How to start a welding business: a founder's playbook

Starting a welding business is a rewarding venture that combines technical skill and craftsmanship with business savvy. The industry pulls in billions of dollars annually, with steady demand for skilled welders in construction, manufacturing, and automotive repair.

This guide will take you through the practical steps of validating your business concept, securing funding, obtaining necessary licenses, and acquiring the right equipment to help you launch a successful welding business in the U.S.

Step 1: Plan your business and validate your idea

Research your local market

Start by identifying your ideal customers. Are you targeting residential clients for fence repairs or commercial contractors for structural work? Use Google Maps to scout existing welding shops in a 50-mile radius. Note their services, read their reviews, and check their pricing if available.

Many new owners skip this, but you should talk to potential clients directly. Visit construction sites or local farms. Ask general contractors or fleet managers what welding services they currently use and what they wish were available. This gives you direct insight into market gaps.

Calculate your startup costs

Your initial investment will vary, but a solid budget is non-negotiable. A common misstep is to underestimate these figures. Planning for a higher-than-expected cost provides a helpful buffer. A reliable mobile setup can range from $15,000 to over $35,000, depending on your vehicle and equipment choices.

Here is a typical cost breakdown:

• Welding Machine (MIG/TIG/Stick): $2,000 - $7,000
• Work Truck or Van (Used): $10,000 - $25,000
• Safety Gear & Hand Tools: $1,000 - $2,500
• Insurance & Licensing (First Year): $1,500 - $3,000

Here are 3 immediate steps to take:

• Identify and list five local competitors and their primary services.
• Create a detailed spreadsheet of your estimated startup costs.
• Contact two general contractors or machine shops to ask about their welding needs.

Step 2: Set up your legal structure and get licensed

Choose your business structure

Protect your personal assets by forming a Limited Liability Company (LLC). This structure separates your business from your personal finances. Many welders who start as sole proprietors find their personal assets are at risk during a lawsuit. An LLC avoids this problem.

You can file for an LLC through your state's Secretary of State website for about $50 to $200. After that, get a free Employer Identification Number (EIN) from the IRS website. You will need this for taxes and business banking.

Secure the right permits and licenses

Your state likely requires a general business license and a specialty contractor's license if you do structural work. Check your state's contractor board website for specifics. These can cost $150 to $500 and take 4-8 weeks to process.

Also, contact your city hall for a local business license. A frequent oversight is forgetting the local fire department. They often require a "Hot Work Permit," which can cost around $100 annually, for any welding done outside a permanent shop.

Here are 4 immediate steps to take:

• File LLC formation documents with your Secretary of State.
• Apply for a free EIN on the IRS.gov website.
• Research your state's contractor license requirements.
• Call your local fire department to ask about Hot Work Permits.

Step 3: Secure your insurance and manage risk

Your first policy should be General Liability insurance. It covers property damage and injuries to others. Most clients will require you to have a $1 million policy. Annual premiums for this typically range from $700 to $2,500, depending on your location and services.

Next, you need Commercial Auto insurance for your work truck. A frequent mistake is to assume a personal auto policy provides coverage, but it does not. A claim on a job site would be denied. Expect this policy to cost between $1,500 and $3,500 per year.

You should also get Inland Marine insurance. This policy protects your welder and other equipment from theft or damage, whether they are in your truck or at a job site. If you plan to hire anyone, you will also need a Workers' Compensation policy.

You might want to work with an insurance provider who understands the trades. Consider getting quotes from companies like Hiscox, Next Insurance, or Thimble. They are familiar with the risks of welding and can help you avoid gaps in your coverage.

Here are 4 immediate steps to take:

• Request quotes for a $1 million General Liability policy.
• Verify that your work truck requires a Commercial Auto policy.
• Ask about an Inland Marine policy to cover your equipment.
• Contact an insurance broker who specializes in trade businesses.

Step 4: Set up your location and buy equipment

Find your workspace

For a mobile operation, your truck is your shop. If you need a home base, look for a 500-1,500 square foot space. Check your city’s zoning map for areas marked "Industrial" or "Commercial," as residential garages are rarely permitted for this kind of work.

