Is there a better way to execute car projects

[Blake Foster]

Good discussion.
I am sure most shops are in the same boat on one level or another.
I know guys who spend all their time and money building cool cars to use for advertising and are so "INTO" building cool cars that they end up just building cool cars and never get the business working. I on the other hand spend 90% of my time on the business side and if a cool car happens then that is awesome. but I figure with out a business that makes money there won't be any cool cars. I have friend that continually prove me wrong on this point.

Our focus is a little different in that the PART are #1 and building cars and installing the parts are #2 (not that we don't do a good job on the cars also)
but I do not pursue the high end super custom cars been there done that!

I agree with Rodger about the customers that have the money to pay are not always WILLING to pay. and that causes problems with the scheduling.

I have a excel spread sheet that I use to HELP Estimate jobs, it is not perfect but it does help. one thing I notice is that when you lay it all out and show the customer on paper what the REAL cost is.......... most are scared away.

It is odd to me that this is about the only profession that I can think of where you give an ESTIMATE before you ever see the job, then do work and hope you get paid, all the way along till the LAST invoice then the whining starts and the negotiating and nit picking and the builder takes it in the shorts every time. contract or no contract
it is like it is not a legitimate industry (and sure some are not legitimate but that is what you get when you take your car to a guy in his garage and get a low labor rate )
I always joke I should have been a plumber then the only tools I would need are a white Chevy van, pipe wrench and plunger. Instead of 100's of thousands of dollars worth of equipment to charge less than a plumber???

[Ron Sutton]

One thing I find interesting in our industry is the hourly labor rate.

Today ... 2014 ... Auto Dealerships, Copier Repairmen & most Technical Trades with repair technicians commonly charge customers a little over $100 per hour for a pretty common service. It has always seemed odd to me that ultra talented shops building trick race cars, customized show cars or some combination in between charge less per hour.

I'm not suggesting shops raise their prices to $110 an hour, as you may price yourself out of the market. But it does seem odd that common repairs of production cars, copiers, etc, are billed at $100+ while work performed by rare talented craftsmen is billed at a lower rate. It makes the business of building race/custom cars more challenging to be profitable at & harder to keep employees long term.

I owned a race car chassis building shop & starved for a couple years until a mentor taught me the "business of business" ... and I made my shop profitable & smooth running. But it is no small task. I am sure there are ProTouring shops that do a great job at both ... making money & keeping employees. But it is very challenging in any business ... and even harder if the market pays less for higher grade work.

[Boss 5.0]

Originally Posted by Ron Sutton

I owned a race car chassis building shop & starved for a couple years until a mentor taught me the "business of business" ... and I made my shop profitable & smooth running. But it is no small task. I am sure there are ProTouring shops that do a great job at both ... making money & keeping employees. But it is very challenging in any business ... and even harder if the market pays less for higher grade work.

As a technical rep for a very large jobber in the north east I have almost 200 collision/ restoration shops to deal with regularly. It is amazing to me how many are owned by guys that can fix a dent or paint a car with high quality, but have no idea how to really run a business.

Body shop owners typically fall into one of two categories. the first, and smallest group is the guys that are business minded and "get it". These are the guys that are very forward thinking. New products, great equipment etc etc....

The second and much larger group are the guys that worked in a body shop making their hourly wage. They saw the boss making money, owning a nice house. Maybe had a boat and a snow mobile etc. So they decide, well if he can do it so can I. So they rent a building and have business cards made up. Bang, they are in business. What they didn't ever consider is that their old boss had more of a business mind. These are the guys that are getting by, but barely. Maybe they last 20 years, but they are just squeaking by. Scrounging for every $$. The sad fact is most will fold up and go out of business within five years.


