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Thread: How to price a job?
          
   
   

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  1. #1
    hotroddaddy's Avatar
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    How to price a job?

     



    I have a friend who has a 63 impala supersport, he`s had it about 15 years, well its been sitting in the garage for about the last 7 or 8 years and now he wants too have it fixed up again. i cant find anybody that has time so im thinking about doing it myself, i dont really have the time either, but the money would be nice, basicly he wants all the old work redone like stripping it, cleaning up all the rust that has formed thru the years, possibly doing a body off resto. My question is if i do this how much is a fair price?, how do i go about pricing this kind of job? Taking into account that im not a pro, so were not talking highest dollar job, but a fair price for the amount of work, plus there is no time restriction, any help would be much appreciated

  2. #2
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    I think you need to set an hourly rate,,,acceptable to both of you. He also needs to realize that you will likely take longer than you can possibly estimate...it always seems to work that way.

    Also...you need to discuss about parts and supplies.........Does he front you some money for that?.
    Last edited by poncho62; 02-20-2007 at 08:56 PM.

  3. #3
    HOTRODPAINT's Avatar
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    An hourly rate sounds like a good plan to me. Whatever is the least you can live with, because it will still add up fast. You probably should ask the tough questions before you get too deeply into the project. Questions like:

    How much are you willing to put into the project?....10,000, might buy a streetable cosmetic restoration......30,000, a quality restoration, that drives nice and is reliable......50,000, a glistening show piece........."blank check", a museum piece, maybe the nicest one existing.

    That will tell you what he will accept, you won't be involved in a lawsuit, and you guys can still be friends when it's done.

  4. #4
    Itoldyouso's Avatar
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    hotrodpaint said something very important, you and the guy have to have a very clear understanding up front of his budget, and what it might cost.

    In the job I just lost ( ) it was my responsibility to sit the boat owner down and have a Dutch Uncle talk with them so that there were no gray areas once the work was begun or completed. I found if we didn't do this, he was going to be very mad when the final bill was put in front of him.

    I think John you will be in a really tough situation here, because of the friendship thing. Sometimes money and friends are a bad mix, and many friendships have gone sour over this sort of thing.

    The hourly thing seems fair to me too, and maybe you should be continually getting paid as one phase is done so that you don't have to hit him with a huge outlay at the end, plus it will cost you money in consumables such as sandpaper, primer, etc., so you don't want to get behind in your personal outlay.

    I think if you have a heart to heart talk and let him know that you will be less expensive, but not free, it will make it easier in the end.

    Don

  5. #5
    kitz's Avatar
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    Like Don said, doing business with friends is not usually a good thing. If I did something like that I would feel like I would have to honor a warranty for life deal on the dang car afterwards too.

    If you go for it the time plus materials gig is the way to go. But as said above be very careful to agree on all Terms and Conditions up front. Even though it's your bud, draft up a written contract specifying the T&C's. What happens if he don't pay? Mechanics lien, etc?

    Kitz
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  6. #6
    robot's Avatar
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    Like the others have said, dont jump into this with a fixed price unless you want to lose your butt. Once you get the customer to state his expectations, you can set an hourly rate....dont set it before he spills his goals. Then, agree upon a payment increment....should be no more than every two weeks or bi-monthly. Then, you wont be too far in the hole if the customer decides to quit paying.....you dont want to be stuck with a car that you personally have a bundle of $$ in that is unpaid. Agree on the billing period and upon a payment period....say within a week of billing. Thus, if he stops paying, you stop working. You can even suggest that he pay in advance for the billing period....best for your since you are working on his money. In any event, progress payments are a must!!!

    mike in tucson

  7. #7
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    To add to what I said earlier about freinds and money..........I just had it happen to me, but on a smaller scale. Good friend of mine asked me to sell his boat on Ebay for him because I have done it a bunch of times for myself, and he doesn't know how to do Ebay or even have an account with them.

    I spent a Sunday afternoon taking the pictures, getting all the info, and that night I listed the boat. I asked him and his wife what they wanted out of the boat, and he said $ 9,000.00, so I set the reserve at that figure, and if it went over it would be gravy. He asked me what he would owe me for doing all this, and I told him all I wanted was him to pay any Ebay and Paypal fees I incurred on my account. He is a friend, and I just wanted to help him sell it.

    During the sale I got a zillion questions from bidders, etc., and finally the boat closed..........at exactly $ 9 K. The winning bidder showed up next day with cash and left with the boat. When I asked my friend if he was happy, he said "oh, I wish I could have gotten more." I reminded him he told ME what he wanted. Anyway, it has been over a month, and I have not heard word one about my Ebay fees, which amounted to $ 89.00. Not a big deal, and I will chalk it up to experience and friendship, but it just irks me because if the shoe were on the other foot I would have been at his door the next morning with the cash to cover these expenses. I'm just going to wait and see how long it is before he calls, and rate the friendship from there.

