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IndustryArena Forum > MetalWorking Machines > Uncategorised MetalWorking Machines > Vertical Mill, Lathe Project Log > How do you guys, price your retrofit services ? What traps to avoid ?
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  1. #1
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    Question How do you guys, price your retrofit services ? What traps to avoid ?

    Hi guys,

    I'm getting in the retrofit business and I'd like to be advised about how to price my services for a retrofit project, what to look for, what traps to avoid, how to negotiate and customer relationship in general.

    As we all know a customer will try to bargain, but on our side, we need to work on every bit, from choosing the right components to finding suppliers to installing configuring everything to work together to the after sales support...etc.

    How do you guys deal with all of this ?
    what's your recipe for success ???

    Many thanks !
    bmn.

  2. #2

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by bmn View Post
    Hi guys,


    As we all know a customer will try to bargain,.
    Set a price and don't bargain

  3. #3

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    After being in the business for 25 years I could write a book on the subject. My speciality was in the wood products industry, high speed computer controlled chop saws. This was heavy industrial rather than mom & pop shops, so the money was normally not an issue. They just wanted the machines to run. Then I got into CNC upgrades later, I kinda fell into that one.

    First find out what the customer needs and their goals. This is the most important job that you have.

    The tendency for a startup business is to ''give the customer a good deal'' just trying to get your foot in the door. A little of this is OK, but don't under price your services. $125/hr is the going rate now, but at that rate you had better produce results quickly and know what you are doing. I normally capped the daily rate at $1000/day even if I spent a bit more time in a day. If travel is required, add actual expenses to the invoice. I normally charged $50/day for meals, plus all other travel expenses. If I could drive to the customer, it's a buck / mile.

    I learned early on not to ''cheap out'' on parts. Spec the best stuff for a given job. Trying to save a few hundred bucks on the front end may come back to bite you later. Find the suppliers that have equipment that you need and is adaptable to most applications and stick with that. Become an expert using those products, that way you are not having to learn as you go.

    I could go on, but I would rather answer questions so I'm not trying to write a book here.

    What kind of upgrades are you planning on getting into? What is your market?
    Jim Dawson
    Sandy, Oregon, USA

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Thanks very much for the replies guys !

    metalmayhem, it's not easy to set a rate, on what basis...etc. it's easy to feel that you're ripping off the customer doing "easy stuff" (well easy for you that is) but hurt yourself in the process...

    Jim, thanks for the numbers, I'm getting into heavy metal boxway VMC retrofit...
    it is an old cycle based/non programmable machine, the plan is to keep the frame and turn it into a VMC with programmable everything... I'll have to choose/find suppliers for the right components (axes/spindle motor+drive bundles, controller & maybe ballscrews) I might end up building an EMC2 based controller tough.

    The customer is trying to cheap his way trough this, wanted to reuse 40yo obsolete motors, I convinced him not to but, he asked for the cheapest possible solution... Chinese parts I guess...

    How to deal with cheap ass customers who might not understand the cost of craftsmanship compared to the parts cost ??? charging $1000 or more for installing $1000 bundle, might be perceived as a rip-off... How to explain/justify that to the customer ???

    Thanks very much !
    bmn.

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    TV Repair & Retrofitting Inc...

  6. #6

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Cheaping through a job is the best way to turn the job into a disaster. Been there, done that. My first CNC upgrade was like that. A large industrial class router, the customer insisted on steppers and Mach3 for a control. I installed it and while it worked, the performance was about that of a hobby table top machine. That's what you get when installing hobby class parts and controls on an industrial machine.

    Old motors are fine if they work, but the interface is expensive. I'm using the original 30 year old DC servos on my mill. For what you describe I would use DMM Technologies servos and drives and Centroid Acorn CNC controls. At least you have a chance of it running well. I'm using DMM servos on my lathe and have been very happy with the result.

    Without ball screws the accuracy of the machine is going to be marginal at best, especially with no direct table position feedback. Time to find out exactly what the customer expects from the machine when completed. If he is expecting the performance and accuracy of a million dollar VMC then he is going to be very disappointed. There are ways around backlash, sort of, but there is no substitute for a tight machine.

