Automobile restoration shop help - from the inside

[drhach]

On 1/20/2023 at 5:43 PM, duigoose said:

I do agree.  Loyality and not able to let go are two of my flaws sometimes.

I don't know. I don't find airing one's employer's dirty laundry on the internet to be terribly "loyal", even if it is anonymously. Frankly, if you worked for me and I got wind of this, you'd be walked out the door. This is very inappropriate and unprofessional. 

 

 

[MGRAB]

27 minutes ago, Frank DuVal said:

If you think this applies to restoration, think again. How about spending a day or more on the phone, searching internet sites, etc. to find almost unobtainium parts.

Well, the main point I was trying to make is that just because you are large doesn't mean you need a large MU.  Smaller vendors need a larger MU... no doubt.  The same paradox holds true for your example though.  Let's say you have a customer with a '59 Eldorado and you need all the side stainless.  Another customer with an obscure '20's car, not worth much but it's been in the family since new that needs a very rare front wheel bearing.  You spend two weeks trying to find each but the trim costs $20K, maybe $25K since you need it badly??  However, that bearing with wind to its back is only worth $300 because you're the only one looking for it.  You get hosed on the bearing but make out OK on the trim.  MU is poor way to make a profit and can often inflate or in other cases put the vendor at risk.  We prefer to see the bulk of the profit on the labor rate... not the material MU.  In fact, for many vendors we don't buy from them we go straight to the supplier.

[TAKerry]

I do not use a markup as a revenue source, only to at least cover the cost and if I can make a small amount of money on it that much the better. I typically do no work with material over the tens of thousands of dollars, so your hvac example is irrelevant. A better example in my case is that when I need $500 worth of trim, paint, etc. I found that by only charging 20% that I was loosing money every time I went to the store. I do not bill for my time not on the job, plus gas, insurance on the truck etc. Depending on the job and its location to material the rate varies. I am upfront with my customers on labor rates, mark up and O&P. If they dont like the numbers, they can find someone else to do the job. I will add, I also give my customers the choice if they want to procure materials and have them on site when needed. This usually lasts for about one or two items, then they realize what a PIA it can be.

 

For car restoration that is why I think I would stick as close to something with available resources as possible. The more stuff one can order from a catalogue the quicker and easier it will be to find parts. 

[Frank DuVal]

19 hours ago, MGRAB said:

You get hosed on the bearing but make out OK on the trim. 

So getting hosed on the bearing is good business? Most every obscure part is in the small dollar category! All that stainless trim you mention, each part comes form a different source and takes time to find. Who would you call to get all the trim from one source? GM doesn't have it anymore.

[Xander Wildeisen]

Question, a customer brings out a project car to your shop on a trailer. You knew they were coming, at a certain time. You meet with them, watch or help unload the car. Move it in the building. BS for a couple of minutes. Customer leaves. Do you charge for that hour or two? It is your time. Is that a freebie? That you for shopping with us, no charge getting you in the door? A couple of employees helping just moving a car in will result in a few combined work hours.

[MGRAB]

1 hour ago, Frank DuVal said:

So getting hosed on the bearing is good business? Most every obscure part is in the small dollar category! All that stainless trim you mention, each part comes form a different source and takes time to find. Who would you call to get all the trim from one source? GM doesn't have it anymore.

Oh no, it's bad.  We don't want that to happen, why we don't believe MU's are a good method of compensation for either party.  Our preference is to drive profit to the profit column within the labor rate burden that adequately compensates the vendor but doesn't artificially bias profit.  In the example I gave for HVAC, those vendors also have to procure small items to complete the job.  Those no doubt reduces the profit realized on the larger purchase and maybe it works out for both parties.  It's not always that easy or straightforward.  When we typically engage on a large project say a $100MM capital project.  Our category managers will review a BOM and do an analysis on whether it's in our interest to procure or have the vendor do this for us.  We also have variable MU's with vendors in addition to VBD's (volume-based discounts) that we get incremental discounts based on stratified spend.  We're talking big money though... why it matters to this extent.  Like some of the deep pocket customers you all deal with.. makes your average life that more frustrating.  After doing this for so long it's like being in the Matrix once you've swallowed that pill life sucks for your own personal endeavors.  Like having to enter every restaurant through the kitchen for the rest of your life.