Glenn

[RCC]

wow what a great thread I'm only on page 5 but had to jump ahead and make a comment Greg weld- Iron works-Ron Sutton some great stuff ya'll are spewing

[Cyclone03]

A friend decided his "retirement" job was going to be building hot rods and street machines. He wanted me to be the mechanic/fabricator because he is more of a bolt on type.
He rented a shop, he needed a shop type space anyway to house his car stuff. I made sure the storage was well separated from the work areas.
Our plan was to find guys who wanted cars like ours but couldn't/didn't have the skills or time to do it themselves. Took us less than 2 weeks to find a stalled project ,not a signature car for sure. The stopping point was wiring. The owner bought into the magazine hype that it just goes in in a weekend. Over a year later he was frustrated and stuck.
The problems where many but the main one was cross breeding a harness from one supplier,engine harness from another (efi swap) AC kit not matched to wire harness. All pretty strait forward for me to figure out,because I'm wiring guy,but the customer was against the wall over it all. The customer also moved the fuse block from it's designed location and cut all the break out legs so it was just a mass of wires.

I looked the project over to build the estimate while discussing exactly what we where to do.

In the end we estimated 50 hours to correct wiring.Wire gauges.Connect EFI. Install an EFI fuel system. Connect Power steering,mount and plumb PS and Box. Connect and mount shifter (AOD swap) then test fire engine.
Time was discussed and agreed to. I work only part time as I have a real job. But it was done in less than 3 weeks . Under budget.

We also estimated everything else the car needed to be a SAFE driver. Brakes,suspension exhaust ,only another 15 hours. Thats way too much ?
2 years later the car has yet to be driven.
We then got another project,friend of the first guy, that was just a list of do this next type work ,4hours here 6 hours there he finally took the car home when he figures out we where not going to replace all the sheet metal on his Mustang for $200.

Over time we got pretty good at estimating jobs,and must came under budget to the customer.
We even got to estimate some jobs that sound like huge money but truly are not. Can You put my 70 Boss 302 back together? Yes $30,000. WHAT! still sitting..... Put my bad ass highriser in this 62 Galaxie and make it look great? Yup $2500 , you guessed it 3 years still not done.
Too be honest the Boss should have been closer to $40000 but the end result would have been a nice calling card and the Gal. easy $5000 with the complete detail on the under chassis.

OUR problem was/is I'm not in the position to be in 100% , I have a "real" job and boss needed much more $$ than I could earn 10 hours a week.

But even with me passing out flyers at every cruise in and car show in the area ,over 1000 flyers just me , we only got about 20 calls ? and 1 customer.
I have seen some of the lost customer paid for someplace else work and 2 told me they got screwed. $600 to install a 4brl on a 289? From a $300 quote. Our shop rate is $80 per hour.

Our plan at the beginning was 2 or 3 guys like me with different skill sets but we never found a 2nd or 3rd . So it's now our project work space.

[RECOVERY ROOM]

Damn good insight on here fellows

[Munssey]

Ironworks, Blake, Ron... Excellent points!

Communication, communication, communication right?

One thing I try to constantly remind myself to run like a checklist is the communication to customers on how this process will go, what is expected of them by when and what exactly we will be doing so they can get the understanding that it's an involved process.

So this might be a good conversation for this topic. Best practices to keep project management and the discipline to run it like a business instead of a hobby. I'd love to hear what others think should be\ not be in the list from either an owner\ operator or a customer's prospective.

Three documents that I find are life savers but take some discipline to use and I have had to evolve into what I use today:

1. Written Detailed Estimate of Work (to outline all the details discussed before hand). Not just 'build part x' but build it for this customer, using these materials and then amend with a start and estimated end date when possible after timing has been agreed on and the Estimate turns to a contract. I am not only surprised by how many shops dont do this but am uncomfortable when I have work done and they do not supply me with this as a customer. I always feel like a surprise is in my future and make it a point to connect with the manager of the project so they know I really appreciate knowing of changes up front instead of waiting until the end and get hit with it. I'm a big boy, I can take bad news... just less gracefully if it's at the end when the bill shows up.

2. MOU (Memorandum of Understanding) I explain this as the 'rules to the game'. Since Monopoly can be played different in every household, it's best to agree on the rules before the dice are rolled. That's usually where we discuss what is expected of the customer as far as engagement, payment schedule, how to access their customer page for project updates and... the change orders (which is #3).

