Starting your own business as a skilled tradesperson can be very lucrative in the current market. With so many people flocking over to STEM degrees and office work in general over the last decade, demand for professional services like welding has been steadily rising.
Working under someone else has its benefits – mainly stability – but if you’re looking to maximize your potential in the long run, running your own business is the best way to go. As long as you’ve got what it takes, and have some capital built up to endure the first few months until you’ve acquired enough customers, you can see a significant improvement in your bottom line.
Of all the trades you can specialize in, welding is one of the most lucrative. You don’t need much to start your own welding business if you already have some experience. Expert welders are always sought after. In some areas, it’s often impossible to contract someone on short notice. The best welders are typically booked for months ahead and they pick their customers carefully.
Can You Make Money with Your Own Welding Business?
You can earn quite well from running your own welding business if you play your cards right. Like pretty much any other similar venture, you’ll need a good mix of core skills and business sense. If you’re a good welder with significant experience, you already have the first part of the equation.
The second part can be a bit more challenging if you’re not used to running a business. If you don’t feel confident in this aspect, it’s a good idea to take some time paying close attention to what your boss is doing.
Of course, you shouldn’t outright steal their ideas! But there’s probably a lot going on behind the scenes that you’ve never given much thought while going about your daily tasks. If the situation is appropriate for that, let your boss know what your intentions are and see if they can give you some specific tips.
How Much Can You Earn as a Standalone Welder?
At the start, you will probably earn less than you do now as an employee. This is normal for most types of businesses. With the right approach, you can quickly turn the situation around in just a few months. With an expected gross margin of about 65%, you’ll be in a better position than many entrepreneurs who have similar startup costs to yours.
In terms of gross profits, a successful welding business can bring in about $70,000 a year on average. Keep in mind that this will vary from state to state.
Is It Worth Starting Your Own Welding Business Instead of Working for Someone Else?
Starting a business of any type is always risky. While your earning potential is practically unlimited if you can scale up sensibly, it also comes with various potential dangers that you will have to deal with yourself. Some people find the stress of running a business to be too much and prefer to stick to traditional employment.
Here are some of the pros and cons of working for yourself compared to working for someone else:
- Pro: you can earn a lot more money. Once you feel bottlenecked by your own availability, you can start expanding and hiring people.
- Pro: you choose who to work with. You’re free to turn down clients and projects as you see fit.
- Pro: you choose when to work. Your schedule can be as flexible as you want, as long as it allows you to bring in enough money at the end of the month.
- Pro: you can turn this into an almost entirely passive source of income in the long run. It will take a while to get there if that’s your goal, but once you’ve hired all the right people you know you can trust, there will be very little need to intervene personally.
- Con: there’s a lot more work involved. In addition to the welding itself, you have to handle all the administrative tasks and bring in new clients on your own.
- Con: your income is not guaranteed. With regular employment, you have a guaranteed paycheck regardless of how much work you did through the month. When you’re running your own business, any slow periods will reflect on your bottom line directly.
- Con: it can be stressful. When things are running smoothly, you will usually feel very motivated. But you’re also going to see every potential risk through a magnifying glass, and there will be no shortage of those along the way.
Which State Offers the Best Prospects for Welders?
If you have the option to relocate before starting your business, it’s a good idea to study the job market across the whole country before you get things set up. Some states are much more attractive than others.
Relocating for this purpose is a luxury for many of us. It’s also a risky move, because you may find yourself in a distant, unfamiliar state with a failed business on your hands and no easy prospect of getting back to your home state anytime soon.
With that in mind, you should only do this if you have a sufficient financial buffer that can allow you to survive for a longer period without seeing any profits. Ideally, you should also set some money aside for moving back if things don’t work out.
If you are willing to relocate and can do it safely, here are some of your best options. Even though these stats are mostly based on salaries, they should still give you a good idea of what to expect when running your own business.
- Alaska: it should be no surprise that the snowy state of Alaska ranks number one for potential profits for welders. Skilled labor is always in demand here, and good welders are highly valued. With a ceiling of almost $100,000 per year, the opportunity for growing your business to a respectable size is definitely there.
- Texas: this state offers a good balance between high earnings and a cozy lifestyle. Its weather is on the opposite end of the spectrum to Alaska, so you can anticipate a lot of heat through the year. The low end of the pay scale for welders starts at around $46,000, with some of the best welders in the state earning up to around $70,000 per year. Combined with Texas’ relatively low cost of living, this is a great place to operate from if you want to save some money.