 

[MGRAB]

30 minutes ago, Xander Wildeisen said:

Question, a customer brings out a project car to your shop on a trailer. You knew they were coming, at a certain time. You meet with them, watch or help unload the car. Move it in the building. BS for a couple of minutes. Customer leaves. Do you charge for that hour or two? It is your time. Is that a freebie? That you for shopping with us, no charge getting you in the door? A couple of employees helping just moving a car in will result in a few combined work hours.

This is the cost of business.  On spend over a certain amount we create a standard RFQ and invite vendors to conduct a walkthrough and bid afterwards we do a bid evaluation.  Many spend LOTS of time bidding for work they may or may not get.  I can talk for hours and hours and hours on this one... 

[1937hd45]

3 hours ago, Xander Wildeisen said:

Question, a customer brings out a project car to your shop on a trailer. You knew they were coming, at a certain time. You meet with them, watch or help unload the car. Move it in the building. BS for a couple of minutes. Customer leaves. Do you charge for that hour or two? It is your time. Is that a freebie? That you for shopping with us, no charge getting you in the door? A couple of employees helping just moving a car in will result in a few combined work hours.

When does the "Free storage" start? Does it then get moved to another building after slow payments? What about all the parts that have been removed? 

[pkhammer]

  The shop I spoke about above rents a Turkey house from a farmer that is no longer used to raise animals. It is 300' long with an isle down the middle and a row of cars on each side. Some are completely disassembled with the parts all piled inside the car, some are stripped, some are painted, etc... all levels of completion. These are mostly cars that work was stopped on because the client got in over his head and quit paying. I understand it's difficult to give an estimate but a rough order of magnitude might be a dose of reality a lot of people need. There are a multitude of people that have no idea what a restoration costs and may think $20k will cover it. I think the owner is very fair with storage fees but my point is maybe having all those stalled projects could've been prevented with a reality check up front. I brought this up once and the response was "If I told them up front it was going to cost six figures, they wouldn't give me the work". My reaction was, "good!".

Edited January 24, 2023 by pkhammer
mispelling (see edit history)

[Xander Wildeisen]

58 minutes ago, 1937hd45 said:

When does the "Free storage" start? Does it then get moved to another building after slow payments? What about all the parts that have been removed? 

Parts removed are for weight distribution. Once stored, it is a must that the car remains balanced on all four flat tires.🤔

[Xander Wildeisen]

30 minutes ago, pkhammer said:

  The shop I spoke about above rents a Turkey house from a farmer that is no longer used to raise animals. It is 300' long with an isle down the middle and a row of cars on each side. Some are completely disassembled with the parts all piled inside the car, some are stripped, some are painted, etc... all levels of completion. These are mostly cars that work was stopped on because the client got in over his head and quit paying. I understand it's difficult to give an estimate but a rough order of magnitude might be a dose of reality a lot of people need. There are a multitude of people that have no idea what a restoration costs and may think $20k will cover it. I think the owner is very fair with storage fees but my point is maybe having all those stalled projects could've been prevented with a reality check up front. I brought this up once and the response was "If I told them up front it was going to cost six figures, they wouldn't give me the work". My reaction was, "good!".

The farmer will be the winner in the end of that deal. A car owner might want to read the rental agreement between the shop and farmer bob. 

 

[ojh.]

I found it easiest to not do any MU, the customer has a deposit with me that I draw from, it is his money that I am spending on parts for his project so I don't feel entitled to a markup.  The labor I spend locating parts is a problem, I don't charge for time spent but I do record it as 'Non-Billable Hours' so the customer is aware I have gone the extra step in his behalf.  Those hours can be considerable by the time the project is complete, I think the customer takes this into consideration with his 'tip' at the end of the job.

It may not be a 'Professional' policy but when I lay my head to pillow at night I don't ponder if I've screwed a customer, I know he got my best effort.

[Restorer32]

About 1/3 of the projects we get come from other shops or circumstances where they were disassembled and some work done but for whatever reason work ground to a stop. It's easy to take a car apart. Putting it back together is the hard part. We have been trying for 2 years to retrieve all the parts for a '58 Cadillac that came from another shop. They took a big deposit, took the car apart, subbed out the interior,  chrome etc then gave up. They did not have the $ to retrieve the parts they had farmed out.  Our client had to pay twice to retrieve some of the new interior. Needless to say lawyers are now involved. 

 

[duigoose]

I didnt abandon, just got busy.  

