How To Start Welding and Fabrication Business in India – Business Plan, Profit Margin and Ideas

Metal Fabrication also known as Welding is an important step in the manufacturing and construction business that involves using metals and their related components to create structures such as Gates, Fences, Windows, and Door Joints, etc., Now, using various metal fabrication ideas to help cater larger customers and successfully run a business is called Fabrication Business or Welding Business. Today, the demand for Fabrication works has significantly increased due to the growth of the construction sector and the rise of urbanization

How Does Fabrication Business Work?

A fabrication shop runs by taking orders from customers or working as a contractor for a construction project. Most of the metal fabrication work includes making steel doors, gates, fences, iron windows, iron grills, and door joints as well as fixing-up farm equipment and automobile accessories. The business mostly operates at fabrication shop or works at the customer location. The profit margin in this business depends upon the scale and complexity of the project

Fabrication Business

Requirements to Start a Fabrication Business

In order to start a fabrication business, you need certain resources and an effective business plan to help your business grow, here are the following items that you should check out while starting a metal fabrication shop

1. Fabrication Business Plan

The first thing you need to have in order to start a metal fabrication shop is to create a business plan. A basic business plan for your Metal Fabrication business can be simple with details such as type of services, prices, equipment list, forecast of sales, estimated yearly profit and investment details

2. Capital Requirement

Metal fabrication workshop generally requires less investment to start; major part of the investment is spent on Welding equipment and leasing workshop space. A small-scale steel fabrication business can be started with 2 to 3 Lakh Rupees. However, if you typically serve large customers like real estate projects, then the capital and the ongoing investment will be more, and this can be anywhere between 5 to 7 Lakhs

The best aspect of the wielding business is you are not pouring in all the money by yourself, rather you will take some advance amount to buy the raw material from customer and once the work is finished you will be paid the remaining amount

3. Tools and Machines Required for Welding Business

Welding Machine

A welding machine is the equipment required for fabrication works and they come in different capacities such as 200 AMP, 250 AMP, and 300 AMP. A basic welding machine used for joining light metals such as steel can be operated at 200 AMP model; However, if you weld strong metals such as cast iron then you require 250 AMP – 300 AMP Models

Brands such as Camel, iBELL, and Shakti Technology are popular in India; Price of Welding machines ranges from 5,000 – 20,000 INR

So, how to decide the right wielding machine to get for your business? Well, it’s easy here are some quick things you can check while purchasing…

  • Ease of carrying the machine
  • Inverter technology
  • Over-current and Overload protection
  • Welding Capacity
  • Durable welding cables
  • Overheat resistance
  • Voltage capacity

Work Bench

A Fabrication and Welding workshop requires at least one single large study workbench. To carry out welding, drilling, hammering, and cutting metals. When purchasing a workbench look for one with a cupboard, castors, and drawers

Other Miscellaneous Equipment

You need to ensure your wielding workshop is equipped with almost all the equipment necessary to perform a welding job. So, here’s the list of items your inventory should have…

  • Drilling Machine
  • Angle Grinder
  • Metal Sheet cutter
  • Drill Toolset
  • Right angle tool
  • Welding screen and goggles
  • Safety equipment
  • Angle grinder machine
  • Extension Board
  • Bench Drilling machine/ fixed drill machine
  • Basic Tool Kit
  • Magnetic welding holder claps
  • Soldering rod

4. Workshop and Location Requirements

A welding workshop is an important place to perform your job safely and well-planned. Before leasing a space or constructing a workshop there are a few things to keep in mind such as ventilation, fire safety, storage space, etc.,

A 300 Sq.ft of floor space is sufficient enough to set up a welding workshop, this can mostly accommodate all the accessories and tools required to perform the job. However, if you do not have enough floor space, you can try checking for a workspace having ample outer space., because, welding large objects like TMT bars, Doors, Gates, and Tractor equipment, generally occupy larger space; if you have ample out space and no concerns with your neighbors you can carry out wielding in such areas

You need to ensure your workshop has three phase power connection. All the welding equipment consumes high amount of energy hence getting a three-phase connection to your workshop is highly beneficial

Next, ensure your workshop has road access and is located ideally near residential as well as commercial zones

5. Licenses and Permits for Fabrication Business

In order to run a fabrication business, you need certain licenses and permits. Such as having a business license to operate your workshop legally. You can choose to register your business as a Sole proprietorship, Private Limited or Partnership

