Automobile restoration shop help - from the inside

[TTR]

22 hours ago, alsancle said:

Restoration work is a miserable tough business.   The skilled labor is hard to find, and the number of hours it takes to do good work makes the projects costly beyond what most customers feel comfortable paying.

 

So even a shop with great employees,  a smart boss and lots of experience struggles to some extent.  The most successful shops I know have a small client list of guys that are wealthy enough (some measured in "B"s) that they can spend liberally because they want to.

 

Any shop that relies on more regular folk is going to struggle.    If you are honest with those customers about the costs up front you have no business.  If you fudge it they freak out when the costs explode.

As someone with 30+ years of "from the inside" in restoration business, I mostly agree on above with minor exceptions (based on my experiences) to last two sentences.

Being honest and clear upfront about the REALISTIC costs involved (not the commonly used "fish bait" to lure in new customers) is or should be most important starting point and if you manage to "scare off" potential new customer with that, you can consider it as "dodging a bullet" of huge amounts of frustration and eventual unhappy outcome.

 

Over the years, I've encountered "dreamers" with cars of which even the best known examples in the world would be worth a fraction compared to what they want(ed) me to do to theirs, but I always made sure they were aware of this fact before anything got started.

Most of these "dreamers" (thankfully) walked away after I laid g out the hazards and pitfalls, including many initially unforeseeable, but potential nightmares involved, yet couple of those who had acknowledged all this and still wanted to proceed, later cried "Oh, I wish I would've known" BS, at which point, out the door their projects went.

 

21 hours ago, alsancle said:

My advice it so limit the scope of the work to mechanical and MINOR cosmetics.    Cars have to run but they don't have to look perfect.  I will never paint another car, it makes zero sense.

 

There is more work out there than shops that can do it.    FOCUS ON MECHANICAL WORK.   The jobs and scope will be smaller,  less likely to be a sinkhole with an irate customer.

OTOH, I do disagree with this ^^. FOCUS ONLY ON WHAT YOU DO BEST, drop everything else and even then it can be a struggle to succeed.

 

Just like in any other field of business/commerce, majority of the enterprises always have and always will fail before they become (truly) successful. That's just a law of nature (in business).

And anytime somebody asks my advise on starting or operating/running a restoration business, I tell them not to start and especially if they don't know how to operate/run it before starting.

As for the OPs predicaments, there are probably umpteen million shops that work on similar stuff and in similar fashion than in his and as far as I've seen, most have and always will fall on same, self held sword.

 

39 minutes ago, pkhammer said:

I visited a shop last year that specializes in Model A Ford restorations. I was dumbfounded when I asked the owner what the average Model A (total) restoration costs. His reply was "well into six figures". This obviously included total chassis and driveline refurbishment, bodywork, paint, upholstery and some upgrades as well such as overdrive units. So who spends six figures on a Model A? Apparently enough to keep this man's shop (with about a half dozen employees) plenty busy. Costs are what they are. If a total restoration takes 1000 man hours (that might be light), even at $75/hour that is $75,000.00 before parts. There are also plenty of people who still think they should be able to get a quality paint job for $5,000.

With all due respect, but anyone finding this ^^ "dumbfounding" is not familiar with the REALITIES of "complete/full restoration" of an automobile (99% of so-called restored vehicles really aren't).

And keep in mind that above "1000 man hour" (whether in-house or subcontractors) guesstimate is "light" and restoration of any vehicle more complex than Model A obviously compounds that figure exponentially, regardless of the make/model or perceived "market value" of that car. 

Simple math.

[Xander Wildeisen]

Another big problem a shop faces is supporting trades. Other businesses/companies needed to finish a project can really bring a lot of harm to a business by delaying completion of their part of the job. And returning a presentable finished product, but not one to a high level of quality. So your shops finished product is just not quite as nice as that other shops. I can tell you for a fact, this industry as a whole can decide the success of any business that operates with in it. And there is a side to it that excepts and willingly watches as people and businesses are set up. My comments come from my experiences in Idaho. Not meant to slam other parts of the country. Hassling businesses with problems in an attempt to get them to charge for their time. Will result in a business put out of business. For the purpose of protecting established businesses ability to donate (is that a good word to use) to local entities/institutions. And it is only through this coming together that we as a people/society can grow and prosper.😂 I have heard it all, incredible industry engaged in questionable activities against certain people. For the ability to take a swing at pouring a glass of refreshing kool aid. For the benefit of certain entities/institutions.