For those that think it's wrong what I'm doing, how?

It's a general shop with no name with an owner you don't know.  I don't need an answer on that because I think that's a different subject for another thread but I won't be on that one.

Anyway, I'll be back soon.  I still appreciate the comments.

[bryankazmer]

With all respect to MGRAB's comments, I worked in the automotive industry, and potential customers who wanted to see your books and tell you what to charge were politely told to make their purchase decision on the price, service , and quality offered.  

 

There has been much good advice offered.  You have a backlog of business and are not making money.  Raise your prices.  Losing money on each job but making it up on volume?  Less volume and a profitable business is a win.

 

Compare the actual cost of jobs to your estimate.

 

When a car is completed, require payment before turning over the car.  You are handing over your leverage.

[MGRAB]

1 hour ago, bryankazmer said:

With all respect to MGRAB's comments, I worked in the automotive industry, and potential customers who wanted to see your books and tell you what to charge were politely told to make their purchase decision on the price, service , and quality offered.  

 

 

We have a standard three-year audit clause in all of our master agreements for T&M work.  Only exception is LS.  OEM's only produce equipment LS, but service is fair game.  I'm at a vendor's office as I type doing just that.

[rwchatham]

On 1/24/2023 at 4:36 PM, pkhammer said:

  The shop I spoke about above rents a Turkey house from a farmer that is no longer used to raise animals. It is 300' long with an isle down the middle and a row of cars on each side. Some are completely disassembled with the parts all piled inside the car, some are stripped, some are painted, etc... all levels of completion. These are mostly cars that work was stopped on because the client got in over his head and quit paying. I understand it's difficult to give an estimate but a rough order of magnitude might be a dose of reality a lot of people need. There are a multitude of people that have no idea what a restoration costs and may think $20k will cover it. I think the owner is very fair with storage fees but my point is maybe having all those stalled projects could've been prevented with a reality check up front. I brought this up once and the response was "If I told them up front it was going to cost six figures, they wouldn't give me the work". My reaction was, "good!".

Sounds like a heck of a shop not being open about what a reality price is on a restoration , why would a real restoration shop have to hide the truth to get work and end up with a bunch of stalled projects ?

[Restorer32]

We always ask a potential customer "What do you think a full restoration of your car might cost?" Recently went to look at a 30's 4 door sedan, about the cheapest sedan you could buy in 1938 but the owner was very sentimental about the car.  It had belonged to relatives who bought it new.  Unfortunately it spent many decades stored in a chicken coop and needed everything, rusty, engine seized etc.  His answer?  "I assume it will cost in excess of 100K?" A knowledgeable client is a joy to work for. Regarding earlier topics. We do not charge to travel and look at potential projects. When the resto is completed we encourage the client to show the vehicle at least once.  We do not charge to show cars we restore, figuring showing benefits us as much if not more than the owner.  Best advertising there is.  Now if the show is some distance from our shop we might charge for fuel and overnight stays but we don't charge for any time we spend on the show field.  Bottom line, treat folks fairly and don't be greedy and you will do ok.

[bryankazmer]

5 hours ago, MGRAB said:

We have a standard three-year audit clause in all of our master agreements for T&M work.  Only exception is LS.  OEM's only produce equipment LS, but service is fair game.  I'm at a vendor's office as I type doing just that.

I understand what you're saying, but purge the alphabet soup.  The customer buys the product at the price he's willing to pay and the supplier is willing to accept.  How profitable that is or isn't - is the supplier's concern, not the buyer's.  Only exception I made was offering automatic price changes (both directions) based on primary raw material cost as a term.

[rwchatham]

4 hours ago, Restorer32 said:

We always ask a potential customer "What do you think a full restoration of your car might cost?" Recently went to look at a 30's 4 door sedan, about the cheapest sedan you could buy in 1938 but the owner was very sentimental about the car.  It had belonged to relatives who bought it new.  Unfortunately it spent many decades stored in a chicken coop and needed everything, rusty, engine seized etc.  His answer?  "I assume it will cost in excess of 100K?" A knowledgeable client is a joy to work for. Regarding earlier topics. We do not charge to travel and look at potential projects. When the resto is completed we encourage the client to show the vehicle at least once.  We do not charge to show cars we restore, figuring showing benefits us as much if not more than the owner.  Best advertising there is.  Now if the show is some distance from our shop we might charge for fuel and overnight stays but we don't charge for any time we spend on the show field.  Bottom line, treat folks fairly and don't be greedy and you will do ok.