- Hawaii: Hawaii offers fantastic prospects for welders with salaries that almost rival those of Alaska. With a cap of nearly $90,000, the state is great for establishing a business with a good long-term potential. However, Hawaii is also a very expensive state. The cost of living in the area is nearly double that of states like Texas in some regards. Depending on how you live and how quickly your business takes off, you might end up earning less after taxes compared to Texas and other cheaper states.
What Should You Do About Customer Acquisition?
Marketing a new trade business is always tricky. Poaching clients from your current employer is obviously out of the question. It’s both unethical and can get you in trouble if word gets out. Plus, if you’re relocating, it may not even be an option to begin with.
Word of mouth is going to be your best friend in the long run. But until you get to the point where you can comfortably sustain yourself with that alone, you’ll need to work on establishing some presence.
A good approach that requires relatively little funding is to go around various workshops in the area and introduce yourself. Metal shops and auto repair shops are some of your best bets. Their owners might not need your services right away, but they can often point you in the direction of someone who does.
Farmers can also be profitable customers if you live outside of the big city. It will take a while to drive out and meet most of the locals, but it will be worth your time in the long run.
Social media is another great option that you should always utilize as much as you can. It doesn’t take much to set up a Facebook page for your company. A YouTube and/or Instagram account where you post tutorials and other useful information can be a great way to attract interest.
Setting up your own website is, by far, one of the best things you can do. With the help of an SEO expert, you can drive a lot of people to your business. It’s also something that many of your customers will expect by default.
Nowadays, a business without at least some web presence is usually seen with some degree of suspicion. Having all the essentials – a website, social media profiles, a Google Business profile with good reviews – will immediately instill some trust in every potential customer who decides to check you out.
In the long term, your website could even turn into an additional source of income. When you’re just starting out though, you should avoid trying to monetize it too heavily, as that could turn people away.
What Are the Typical Costs of Running a Welding Business?
If you’re starting from scratch, you’ll have some significant initial expenses, mostly for equipment and materials. After you’ve set things up and have your workshop running, your expenses will mostly come down to consumable materials and administrative costs.
Your initial gear can cost as little as $50 – $100, or as much as several thousand dollars, depending on what exactly you invest in. But while a basic electric arc welder will do fine for simple jobs, you’ll definitely need to upgrade to more expensive equipment if you’re planning to take this seriously.
Choosing the right welding machine(s) can make a huge difference in the beginning when your resources are still limited. You have several main options in this regard. While you’re probably familiar with most of them, it’s still a good idea to check out the current state of the market with regards to availability and prices.
- Arc welding machines are very popular and pretty much every professional shop has at least one. Arc welding can take some time to master, but it can come in handy in a variety of situations, especially when working outdoors. Arc welders are very cheap, with some models costing as little as $100.
- MIG welding machines are probably the most popular. You can use them for various small- and medium-sized projects and they are also perfect for fabrication jobs. They are also quite expensive compared to arc welders, and you should set aside at least $500 – $1000 for a good model.
- TIG welding machines, while useful for certain specialized jobs, will probably not be necessary in the beginning. They are generally good for more precise welds that require additional control over a smaller area. TIG welders tend to be cheaper than MIG welders, with the average model costing around $500 – $700.
- Spot welding machines are another category of more specialized devices which you likely won’t need at first. Definitely keep an eye on the market for good deals, because if your business takes off and you decide to expand, having one can come in handy for taking on certain types of projects. Expect to pay around $300 – $500 for a good model.
Your main ongoing expense will be buying materials. If you diversify into different types of welding, you’ll need to keep an ample supply of 14-gauge steel, gas, and wire. You will also need a lot of sandpaper on a regular basis.
Steel can vary a lot in price. You should anticipate between $45 to $125 for a single 25ft stick. A bottle of gas will set you back around $40 – $50. Wire is typically bought in rolls, with a standard 30-pound roll costing around $40. Sandpaper is quite cheap and can vary a lot depending on the coarseness and packaging (whether you’re buying a single large roll or pre-cut sheets), but it can still add up fast if you use a lot of it in your projects.
Transport and Additional Tools
Mobility can make all the difference when you’re starting out, especially if you operate out of a larger state and want to prioritize working on farms, ranches, and other remote properties.
