Table of Contents

Start a welding business by following these 9 steps:

STEP 1: Plan your business

A clear plan is essential to success as an entrepreneur. It will help you map out the details of your business and uncover some unknowns. Some important issues to consider are:

  • What are the initial and ongoing costs?
  • Who is your target market?
  • How much can you charge customers?
  • How will you name your business?

Fortunately, we’ve done a lot of this research for you.

What are the costs involved in opening a welding business?

Start-up costs are around $10,000 to $50,000. These costs include a metal fabrication shop, which has a rent of approximately $3,000 per month. These costs also include insurance, tools, electronics, mobile service options, and personal protective equipment. Minor equipment can be purchased for as little as $1,000, but you’ll need to expand your inventory as more projects come along.

Read our welding business buying guide to learn what materials and equipment you’ll need to start a welding business, how much to budget, and where to shop.

What are the running costs of a welding business?

Employees will be paid between $45 and $65 per hour. In addition, it will be necessary to buy raw materials. Typically, this raw material will be marked down by about 50 percent when used.

Who is the target market?

The best customers and clients are those with ongoing welding needs. While you can take on individual projects, it’s best to hire clients who manage commercial machinery. Among your many clients, several will be incredibly profitable. The best jobs a welding business scan performs are mega yacht repair, marine equipment fabrication, architectural iron modification, aircraft repair, and refabrication, cruise ship services, and restaurant equipment repair.

Because commercial providers must meet certain industry standards, they are incredibly profitable. Welding customers can range from farm equipment owners to other welding shops, silo tank suppliers, and even steel dairy equipment suppliers.

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How does a welding company make money?

Most welding companies make money doing small projects. However, they can earn a lot of money by participating in long-term projects. Because the best suppliers to a welding company are typically marine equipment suppliers, a host of services are needed to prevent rust and water damage.

A welding company also makes money doing metal modifications and repairs. If a company’s machinery breaks down, a welding company will be called in to examine the surrounding problems. You can also contact an independent repair team, which handles any necessary metal repairs and fabrications.

How much can you charge customers?

Welding services can be charged in two ways. First, they can be charged per job. They can also be charged at an hourly rate. Hourly rates typically range from $30 to $70 per hour. A well-established welding company can offer higher prices for special jobs and labor needs.

What benefit can a welding company obtain?

A well-established welding service provider can make an annual profit of approximately $70,000. A large successful welding business, meanwhile, can easily make six figures.

How can you make your business more profitable?

Each working period must be budgeted. A poorly crafted business plan is believed to be the leading cause of welding business failure. Know what you can afford and prioritize your customers. Don’t buy personal toys (welding equipment) before you need them. Focus on opening the door to the business and finding the best customers who need your services. From freelance start-up jobs to multi-million dollar contracts, you’ll need to be a good face-to-face negotiator.

How will you name your business?

Choosing the correct name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Welding Business Name Generator

If you operate a sole proprietorship, you may want to operate under a business name other than your name. Visit our DBA guide for more information.

When registering a business name, we recommend that you research your business name by checking:

  • Business records for your state
  • Federal and state trademark registrations
  • social media platforms
  • Availability of web domain.

It is very important to protect your domain name before someone else does.

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google’s G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. try it for free

The most common types of business structures are sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your welding business is sued.

FORM YOUR LLC

You can start an LLC yourself and pay only the minimum state LLC costs or hire a Business Formation Service for a small additional fee.

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Recommended: You will need to choose a registered agent for your LLC. LLC formation packages generally include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open your business.

To register for taxes, you will need to apply for an EIN. It’s really easy and free!

You can get your EIN for free through the IRS website, by fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, please read our article, What is an EIN?

STEP 4: Open a business bank account and credit card

The use of bank and credit accounts dedicated to companies is essential for the protection of personal assets.

When your personal and business accounts are mixed, your assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is known as piercing your corporate veil.

Plus, learning how to build business credit can help you get credit cards and other financing in your business name (rather than your own), better interest rates, higher lines of credit, and more.

Open a business bank account

  • This separates your assets from your business assets, which are necessary for the protection of personal assets.
  • It also makes it easy to file taxes and bookkeeping.

Recommended: Read our Best Small Business Banks review to find the best national bank, credit union, banks that accept business loans, one with many physical locations, and more.

Get a business credit card

  • This helps you separate personal and business expenses by putting all of your business expenses in one place.
  • It also builds your company’s credit history, which can be useful for raising money and investments later.

Recommended: Read our guide to finding the best small business credit cards.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and itemized accounts also greatly simplify your annual tax return.

STEP 6: Obtain the necessary permits and licenses

Failure to obtain the necessary permits and licenses can result in heavy fines, or even cause your business to close.

Federal business license requirements

Certain state permits and licenses may be required to operate a welding business. Learn more about licensing requirements in your state by visiting the SBA Reference to State Licenses and Permits.

Services contract

In companies where services are provided extensively, a service contract is often established that outlines the terms and conditions of the service.

Welding companies must require customers to sign a service contract before starting a new project. This agreement should clarify customer expectations and minimize the risk of legal disputes by establishing payment terms and conditions and service level expectations. You can find a sample service contract here.

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Job security requirements

It is important to comply with all Occupational Safety and Health Administration requirements.

Relevant requirements include:

  • Employee Injury Report
  • safety signage
  • Etc.

certificate of occupancy

Businesses that operate from a physical location generally require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws, and government regulations have been met.

  • If you plan to lease a location :
    • Generally, it is the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that applies to a welding business.
    • After a major renovation, it is often necessary to issue a new CO. If your workplace will be renovated before opening, it is recommended that you include language in your lease stating that lease payments will not begin until a valid CO is issued.
  • If you plan to buy or build a location :
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for your business location to ensure your welding business is compliant and able to obtain a CO.

STEP 7: Get Business Insurance

As with licenses and permits, your business needs insurance to operate safely and legally. Business insurance protects the financial well-being of your business in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks your business may face, start with General Liability Insurance. This is the most common coverage small businesses need, making it a great place to start your business.

Another notable insurance policy that many businesses need is workers’ compensation insurance. If your business will have employees, your state will most likely require you to have workers’ compensation coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how the public perceives your business. A strong brand will help your business stand out from the competition.

If you don’t feel confident in designing your small business logo, check out our Beginner Design Guides, we’ll give you helpful hints and tips to create the best unique logo for your business.

How to promote and market a welding business

Market directly to companies. While cold-calling tactics are difficult to implement, you’ll need to get good at them to find high-quality customers. Market any business related to maritime services and try to get hired by big companies. If they are part of a business network, look for opportunities there.

How to keep customers coming back

Hiring a continuous welding service provider is a long-term commitment. For this reason, customer retention can be difficult to obtain but easy to maintain. Your best retention tool is ensuring fast, high-quality services. As with any contracting job, companies will stick with providers that guarantee reliable services.

STEP 9: Establish your presence on the Web

A business website allows customers to learn more about your business and the products or services you offer. You can also use social media to attract new customers or clients.