[MGRAB]

Newbie here, I have been lurking for a bit.  Finishing up my own hobby shop and hope to be working once again on my own cars soon.  This topic has been an interesting read and may have a slightly different perspective.  For a living I lead an audit team focused mainly on capital and construction fraud.  I work for a very large multinational company and my team reviews about $6 billion in spend.  I've done this for roughly eight years, prior to that I worked for about 12 or so years in manufacturing in engineering and ops management.

 

You have to know your cashflow, if you don't manage that properly your ship will be rudderless.  When my company engages in T&M or T&M NTX (not to exceed) contracts we require our vendors to submit a labor rate sheet with buildup.  Included in this should be your base rate of pay (what you pay your employees) plus: FICA, FUI, SUI, small tools & consumables, OH and profit.  I audit these buildup rates and look for a range of 30-40% over base as reasonable. When I start to see a 50% over base, I grimace and tell our strategic sourcing team they need to do a better job negotiating.  When I say audit, I go to the vendors site and audit their actual payroll, I always come back with money.  You need to get this right though for you situation.

 

Do you have a formal contracting process with your customers?  You don't need a contract until you do.  Do you have a formal change order process that requires a formal approval from the customer to acknowledge that something unknown to both parties or something new has modified your pricing.  I highly recommend that you do not engage in fixed price or lump sum pricing, way to many unknowns in your business.  You have to have a very tight scope of work to do lump sum.  When you do lump sum the risk of overage shifts to the vendor.. ask me how many people I don't pay when they come back for more on LS.   How well defined is your scope process?  Do you have a formal work order management system?  Do employees get a job tickets for the day for what is expected to be completed with estimated hours to complete.  Do you have a plan, check and adjust when that doesn't happen?  If I'm a customer I would like to see line-item detail of hours worked with appropriate work breakdown structure.  I could fill your day with tales of invoices I short-pay or don't pay.

 

How much do you engage with the customer during the process?  If you wait for them to come around, you run the risk of them being complacent in paying their bills.  For our major projects I consistently review weekly progress reports. If you engage with them regularly, they will know that you will be quick to pull the plug for non-payment.  Most all vendors invoice monthly.  If you have to invoice weekly, it would be a tell to me that you are cash strapped and my project is at risk.  You do have to stay on top or your receivables.  If customers are short to pay don't hesitate to take action. Me personally, I would regularly visit fab shops building equipment for me when I floated them capital for one of my projects.  I can fill your day with stories when this goes sideways.

 

You manage the storeroom.  Do have a formal requisition process for using parts and consumables that you can bill back to your customers?  Do you conduct cycle counts on a regular basis to look for leakage?  If you haven't been told this already, inventory is evil. You're tying up capital and you need to understand how often you turn your consumables inventory.  How are you charging for markup on materials.  General rule is ~10% MU, very large vendors we try to negotiate 5%, when I see a 15% I grimace, and you better do something special.  If I'm a customer I want to see all tracking of parts and consumables to my project.

 

How efficient is your shop?  Do you look for stuff often or is there a place for everything, and everything in its place.  Shadow boards are great for identifying missing tools etc.  A well-run factory has lines on the floor to locate where everything needs to be, think tripping hazards etc.  Try doing a spaghetti diagram of your day.  How much wasted motion do you all do?   If something isn't used in 24 hours, doesn't belong directly in the workspace.  Do you have ergonomic mats where people stand?  There is a reason old plants used word for flooring.

 

I could go on and on about this.. but if this is too much rigor and discipline for a small shop??  You're not making a profit you can't add enough controls to the process at this point.  Get yourself to a level of profitability and then consider what you can back off on.  Best of luck..

 

Edited January 21, 2023 by MGRAB (see edit history)

[Xander Wildeisen]

What once was a poor man’s hobby, is now a rich man’s sport. Getting a customer with a project car, that is clueless about cost involved. Will result in a very disappointed customer, that on sum level will tie that disappointment to the shop working on the project.

[TTR]

1 hour ago, Xander Wildeisen said:

What once was a poor man’s hobby, is now a rich man’s sport. 

While it can be a "sport" for some, as far as I can tell, owning or restoring antique/classic/vintage cars has NEVER been "a poor mans hobby" .

Anyone who thinks that needs their head or at least priorities examined.

 

I believe owning/restoring/etc vehicles one has absolutely no need or use for and whether one chooses to restore each themselves or contract professionals, it will cost time and money poor folks couldn't probably even imagine wasting so frivolously. 