    So hotroddaddy, make sure you get this thing in concrete up front, or you will be doing a whole lot of work for very little profit, or none at all.

    Don

  8. #8
    facemelter is offline CHR Member Visit my Photo Gallery
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    Quote Originally Posted by robot
    Like the others have said, dont jump into this with a fixed price unless you want to lose your butt. Once you get the customer to state his expectations, you can set an hourly rate....dont set it before he spills his goals. Then, agree upon a payment increment....should be no more than every two weeks or bi-monthly. Then, you wont be too far in the hole if the customer decides to quit paying.....you dont want to be stuck with a car that you personally have a bundle of $$ in that is unpaid. Agree on the billing period and upon a payment period....say within a week of billing. Thus, if he stops paying, you stop working. You can even suggest that he pay in advance for the billing period....best for your since you are working on his money. In any event, progress payments are a must!!!

    mike in tucson
    agreed 100%

  9. #9
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    How to price a job

     



    If he's a friend now, I'll bet halfway thru the job he's not and before the job is done he will be your enemy.
    Just my 2 cents worth.

  10. #10
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    Don wrote...."Anyway, it has been over a month, and I have not heard word one about my Ebay fees, which amounted to $ 89.00."


    Don - Unfortunately a tough lesson, learned cheap. Could have been a lot more costly. Forty years ago a friend who was a new car dealer told me to never buy a car from a friend, if you want to keep the friend. I have tried to live by that rule for a lot of ventures. Hopefully the guy won't turn out to be your ex-friend turned bum.

    Hotroddaddy - As to the Chevy redo, you really got to talk with the guy, get everything he wants in writing and signed. Establish a labor rate up front. Even though you may not be a pro.... you are still going to give it your best shot and you are going to feel responsible for your work, so don't get too cheap. Most car repair shops charge no less than $45/ hour, many charge double that. You may not have the overhead that they do, but your skill level may be just as good.. maybe better. (At least your pride level will be greater ) Estimating the number of hours it will take to complete each task is the larger problem, that's one reason you don't want to sell your self short on the $$ rate. You may find that some things may take twice as long as originally estimated. No one likes to work for free. If you know someone in the body repair or resto business you may want to question them about time for specific parts of the project.

    I can only wish you good luck, cause what you are thinking about undertaking could end up as a huge job and the making or departing of friends. Tough challenge.

    If you decide to go cheap... give me a call and I'll send you my streetrod for a little makeover work. We're not friends so we won't have to feel bad when things go horribly wrong.

  11. #11
    Bob Parmenter's Avatar
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    Warning; any references to past history are intended to form a frame of reference, not to wound you in any way.

    A while back you asked for advice/opinions about your recent career change. You thought that business owners should be welcoming your program with open arms. I warned that the reception might not be as warm as logic might imply. I don't recall that you responded, but there's a lesson there.

    This situation is similar, that being that it's a sales scenario. As you're learning (I hope) in your new career, selling is more demanding than it looks. Effective selling is about educating, not just holding out something you think is of value and expecting others to recognize that value the same way you do and take whatever it is away from you in exchange for a few pesos.

    Don's boat selling story is a good example. The guy threw out a figure he claimed he wanted and Don ran with it. I'd bet that in the intervening days the guy started to second guess himself, without telling Don, and started doing some "research". He looked up ads that were for boats he figured were comparable to his. As many of us have learned, most people tend to overvalue what they have to sell, and undervalue what others have. Plus he was looking at asking prices, which again we've learned are usually optimistic to say the least. In that process he probably convinced (taught) himself that surely the wonderful world of ebay would appreciate just how valuable his boat is and bid madly to the stratosphere. Given that, no wonder he ends up disappointed in the selling price. Unrealistic? Yeah, that's how it works. Unless....................

    So, here's what I would suggest. This is based on my guessing that he has no idea of what it's "worth" to repair the car the way he wants to. As has been stated on this site and countless other similar ones, a job always takes longer and costs more than even experienced people imagine. Dealing with an inexperienced person just compounds the potential problems. What you need to do is "sell" the job properly. In other words, educate the guy. If possible, even though they may not have time to do the job, get an estimate to do either the whole job, or better, some portion of the job (explanation later). First, this will set the benchmark at a more realistic level. No matter what the guy tells you today, he has a figure in mind that HE thinks the job is "worth". It may be close, more likely it is wildly off the mark. If you don't do something first, before burying yourself in the job, to set expectations you're setting yourself up for failure. Maybe you'll need to get two such "professional" estimates so that the guy is convinced............just depends on how easy to educate he is. Once you've done that, this is where some of the good advice in other posts comes into play, agree on what your hourly rate will be. First, you'll likely be lower because you don't have the overhead the "shops" have, and second, you're (self admittedly) not a pro. Agree to do a portion of the job. You need to figure what's best for both of you. Do you do a very small job, or do you tackle the most difficult portion of the job? Your call, pitfalls in both choices. Too small and easy, you set too low a bar. Too big and difficult, you may poison the rest of the well. So choose wisely. The purpose is to take on a small part of the job to set his expectations in the real (rather than estimated) world. This will confirm he's willing to pay you the rate, and that he's satisfied with the quality level of your work. Of course once he sees what the pros want, even if you're going to charge, say 2/3 as much, he may learn that he's not willing to fix the car.

