Starting a Welding Business
Knowing how to weld a tight bead is just one part of the welding business. If you’re interested in opening your own shop, you’ll need to consider a whole lot more than whether or not you enjoy the work.
Operating your own shop involves both creating high quality welds and sound business planning. Even if your shop will remain a small operation, you’ll need to create a simple business plan and develop a list of the materials you’ll need.
This article will explain what you need in order to plan a welding business, but keep in mind that entire books have been written on this topic. There will be additional resources at the end.
Before You Weld: General Business Advice
Plan Your Finances
If you’re launching a business, chances are that you want to make enough money in order to support yourself and possibly a family. You’ll need to anticipate expenses, initial costs for starting up, and how much you can borrow as a loan.
Banks will hand out credit cards for your business, but beware borrowing too much money up front. It is far better to rely on your own savings and possibly investors if you anticipate launching a large business.
If you don’t think you’ll have cash on hand, consider adding a side job that can help pay the bills. While you don’t want to start working for the competition and then steal their customers, some shops may need a part time welder. This will keep you in the black during the lean months of your launch.
Pick a Unique Business Name
If your name is Bob Lincoln or Andy Miller, you probably shouldn’t use your last name before the word “welding” in your business. Lincoln Welding and Miller Welding are already well known company names. Pick something unique that is clear and simple. Customers should not be confused by your name. A confused potential customer will most likely not become a customer.
If you plan on specializing in mobile welding or automotive welding, consider including that in your name. However, remember that a name may limit your future options. A construction company that needs an extra welder may not contact you if they think you only do automotive welds based on your company’s name.
Write a Business Plan
A business plan begins with an executive summary that identifies your company’s mission and your target markets. You need to strongly identify the core mission of your business and what you do best.
Identify your competition and the need for your business in the market. Consider the needs and opportunities in your community. If there already are several small welding shops, consider ways you can either go mobile to take advantage of the work they aren’t finding or look into larger projects that they can’t handle in their shops. If there are large companies in your area, think of ways you can run a small operation that beats the competition’s price every time.
You need to have a clear idea of how you’ll make money. That means you need a clear idea of how you imagine the company growing and how you hope to keep your expenses below your income. One of the first things you need to figure out is how much to charge for your jobs.
Many welders have a set rate that’s anywhere from $25-$35 per job no matter how small it is. That will save you a lot of time and money by weeding out the small jobs that won’t earn you a profit. When running your own business, the question isn’t whether you’re busy. It’s whether you’re making money.
If you need to figure out an hourly rate, ask other welders in your area and at online forums. For example, Welding Tips and Tricks recommends the following breakdown: “For tig welding start at one dollar per inch of weld plus a dollar per tack weld. (Remember that for round parts, multiply the diameter by 3.14) … For multipass welds like for pipe welding, figure in every pass. For example for 6 inch schedule 40 pipe, it might take 3 passes. That is approximately 18 inches per pass. 3 x 18 =54. Add another 4 dollars for 4 tacks and you are up to 58. 58 bucks per 6 inch pipe weld. Sounds a little low to me but it’s a starting place.”
How Will You Manage Your Welding Business?
Even if your business is yourself and a few welding machines, you need to think about how you’ll manage your day to day operations. Will you eventually hire staff? How will you send invoices? How will you keep track of your customers and jobs?
How Will You Market Your Welding Business?
There is no substitute for networking and the power of word of mouth when marketing your business. Build strong relationships with local repair shops and businesses that may need a welder. In fact, just stopping in to introduce yourself may be enough to drum up some business. Some welders create unique “calling cards” by welding together razor blades or something else small and memorable that they can drop off with local businesses. The advantage of these objects is they can display your skill.
An ad in the Yellow Pages may work because some folks still consult these directories for the service industry. However, make sure everyone in your area who may need some welding knows that you’re open for business. Oftentimes a fabricating business will be willing to send work your way if they’re overwhelmed with a big order. The key is to go in and introduce yourself if you want to find more work.
Consult Small Business Experts
Launching your own company will require insurance, permits, health insurance, and a variety of other forms that will be completely new to you. Consult experts in your town so that you fill out all of the necessary information in the proper order. If you need welding certification, then secure it as soon as possible. However, don't underestimate the time it may take to secure permits from your local town government or coverage from an insurance company.
Many businesses have messed up paperwork and have suffered delays in launching their openings. Excellent advice for a business startup is available, and you can’t afford to ignore it.
Welding Business Advice
Setting Up a Home Shop, Professional Shop, or Mobile Shop
Every welding shop needs to be designed for functionality and safety. You’ll need a metal welding table where you can safely and securely work on your materials, proper ventilation, safety screens covering any openings to the outside, and a workspace that is clear of anything burnable. Fire extinguishers should be handy at all times.
consider how you’ll handle phone calls and walk in orders. You may use
something as simple as a blue tooth headset, but just make sure you
aren’t welding next to your computer.
What Machines Do You Need
Every welding shop will need a TIG welder. If you’re investing in a TIG welder, you’ll most likely want to get a TIG/stick combination. Just keep in mind that any problems with your multi-process unit will prevent you from doing both kinds of welding, and therefore some welders like to have single units dedicated to each process. Make sure you purchase a unit with enough power and a sufficiently long duty cycle so that you can work on metal of any width and kind.
A MIG welder is another must for a welding shop. A heavy-duty unit such as the Millermatic 250 or 251 will accomplish everything you need.
Some operations will need metal cutting equipment and therefore an oxy-cutting set up or plasma cutter will be necessary. Other tools include an angle grinder, basic hand tools such as pliers, an air compressor, and a metal workbench.
Which Materials Do You Need?
Welding requires the regular purchase of consumable electrodes, gas, and non-consumable electrodes.
Here are some materials listed from Welding Tips and Tricks:
- Tig rods…you need a few pounds each of E70S2 mild steel rod, ER308 stainless steel rod, and 4043 aluminum rod. You need both 1/16 and 3/32 diameter. You might even want to have some .030” stainless on hand for precision. You can strip off some mig wire if you need to use small diameter mild steel.
- Mig wire: for starters just get a roll of E70S6 in 035” diameter.
- Gases: 1 argon for Tig, 1 50/50 argon/helium for Tig aluminum, 1 75/25 argon/co2 for mig.
- Consumables… a good supply of grinding and sanding discs
Keep Learning About the Welding Business
By visiting Baker’s blog Weld My World, you’ll stay on top of the latest news in the welding world and find fresh tips each week that can save you time and money while also introducing new procedures that can help you expand your business. Professional development is a key factor in the growth of every business, and Baker’s provides that in addition to low prices on equipment.
Learn More About the Welding Business
- What You Need to Weld at Home
- Common Welding Supplies
- Pursuing a Welding Career
- Proper Welding Gear and Safety Tips
- Ten Tips to Reduce Your Welding Costs
- Starting a Small Business (SBA site)
- Advice on Starting a Small Business
Written Exclusively for Baker's Gas and Welding by Ed Cyzewski