 

 

Edited January 21, 2023 by TTR (see edit history)

[Xander Wildeisen]

A car has about a 15 year run, and then it’s value is really in the tank. If you are into 2003 Chevrolets, you can buy one and enjoy it. When I went to high school, 1989-91. You could pick up used muscle cars cheap. Driver quality, in good condition just used. A person of limited funds could drive and enjoy that car. A bombed out project now will cost you 8,500. Way out of reach for the average person. To be honest, I should not even have a classic car anymore. Not in a position to work on them. They just sit and cost money to store. I hope a story comes out, about the set up and targeting of people and businesses. That way people can see who some of these people are. And states like Idaho can stand tall for what they allow to go on behind the scenes. Picking and choosing winners based on who is owned. Show platforms being used for pay to plays. It is really sad the talent this industry has destroyed, in attempts to own it. Over letting people succeed based on drive, ambition, motivation, innovation, ability and work ethic. Just a part of Idaho that still lingers from the past.

[duigoose]

Everyone.....thank you.  If I tried to address every post in the thread it would just be redundant.  The only new information I have is that I am not privy to the money or hours worked per job.  I am pretty sure they are using quick books pro if that is a thing.  I am sitting down to see if I need to address what has been written so far.  I can add this too,  at the end of the day the product is outstanding.  Says every time expansion has been tried it hits this bottleneck.  As for the scope.of work, right now the earliest is the '32 and it goes to a early 80's Pontiac.  About 15 cars at some stage of progress.  It's looking like time and resources management issues.  We don't keep an inventory as parts vary.  Cant seem to get the ball to continue to roll.  

Edited January 21, 2023 by duigoose
Add thought (see edit history)

[Ed Luddy]

I've been around body shops, mechanic shops and restoration shops most of my life. Biggest lesson I've learned so far is DON'T TRY TO RESTORE CARS FOR A PROFIT.

  Best lesson is if you want a certain make/model or already own a rusty project of that certain car that you gotta have go buy one already done.

[Xander Wildeisen]

58 minutes ago, duigoose said:

Everyone.....thank you.  If I tried to address every post in the thread it would just be redundant.  The only new information I have is that I am not privy to the money or hours worked per job.  I am pretty sure they are using quick books pro if that is a thing.  I am sitting down to see if I need to address what has been written so far.  I can add this too,  at the end of the day the product is outstanding.  Says every time expansion has been tried it hits this bottleneck.  As for the scope.of work, right now the earliest is the '32 and it goes to a early 80's Pontiac.  About 15 cars at some stage of progress.  It's looking like time and resources management issues.  We don't keep an inventory as parts vary.  Cant seem to get the ball to continue to roll.  

You have 15 cars in the shop to be worked on. And how many workers? that work on the cars? If you bounce people from one task to another, from car to car. The productivity will drop. You have got to be in a building at least 5000-6000 sft, with lifts. To even store that many cars, and have the needed room to work on them. I never brought out a customers car, till it could be worked on. To tell someone they can bring in their car, but it will sit for a couple of weeks till some other ones are finished. Can cause problems, what the customer will remember is how long it has been there. Not how long they had to wait to get it in the shop. Working by myself, two customers cars is all I would allow. Any more is just asking for it. You can swamp yourself with work, and fool yourself that the more you see the better you are doing. 15 cars, you would want 6-7 workers. And you need a high work flow volume to keep that many workers busy full time. My dad ran an electrical contracting business my whole life. I have seen the headache that goes with to much, or to little work. To many workers, or no enough. Finding quality people is tough in all aspects of owning and running a business. Good comments on here by people, great forum, I have never seen people on here hand out bad advice.  

[duigoose]

Many valid points were made there.  It is a good size building with a lift, a couple of rotisseries and a paint booth.  He's not lacking tools or experience in the shop.  My advice this far has been to drop everything, focus on two cars and get them gone.  Already working for free.  Two are extremely close to out the door.  Boils down to car in-work on car-get money-get car out door.  Not that easy but minus hundreds of variables that's all it is.

[Xander Wildeisen]

If car coming in, is giving you the funds to finish a car that needs to go out. You have a problem. 

[duigoose]

Agreed.  I dont have access to Financials but it does appear the case from where I sit.

I will ask this.  Should the parts department and other 'front of house' personnel be considered liabilities instead of assets and paid from proceeds from the markup on parts?

[Xander Wildeisen]

Parts department? Front of house personnel? Sounds like a big operation, lite on shop workers. Heavy on office staff. As a business grows it is easy to hire staff to fill all of the positions that can open up. If the business slows down, that staff needs to be down sized to meet the needs of the current state of the business. Not sure why you are wanting to get so involved in someones   business. If red flags are there that the company is in trouble, use the down time to look for other opportunities for yourself, while giving your boss advice and the help he/she needs while you work for them. Taking on the troubles of a business for someone else can get you in a pickle of liability. You would already know all of this stuff, if the owners wanted you to know it. 