    All the warnings previously about straining your friendship, and making sure agreements are in writing, are well founded. It will all hinge on expectations. If you set them well, the road will be smoother.

    Edit, implicit in my remarks, in agreement with others, you don't want to do a fixed price bid, agree on an hourly rate and charge by the actual time involved, and yes, get paid per benchmark (day, week, number of hours, some portion of the total job reached, whatever)
    Last edited by Bob Parmenter; 02-21-2007 at 10:59 AM.
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  12. #12
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    Not to differ too much here....but I would get a fixed price because when he comes over and you are not working at his assumed pace or happen to be fooling with something while shootin the breeze with your buddy or having a cold one and not working at a break neck pace,he will assume you are screwin him over by only geting 45 mins worth of work done every 60 mins. With a fixed price you can take 10 hrs on the side mirror and no one complains.Take that long at a hourly deal and hes going to freak out.
    The hourly thing gives them too big of a lever.......pro shop 55 bucks an hour and it takes them 2 hrs to set the rear end......your garage at 30 an hr and it takes 6 hrs,......see my point.The hourly deal gives them a lever to try and bust you down by saying it takes 110 dollars for the pros to do it and it took you 160 dollars to do the best you could.......see how things can get funky when you have a scale to be judged against.Say you asked 15,000 to do the job and a pro shop wants 35,000 you have a lever now by having a favorable scale to compare it too and bottom line no matter how much time is spent on each component you are still giving them a good deal.
    This may not be the most profitable avenue to go down,but it keeps things from getting too far outa hand by having a base number for the restoration and no gauge on how long each step should take or cost ,only that it should be like this when complete....not how long it should take to complete or how much it takes to complete or whether you were working at a certain pace to complete.
    This is what has worked for me in the construction field for many years,auto industry may be different,I dont know.
    Its gunna take longer than u thought and its gunna cost more too(plan ahead!)

  13. #13
    Dave Severson is offline CHR Member/Contributor Visit my Photo Gallery
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    Friend or no friend, time and material is the only way to do a restoration or rebuild of any kind on a complete car. There are so many things you will discover as the tear down and build up starts.... I work on cars full time everyday and have for many years and there is no way I will quote a total redo on a car....

    Friend or no friend I will also guarantee you that his plans and build list will change as the build progresses. I work back and forth with a number of different guys with different skills and specialties. We all keep track of hours spent and occasionally sit down and settle up.....Wish usually ends up that everyone just sez heck with it, we must be even. I would much rather do it this way then fight about who did what to what for how long later...

    Been through this with a friend once about a year ago. I got the shaft, he got a nice car and we have just recently started speaking to each other again.... He also admitted he was wrong, and gave me a great big check!!! Whatever you do, don't let it get that far out of hand.....
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  14. #14
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    Thanks guys, you have hit most points i was scared about, i will start by saying, when i bid construction jobs i set one price for the amount of work im bidding, i can usually tell whats involved up front, we agree on what im gonna do, then agree on a price, if they add or change then i charge for the change, before i do it. A car is different, i know the car pretty good, but i was not around when he built it, so i dont know whats under the paint, thats where i feel i could underprice myself, cause what happens if i strip the paint and the body is real bad? then im in for it


    As far as our friendship goes, he`s my ex`s dad, ive known him for about 12 years, me and his daughter dated when we were in our late teens, but me and him stayed friends, i dont speek to him all the time but i stop and say hey 2 or 3 times a year, he originaly built the car, he used to drive it every day, then he bought a harly and the car got left behind, now he wants to drive it again but it has sat to long and bubbles in the paint, rotting rubber parts things like that have taken over. He understands its gonna cost around 10 grand, but to me and my little experience, that price seems kinda low, if i just fix the small stuff and smooth it for paint is one thing, but im the kinda person that likes to do it right, not just patching, but really making it nice for another 20 years, so then the price gets higher.


    Thanks for the words of wisdom guys, you have given me alot to think about, now i will go set up the bounderies with him and go from there

  15. #15
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    Good plan!!! As long as all these things and other possibilities are discussed there's a good chance the rebuild can get done and the friendship remain intact.

    PS, one other item for discussion if you will be doing it in your shop, is who is going to maintain insurance coverage on the car? Fires and stuff do happen!!!!!
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