    ''How to deal with cheap ass customers'' I would run away from that job. I have about $3000 into the upgrade on my mill, and about $7500 into the upgrade on my lathe. That's just parts, no labor. Admittedly, I use a rather expensive motion controller in my systems. Both machines had ball screws and are in excellent mechanical condition so I had something to start with.
    Jim Dawson
    Sandy, Oregon, USA

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Hi BMN - If its uneasy for you to set a rate then perhaps this is not the biz for you. One mistake is to start something in the hope it will work out. They rarely do. Firstly on a job like this you settle on a hourly rate to cost out the job or a fixed price to cost it out and make recommendations. I wouldn't "physically" do anything until an agreed budget and a costing is done, many times projects will end there. It will turn out to be uneconomical unless you work for peanuts. Maybe better to search for newer second hand machine or even a new chinese machine will work out better.

    Second rule is don't work for cheap arsed customers. Walk away, find a better customer, better for you and your biz. And when you do figure out your rate x1.5 just to be safe...Peter

    You don't have to "justify" your time or expertise to a customer. If you do then they are the wrong customer. You set a rate and an agreed project scope. You do the job, done. If they do not accept the scope and costs then onto the next one. Another trap is to spend your own money on parts, instal them etc and then the client doesn't pay. Hard to get that stuff back. So send the customer a shopping list and they pay for parts and outgoings or they pay a lump to you that is the value of the parts so you are not out of pocket. It's about making money in the end and you have to focus on the money...

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by Jim Dawson View Post
    Cheaping through a job is the best way to turn the job into a disaster. Been there, done that. My first CNC upgrade was like that. A large industrial class router, the customer insisted on steppers and Mach3 for a control. I installed it and while it worked, the performance was about that of a hobby table top machine. That's what you get when installing hobby class parts and controls on an industrial machine.

    Old motors are fine if they work, but the interface is expensive. I'm using the original 30 year old DC servos on my mill. For what you describe I would use DMM Technologies servos and drives and Centroid Acorn CNC controls. At least you have a chance of it running well. I'm using DMM servos on my lathe and have been very happy with the result.

    Without ball screws the accuracy of the machine is going to be marginal at best, especially with no direct table position feedback. Time to find out exactly what the customer expects from the machine when completed. If he is expecting the performance and accuracy of a million dollar VMC then he is going to be very disappointed. There are ways around backlash, sort of, but there is no substitute for a tight machine.

    ''How to deal with cheap ass customers'' I would run away from that job. I have about $3000 into the upgrade on my mill, and about $7500 into the upgrade on my lathe. That's just parts, no labor. Admittedly, I use a rather expensive motion controller in my systems. Both machines had ball screws and are in excellent mechanical condition so I had something to start with.
    Thanks for the reply Jim

    originally the machine had PMDC brushed servos, fat and heavy 70 amp, I couldn't find drives for that... I only deal with this kind of currents when welding + the drives would be ~ $1000 each... equivalent brand new Chinese bundles are < $2000 minus all the hassle of shot motors/brushes/bearings on 100Kg motors...etc. I would have preferred name brand Siemens/Mitsubishi self tuning but It'll be too costly I guess.

    The machine came originally equipped with ballscrews, which seem to be shot now...might be repairable but doesn't seem to be worthwhile to me.

    The spindle is shot, it's not a cartridge and needs rebuilding + power bundle. The cleaning / mechanical work should be done by the customer's employees.

    A rough figure for the parts is around $10K EXW, without craftsmanship, using only cheap "quality" Chinese parts, I am sure the customer can afford it but, I'm afraid he'll think I'm earning too much/too quickly and find it unfair.

    I am sure there is a way through the right negotiating techniques, but I'm afraid to be lacking such skills.

    Would you still run away from that job and possible future opportunities ?

    Thanks very much !
    Bmn.

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Thanks for the reply Peter !