[MGRAB]

56 minutes ago, duigoose said:

Agreed.  I dont have access to Financials but it does appear the case from where I sit.

I will ask this.  Should the parts department and other 'front of house' personnel be considered liabilities instead of assets and paid from proceeds from the markup on parts?

Everything you just reported is bad, very bad.  This is NOT how you or your coworkers should be compensated.  I have never heard of such nonsense and it's probably breaking labor laws.  If you are "robbing Peter to pay Paul", you are involved in a Ponzi scheme.  Think Madoff and FTX.  You should never use the funds from one customer to finish the work for another.  Monty Python comes to mind - Run Away!  Get outta there before the cops bust down the door.

[Xander Wildeisen]

 

[duigoose]

Y'all aren't beating a dead horse.  I mentioned the finances because there are some questions I cannot answer.  I dont need/want to know it all.  I laugh at the impression if I gave it as a huge operation.  Me for parts and one other person for accounts payable and receivable and paperwork.  Boss floats in and out as needed then the 4 outside.

As far as why I'm going this far...I don't really know.  I do know I never stop looking in case I'm suddenly let go or have to leave.  I also know this has been and is a wonderful learning experience for me personally.  Feel free to keep giving any thought or talking point.  I am going to start taking all of this and making something to present all the ideas.  I dont abandon my threads and hope I'm not wearing out a wonderful welcome.

Edited January 22, 2023 by duigoose
Clarification (see edit history)

[1937McBuick]

One more comment.    Do you have any other skills that would be useful in the shop part of the business.

I'm not saying you need to become a master painter, body man or mechanic but even a helping hand to any of those "journeymen" might help you gain more hours and help productivity of the shop.   

 

I guess as long as you help more than you hinder,  or cause a bunch of re-do's ....those are real money losers if the shop owns up to their screw ups and not download the cost onto the customer.

[Grimy]

Today I spent 2.5 hrs chasing threads of cylinder head studs and nuts on one of my cars while my friend Jeff spent the same amount of time stripping paint and painted over crud from around the outside of cylinder bores on the block of a Packard 8.  I commented that if we were a business, we'd be billing shop rate (about $100-125 in this area) but we could be using less-skilled, less-experienced personnel for these mundane but necessary tasks while he and I did the not-quite-brain-surgery that requires significantly more skill--and I pointed to Jeff's 13-yr-old son who is learning the ropes beginning with simple tasks.  And that seems to be one principle to be applied:  have on call, at least, someone who can be paid minimum wage or slightly above to perform the simple tasks that Jeff and I were doing.

[Bryan G]

When things got to the desperate end in my business, I stopped paying myself, and it took everything I could do to make payroll each Friday. How did I get to that point? It's really not that difficult. Either too much went out, or not enough came in! I cut expenses to the bone, but didn't do much about bringing more in. (I didn't feel my regular customers couldn't afford more than I charged.) Those guys still come up to me, a decade later, and lament that they can't find another shop like mine. I wonder why?😄 What I really needed was a great accountant who could look at the numbers and show me what to do; neither of the guys I tried working with were any help. 

 

I do like the idea of specialization, by the way. I've long thought that, if a body shop had enough volume, the ideal would be to have one tech who did nothing but F-series trucks, another all the GM trucks, another could do all the Rams. One to do Camry's...and so on. I think the time savings would be amazing. That's the real trouble in the industry: so much variety in both the make/model/year and the nature of damage. That is only compounded in restoration work.

 

I'll add this: I had a younger guy working for me, very well trained and an excellent restoration man. My daydream was that he would someday, sooner rather than later, buy the place from me. It never came true, but I still wish I could have seen it happen.

[Crusty Trucker]

...and we all wonder why the auto industry is run by accountants.

 

 

[MGRAB]

9 hours ago, duigoose said:

Y'all aren't beating a dead horse.  I mentioned the finances because there are some questions I cannot answer.  I dont need/want to know it all.  I laugh at the impression if I gave it as a huge operation.  Me for parts and one other person for accounts payable and receivable and paperwork.  Boss floats in and out as needed then the 4 outside.

As far as why I'm going this far...I don't really know.  I do know I never stop looking in case I'm suddenly let go or have to leave.  I also know this has been and is a wonderful learning experience for me personally.  Feel free to keep giving any thought or talking point.  I am going to start taking all of this and making something to present all the ideas.  I dont abandon my threads and hope I'm not wearing out a wonderful welcome.