Now you and your shop definitely sound like a class act 👍

[MGRAB]

3 hours ago, bryankazmer said:

I understand what you're saying, but purge the alphabet soup.  The customer buys the product at the price he's willing to pay and the supplier is willing to accept.  How profitable that is or isn't - is the supplier's concern, not the buyer's.  Only exception I made was offering automatic price changes (both directions) based on primary raw material cost as a term.

A lot of contracts we do are Cost+ GMP.  The only way to validate actual costs are to do a true up at project end.  Additionally, we have had situations where contractors run subs through as their own employees - when the aren't.  State unemployment insurance also caps out early in the year, i.e. that cost burden is (or should be) reduced, i.e. when that caps out the rate should reduce to us.. we true that up too.  

 

A lot of what we do isn't necessarily "fraud".  Material escalation is big right now.  I'm holding up over $1MM on a LS for steel escalation.  Vendor didn't purchase when we inked the contract in 2020... played the market with our money, held off buying for eight months (thinking it would drop.. it didn't).  I get to be the bad guy.

 

Half my team focuses "Procure to Pay" - vendors.  Other half is "Order to Cash" - customers.  Sorry if it feels like I picked on vendors.. I have two bets.  I won't go through the why, but I have twice the bet for  customers "taking advantage".  Partnerships are big for us, my job is to validate ones that are from those that aren't.

[Frank DuVal]

Well, I see you dropped the alphabet soup. Not!    I don't know what you are saying. Not worth the time to Google all the terms.

 

I still do not see how any of this applies to a restoration shop. Exactly how much labor to do any small job is unknown until the job is done. These are not, as the crash books say in the collision field, new, OEM   undamaged parts on new undamaged vehicles. So no labor guides are applicable.

 

 Add to that most shops work on a variety of cars, so every operation is a discovery of how to do it, since Chrysler builds differently than Chevrolet, than Ford, etc. and every model is different even of the same brand.

[MGRAB]

8 hours ago, Frank DuVal said:

Well, I see you dropped the alphabet soup. Not!    I don't know what you are saying. Not worth the time to Google all the terms.

 

I still do not see how any of this applies to a restoration shop. Exactly how much labor to do any small job is unknown until the job is done. These are not, as the crash books say in the collision field, new, OEM   undamaged parts on new undamaged vehicles. So no labor guides are applicable.

 

 Add to that most shops work on a variety of cars, so every operation is a discovery of how to do it, since Chrysler builds differently than Chevrolet, than Ford, etc. and every model is different even of the same brand.

I'm simply answering questions asked or informing where someone is wrong.  If you work in a mid-large company in purchasing, sales or accounting these are all well understood business norms.  We engage with thousands of vendors; this is all known to them.  If you work for a company that just always pays the price you are given you paid a lot, lot, lot more than you needed to.  Kind of like paying sticker price for every car you ever buy.

 

The things I've added to this thread are relevant to any business.  But I agree, many of the things that I've brought up would only be relevant to a thread where a few guys that are really good at restoring cars (but know nothing about running a business) get together and unsure why their throughput is poor, not making a profit, and running a Ponzi scheme.

Edited January 27, 2023 by MGRAB (see edit history)

[Frank DuVal]

So, you are saying a person who wants a car restored should shop for the lowest bidder because if they pay the asking price they are being had? I'd rather shop for a shop that does good work. Same applies to collision work. Shop for lowest price (insurance agreed price too) and wonder why the paintwork is not perfect and the car doesn't drive quite the same? I don't. You get what you pay for, maybe. Chisel a supplier down and something has to give.

[64avanti]

13 hours ago, MGRAB said:

I'm simply answering questions asked or informing where someone is wrong.  If you work in a mid-large company in purchasing, sales or accounting these are all well understood business norms.  We engage with thousands of vendors; this is all known to them.  If you work for a company that just always pays the price you are given you paid a lot, lot, lot more than you needed to.  Kind of like paying sticker price for every car you ever buy.

 

The things I've added to this thread are relevant to any business.  But I agree, many of the things that I've brought up would only be relevant to a thread where a few guys that are really good at restoring cars (but know nothing about running a business) get together and unsure why their throughput is poor, not making a profit, and running a Ponzi scheme.