When you look at a lease, confirm the space has 240-volt or 3-phase power. Some welders get stuck with a great location that needs a costly electrical upgrade. Also, ask about ventilation capabilities and floor load capacity. A concrete slab is non-negotiable.

Purchase your core equipment

Your equipment is a notable investment, so it pays to shop around. You can often find package deals from suppliers like Airgas, Praxair, or your local welding supply store. They also handle gas cylinder leases for argon and C25.

Here is what a basic mobile setup includes:

• Multi-Process Welder: $3,000 - $8,000
• Plasma Cutter: $1,500 - $3,000
• Angle Grinders & Consumables: $500 - $1,200
• Welding Table & Clamps: $400 - $1,000

Here are 4 immediate steps to take:

• Research industrial zoning codes on your city’s planning department website.
• Create a list of questions for landlords about power and ventilation.
• Price out a multi-process welder from two different suppliers.
• Get a quote for a gas cylinder lease from a national and a local supplier.

Step 5: Set up your payment processing

For larger jobs, it is standard practice to require a 50% deposit upfront. This protects you and covers your initial material costs. For smaller residential repairs, payment upon completion is typical. You can offer Net 30 terms to established commercial clients later on.

Once the job is done, send a professional invoice immediately. Use a simple template that lists the services performed, materials used, and the total amount due. This reinforces your professionalism and helps with your bookkeeping.

While some clients still use cash or checks, most expect to pay with a card. You might want to find a payment solution that is portable, has low fees, and gives you quick access to your money. A mistake some new owners make is to get caught with high fees or slow transfers.

For on-site payments, JIM is a streamlined solution. You can accept debit, credit, and digital wallets directly on your smartphone. Just tap and you are done. At 1.99% per transaction with no extra hardware, it is great for mobile repairs. Other providers often charge 2.5% to 3.5%.

Here is how it works:

• Get Started Download the JIM app for iOS.
• Make a Sale Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.

Here are 4 immediate steps to take:

• Decide on your deposit and payment terms for different job sizes.
• Create a simple invoice template for your business.
• Compare JIM's 1.99% rate with other mobile payment options.
• Download the JIM app to see how it works on your phone.

Step 6: Fund your business and manage finances

Secure your startup capital

The Small Business Administration (SBA) is a great starting point. Their 7(a) loan program can fund equipment and working capital. For a new welding business, loans between $25,000 and $150,000 are common, with interest rates often around Prime + 3-5%.

You could also look into equipment financing. With this option, the welder or truck you buy acts as collateral, which can make approval simpler. Rates vary from 6% to 20% based on your credit history. Don't just check with big banks; local credit unions often offer better terms.

Plan for your working capital

Many new owners underestimate their initial cash needs. A good safety net is to have 3-6 months of operating expenses set aside. This covers fuel, insurance, and consumables before you have steady income. For most, this means having $5,000 to $10,000 in a business bank account.

In addition to loans, look for grants. The American Welding Society (AWS) Foundation offers scholarships and grants, though some are for education. Also, check your state's economic development website for small business grants, which sometimes favor trade professions.

Here are 4 immediate steps to take:

• Contact your local SBA office to discuss the 7(a) loan program.
• Request a quote for equipment financing from a lender that works with trades.
• Calculate your operating expenses for a six-month period.
• Research welding grants on the AWS Foundation website.

Step 7: Hire your team and set up operations

Hire your first welder

Once you are turning down more jobs than you can handle, it is time to hire. Look for a Certified Welder with an AWS D1.1 certification for structural work. Expect to pay a skilled welder between $25 and $40 per hour, depending on their experience and your location.

A mistake some new owners make is classifying hires as 1099 contractors to save on taxes. This can lead to significant IRS penalties. It is better to set them up as W-2 employees from the start to stay compliant and avoid future headaches.

Streamline your daily operations

As your team grows, manual scheduling becomes difficult. You might want to use a field service software like Jobber or Housecall Pro. These platforms help you manage schedules, dispatch jobs, and communicate with clients from one place, which saves a lot of administrative time.

In terms of revenue, a good benchmark is that one full-time welder can support about $150,000 to $200,000 in annual sales. This figure helps you decide when it makes financial sense to expand your team. It keeps your labor costs in a healthy range.