The owner of this shop has a good friend in you... you care.  You say he floats "in and out".  That is a big tell, he should be there all the time trying to make this right.  This is how the story ends on the path you are on:  If you keep taking money from new customers to pay for old you will end up with a shop filled with fifteen cars and no funds to finish, while five cars are in the parking lot of paying customers trying to get any of the fifteen out the door.  If I'm reading incorrectly into the moral compass of the shop owner and everyone is just trying to do right, then I highly suggest you clear the deck of business and start fresh.  You grew too big too fast.  You need a business plan.  Most small start-ups develop at least a three-year business plan with projected revenue growth.  If you don't have a plan, what are you working towards?  The suggestion above to get inexperienced talent is a good one.  On my own team (and this isn't my business) I have what I call a "continuum" of talent.  I have interns up to sr. managers and if someone leaves, I backfill the role internally.  Great way to reduce labor costs and reduce risk of turnover.  I don't know the skills of your AP/AR person, I highly suggest your boss engages with a local CPA firm to get some guidance.  Many are QuickBooks advisors and get your team on the right track.  You also need a business/general manager to manage the flow of work in and out of the shop and if you grow big enough probably a shop foreman too.  From what you've presented above your shop lacks vision, the right talent and leadership; it will fail on its current path.

[Xander Wildeisen]

I think as a business owner you do a disservice to your employees by having them specialize in one area. I would want my employees to know all aspects of a build/restoration. That way they would see a project through the process. And be able to jump in and complete any task given to them. It also gives them the skills to find work down the road in any area of the industry. 

[TAKerry]

Very interesting reading this saga. As a small business owner It sounds to me like this shop is on life support and the plug needs to be pulled asap! I will admit the 'business' side of running a business is my weak point, doing the actual work correct is my forte. But I like to think I have learned from my mistakes. 1. There are too many people there. No offense to the op, but if your work load has been cut back to a few hours a week were you really necessary to begin with or was it convenient for the owner to ask someone else to procure a part. And if you have to get approval from the accountant, could those 2 positions be combined as one? Is an accountant really needed? Are 5 guys in the shop really needed? 

How would I run this business: Keep a good time clock to log every hour worked on every car. I would sub out accounting services. A lot cheaper than in house. As the owner of the business I would dedicate an hour or two each day either morning or after work and assess where each car being worked on stood, make sure they had the needed parts and get stuff ordered. If my specialty was body and paint, I would focus soley on that. I would get rid of a full time mechanic and find a decent reliable shop that would be willing to work with me and again sub out the mechanical work. Be up front with customers so they realize it is going to be a long costly road to restore a car. If they flintch you probably dont want them to begin with. Concentrate on maybe 3 cars at a time. 2 full time that are good payers and the third to take up slack when waiting for paint, parts, mechanics, etc. As difficult as it may be you need to figure out how much you need to make a month to be profitable, or to at least keep the lights on and make sure that much work gets finished. Detailed billing on a monthly basis with each hour accounted for, and every part down to the screws and washers being billed with a reasonable markup.

This formula eliminates at least 3, maybe 4 people. 

The shop as originally described sounds like every body shop I have ever been to that works on new cars doing insurance work. That is the bread and butter of that industry. 

 

Its easy to have 4, 10, or 20 cars lined up but getting them finished is another thing. I believe there are so few good shops that its easy to have a wait list. 

 

I have been in a family owned business with as many as 30 employees doing multimillion dollar projects successfully for many years. When that business was closed, I started my own remodeling business. It had 3 employees, myself and 2 men. One guy was hurt and left the job for a year. The biggest hurdle for me was that I had to physically work more and less work day time in the office. I also noticed more money in my bank acct. every month! It is just myself and my son doing the work now, and if we cant do something I will pass. We stay very busy working mostly with a select clientele. I get up early do the 'office work' before hitting the road, and get back to it when need be after a day of work. We joke that for an old guy and a youngster we can get a lot of work done.

[Xander Wildeisen]

You never loose  money on a job you do not do.