A good truck is the most important expense in this category. Don’t be afraid to go big. Even if you can’t find a use for the extra space now, it will definitely come in handy at some point once your business starts to grow and you need to pack a lot of extra gear.
Truck prices can vary widely across the country. It’s possible to get lucky and get a good deal below $10,000, but in most cases you should anticipate at least $15,000 – $20,000 for the truck alone.
You will also need some additional tools on top of your basic welding gear to be ready for most types of basic jobs. An air compressor and a variety of saws are going to be indispensable, and they will cost you around $500 in total. You should invest in at least one grinder – $50 should cover most of the adequate models on the market.
Additional lighting can be helpful for working in enclosed spaces or if you want to operate with a flexible schedule, taking on assignments through the night. While you can get a good lighting setup for as little as $50, it’s a good idea to splurge a little here and get something in the $100 – $150 range.
Accounting and Legal
No matter how good you are at what you do, you should not underestimate the administrative side of things. Doing this yourself can quickly bury you in additional work and drain your motivation to do your main job.
A good accountant is indispensable at every step of the way. They can help you set everything up in a fully compliant manner, filing all forms for you and communicating with the IRS and other authorities. You will just have to prepare invoices and submit them to your accountant for bookkeeping.
The same goes for legal advice. Keeping an attorney on retainer is probably a bit overkill for a solo welding business, at least at first. But you should still pay someone to give everything a thorough check before you start. Especially if you’re moving to a new state that you’re completely unfamiliar with. Sometimes, something seemingly simple like a missing disclaimer on your website can open you up to heavy fines.
Should You Specialize?
Specializing is a great way to increase your profits, but it has to be done with some precautions. It’s a good idea to take some time to study your local market in detail before deciding to make that leap.
Certain types of welding specializations can be extremely lucrative, but they also tend to be very limited in their scope and opportunities. Underwater welding is probably one of the best examples of this. It’s a high-risk, high-reward type of job that’s mostly limited to a few regions.
- Construction welding is probably the most common type of specialization. You will work on construction projects, which can be commercial or residential. Commercial construction welding is typically more challenging and comes with higher quality standards, but also offers more lucrative jobs.
- Pipe welding pays very well and has a very broad, accessible market across the entire country. You will mostly find yourself working on oil and gas pipelines and various other industrial projects. The safety requirements of this type of welding are significantly higher compared to other welding jobs.
- Industrial welding is a more general category that will have you working on various industrial projects, including production plants, large machinery, and industrial transportation vehicles. It can pay very well if you’re in an area with heavy industrial activity, but the market tends to be limited otherwise.
- Boilermaking is a tightly specialized category of welding that offers some great prospects for those with a knack for it. This type of work requires a lot of mobility as you’ll usually have to work on-site for prolonged periods of time. It can also be difficult to break out of the mold of boilermaking once you’ve been at it for a while, so make sure that you’re actually interested in doing this in the long term before you commit.
- Nuclear welders work on power plants and various sea vessels like submarines and ships. If you want to specialize in this category, you should not only bring some serious skills to the table, but have a spotless past too. Expect to be thoroughly vetted by government officials before you’re allowed anywhere near sensitive equipment.
- Aerospace welding is in a similar category in terms of complexity as nuclear welding, though the entry requirements are not as high. As long as you don’t work on any advanced/secret projects, there’s no high barrier of entry like with nuclear welding.
If you ever decide to move to another state, you may find out that your specialization is not appropriate for that market. The safest approach is somewhere in the middle. Try to find a specialization that works for you, but keep honing your general skills to ensure that they stay relevant.
Do You Need Insurance?
Insurance is a major concern for any tradesperson and should be taken seriously. There are several types of insurance applicable to a business like yours. Some of those may be mandatory for getting hired on certain projects. Others are good to have, even when not required.
- General liability insurance covers you against most types of mishaps that may happen on the job. It can help you pay for property damage and medical costs, and may even cover any legal costs arising from claims against you.
- Contractors’ errors and omissions insurance is a more tightly specialized package. It protects you against making mistakes that end up costing your customer more, such as using an inappropriate type of material or forgetting certain safety precautions.
- Tools and equipment insurance, as the name implies, covers your gear. Most of these insurance packages protect you not only against damage, but also against theft. This may not be necessary at first, but when the time comes to invest in expensive specialist gear, you should definitely get it insured.