    Maybe better to search for newer second hand machine or even a new chinese machine will work out better.
    The customer is considering a new Chinese machine but, I guess he'll retrofit if it's cheaper for him...they only use manual machines so, they have no skilled CNC operator, I guess they're interested in a retrofit to get their feet wet with lower risks/costs..etc.

    At what percentage of new machine cost would you consider a retrofit project to still be worthwhile ?

    I wouldn't "physically" do anything until an agreed budget and a costing is done,
    I moved on site to visit the customer and have a closer look at the thing, free of charge, an afternoon total, is that a mistake on my part ?


    You don't have to "justify" your time or expertise to a customer. If you do then they are the wrong customer.
    That's a nice one ! I've never thought about it this way, this one should be carved in titanium and plated in foil gold

    Another trap is to spend your own money on parts, instal them etc and then the client doesn't pay. Hard to get that stuff back. So send the customer a shopping list and they pay for parts and outgoings or they pay a lump to you that is the value of the parts so you are not out of pocket. It's about making money in the end and you have to focus on the money...
    I didn't perceive it as a trap, I told them that I'd choose the right parts and they'd have to import them and deal with the customs...etc. out of honesty & transparency... but I somehow know they will try to relate my rates to the parts cost and perceive it as a rip-off but, the previous tip comes into play

    Second rule is don't work for cheap arsed customers. Walk away, find a better customer, better for you and your biz. And when you do figure out your rate x1.5 just to be safe...Peter
    Cheap ass might be a biased/ misperception/ gut feeling on my part as I haven't set my rates yet, they sure can afford it but, will they eek on my rates and try to bargain, maybe but what would you consider a red line while negotiating with the cusomer apart from above rules ?

    Thanks very much !
    bmn.

  10. #10

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by bmn View Post

    metalmayhem, it's not easy to set a rate, on what basis...etc. it's easy to feel that you're ripping off the customer doing "easy stuff" (well easy for you that is) but hurt yourself in the process...

    How to deal with cheap ass customers who might not understand the cost of craftsmanship compared to the parts cost ??? charging $1000 or more for installing $1000 bundle, might be perceived as a rip-off... How to explain/justify that to the customer ???

    .
    Time and cost are first and foremost , you'll need to figure out what hourly wage you want and thats the basis . For example I cost material at 10-15% , then there are other costs . My hourly rate plus cost dictates the end product price .

    I won't for any reason deal with the guys who want me to cut my prices , if they want the product they can pay what I fairly charge . Otherwise they can go elsewhere or make it themselves , both of which would be difficult to impossible for my customers .

    One thing about dealing with a cheap customer is the question // is the end product something that you want your name attached to . Everyone wants to save a penny but if the customer agrees to your terms then chances are that they would be happy in the end if the work is quality . Otherwise for every cheapskate there are many more who are willing to pay for quality work .

    Plus most guys get that labor can easily out price parts . I recently had a blown head gasket on my car , the parts cost hardly nothing yet the labor was in the thousands

  11. #11

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    ''I'm afraid he'll think I'm earning too much/too quickly and find it unfair.'' This sentence jumped out at me, and is maybe the most important sentence in that post. I think half of the problem here is your unwillingness or uneasiness to quote a reasonable amount for your labor. Don't sell yourself short if you are confident that you can accomplish the task in a reasonable amount of time. Figure out how long you think it will take you to get the job done, and quote a fixed price at an hourly rate that you are comfortable with. If it takes you longer to get the job done, then your hourly rate goes down, but the customer pays the fixed quote. Only you know you are making less/hr than you planned on.

    Have you actually discussed budget with the customer? ''.....he asked for the cheapest possible solution'' Does that actually mean that he really wants the cheapest possible solution, or rather does it mean he wants a good value for the money? I mentioned above understanding the goals and expectations of the customer, you need this information to be able to offer the best advice. The customer is hiring you for not only doing the actual work, but as important, is the experienced advice you will give him.

    If the customer is going to do all of the mechanical, then all you have to do is wire it up and get it running. In most cases not normally a big job. But understand that the mechanics can affect the outcome of the controls. You need to make sure the mechanical is correct.