[Restorer32]

I can only relate what has worked for us over the last 44 years of restoring professionally.  For the first 10 or so years we concentrated on proving we could actually restore cars to the level clients wanted. For 10 years I worked a 40 hr/wk job and worked another 40 hrs/wk restoring cars. First car we did was a Model A followed by a '31 Chev and various other cars. Slowly we built a reputation for good work at a fair price and better work came in. Now we do only "show quality" restorations. There is a great demand for "driver quality" work but that is not what we do. When anyone approaches us about a project we (it is now my Son's business)  have a conversation with the potential client and point out that in the vast majority of cases they can buy the best restored example of the car they wish to restore for less, often far less, than they can have us restore their car. We then tell them how we work.  We do not give estimates.  We work strictly time and materials.  We sell whatever experience and expertise we have gained over the years by the hour. Our clients are free to buy as many hours as they wish.  Hopefully they buy enough hours to finish the restoration.  We take no deposit up front.  We keep our hourly rate as low as we can. We bill monthly and expect to be paid monthly.  Anything we purchase for a client's car is marked up 20% from our cost, which is often still less than what it would cost them to buy the parts or materials themselves given the discounts we often get.  We now have an 8400 sq ft shop and have employed 6-7 workers since the 1990's and have plenty of work.  Professional restoration is now and always has been a painfully expensive endeavor. We always qualify our clients before we work for them. Easy to do in the Internet age. In a few minutes we can get a picture of their house and learn what they paid for it.  We want to see evidence that the potential client can afford to get involved in a full professional frame up restoration to show standards. Prove you can do the job and treat folks fairly and you will develop a following. We have done 5 complete restos for one fellow, all of which  have won AACA Senior Awards etc. and are now doing 3 restos for another fellow, all 1950's Cadillacs and all at the same time. You sound like a great employee.  Where are you located?  We are always looking for talented and experienced help.

 

[alsancle]

2 minutes ago, Restorer32 said:

I can only relate what has worked for us over the last 44 years of restoring professionally.  For the first 10 or so years we concentrated on proving we could actually restore cars to the level clients wanted. For 10 years I worked a 40 hr/wk job and worked another 40 hrs/wk restoring cars. First car we did was a Model A followed by a '31 Chev and various other cars. Slowly we built a reputation for good work at a fair price and better work came in. Now we do only "show quality" restorations. There is a great demand for "driver quality" work but that is not what we do. When anyone approaches us about a project we (it is now my Son's business)  have a conversation with the potential client and point out that in the vast majority of cases they can buy the best restored example of the car they wish to restore for less, often far less, than they can have us restore their car. We then tell them how we work.  We do not give estimates.  We work strictly time and materials.  We sell whatever experience and expertise we have gained over the years by the hour. Our clients are free to buy as many hours as they wish.  Hopefully they buy enough hours to finish the restoration.  We take no deposit up front.  We keep our hourly rate as low as we can. We bill monthly and expect to be paid monthly.  Anything we purchase for a client's car is marked up 20% from our cost, which is often still less than what it would cost them to buy the parts or materials themselves given the discounts we often get.  We now have an 8400 sq ft shop and have employed 6-7 workers since the 1990's and have plenty of work.  Professional restoration is now and always has been a painfully expensive endeavor. We always qualify our clients before we work for them. Easy to do in the Internet age. In a few minutes we can get a picture of their house and learn what they paid for it.  We want to see evidence that the potential client can afford to get involved in a full professional frame up restoration to show standards. Prove you can do the job and treat folks fairly and you will develop a following. We have done 5 complete restos for one fellow, all of which  have won AACA Senior Awards etc. and are now doing 3 restos for another fellow, all 1950's Cadillacs and all at the same time. You sound like a great employee.  Where are you located?  We are always looking for talented and experienced help.

 

 

There is the wisdom of experience in this reply.   I always chuckle when guys on here insist that you should be getting an estimate up front.  The ole "if you have to ask you can't afford it" response is appropriate.

[Carroll_1]

As a small mfg. business owner for 35 years., here are my random thoughts on crisis management. Everyone has at least one of these traits - Technician, Manager, or Entrepreneur. Any business owner should have entrepreneurial skills. If not, at least be a good manager. Entrepreneurs can find managers and technicians; not the other way around. Customer down-payments are recorded and accounted as liabilities. Treat them for what they are, OPM, Other People's Money. Inventory isn't necessarily bad, but recognize that it represents cash. Building a nice big inventory, either materials or finished goods, can create a false sense of security. It's your money. Cash Is King. Weekly cash flow management (cash flow statements, sources and uses of funds, balance histories) is a must. Maybe even daily. Monthly cash flow management is too late, the horse is already out of the barn. Employees require leaders. Identify the good ones, share the plan, then get out of their way. Train the mediocre ones. If they learn, repeat, and then get out of their way. If they can't, or won't learn, unfortunately, they also must live by the King's rule. Personally, I believe everyone can learn, but the question is, at what cost?

