How much should a custom luthier make per hour?

[hdracer]

See? That's part of the problem with many small business owners, some luthiers included. If you don't have a handle on your labor costs (including your own) you don't have a handle on your business. How can you figure out what the correct price is for your instrument if you don't know how much labor you have in it?

The market sets the price.
You have to find a way to make it work.

 

[g4string]

For a small business builder to net $100,000 he is lucky to be making $30-40 a hour net

$30-$40 calculates to approx $60-$80K per year on a 40hr work week (2080 hours per year)....not bad dough by any means. You need to hit $50 p/h to make $100K

 

[g4string]

Well said.

The other catch with luthiery is if orders aren't there, you don't get paid... and you likely won't be able to fill even a 40 hour week with billable work. Especially in this economy.

BINGO!!! Thats would be the hardest thing about being a luthier/small biz owner...esp one where your lively hood is dependent on "disposable" income.

 

[calebbarton]

See? That's part of the problem with many small business owners, some luthiers included. If you don't have a handle on your labor costs (including your own) you don't have a handle on your business. How can you figure out what the correct price is for your instrument if you don't know how much labor you have in it?

Thats just poor business management. Your labor is worth however much you decide to pay your self per hour or per job. You should have that already worked out when you set out to start a business.

At this point, I wont repair guitars for less than $30/hr.

Although I have constructed instruments before, I don't qualify as a luthier. But If I was, I wouldn't touch a block of wood for less than $50/hr just because It took all that time and effort to build up my tool collection and experience.

 

[hdracer]

$30-$40 calculates to approx $60-$80K per year on a 40hr work week (2080 hours per year)....not bad dough by any means. You need to hit $50 p/h to make $100K

$29.58 X 65 hours=$1922.70 X 52 = $99,980.40

When you are a small business owner you think in monthly or yearly net. If you think hourly you will close your doors real fast.

Successful small business craftsman have no idea what a 40 hour work week is unless they are sick and then still struggle through.

 

[Jeff Bonny]

When you are a small business owner you think in monthly or yearly net. If you think hourly you will close your doors real fast.

Successful small business craftsman have no idea what a 40 hour work week is unless they are sick and then still struggle through.

Truth.

 

[g4string]

$29.58 X 65 hours=$1922.70 X 52 = $99,980.40

When you are a small business owner you think in monthly or yearly net. If you think hourly you will close your doors real fast.

Successful small business craftsman have no idea what a 40 hour work week is unless they are sick and then still struggle through.

Not a real apples to apples comparison if your comparing a 65 work week to a 40 hour work week. Most states have labor laws that require biz owners to pay OT for all hours worked over 40 in a work week....obviously that rule doesn't apply if your paying yourself. So if a "normal" 9-5 guys works 65 hours p/week at $29.58....his OT rate is $44.37 p/hour. His total OT pay for the year is $57,681, base pay is $61,526. Base + OT would be approx $120K then. I guess the lack of premium pay/OT is another to consider was well. Kinda taking a 20% pay cut for everything over 40 hours.

But it's all a moot point as yes, I agree with you. A luthier should/would have to look at his biz in sales volume and not p/hour wages. Profit margins can be increased through efficiency, insourcing/outsourcing, bulk/mass stock, etc, etc

 

[Snarf]

Us musicians almost never get to sniff that kind of money. It's more than a little depressing sometimes.

 

[jg42]

Well said.

The other catch with luthiery is if orders aren't there, you don't get paid... and you likely won't be able to fill even a 40 hour week with billable work. Especially in this economy.

Well, to be fair, that's the case with any small business, regardless of the occupation. In order to do the job you have to get it first.

 

[Munjibunga]

Not including cost of supplies (and tools I suppose), a luthier I've gone to in the past who is top tier with many celebrity clients and works out of a major city charges about $125/hr (itemized bill). He's worth every penny when it's a job that goes beyond the basic stuff, like fixing damaged wood or worn frets on a vintage instrument. Another guy who does great basic setups, tweaks, and fret leveling charges lower rates to accomodate working musicians and charges ~$60/hr. I think these should be the lower and higher extremes (and the cheaper guy could easily charge more but chooses not to)

Edit: should note that both guys are indeed instrument builders as well as techs, this is just their given hourly rate for repair work...

But that $125 presumably includes overhead, so we don't know what the real net hourly rate is. If he has health insurance, it's going to be a lot less.

 

[Munjibunga]

$30-$40 calculates to approx $60-$80K per year on a 40hr work week (2080 hours per year)....not bad dough by any means. You need to hit $50 p/h to make $100K

And that's $50 per hour after overhead.

 

[Munjibunga]

$29.58 X 65 hours=$1922.70 X 52 = $99,980.40

When you are a small business owner you think in monthly or yearly net. If you think hourly you will close your doors real fast.

Successful small business craftsman have no idea what a 40 hour work week is unless they are sick and then still struggle through.

The difference between annual and hourly is arithmetic.

 

[Just Thumpin']

Based on my experience, you might be interested to learn that the lower end of your range is actually an exceptionally high wage for even the very, very best luthiers in the world. Until 3 years ago, two very good friends of mind that had been at it for 27 years (read between the lines) consistently earned well under your range.

This is simply not an easy business in which to generate huge financial returns...you either love it or it makes more sense to do something else...

J

$50 - $100 hr I think is fair for a skilled craftsman with a respectable reputation. I think that more than puts in perspective the cost for a Fodera

 

[nukes_da_bass]

Fixed it for ya

Craftsmen do not get paid what they are worth anymore. It is hard to compete with the big guys and hit a "price point" and still make a good living.