    As far as negotiating, there is no need. You tell the customer what is needed and your labor quote, and that's the price. The only negotiating I do on a job like this is to offer less cost options if available and requested. But those less cost options normally come with hidden costs later; lack of performance, or failing parts. And I explain to the customer the problems that may be encountered later. Normally I spec materials and hardware that, in my experience, will meet the customer's needs and goals. This is why you need to understand what it is that the customer really needs, not necessarily what the customer thinks he needs. What they need and what they think they need may be two different things. It's your job to offer guidance to the customer based on your experience.

    Parts cost what they cost, you have little to no control over that. As peteeng mentioned above, present the parts/vendor list to the customer and have him buy the parts.
    Jim Dawson
    Sandy, Oregon, USA

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by metalmayhem View Post
    Time and cost are first and foremost , you'll need to figure out what hourly wage you want and thats the basis . For example I cost material at 10-15% , then there are other costs . My hourly rate plus cost dictates the end product price .
    Wow !!!

    I won't for any reason deal with the guys who want me to cut my prices , if they want the product they can pay what I fairly charge . Otherwise they can go elsewhere or make it themselves , both of which would be difficult to impossible for my customers .
    "Fairly" means different things to different people...
    Do you charge the same rate for reading a servo driver's manual, if it's a brand/model you don't know ?

    One thing about dealing with a cheap customer is the question // is the end product something that you want your name attached to . Everyone wants to save a penny but if the customer agrees to your terms then chances are that they would be happy in the end if the work is quality . Otherwise for every cheapskate there are many more who are willing to pay for quality work .
    Never thought about it this way... business might be low but, reputation is priceless !

    Plus most guys get that labor can easily out price parts . I recently had a blown head gasket on my car , the parts cost hardly nothing yet the labor was in the thousands
    Good point, but compared to a shop/garage we are often perceived as selling wind/thin air... your only capital is a $1000 laptop and a screwdriver :P how dare you charge more than a guy who runs a shop/garage with employees...blah...etc... in the end we can always pull the flush on those

    Thanks very much !

  13. #13

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by bmn View Post
    "Fairly" means different things to different people...
    Do you charge the same rate for reading a servo driver's manual, if it's a brand/model you don't know ?


    !
    Fairly means I don't overcharge and I don't cut my competitors throats .
    I don't read manuals because I know the products that I sell , but if I had to then I'd roll it into the cost no different than any other technician .

    I've watched clueless haas repairmen break more than they fixed (at the companies expense), and I watched them while they were on the phone getting instruction from the factory while doing the job . CNC technicians from any of the industrial cnc distributes charge every penny . I've never seen a tech do work on their own time or dime . It's the nature of the beast

    I'm in business to make money . I have mouths to feed and a mortgage to pay . I paid for machinery that needs to earn it's keep . If I can't make a decent wage then I may as well work for someone else and sleep without a worry .
    If it was a part time gig and I felt like helping people within a hobby lets say , then I'd be flexible , aside from that business is business and my time working is worth something

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by Jim Dawson View Post
    ''I'm afraid he'll think I'm earning too much/too quickly and find it unfair.'' This sentence jumped out at me, and is maybe the most important sentence in that post. I think half of the problem here is your unwillingness or uneasiness to quote a reasonable amount for your labor. Don't sell yourself short if you are confident that you can accomplish the task in a reasonable amount of time. Figure out how long you think it will take you to get the job done, and quote a fixed price at an hourly rate that you are comfortable with. If it takes you longer to get the job done, then your hourly rate goes down, but the customer pays the fixed quote. Only you know you are making less/hr than you planned on.
    I'm no into selling myself short but, in my first experience, I had a bastard who wanted me to model+program parts for him at a rate he did set himself ~$200/part I said OK I take the challenge(I was looking for a machine to get my feet wet as a CAD/CAM newbie) the first jobs I did get paid in machine time to make my own parts but, as soon as the customer saw how fast I could produce the work he started to delay things and wanted to pay me $60 for a prog I made which I refused to take & left...then, he gets a dumb kid to whom he did teach simple gcode for his old machine... once he was confident enough in his trained monkey, he left him to do a simple part on his own, a 10mm sheet metal sieve, a $hit load of ~10mm dia. holes so, the dumb kid clamped the sheet directly on the machine table and put Z -10 in his program, at some point he realized that the drill wasn't going through so, he measured the drill bit's tip length and added that in his program...effectively drilling many holes into the machine's table...bouhaha...that's what you get for paying bananas !