[duigoose]

I will add this, when I say the owner is 'in and out' I mean from the shop to the office.  He is quite dedicated.

I could jump in anywhere to help but I would not be comfortable painting for someone.  Only issue with me is physically I can't hang in there.

The other employees can pretty much do anything but fall into their strong points.  

I still can't understand why nothing is leaving.  Lack of focus, discouragement, I don't know.  I agree an accountant or someone needs to take a look and see what's going on moneywise.  I see the workers working.  How efficiently I dont know.  I do know it is on different cars at different levels of progress.

Am I needed?  Right now, no.  When I started, yes.  There are many parts to be ordered and fleshed out.  I'm trying to stagger orders so they always have something to do but it's getting hard to do.  I used to research big orders to make sure everything I was ordering is both quality and the best price and will work with what has been ordered and will be ordered.  I was told to stop doing that, taking too much time.  I also do not have a 'favorite vendor' list so sometimes I order from the 'wrong place'.  Otherwise I have been told I was doing a good job.

I know alot of this post seems to be about me and it is.  I'm the one fighting for a job that has vanished.

[duigoose]

...and Restorer32, apparently I don't have the magic powers yet to make a pm or I would let you know.

[39BuickEight]

I think 2 things:

 

1.  Telling a potential customer “no” is both difficult and sometimes necessary. Costs can overrun any small auto business quickly if they don’t say “no” sometimes, or even more frequently, depending on their financial situation.

 

2.  Everyone in the place needs to be able to do a little of everything (except maybe a painter-a good painter is an artist that can’t often be duplicated).  If there is work to be done, then someone needs to be able to do it.  Never should someone be idle if they can learn and contribute.

 

You have a bright future ahead.  

Edited January 22, 2023 by 39BuickEight (see edit history)

[brasscarguy]

Having been in the Subaru business for over 30 years its easy to hone your skills and give the customer a fair and reasonable estimate. Federal law requires a shop to give the customer a written estimate if they ask for one. If the work requires more parts or labor and that amount accedes 10% of the original estimate the shop is required to contact the customer.

 

Interesting a shop doing restoration business on older cars, they are not required to give a written estimate. Having restored too many antiques to remember over that last 50 years, I have never figured out how a restoration shop can charge for their time for the removal say door hinge screws that are rusted solid. It may take a few minutes or a few hours you will never know how long until you start the job. Any shop worth their salt, will take the time to do it without destroying an irreplaceable part. That is a tough way to make a living.

just sayin'

brasscarguy

 

[Restorer32]

18 hours ago, Carroll_1 said:

As a small mfg. business owner for 35 years., here are my random thoughts on crisis management. Everyone has at least one of these traits - Technician, Manager, or Entrepreneur. Any business owner should have entrepreneurial skills. If not, at least be a good manager. Entrepreneurs can find managers and technicians; not the other way around. Customer down-payments are recorded and accounted as liabilities. Treat them for what they are, OPM, Other People's Money. Inventory isn't necessarily bad, but recognize that it represents cash. Building a nice big inventory, either materials or finished goods, can create a false sense of security. It's your money. Cash Is King. Weekly cash flow management (cash flow statements, sources and uses of funds, balance histories) is a must. Maybe even daily. Monthly cash flow management is too late, the horse is already out of the barn. Employees require leaders. Identify the good ones, share the plan, then get out of their way. Train the mediocre ones. If they learn, repeat, and then get out of their way. If they can't, or won't learn, unfortunately, they also must live by the King's rule. Personally, I believe everyone can learn, but the question is, at what cost?

A very wise and successful friend once told me "There are no bad employees, just bad managers".

[TAKerry]

Something my son has instilled in me that has increased our productivity is NOT to multi task. When you have 6 or 7 things going on at once nothing gets done. Concentrate on one task at a time. At least to get back into the swing of things and profitability I would only restore cars that have a very strong support for parts. 

 

We used to charge 20% markup on material but after talking with someone working for a very large construction firm realized that was way too low. If your doing mail order that may be ok, but if you are picking stuff up you will be loosing money with every part you buy!

[Xander Wildeisen]

Jumping over dollars to pick up dimes. My dad used to say that.

[Restorer32]

Never underestimate the value of sentiment. Many if not most of the restorations we do are for folks who have a sentimental attachment to their vehicle.  We recently did a total ground up resto of a Model A Fordor and are currently doing a Model T that was first restored in the 1950's by the owner's Father.  We will soon be starting on a car that was the cheapest model sold in the US the year it was new. The car is in atrocious shape but the client wants it so we will do it. Not everyone values objects just for their monetary value.  As I've written before "Beware the Phillistine who knows the Price of everything but the Value of nothing'.