I do have to disagree with the thought that your practices apply to any business. Squeezing every penny out of suppliers is standard operating procedure for the big guys-Ford, GM, Toyota, etc-but not for small businesses, like my own and the businesses run by my friends and colleagues. The business in the OP is a small business, so your business norms do not work. I don't know of any small business that would accept a contract entitling the purchaser to clawback excess profits on labor and materials.

 

I have done jobs valued at $4 million and was required to provide reams of documentation, including Certified Payroll Reports, proof of payments to my vendors and subs, and detailed Schedules of Values with every pay application; each Change Order required the same level of documentation. In the end, I was paid based upon my contract, regardless of the cost of labor and materials. The point is that most if not all small businesses run on fixed or set price contracts.

 

I have done work under a Time and Materials Not to Exceed contract; in these cases, we have agreed to an hourly labor rate and a set material price, including markup. Again, I provided documentation of the costs, and was paid the agreed upon amounts.

 

The point is that the OP is seeking advice regarding a typical small business. He is attempting to analyze the business and determine what the problems and and what is causing them, which is something every small business has to work through. Unfortunately for him, he is a minor player at this company and does not have access to the financial and operations details that are necessary to analyze and find solutions to these problems, so he is really just spinning his wheels.

 

I am impressed with his ambition and curiosity, and believe that it will serve him well in the general workplace; I have had very few employees with the initiative that this fellow shows. 

[MGRAB]

10 hours ago, 64avanti said:

I do have to disagree with the thought that your practices apply to any business. Squeezing every penny out of suppliers is standard operating procedure for the big guys-Ford, GM, Toyota, etc-but not for small businesses, like my own and the businesses run by my friends and colleagues. The business in the OP is a small business, so your business norms do not work. I don't know of any small business that would accept a contract entitling the purchaser to clawback excess profits on labor and materials.

 

So, my company is an OEM.  We get the price we get; I did note above OEMs (Original Equipment Manufacturer) are LS (Lumpsum).  However, we procure services, parts, and materials (both raw and for process equipment).  All of these are procured with many different pricing models.  Some are negotiable, some aren't, some can be audited, some can't.  But it's not a one size fits all.  Let's say I'm a small business owner.  I have to build a building, pave a parking lot and procure different items.  I can be oblivious to contracts and just pay everyone LS (Lumpsum).  Or I can learn how to maximize my capital and reduce cost where available.  This is why contract strategies are necessary for every business owner to know.  I personally, like to know the most I possibly can, personal preference. 

[bryankazmer]

2 minutes ago, MGRAB said:

So, my company is an OEM.  We get the price we get; I did note above OEMs (Original Equipment Manufacturer) are LS (Lumpsum).  However, we procure services, parts, and materials (both raw and for process equipment).  All of these are procured with many different pricing models.  Some are negotiable, some aren't, some can be audited, some can't.  But it's not a one size fits all.  Let's say I'm a small business owner.  I have to build a building, pave a parking lot and procure different items.  I can be oblivious to contracts and just pay everyone LS (Lumpsum).  Or I can learn how to maximize my capital and reduce cost where available.  This is why contract strategies are necessary for every business owner to know.  I personally, like to know the most I possibly can, personal preference. 

Do you offer your suppliers the opportunity to review your economics and see where they think you are wasteful, uneconomic, and “excessively” profitable?  You can sometime bully a Tier One if you have a big enough share of his business. A Tier two will rarely tolerate it. As said, this really doesn’t apply to the OP situation.  The shop does need to understand their costs as part of running their business. 

[MGRAB]

4 minutes ago, bryankazmer said:

Do you offer your suppliers the opportunity to review your economics and see where they think you are wasteful, uneconomic, and “excessively” profitable?  You can sometime bully a Tier One if you have a big enough share of his business. A Tier two will rarely tolerate it. As said, this really doesn’t apply to the OP situation.  The shop does need to understand their costs as part of running their business. 

Do we get audited? Absolutely, but on volumes reported, not price.  Do they find things, unfortunately they do!  Is it sometimes fraud?  Well, people do get fired.  You need to know contracts and cost.  Handshakes don't always work these days.  I recommended very early in this thread that the OP need use contracts: inclusions, exclusions, quality of workmanship etc. Any business that doesn't educate themselves on pricing models and contracts will lose money, only a matter of when and by how much.

