To make more money you need to do more work, to get more work comes with pay out for more exposure, more work comes with hiring more guys, which comes with more added bills. Its all about passion, if your in it for the funds only then you might as well open up a collision shop. If you have a great reputation and can charge a little more than your competitor most likely your not bringing in more income. A more reputable shop will have larger overhead, higher skilled employees which means higher payroll and more taxes due to the added income. It follows same suit for pretty much any company that does labor contracting.
A consumer most likely will always question the hours and always assume that it shouldn't take that long. If by chance you give the client a bid up front based on the work to be done, you would be pricing it so high to cover your butt just to make sure you don't lose and the consumer will think your out of line.
Your profit is based on payroll only. As Rodger stated earlier, production parts, t-shirts, etc will bring in your additional income but you need that "status" for people to buy your products.
Although Im in the construction industry, an example of a 70.00 rate with the average employee at 27.00 after all expense contributions have been paid the profit would be roughly 18/19% which is 12/14per man hour. This is based on corporate WI. and a very large overhead. When you achieve the 28% tax bracket on income it gets worse.
Keep in mind no matter how many employees you have, they will make mistakes now and then. You can not bill the customer for redo (ethically) and in the end, it's your company, your reputation and your mistake.

NVR --

Another good post... on "bidness".

Reading all these good posts on here dredges up some good memories. I've owned and operated 3 of my own businesses - and sit on the board or am an investor in others. So I'm only tossing in my usual .00000003 worth of opinion - and none of our opinions is worth much except to take the info and digest it. In the end - everyone can open a business and some will stay in business and make a living for many years - some will fail within a year - one out of 10 might be considered 'successful'. Some of the best businesses are the ones that can be replicated (franchised)... hot rod building is NOT one of those. Some businesses can find a way to build more things faster and cheaper... hot rod building is NOT one of those. So for me - to hear the guys that speak to the passion side of the business... that is the clearest message and probably the best advice that can be offered. If you can get out of bed every day - and go do something that you love to do - to whatever "level" that is... and pay your bills... and be proud... then that's probably something you should be happy to attain.

I liken this to Steve Rupps comments about a camera purchase... when he said -- "the best camera is the one you have with you". How simple - and how true... owning the best camera is worthless if it's at home when you want to take a shot... in that case the best camera might be your cell phone.

So here's the advice I'm going to put forth.

Go ahead and give your ideas a try. Start a shop or start a project - and see where it goes. What the hell do you have to lose... if it works out.. Great! If not - you've learned something... But you're never going to have the perfect opportunity - or the perfect time - or enough money etc. So might as well just get down and dirty and get acting on your dreams. Just don't hawk your house - your wife - or anything else that affects OTHERS... It's like gambling - you've also got to be smart enough to know when to fold if things don't go as planned (which they NEVER will in business!). Start it out any way that works for YOU. But start - otherwise you're never going to know.

Here Here Greg, well put. You cant vision income upfront. Its a gamble on a yearly basis. As long as you have work and love your job in the end thats all that counts. I started from scratch 20 yrs ago bought 2 other construction companies along the way to collaborate with mine and venturing into a distribution company of construction products within the next two weeks. Is it serious profit, NO, but I enjoy it. Once your company has its limits you either need to be comfortable with it or look into adding on to it. (labor with product) The biggest thing I've learned in business is not to carry all the reigns. Business owners have a tendency to be controlling and with that said you will end up doing all the work yourself and have no free time to enjoy life.

A lot of great advice so I'm only going to add that, at least in Rodgers case, he also has Workers Comp to deal with which many don't realize is a HUGE pain!

I used to own a factory that employed around 250 people. The WC premiums were INSANE!! Add having to deal with false claims, etc. and your margin shrinks to almost nothing!

One step at a time OP....as mentioned before, build the best car you can on your dime and then work from their. If you wanna get rich this ain't the business to do it.

John

Are rates went up in July 09 tremendously. Enough to put some small business out of work. For you California boys here what you may be in for.
http://www.sacbee.com/capitolandcali...y/1711617.html

Whats the labor rate for a Hot Rod Shop ? A collision shop is around 48.00 per hour here in the midwest for body labor .

Labor Rate depends on Experience the shop has, Location, and Machinery used to perform given task.

Most West Coast shops are 65.00 - 105.00 per hour.

I had a customer come get a quote from us on chopping the top on his pick up. He asked what our labor rate was, I said 65.00. He said well These guys are 45 per hour. Well when the Job was done I saw the car in bare metal and done, I asked what his total bill was and inquired about the quality, not quite up to what would have left my shop. He said man those guys charged me 5000 bucks, They has like 125 hours in the top. I said funny we did a truck like that last week in 80 hours. He did the math and asked why so different, well we have tools to shape our sheetmetal they use a tree stump. ( Really they have a tree stump and a small bench mount shrinker / strecher). The prices were the same but it took them longer to do the same task, but there quality was a little less due to lack of skill & proper equipment.

Talent will get you along ways, But Talent no tools will only get you so far. Talent with proper tools will you a proper job, Talent with a top notch tooling will get you a top notch product in less time.

Could a talented guy build a really nice home with a hand saw and claw hammer, sure. It might take longer, Could he build a better house with power tools, in some instances yes, but I guarantee it would be quicker.


Oh and my Workers Comp insurance just jumped 40 Percent this year.... YIPPIEE. I have never had one claim in 9 years.

Rodger

Id like to know who's only charging 48.00 an hour for collision work. I just had my daughters Mazda 6S she trashed in the first snow fall we had a couple of weeks ago. Labor rate was 60.00 at ABRA in the Milwaukee area and they did a "fair" job. Collision shop repair trade practices are regulated by Chapter 132 here in WI. administered by the Bureau of Consumer Protection. Hot Rod shops do not have to follow those guidelines.

Prior to my ongoing build I checked around and found the rates to be 50-100 per hour. Sorry I wont pay 100 an hour because its a pretty looking facility.

You Guys are a great wealth of knowledge! Thanks for all the great advice! I am planning on keeping my day job, lol, but this is a real passion of mine and I would love to help others in making their dreams come true. That and I would love to build/work on, a lot more cars than I can afford to own or house.
I think we're going to take HRBS's advice and just start off with a "house" hot rod and see where it goes. The nice thing is that even though I'm not independently wealthy, I only need the shop the pay for its self.
If you know of any reputable shops in the Portland, OR area, I would love to build a relationship with them.
What type of laws and restrictions do you guys have to deal with?

Thomas

Dave, Most areas are in the 42.00 to 50.00 an hour range for collision repair. Most shops are locked in to what agreements they have with ins companys that they do work for under a contract (DRP Direct Repair Program). Most ins companys go by the prevailing rate for that area. It's a big long discussion that would take up way to much space on Lateral -G. Most ins companys will say that they do not tell shops what to charge BUUUUT they will tell you that there is a shop down the block that will do it for only X amount labor rate and they don't charge us for all the extras that you have on your estimate. You get where I'm going with it.