    I would save more time if I could prune such bastard s early on in the process.

    Have you actually discussed budget with the customer? ''.....he asked for the cheapest possible solution'' Does that actually mean that he really wants the cheapest possible solution, or rather does it mean he wants a good value for the money? I mentioned above understanding the goals and expectations of the customer, you need this information to be able to offer the best advice. The customer is hiring you for not only doing the actual work, but as important, is the experienced advice you will give him.
    We haven't talked budget yet, I guess he is waiting for the parts cost and base his labour rate expectations on that/use that as a starting point to negotiate... I guess he wants good value for the money using the cheapest possible parts... I am aware about my advising role, that's why I pushed the brand new motor bundles...the customer never saw the machine working as he bought it scrap for the nice condition heavy frame, I am confident that the performance will blow his mind since he only owns manual machinery and the new motors should have the same power as the originals... of course it'll never be as fast as a mold making machine but, the frame was never designed for that in the first place...5000mm/min feed rates should be possible with 15000mm/min theoretical rapids as the boxways are the limiting factor

    I don't want to be a for free advisor either so, they do/buy everything on my advise and pay a monkey to patch it all up together... at some point it costs me time and money/commuting to give said advice.

    If the customer is going to do all of the mechanical, then all you have to do is wire it up and get it running. In most cases not normally a big job. But understand that the mechanics can affect the outcome of the controls. You need to make sure the mechanical is correct.
    Yep, I should advise on that and said that we must first assess the condition of the boxways and get everything in pristine condition before we get started on the retrofit...if I cannot move the table with my hands or by turning the screw using reasonable torque then, it's hopeless.

    BTW, I saw online a similar machine which had been retrofitted so, I am not trying to make a ballet dancer out of a whale


    As far as negotiating, there is no need. You tell the customer what is needed and your labor quote, and that's the price. The only negotiating I do on a job like this is to offer less cost options if available and requested. But those less cost options normally come with hidden costs later; lack of performance, or failing parts. And I explain to the customer the problems that may be encountered later. Normally I spec materials and hardware that, in my experience, will meet the customer's needs and goals. This is why you need to understand what it is that the customer really needs, not necessarily what the customer thinks he needs. What they need and what they think they need may be two different things. It's your job to offer guidance to the customer based on your experience.

    Parts cost what they cost, you have little to no control over that. As peteeng mentioned above, present the parts/vendor list to the customer and have him buy the parts.
    The problem with the customer, is that he hides his previous works(so I can not estimate the value of his work) and knows zit about performance and needs but, I am targeting the machine's max factory performance to restore it to its old glory... it's a job shop in the maintenance sector not a production shop so, versatility is what he craves... at one point he considered turning it into a manual but, I pointed the huge limits and cost of additional tooling for simple tasks on a manual then, he asked me for the lowest cost bundle solution... and here I am.


    Many thanks !

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Thanks for the reply metalmayhem !

    Quote Originally Posted by metalmayhem View Post
    Fairly means I don't overcharge and I don't cut my competitors throats .
    I don't read manuals because I know the products that I sell , but if I had to then I'd roll it into the cost no different than any other technician .
    Thanks for the clarification !

    I've watched clueless haas repairmen break more than they fixed (at the companies expense), and I watched them while they were on the phone getting instruction from the factory while doing the job . CNC technicians from any of the industrial cnc distributes charge every penny . I've never seen a tech do work on their own time or dime . It's the nature of the beast
    I hate when that happens, took some small parts to a machine shop for simple rework and they shamelessly scraped them, I'd hate to see that happen on a large/costly piece of equipment... it's a shame that they charge for that... they've got no conscience.