[MuirDo]

3 hours ago, MGRAB said:

Do we get audited? Absolutely, but on volumes reported, not price.  Do they find things, unfortunately they do!  Is it sometimes fraud?  Well, people do get fired.  You need to know contracts and cost.  Handshakes don't always work these days.  I recommended very early in this thread that the OP need use contracts: inclusions, exclusions, quality of workmanship etc. Any business that doesn't educate themselves on pricing models and contracts will lose money, only a matter of when and by how much.

Well, that mostly happens, because our human pride sometimes tells us "We can do everything on our own". However, it is not true, fortunately or unfortunately. We should ask for help. 

[ojh.]

I find that in the restoration business the more important attribute is Credibility, the customer has to have total faith in your judgement.  All else is secondary.  For instance, a friend was told the scratch on his Rolls would require a total repaint at a cost of $116K, no amount of paperwork, documentation or other accounting methods and schemes will be able to justify such a cost, only the Credibility of the shop can make that hurdle.  

[edinmass]

Interesting thread. 
 

 

1 Cars are expensive to restore.

2 All old cars suck.

3 Cars are very expensive to restore.

4 All old cars suck, and take up too much time.

5 Cars are very very expensive to restore.

6 You have to be nuts to work on old cars, they all,suck.

7 Restoring cars is five time more expensive than it should be, and they are very very expensive to restore.

8 Nothing worse in the world to work on the same rust bucket for two years straight, all old cars suck.

9 If you can get past the above 8 line items and still want to do the project, you’re nuts.

10 After almost 50:years of doing this, I can confirm I’m insane. Why do you think I drink?

 

Ok……enough fun. Good shops with proven records are backed up for 2 or more years. The last five years costs and outside services have doubled or tripled in price, and half of them are gone now. Five years ago, we could do a Pebble 100 point big early classic in 10 months. Today, 24-36 months is required. Fact is most of the talented people with experience are getting burned out BIG TIME. When you’re 60……..you can only burn the candle at both ends for so long. I no longer do ANY work with an estimate or time frame. You can’t do it any more and not be off significantly. That said, I have unlimited demand for sorting cars now……..literally unlimited. 

[edinmass]

True story. 

 

I recently asked one of the top five restorers in the world, who is more insane? The guys running the shops and doing the work, or the customers paying the bills. We agreed that it takes a significant amount of brain damage to restore cars for a living. That said, most do it because they love it. In the end it’s only show deadlines that make me miserable. I just drove a world class 100 point Pebble Beach car today. The owner asked me “how much” to dial it in. My starting list was……

 

All new tires and tubes.

General overall service.

Battery.

 

Rebuild the steering box on the 7 figure car that was low mileage and screwed up by the shop that restored it and over adjusted the box causing binding.

 

Alignment.

Rebuild shocks.

Find and fix rattle in rear of car.

 

I gave a “swag” sophisticated wild ass guess as to cost. 80k and I’m certain it is too low. 
 

 

[duigoose]

Hi everyone.  As promised, I don't abandon what I started.  This is just a small update as things are progressing and changing as we go on.  I won't say business is now fluid and all is smooth but it looks like progress.  We have hired more people, streamlined / refined our process and there is light at the end of the tunnel.

I will expand on this hopefully tonight and once again, I thank everyone greatly for their input.

[Frank DuVal]

On 1/28/2023 at 9:51 AM, MGRAB said:

Do we get audited? Absolutely, but on volumes reported, not price.  Do they find things, unfortunately they do!  Is it sometimes fraud?  Well, people do get fired.  You need to know contracts and cost.  Handshakes don't always work these days.  I recommended very early in this thread that the OP need use contracts: inclusions, exclusions, quality of workmanship etc. Any business that doesn't educate themselves on pricing models and contracts will lose money, only a matter of when and by how much.

Nothing in this paragraph applies to small business like a restoration shop. How does one even put quality of workmanship in a words? When in the collison business all my competitors did "industry standard repairs". What the (&^%#$ is that? You should have seen some of my competitors work, but the insurance companies loved them. 

 

If I tried to limit employee's pay, then they would leave. If they were good, honest, gave a crap about doing the best they could, then when they left where would I find another? You might not for a year. That's not good for the bottom line either. Sure you can always hire a warm body. Like the helper I had that liked to drive customer cars on the weekend. 😲 And a customer caught him! Oh the stories I could tell.....