Here are 4 immediate steps to take:

• Draft a job description for a Certified Welder, including AWS certification requirements.
• Research the legal differences between a W-2 employee and a 1099 contractor in your state.
• Watch a demo for a scheduling software like Jobber to see how it works.
• Set a revenue goal that would justify hiring your first employee.

Step 8: Market your business and get customers

Build your online presence

Start with a Google Business Profile. It is free and puts you on Google Maps where clients search for welders. After each job, ask the customer for a review. Aim for 5-10 reviews in your first 90 days to establish trust with new prospects.

A simple one-page website is a great asset. You might use a platform like Squarespace to show photos of your work. Also, pick one social media channel like Instagram. Before-and-after pictures of your projects are very effective for showing your skill.

Use direct outreach and networking

Your best leads will come from direct contact. A mistake some owners make is to just wait for the phone to ring. Instead, dedicate a few hours each week to visit construction sites, farms, and machine shops. Introduce yourself and leave a business card.

With that in mind, do not overlook traditional print materials. Professional business cards and flyers are still very effective. You can leave them at local supply houses, auto parts stores, and equipment rental yards. A small $100 investment can land your first big job.

Here are 4 immediate steps to take:

• Set up your free Google Business Profile and upload photos of your work.
• Order 250 business cards with your name, number, and services.
• Create a business page on Instagram to post project photos.
• List five potential commercial clients to visit in person this week.

Step 9: Set your pricing and create estimates

Choose your pricing model

You can price your work by the hour or with a flat-rate bid. Hourly rates for mobile welding typically run from $75 to $150. This should cover your labor, overhead, and profit. Your experience and location will determine where you fall in that range.

For materials, a standard markup is 20-50% over your cost. This covers your time to source parts and provides a small profit. A mistake some new owners make is to only charge what they paid for materials, which cuts into their earnings.

When you offer a flat-rate price, be sure to account for everything. This includes travel, setup, welding time, and cleanup. Underbidding is easy if you forget these hidden time costs. A good practice is to estimate your hours and multiply by your rate, then add the marked-up material cost.

Create professional estimates

Your estimate is a sales document. It should clearly list the scope of work, itemized material costs, and your labor charge. This transparency builds trust and prevents misunderstandings about what is included. Always include your payment terms, like "50% deposit required."

Here are 4 immediate steps to take:

• Calculate your minimum hourly rate based on your expenses and profit goals.
• Decide on a standard material markup percentage (e.g., 30%).
• Create a professional estimate template with your business details.
• Practice bidding a small, imaginary job to test your pricing model.

Step 10: Maintain quality and scale your operations

Establish your quality standards

Your reputation depends on consistent quality. Create a simple checklist for every job. It might include weld appearance, dimensional accuracy, and site cleanup. This ensures every project meets your standard, whether you do it or an employee does.

For a higher level of qualification, you could pursue an AWS Certified Welding Inspector (CWI) certification. This credential demonstrates a deep commitment to quality and can help you win larger, more regulated contracts. It is a significant professional milestone.

Measure your performance and know when to grow

Track your callback rate, which is the percentage of jobs that require a return visit to fix an issue. A good target to aim for is under 2%. Many new owners get so busy they forget to measure this, but it is a direct indicator of your work quality.

Once one welder consistently generates $150,000-$200,000 in annual revenue, it is a strong signal to expand. This could mean buying a second truck or hiring another certified welder. Avoid growing too fast before your processes are solid.

As you scale, field service software like Jobber or FieldPulse becomes very helpful. These platforms manage scheduling, invoicing, and customer communication in one place. This frees you from administrative work so you can focus on high-value tasks.

Here are 4 immediate steps to take:

• Draft an internal quality checklist for job site completion.
• Research the requirements for the AWS CWI certification.
• Set a revenue goal that will trigger buying a second truck.
• Watch a demo of a field service software like FieldPulse.

You have the roadmap to turn your welding skill into a business. Remember that your reputation is built one solid weld at a time, as good work travels fast in this trade. Now you have the plan, so go make your mark.

And as you complete those jobs, make sure getting paid is simple. JIM turns your phone into a card reader for a flat 1.99% fee with no extra hardware, so your cash flow is steady from day one. Download JIM to get started.