    I'm in business to make money . I have mouths to feed and a mortgage to pay . I paid for machinery that needs to earn it's keep . If I can't make a decent wage then I may as well work for someone else and sleep without a worry .
    If it was a part time gig and I felt like helping people within a hobby lets say , then I'd be flexible , aside from that business is business and my time working is worth something
    Yeah, in the end it boils down to profit and only the best achieve it with a clear conscience and good reputation.

    Thanks very much !

  16. #16

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    one thing that I've forgot to mention which may have caused some confusion is that I speaking from a manufacturing aspect and I'm not in the retrofit business . I'm just speaking from a general business perspective , but the same should apply in my opinion .
    Sometimes when starting into business a bit of sacrifice and compromise has to be made to get the name out there . That doesn't mean to bow down to the customers and work for next to nothing . Especially because there is the what if factor , what if is when things go south or there are unforeseen obstacles in the way .
    I don't modify my products upon request , but , I have a few solid customers who need slight mods so that it fits within their needs . Mods are considered custom work at an extra cost , the what if factor is always attached as my insurance for when things go south . One quick mod may equate to a possible broken tool , scrapped part or any other thing that may costs me more than it was worth

    I've done a lot of retrofits , and the what if factor came up on plenty of occasions

  17. #17

    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by Jim Dawson View Post
    After being in the business for 25 years I could write a book on the subject. My speciality was in the wood products industry, high speed computer controlled chop saws. This was heavy industrial rather than mom & pop shops, so the money was normally not an issue. They just wanted the machines to run. Then I got into CNC upgrades later, I kinda fell into that one.

    First find out what the customer needs and their goals. This is the most important job that you have.

    The tendency for a startup business is to ''give the customer a good deal'' just trying to get your foot in the door. A little of this is OK, but don't under price your services. $125/hr is the going rate now, but at that rate you had better produce results quickly and know what you are doing. I normally capped the daily rate at $1000/day even if I spent a bit more time in a day. If travel is required, add actual expenses to the invoice. I normally charged $50/day for meals, plus all other travel expenses. If I could drive to the customer, it's a buck / mile.

    I learned early on not to ''cheap out'' on parts. Spec the best stuff for a given job. Trying to save a few hundred bucks on the front end may come back to bite you later. Find the suppliers that have equipment that you need and is adaptable to most applications and stick with that. Become an expert using those products, that way you are not having to learn as you go.

    I could go on, but I would rather answer questions so I'm not trying to write a book here.

    What kind of upgrades are you planning on getting into? What is your market?
    Couldn't agree more.
    http://cncmakers.com/cnc/controllers/CNC_Controller_System/CNC_Retrofit_Package.html

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Hi BMN - These days you are whats called a "start up" and your a founder by the sounds of it. So you need to work out a cost structure and a typical working week and what you want/need to earn. No point in working for yourself if you earn less then going to a 9-5pm 'gig', becomes a hard place to be working weekends etc to make the customer happy, what about your happiness?. But one advisor many years ago said to me if you want to make money (by that he meant above average wages) then you need to be in the pain biz or the pleasure biz. If your in the middle ground then you'll make average money and you may as well be in the 9-5 gig. So the customers in pain (break downs, staff issues, uncertainties etc etc) just want the pain to go away and will pay whatever it takes for you to stop the pain. The pleasure customers are the ones that want something badly and can and will pay happily for that moded car or boat bling or something luxy. Your customer seems to be in the middle. They realise that they need to get into CNC but don't want to spend money. If they sat down and did the math then a CNC rarely does not make money vs other methods. They get a biz loan buy a machine and make lots of swarf and lots of money. Dipping your toe in rarely gets the rate of return needed. You dip your toe in you get a little return and you say well was that worth it?? Business inertia will then say no wasn't worth it so we''ll do it how we usually do it... If they are in the machining game then the best solution is to buy a machine that hits the ground flinging metal. a) The cost is known b) the performance is known c) The support is known d) the repayments are known. The retro fitted machine however all of these are a variable so how does a business figure out its value and its margins, payback and its job?