 

Costs I could know, but not always control. Try telling PPG or Sikkens what you will pay for paint if you are a small operation. 🤣  I did shop for best price and service on OEM parts. But I still could not tell Toyota or Chevrolet how much they should sell their quarter panel for. Just shop for dealer with best discount that could deliver in a reasonable time.

 

On 1/30/2023 at 12:07 PM, ojh. said:

I find that in the restoration business the more important attribute is Credibility, the customer has to have total faith in your judgement.  All else is secondary.  For instance, a friend was told the scratch on his Rolls would require a total repaint at a cost of $116K, no amount of paperwork, documentation or other accounting methods and schemes will be able to justify such a cost, only the Credibility of the shop can make that hurdle. 

BINGO!

[MGRAB]

2 hours ago, Frank DuVal said:

Nothing in this paragraph applies to small business like a restoration shop. How does one even put quality of workmanship in a words? When in the collison business all my competitors did "industry standard repairs". What the (&^%#$ is that? You should have seen some of my competitors work, but the insurance companies loved them. 

 

If I tried to limit employee's pay, then they would leave. If they were good, honest, gave a crap about doing the best they could, then when they left where would I find another? You might not for a year. That's not good for the bottom line either. Sure you can always hire a warm body. Like the helper I had that liked to drive customer cars on the weekend. 😲 And a customer caught him! Oh the stories I could tell.....

 

Costs I could know, but not always control. Try telling PPG or Sikkens what you will pay for paint if you are a small operation. 🤣  I did shop for best price and service on OEM parts. But I still could not tell Toyota or Chevrolet how much they should sell their quarter panel for. Just shop for dealer with best discount that could deliver in a reasonable time.

 

BINGO!

Sorry, but we will have to agree to disagree.  I don't care if it's a small $1MM or a large $300MM project we do.  If I send a field auditor out to observe and find that a contractor didn't follow an issued for construction print and pours a pad 4" instead of 6" or placed rebar 13" o/c vs 12."  The only thing that allows me to call up the contractor and tell them to rent every jackhammer in the county is a contract.  I don't care if it's a mom and pop or a major outfit - totally irrelevant.  I've had problems with welds, metal fab, paint that didn't happen (they galvanized what should be safety yellow... dealing with this one now).  Audits aren't just financial, fixed price gets "fitness of purpose" validation. 

 

Just today I had a local tree company at my house cutting a tree.  They have worked for both my neighbors - excellent work.  Guess what he had me sign?  A contract with a price attached and a detailed scope of work.  Guess what I asked him for? A copy of his certificate or insurance so when someone falls from a tree or it crashes into my new shop, I have recourse.  I don't care what you do or sell, contracts protect the customer and the proprietor.  I've lost count of how many "help! the shop screwed me" threads I've seen.  What is the first thing that goes through my mind?  "What does your contract say?"  

[alsancle]

16 minutes ago, MGRAB said:

Sorry, but we will have to agree to disagree.  I don't care if it's a small $1MM or a large $300MM project we do.  If I send a field auditor out to observe and find that a contractor didn't follow an issued for construction print and pours a pad 4" instead of 6" or placed rebar 13" o/c vs 12."  The only thing that allows me to call up the contractor and tell them to rent every jackhammer in the county is a contract.  I don't care if it's a mom and pop or a major outfit - totally irrelevant.  I've had problems with welds, metal fab, paint that didn't happen (they galvanized what should be safety yellow... dealing with this one now).  Audits aren't just financial, fixed price gets "fitness of purpose" validation. 

 

Just today I had a local tree company at my house cutting a tree.  They have worked for both my neighbors - excellent work.  Guess what he had me sign?  A contract with a price attached and a detailed scope of work.  Guess what I asked him for? A copy of his certificate or insurance so when someone falls from a tree or it crashes into my new shop, I have recourse.  I don't care what you do or sell, contracts protect the customer and the proprietor.  I've lost count of how many "help! the shop screwed me" threads I've seen.  What is the first thing that goes through my mind?  "What does your contract say?"  

 

I'm guessing you never restored a car?  

[MGRAB]

35 minutes ago, alsancle said:

 

I'm guessing you never restored a car?  