[John Bloom]

2 hours ago, Restorer32 said:

A very wise and successful friend once told me "There are no bad employees, just bad managers".

Restorer 32, I really enjoyed you sharing the pearls of wisdom from your 40+ years of success in this business. I think it is helpful to the content of this thread to read what you have learned and lived through over those years. The original poster would be wise to take your suggestions to heart. However, I can’t get on board with this comment above....  99% of the time this may hold true. However I have had some exposure to “the spawn of satan” in employment situations. No need to go into that here.  My one suggestion is always hire new people under an initial probationary period. If they are truly terrible, make sure you look don’t let them get past that probationary period before you have severed their employment with you.

 

i’m happy to be “on the record” for saying there are bad employees.

[MGRAB]

1 hour ago, TAKerry said:

Something my son has instilled in me that has increased our productivity is NOT to multi task. When you have 6 or 7 things going on at once nothing gets done. Concentrate on one task at a time. At least to get back into the swing of things and profitability I would only restore cars that have a very strong support for parts. 

 

We used to charge 20% markup on material but after talking with someone working for a very large construction firm realized that was way too low. If your doing mail order that may be ok, but if you are picking stuff up you will be loosing money with every part you buy!

Some food for thought on MU's.  When our company negotiates rates, it is our preference to shift profit to the most quantifiable unit rate - labor hours.  Most MUs are not consistent for large contractors, and they are more customer dependent than a one size fits all.

 

Example) We engage with contractor A, a small mom and pop HVAC firm they install a two-ton unit on one of our guardhouses.  For conversations sake let's say it costs ~$10K.  They make a 15-minute call to their supply house, coordinate the purchase, issue a PO and get it delivered to our site.  For that we compensate them $1K to do that.  Same plant, we need roof mounted AHU's.  We call our national industrial controls company, and they make a 15-minute call to their supply house, coordinate the purchase, and issue a PO and get it delivered to our site.  But this one cost $100K and they are compensated $10K.  Let's go further, let's say we need 15 units for the roof, now they make $150K for the same call.  Is that fair compensation for that work?  With those very large vendors we expect 5%.  Do others pay more?  You bet!  But this is America... make what you can, nothing wrong with that.

 

My next-door neighbor is a very large local commercial contractor.  We have very spirited conversations on this.  I am constantly reminded of what some people pay when I go to my dock and look at my $20K used boat and look over at his $250K wakeboat.  Don't do what I do, it's a curse... you end up doing everything at your house.

[Xander Wildeisen]

Make what you can is good to a point. In some industries that sale creates a comp. And now sets the stage for price fixing for the benefit of others through over payment. 

[Frank DuVal]

3 hours ago, MGRAB said:

Example) We engage with contractor A, a small mom and pop HVAC firm they install a two-ton unit on one of our guardhouses.  For conversations sake let's say it costs ~$10K.  They make a 15-minute call to their supply house, coordinate the purchase, issue a PO and get it delivered to our site.  For that we compensate them $1K to do that. 

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.

[Paul Dobbin]

On 1/21/2023 at 10:42 PM, Grimy said:

Today I spent 2.5 hrs chasing threads of cylinder head studs and nuts on one of my cars while my friend Jeff spent the same amount of time stripping paint and painted over crud from around the outside of cylinder bores on the block of a Packard 8.  I commented that if we were a business, we'd be billing shop rate (about $100-125 in this area) but we could be using less-skilled, less-experienced personnel for these mundane but necessary tasks while he and I did the not-quite-brain-surgery that requires significantly more skill--and I pointed to Jeff's 13-yr-old son who is learning the ropes beginning with simple tasks.  And that seems to be one principle to be applied:  have on call, at least, someone who can be paid minimum wage or slightly above to perform the simple tasks that Jeff and I were doing.

   I have a friend that owned and operated a restoration shop for 30 years.   He hired professional Body Men, a Mechanic and a Painter, but he was excellent at all thise trades himself.   I addition to helping all those guys when needed, he ran the business end and customer contacts.   I've seen him let customers come in on Saturday to do the helper work on their own cars to keep the costs down.   I even did that for several cars over a 30 year period.  Then when he also retired, I went to his house and helped him finish his car, that had waited for 20 years for a lot of attention.  

 (There is a lot of "helper" work involved in a restoration.  I was a very experienced helper)  But not worth $100 an hour.

Edited January 23, 2023 by Paul Dobbin (see edit history)