charge enough for our work. Insurance has gone through the roof. We don’t want to increase employee pay-in because of how strapped everyone is for money these days. We’ve given everyone a lot of raises over the last few years to retain good guys. We have large horizontal boring mills that cost 1mil to replace, and having to pay guys more, along with everything else going up in cost, our profit margins are way down. We used to figure 85-100/hr for the machines but that doesn’t seem to be cutting it anymore. Some of our customers are complaining about increases, but if we don’t keep bumping prices up we’ll never be able to replace machinery.

Where are you geographically?

For all anyone ITT knows you could be talking in rupees.
 
What is the fully burdened labor cost? I'm guessing about 175% of hourly wage. Now multiply that fully burdened cost by a factor of 3 to 4. Thats a starting point. Now add in disposable tool cost.

example: $25/hour x 1.75 = $43.75 x 3 = $131.25 + $15 consumables, round up to $150.00. This number doesn't go to the customer, just for internal quoting. YMMV
 
Where are you geographically?

For all anyone ITT knows you could be talking in rupees.
From one of his other threads, Nevada:
 
We have a large HBM here at the shop. When estimating, we typically charge $150-$190 per hour, plus margin. If I am the only one in town who can get the work done, a 50% margin would be reasonable. This puts the effective hourly rate at $225-$285 per hour. No one has complained about the price when they need the machine.

Our commodity machines are bid closer to $100 per hour for reference.
 
Probably depends where in the country you're located. I worked at a shop in the DFW area that had big cnc boring mills, bridge mill, vtl's, etc. the smallest vmc they had was a 50x25 hurco.. Their shop rate was 165, and they seemed to be happy. They were happy when the profit margin was 30% or higher. I don't know what most shops look for in profit margin, but that was where they typically ran.
 
It’s shitty when I can make more money with hand tools and a ladder then running other people’s stuff on my machines.

I’ve been doing more electrical service work lately… $150 an hour for my labour and 10-30% markup on materials. Easier money for a one guy shop.

Told my kids to get into plumbing, electrical or hvac.
 
I can't believe some of you guys are billing so low. I guess that's why paying 30-35 an hour to the help is out of the question industry wide.

I have a few friends in the HVAC and electrical space that make a good living with a 60K worth of tools. Even so, I get to work in air conditioned spaces and leave machines to make money while I'm off in bed sleeping.

Everyone wants to compare to the higher HVAC earners but I never spend my days upside down in a 120 degree crawl space to make a buck.
 








 
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