Design Rates 1

[iumcad]

This may not be the proper forum but I will post anyway; there seems to be many of my type in this forum! I will be starting my own design service within the next three months and was wondering if anyone would care to share what the average hourly rates are for mechanical (primarily machine) design these days. From what I have gathered the rate for full blown 3D design sits right around $60, detailing $40, and checking $25-30. Does this even sound accurate? I have 12 years of experience in design of dies, tools, jigs, fixtures, and specialty automation machinery primarily for the automotive industry and have decided to make more out of my time put in. I am a veteran Autodesk user and got sucked into the Inventor world but have decided on Solidworks for my design service. I wont go into the whole Inv vs Sldwks war. I went to the 3D skills seminar and I am taking the 2006 personal edition test drive. Its frustrating trying to learn at such a fast pace, but I think Solidworks has the upper hand; there has to be a reason why its so popular in mechanical design; plus my primary customer uses it and this weighed heavily in my decision.

 

[ctopher]

The numbers you wrote seem about right. But, they will adjust as you go depending on your expertise, quality, customers, etc.
The others here that have their own business will know more.

Chris
SolidWorks 06 5.1/PDMWorks 06
AutoCAD 06
ctopher's home (updated 01-18-07)

 

[ajack1]

I own a small design company in the UK that does exactly what you are looking at and we charge out at around the top end of the scale you mention if you look at £1=$2. However we struggle to get work from the USA at this exchange rate.

Basically you can charge what someone will pay, although I doubt many will pay you an hourly rate, we always have to quote for a project. As I am sure you are aware this is not an exact science, so the hourly rate is only really a best guess.

Don’t expect to earn every hour you work, you will spend a lot of time quoting, attending design buy offs and the like for which you cannot charge, or at least I should say I have found no one who lets us charge. As an estimate if you work 80 hours per week 50 will be chargeable.

Good luck it is very hard work and don’t expect to earn big money in the early days, but it is hugely rewarding.

 

[JMirisola]

Depending on the project, I charge $35-$50/hour. I won't do flat-rate work. All too often a customer will want to make changes that would cause me to lose money. Granted, I could charge an 'above and beyond' rate in those instances, but it makes life simpler by just charging by the hour.

Jeff Mirisola, CSWP
CAD Administrator
SW '07 SP2.0, Dell M90, Intel 2 Duo Core, 2GB RAM, nVidia 2500M

http://designsmarter.typepad.com/jeffs_blog

 

[iumcad]

Thanks for the great insight. I should probably quote the entire project w/ those numbers in mind. But, like mentioned, I know how customers can change & add things; especially after a %50 design review. Maybe after I get established, or only w/ certain customers, I can go to a flat rate per hour. It is scary yet exciting starting something like this, but when you look at it the capital expenditure: PC $5,000-6,000, software & training $7,000, plotter $2,000; not to bad considering other types of business. I also have a "shoe in" with a certain customer who has offered to give me all of their contract design work. There seems to be many shops that wont carry an in house designer due to overhead; they would rather hire the design work when they get a job and have the money to spend. Im just worried about insurance for my designs. Do I really need to go as far as getting professionals liability insurance for my designs in this type of work? Im not the end integrator who would responsible for all of the safety/osha issues.

 

[ajack1]

Loranmm, I do not know about the States but over here public liability is a must have, professional indemnity is more debateable.

In the UK we have a couple of bodies the chamber of commerce and the federation of small businesses both are geared up to make small companies a sort of co-operative. I do not know if there is anything similar in the US but if so they are well worth joining. You get time with lawyers, accountants, insurance brokers and the like that understand small businesses at a very cheap rate. You will get very good advise on things like professional insurance rather than some company the thinks you design nuclear power stations.

 

[fcsuper]

loranmm,

I may be tainted by my Silicon Valley roots, but the rates you stated seem a little light. I would look into what is appropriate for your area, consider who your customer is, consider whether or not you are competing with others (and who they are) for the work (if you can), how fast you are in comparison to others, and how much skill you have to offer your client.




Matt
CAD Engineer/ECN Analyst
Silicon Valley, CA

http://sw.fcsuper.com/index.php

 

[iumcad]

Yes, rates need to be comparative to this area and they may seem light in comparison to other states. I will offer a niche in some areas of manufacturing so I could be more aggressive in these areas. Most companies come to contract designers if they carry an expertise that they do not have in house. I am lucky enough to have a shop that will be sending me all of there work which (last year) was just over six figures. This should keep my blood flowing; as I can take on other work as well, if its there! As far as insurance goes I know the obvious that is needed and I plan on being an LLC. This seems appropriate to cover my assets, but my main concern being personal items.

 

[Theophilus]

If I go hourly, my rates are considerably higher than those mentioned here.

However, most projects I quote in phases with deliverables expressly laid out in an agreement for the project. So if the client wants to creep the project, it's no problem. I re-quote the phase concerned and restate the deliverables--and the client pays to get what they would like to change. I find that many clients really aren't too serious about what they say they want and back off the changes. The others are serious, and don't mind spending more to get what they need--and I remain respected.

One of the toughest things I encountered when starting off was giving someone my rate--I'd almost always reduce it at the last minute. Never do that. You'll tend to be worth what you can actually get for your work. If you undercut yourself, you'll have a different class of clients than if you hold firm and let the "bargain" hunters go find someone else. (I've NEVER found working with such bargain hunters worth my while--and ironically, those are the only clients for whom I've had to forgo being paid from.)

Depending on your state, getting into an LLC can be quite simple--and definitely worth your while.

I generally don't worry much about liability--after all, I'm only an industrial designer. Most of my agreements have my clients assume liability for what they market or produce--they need to perform all testing, etc. on the products they produce. I simply do my best to make sure they pass such testing.



Jeff Mowry

http://www.industrialdesignhaus.com

Reason trumps all. And awe transcends reason.