    So figure out what you need say 2x the wage of a similar "job" maybe 3x (you have to pay insurance, travel, computers, down time, holidays superannuation, health etc etc) these really add up. Then put forward your proposed work scope to them (fixed price or hourly or a range) and see what happens. I have found a ranged quote sometimes works because the client is an optimist so sees the low value number but at the end you can pick the high value. If you charge less then the high value the customer is emotionally happy so may lead to future work. Got to be a phycologist sometimes with a quote... Peter

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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by metalmayhem View Post
    one thing that I've forgot to mention which may have caused some confusion is that I speaking from a manufacturing aspect and I'm not in the retrofit business . I'm just speaking from a general business perspective , but the same should apply in my opinion .
    Sometimes when starting into business a bit of sacrifice and compromise has to be made to get the name out there . That doesn't mean to bow down to the customers and work for next to nothing . Especially because there is the what if factor , what if is when things go south or there are unforeseen obstacles in the way .
    I don't modify my products upon request , but , I have a few solid customers who need slight mods so that it fits within their needs . Mods are considered custom work at an extra cost , the what if factor is always attached as my insurance for when things go south . One quick mod may equate to a possible broken tool , scrapped part or any other thing that may costs me more than it was worth

    I've done a lot of retrofits , and the what if factor came up on plenty of occasions
    Thanks for the tip !

  20. #20
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    Re: How do you guys, price your retrofit services ? What traps to avoid ?

    Quote Originally Posted by peteeng View Post
    Hi BMN - These days you are whats called a "start up" and your a founder by the sounds of it. So you need to work out a cost structure and a typical working week and what you want/need to earn. No point in working for yourself if you earn less then going to a 9-5pm 'gig', becomes a hard place to be working weekends etc to make the customer happy, what about your happiness?. But one advisor many years ago said to me if you want to make money (by that he meant above average wages) then you need to be in the pain biz or the pleasure biz. If your in the middle ground then you'll make average money and you may as well be in the 9-5 gig. So the customers in pain (break downs, staff issues, uncertainties etc etc) just want the pain to go away and will pay whatever it takes for you to stop the pain. The pleasure customers are the ones that want something badly and can and will pay happily for that moded car or boat bling or something luxy. Your customer seems to be in the middle. They realise that they need to get into CNC but don't want to spend money. If they sat down and did the math then a CNC rarely does not make money vs other methods. They get a biz loan buy a machine and make lots of swarf and lots of money. Dipping your toe in rarely gets the rate of return needed. You dip your toe in you get a little return and you say well was that worth it?? Business inertia will then say no wasn't worth it so we''ll do it how we usually do it... If they are in the machining game then the best solution is to buy a machine that hits the ground flinging metal. a) The cost is known b) the performance is known c) The support is known d) the repayments are known. The retro fitted machine however all of these are a variable so how does a business figure out its value and its margins, payback and its job?

    So figure out what you need say 2x the wage of a similar "job" maybe 3x (you have to pay insurance, travel, computers, down time, holidays superannuation, health etc etc) these really add up. Then put forward your proposed work scope to them (fixed price or hourly or a range) and see what happens. I have found a ranged quote sometimes works because the client is an optimist so sees the low value number but at the end you can pick the high value. If you charge less then the high value the customer is emotionally happy so may lead to future work. Got to be a phycologist sometimes with a quote... Peter
    Very informative, I'd rather be on the pleasure than the pain side, I'd prefer to empower my customers a get paid by a smiling customer (without hurting myself in the process) rather than be a so called "$hit position business" whose customers cringe to pay to get them out of $hit.

    My customer seems to be looking for a first car he can ding and dent without worrying too much, I'll have to explain that in the long run it might not be worthwhile/ might cost more than expected.

    I seem to be lacking the psychologist skills, out of dumb honesty/inexperience I guess. (I suppose you meant psychology since phycology is algae stuff)

    Thanks very much !

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