Ya sure I agree about AFTER taxes...
Note I said this is my short term goal that is still not realized after 6 years in business.

My LONG term goal is MILLIONS!

Lol

 

[nukes_da_bass]

I agree, some builders are great at what they do but horrible business owners. Some are great biz owners but lackluster builders. Part of the dilemma is whether or not you wanna do you straight 8, punch out, caller' a day, and go home. Or do you wanna ALWAYS be dealing with YOUR work. I like punching out and calling'er a day after my 8. I can come home, forget about my job, and enjoy my family with no stress about making sure I have enough $$ coming in.

Risk vs. non risk. The business owner assumes all the risk. I pay EVERY expense except half the gas (I run a commission based cab company).

The only thing my contractors risk is THEIR time, and investing half the cost of petrol.

I haven't had a "straight 8" in almost a decade. I work til I drop to insure the company is still there tomorrow for my FAMILY, and my DRIVERS and THEIR families as well.

A lot of people are counting on my company to eat. Enjoy your "straight 8". And respect the dude that keeps it in place for you!

 

[1958Bassman]

See? That's part of the problem with many small business owners, some luthiers included. If you don't have a handle on your labor costs (including your own) you don't have a handle on your business. How can you figure out what the correct price is for your instrument if you don't know how much labor you have in it?

But that's also the problem with a lot of people who are good at something and use that as the basis for going into business. They know how to do things, but don't have the knowledge to design/build/run a business well, efficiently, or whatever adjective you want to use. There are lots of badly run businesses, owned by people who are really good at doing the work, designing the systems, etc. Ultimately, these businesses often fail unless someone comes along who can guide it toward sustainability. Also, a lot of the people who aren't really "business types" use a gut feeling to base their pricing. Some don't even do it for the money- as long as they they can support themselves, they get more satisfaction from working for themselves and doing what they enjoy. They don't usually find out that they should have & could have charged more until it's too late in their career.

 

[1958Bassman]

Thats just poor business management. Your labor is worth however much you decide to pay your self per hour or per job. You should have that already worked out when you set out to start a business.

At this point, I wont repair guitars for less than $30/hr.

Although I have constructed instruments before, I don't qualify as a luthier. But If I was, I wouldn't touch a block of wood for less than $50/hr just because It took all that time and effort to build up my tool collection and experience.

Someone can think they're worth any amount but if nobody wants to pay that amount, they won't have any work to do. Those of us who use tools for what we do understand why we need to charge what we do, but the customers often don't give a rat's butt about how much our training or tools cost- they just want it done right, on time and below budget. They may see the parts and materials in the finished piece, but they don't know about the materials "wasted" in the manufacturing process. I use " because materials obviously don't grow in the shapes we need.

 

[landau roof]

But it was arcane, esoteric and off-topic. And baroque.

"Completely misunderstood" would have been far more efficient.


If you base it on such terms, their time can easily appear to be valued much less some hourly employees. How are you supposed to log the hours when the various processes are so varied and often sporadic? Does every minute slightly related to work count towards hours worked? Even a salaried employee who has a eureka moment in a dream, and then gets to organizing his thoughts in the middle of the night can't put that on his time card.

Nevertheless, you insist on condensing their compensation to the most basic of units, which is largely inapplicable because they are not paid in those units.

 

[1958Bassman]

If more people had a clue what's involved in doing this kind of work there'd probably be far less crap thrown at them. Unfortunately many simply aren't curious enough to try and gain even a cursory understanding of what it takes to run a successful business. Worse, some builders are in the same boat.

I think a lot of people are under the impression that someone can take a piece of wood, machine/mill it/work it into a particular shape, put the finish on it, assemble it, set it up and call it a 'guitar' or 'bass'. It's not steel or a synthetic material and wood has this pesky habit of taking on/releasing moisture and changing its shape because of it. Often, a board needs to have material removed and left to acclimate for long periods before anything else can be done to it. That's one reason a one-off instrument take as long as it does. With the price of lumber changing and exotics being so high, it's not practical to buy in bulk unless it's a smokin' deal and even then, someone will always want some specie that's not in stock.

 

[KJung]

Interesting topic. I agree with a few posts that suggest that an 'hourly wage' makes little sense for the primary business owner. One of the things I learned prior to starting my consulting firm almost 20 years ago was to stay away from 'hourly billing'. Yes, lawyers get away with it, but to me, it has nothing to do with the 'worth of the product'.

Put another way, I charge my clients for the 'worth of the product', taking into account supply and demand and my 'brand worth/reputation', etc. For some of my projects, I make well over $1,000 an hour (since I have some procedures down to an art, and am very efficient). I'm sure there are some projects that I make less that $100 an hour (luckily rare!). NO client would pay $1,000 an hour for my services if I billed that way, but many would pay $5,000 for a very worthwhile deliverable (even if it only takes me a couple of hours to do it), and it is none of their business or concern how long it takes me to do that.

So, it makes little sense to set an hourly wage for something like bass building (again for the primary owner/luthier). The price you can get for a bass is set by competition, and any sort of brand equity you have built with you name.

Like any business, if you are a luthier who works like crazy, and at the end of the year, can't make a decent living by subtracting his/her costs from the (price x number of instruments sold), then it is time to go out of business (which I assume many do).

Don't know if that even adds anything to the discussion, but it is one I often have with people new to starting up a small business. Unfortunately, most of these people have no business training and shockingly don't really understand the accounting/marketing concepts necessary to run a business efficiently and make a decent profit (or know before-hand that there is no chance to make a decent profit).