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9 Things You Need to Start a Welding Business

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A welding business restores, repairs, and builds items using metal.

A high-quality welding business can make almost anything made from metal, hence supports all kinds of projects all-year-round.

Some important welding and fabrication services your business can offer include:

  • Aluminum welding
  • Flux core welding
  • Plasma cutting
  • Dump truck box repair
  • Metal fabrication

Starting a welding business is a great idea with a high chance of becoming successful. Apart from registering your business with the local state, there’s more to starting a business.

Ranging from proper planning to business registration to becoming compliant legally, a lot goes into starting a new welding business.

Here’s how to start your welding business:

9 Steps to Starting a Successful Welding Business

1. Plan your business well

Every entrepreneur needs a clear plan to succeed in setting up a business.

With a plan, you can map out the particulars of your business to unearth unknowns. Consider the following when creating a business plan:

  • Startup (ranging from $10,000 to $50,000) and ongoing costs – rent for a business space would go for about $3,000 and $1,000 for buying welding equipment.

Electronics, mobile service options, insurance, personal protection equipment, and tools also add up to the costs. Raw materials (mark up by 50%) and labor ($45 to $65 every hour) make up ongoing expenses.

  • Target market – a customer with ongoing needs for welding such as commercial machinery managers
  • How long it takes to break even

Some clients to target with your welding business include:

  • Other welding shops
  • Farm equipment owners
  • Steel dairy equipment providers
  • Silo tank providers

You can charge customers on a per-job basis or at an hourly rate of $30 to $70. Special work and jobs may fetch higher prices.

A successful welding business can make anything from $70,000 to six figures annually in profits.

To make your business more profitable, consider the following:

  • Budgeted work time period
  • A well-drawn business plan
  • Prioritize customers and know what your business can afford – only buy welding equipment when you can afford to do so.
  • Focus on business growth and finding long-term customers with multi-billion-dollar contracts or startup individual jobs.

When naming your business:

  • Choose a brand name
  • Follow business structure naming rules
  • Check for name availability

2. Get the right welding equipment and raw materials

Consider cost, product authenticity, warranty, reputable brands when looking for the right equipment and accessories for your welding business.

Other welding equipment and materials you may need include:

  • MIG welders
  • TIG welders for varied materials and thickness such as stainless steel
  • Protective gear such as gloves with heat resistant pads
  • Arc welders for repairs and maintenance
  • Stick welders
  • Metal raw materials such as alloy, steel, copper and aluminum.

3. Create a legal business entity

Form a legal business entity to protect yourself and business from legal liability in case you’re sued. Consider:

  • LLCs
  • Corporations
  • Doing business as – DBSs
  • Sole proprietorships
  • General partnerships

4. Register your business for taxes

Register for state and federal taxes prior to opening your welding business.

Apply for EIN to register for taxes. It’s free and easy.

5. Open a credit card and business bank account

You need credit card and bank accounts specific to your business for personal asset protection.

Otherwise, your personal assets such as car and home would be at risk if your business is sued. This is known as piercing your corporate veil.

A business bank account separates your personal assets from business assets to protect the former. It also eases tax filing and accounting. 

Find the right bank for your welding business.

On the other hand, a credit card account for your business separates personal from business expenses. It also places all your business expenses in a single place for easy tracking and management.

A credit card also builds your welding business’ credit history for raising funds and investment in the future.

Find the best credit cards for small businesses like yours.

6. Establish accounting for your business

Accounting records your business expenses and income sources to help analyze and understand your performance. With detailed and accurate accounts, you can also file your annual tax easily.

7. Obtain important licenses and permits

Licenses and permits protect your business from hefty fines or shut down. They make your business complaint with local and federal regulations.

Check out local license and permit requirements for welding businesses in your state.

Create a services contract to outline your terms and conditions when offering welding services. It defines client expectations and thus requires the signature of your customers at the onset of each welding project.

The contract sets out welding terms and conditions, including payment and expectations of service level. It protects your business from legal disputes. Here’s an example of a service contract.

Comply with OSHA requirements for labor safety, including:

  • Safety signage
  • Employee injury report

Get an occupancy certificate for your business location to confirm that you’ve met all zoning laws, building codes, and government regulations.

If you intend to lease a place for your business, opt for one with a CO. A new CO is often issued for renovated buildings. Include a phrase in your lease agreement stating that payments are only made after a valid CO is obtained.

However, you’re responsible for getting a CO from a local government authority if you own your business premise. Make sure it meets zoning requirements and building codes to make your welding business compliant and eligible for a CO.

8. Buy business insurance

Insurance makes your business legal and safe. In case of a covered loss, insurance protects your welding business’ financial wellbeing.

Consider General Liability Insurance for your small business. If you intend to hire employees, you’ll also need Workers’ Compensation Insurance.

9. Define your welding business brand and develop an online presence

What does your business stand for? What’s its public perception?

Define your business brand to differentiate it from the competition.

Promote your business directly to potential customers and use cold-calling techniques to get new clients. You can also invest in online marketing.

Create a website for your welding business to reach more potential customers. Use social media platforms to lure new customers. They may include:

  • Twitter
  • Facebook
  • Instagram
  • Pinterest

Offer high quality, reliable, and quick welding services to retain your existing customers.

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