You need to have a certificate of occupancy in order to make sure your workshop is constructed as per government rules and regulations

You also need to ensure your metal fabrication shop implements measures to protect the safety of the employees

Certain states require you to have a specific license to operate the welding business, which you need to check with your local government

CTE & CTO – Consent to Establish and Consent to Operate are two important certificates that are issued by the state government which are essential for your welding shop to operate legally

Please keep in mind, the license and permits may vary from state to state; it is always advisable to approach a business consultant to know about the state requirement

6. Skills and Workforce to Operate the Fabrication Business

Experience plays a crucial role in a successful fabrication business; without prior experience, it is hard to sustain the competition in the welding business. It is well known that most fabrication workshop owners had worked as apprentices for several years before establishing their shop

An Experienced welder knows the time to complete a project, the complexity of the project, and profit margin they can make from a specific job; this gives them a complete advantage over non-experienced welders

In addition, a licensed welding operator is known to have high demand in the market. There are several skill development institutions that provide training and certification to become a licensed welding operator. Institutes like, IIW (Indian Institute of Welding) are known to be one of them; a licensed welder has an ocean of opportunities in different sectors like shipping, oil rigs, automobile, and railway works

When it comes to hiring workers; a metal fabrication shop requires at least two workers to operate; one skilled worker and an apprentice

The apprentice should be given an opportunity to learn and understand the concepts of welding in order to quickly learn the job and become a potential worker. He/she should be slowly trained on how to choose raw materials for work, make the workspace ready for the job, and transport finished equipment

Profit Margin in Welding and Fabrication Business

Fabrication workshops charge in different methods, it can be an hourly charge or welding rate per Kg. In addition to this welder also charge for inspection

A typical service of welding such as inspection, starts with 150 Rupees. On the other hand, a small welding job initial starts with 250 Rupees

To quickly give an example of profit margin in welding business, lets assume a customer reaches out to welding shop to order a Mild steel gate of 6’ x 6’ dimensions

Let’s say, the total steel required for making a mild steel gate is 200 Kgs and the Average price per Kg for MS Steel is 120/Kg; that sums up to 24,000 Rupees. This is the amount the customer pays you for the initial raw material

Now the Welder calculates the price for welding the gate as follows

  • Coating material price
  • Labor Charges
  • Welding charges per square feet
  • Transportation charges
  • Miscellaneous charges
Total Square Feet of MS Gate36 Square Foot (6 x 6)
Welding charge per square feet150 /-
Total5,400/- (36 x 150)
Paint Coating price per square feet20 /-
Total Painting cost720 /- (36 x 20)
Transportation Charges350 /- (Approx)
Other Misc charges500 /-
Welding and Fabrication Work Estimation

So, the total amount charged for customer for welding a 6’x6’ MS Steel Gate is 6,970/- (Welding charge per square feet + Painting cost + Transportation cost + Miscellaneous charges)

A normal steel fabrication shop usually delivers about 5 to 6 Steel Gates per month and 10 to 15 other small projects such as welding steel bars, grills, metal doors etc., which means on average if a fabrication shop makes 3,000 per job it can make 30,000 per Month considering 10 orders per month

If we cut down 40% of the earning for workers, current charges, and maintenance the Fabrication owner can earn 18,000/- month

Please note the number of orders varies from season to season; especially in the rainy season and winter season the business usually thrives as the construction works mostly start around these seasons

Top 10 Profitable Metal Fabrication Ideas

The business of welding and fabrication continues to see exponential growth due to the raise in infrastructure and globalization as a experienced welder one should definitely use this opportunity to expand their fabrication business by coming up with different metal fabrication ideas that can improve their profit margins

So here are recommended top 10 Metal Fabrication ideas that has high demand in market

  1. Portable Welding Services a.k.a Mobile welding services
  2. Steel Doors Fabrication services
  3. Aluminium Doors Fabrication
  4. Manufacturing of Doors and Gates
  5. Designer Grill and Staircase Fabrication services
  6. Wrought iron fabrication services.
  7. MIG – Metal inert Gas welding service
  8. Farm equipment welding services.
  9. Commercial Trucks welding services
  10. Heavy Equipment welding repair service

The business of welding and fabrication has extensive opportunities and continues to be one of the best manufacturing and construction business ideas in the world. With advanced technology and skill set a welder can come up with various fabrication ideas to expand the business and continues to serve as many customers as possible

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