I do the majority of my own work.  If I don't know how, I try to learn.. don't care how long.  My first car was my '56 Olds that I did as a driver when I was 16.  I restore my cars to fit my likes and needs.. I don't seek trophies.  However, if I were to engage with a shop to do a frame-off, I would never engage with someone without a contract of expectations of outcome and estimated pricing.  Whenever someone gets indignant when I ask for a scope and contract, I move on.  Don't care how good the reputation is or what they do.  Just a few years ago you could ask any of Bernie Madoff's customers what his reputation was and how trustworthy his word was - how did that pan out?

[Frank DuVal]

 

 

1 hour ago, MGRAB said:

Just a few years ago you could ask any of Bernie Madoff's customers what his reputation was and how trustworthy his word was - how did that pan out?

And a contract would have helped the investors how? I'm sure he wrote many contracts. Worthless pieces of paper, right?

 

 

 

 

 

[brasscarguy]

I learned several important business ideas from my father that had a business during the depression.

 

I started my Subaru business 30 plus years ago, and financed it from my back pocket. I had little money, and no credit history. I paid cash for everything. If I did not have the money I did without until I could afford to buy.

 

The very worst thing you can do in business bar none is giving credit. I always paid cash and got cash in return when the job was completed. We only started taking credit cards about 15 years ago. I included the cost of using credit cards in my pricing. Those that paid in cash or check I gave them a 2% discount.

 

I put every extra dollar into inventory on the shelf. I realized that I did not make any money with cars sitting around the shop. I made money when the job finished and I got paid. If you drive by a shop and there at lots of cars hanging around they are not making money they are in the non paying storage business. Drive by a few times and the same cars are still sitting.

 

I looked at what would get jobs in and out quicker, having the parts inventory on the shelf was the answer. I also saw we were doing a lot of valve grinds and head gaskets jobs. I purchased all the cylinder head cores I could find and had them reconditioned on the shelf. A basic Subaru head gasket job pays 13.5 hours flat rate. With all the parts and the heads ready to go a good tech can do the job in 7.5 hours. My technicians get paid flat rate. The more they do the more they get paid. So the more jobs they complete in a week the more money they make. On average my techs flag 100-120 hours a week. On average my techs make between $125,000.00 to $140,000.00 annually. Another thing I learned from my dad, was take care of your employees. Its cheaper to keep them than to find a replacement. I give each employee $200.00 tool credit on the tool truck each month. Each employee with more than 1 year of employment, can take one of our many loaners home daily or on vacation. It's taxable but in the long run these are nice perks. We always do a New Years party for employees and their spouses or partners. We pay for child care if needed. We put everyone up in a nice hotel in the city, we then take all car keys and hold them until new years day, then start with a very nice dinner then a show, or dancing. Then after new years we have limos take everyone back to the hotel. New Years day we have an 11 am brunch at a high end restaurant then we give them their car keys back and everyone can go home safe and sound.

 

We are as efficient as possible, with our inventories, our recon parts and the way our shops are laid out. AS I always pay cash for all deliveries each time, I always ask for a cash discount. The parts stores that I do buy from will deliver a thermostat gasket if I needed it, because in the long run other shops don't pay so fast. I am a cash cow for the parts stores and they love the cash. 

 

After 35 plus years we are doing quite well and always looking at ways to improve working conditions and the bottom line. No one knows what tomorrow will bring but as I own every piece of equipment, part, every fixture in my business. I owe no one anything and I sleep very well every night.

just sayin'

frontyboy.

[alsancle]

8 hours ago, MGRAB said:

I do the majority of my own work.  If I don't know how, I try to learn.. don't care how long.  My first car was my '56 Olds that I did as a driver when I was 16.  I restore my cars to fit my likes and needs.. I don't seek trophies.  However, if I were to engage with a shop to do a frame-off, I would never engage with someone without a contract of expectations of outcome and estimated pricing.  Whenever someone gets indignant when I ask for a scope and contract, I move on.  Don't care how good the reputation is or what they do.  Just a few years ago you could ask any of Bernie Madoff's customers what his reputation was and how trustworthy his word was - how did that pan out?

I think it’s great that you do your own work. There are less than less guys with the capabilities to do that.

 

However, for the guys that have to engage with a shop, the contracts are going to be very straightforward if there is one. When they work on your car, they will be on the clock, and when they’re on the clock you’re going to get charged. I know many shops try to come up with ways to get the bills  down. It could be intern help at a low labor rate doing the simple stuff, and they absolutely will give some hours away. Just because the jobs are so labor-intensive and  expensive.