3. Change orders - If something changes from the written detailed estimate that was signed, it must have a change order stating what changed in work, time and\ or price. Very simple to do, and cheap insurance for the customer to make sure they understand and are happy.

Does anyone agree? What else is there that might compliment or even replace any of these?

Learning hat is on.

[ironworks]

Originally Posted by Munssey

Ironworks, Blake, Ron... Excellent points!

Communication, communication, communication right?

One thing I try to constantly remind myself to run like a checklist is the communication to customers on how this process will go, what is expected of them by when and what exactly we will be doing so they can get the understanding that it's an involved process.

So this might be a good conversation for this topic. Best practices to keep project management and the discipline to run it like a business instead of a hobby. I'd love to hear what others think should be\ not be in the list from either an owner\ operator or a customer's prospective.

Three documents that I find are life savers but take some discipline to use and I have had to evolve into what I use today:

1. Written Detailed Estimate of Work (to outline all the details discussed before hand). Not just 'build part x' but build it for this customer, using these materials and then amend with a start and estimated end date when possible after timing has been agreed on and the Estimate turns to a contract. I am not only surprised by how many shops dont do this but am uncomfortable when I have work done and they do not supply me with this as a customer. I always feel like a surprise is in my future and make it a point to connect with the manager of the project so they know I really appreciate knowing of changes up front instead of waiting until the end and get hit with it. I'm a big boy, I can take bad news... just less gracefully if it's at the end when the bill shows up.

2. MOU (Memorandum of Understanding) I explain this as the 'rules to the game'. Since Monopoly can be played different in every household, it's best to agree on the rules before the dice are rolled. That's usually where we discuss what is expected of the customer as far as engagement, payment schedule, how to access their customer page for project updates and... the change orders (which is #3).

3. Change orders - If something changes from the written detailed estimate that was signed, it must have a change order stating what changed in work, time and\ or price. Very simple to do, and cheap insurance for the customer to make sure they understand and are happy.

Does anyone agree? What else is there that might compliment or even replace any of these?

Learning hat is on.

So my question is who pays for the Written Detailed Estimate? Our main customers would tell me just to get to work and communicate with them as the process unfolds what is happening. I talk with customers as much as they want and open the door for the dumbest questions, Because if its a question for them its not dumb. They need to understand the process and they have to see they are being treated fairly.

How can you expect a guy to give a spot on Estimate on a project of this precision when the can't build air craft carriers or bridges on time and exactly on budget?

We are working on 55 Chevrolet and we put a new quarter panel on one side and not the other. I now know it would have been much less work to have put a quarter panel on both sides due to the stamping differences from the original quarter panels and the repo unit. It was a major visual difference. MAJOR. How do you budget for that? Whose fault is that? We are hired to build perfect cars with very imperfect parts that are marketed to Just bolt right on cars that were not perfect when new and perform perfectly. And just because a parts fits perfectly on one car does not mean it will fit perfectly on the next car.

The biggest thing I have learned is you have to be able to charge a customer a fair amount of money to be able to keep the ball rolling. You also have to take your licks when you screw something up. No one builds everything perfect every time. The way to win a customer is with integrity and knocking money off the bill with out them asking because you screwed something up does that.

The only way to fix a lack of communication is with the communication the customer wants and needs to hear to understand. But you can explain it to them all day long and it does not mean they understand you, even if they say they do.

[FlameBroiled]

This Thread needs a Like Button!

[SSLance]

I've always thought of the car building industry as being pretty similar to residential contractor\remodeler work.

When bidding for remodel jobs one has to take into consideration hidden "gotchas" that will pop up behind the old sheetrock, likewise a car builder has to be prepared for gotchas behind paint or parts not fitting as intended. One also has to work with change orders, like the customer not liking a new wall once it's put up or new parts purchased and minds changed mid build on a car. At the same time, the contractor\car builder has to be careful to not price themselves out of the market before they even get the job.

Whereas new home construction can be very different. I recently helped my MIL buy a new house in FL in a pre-planned community. This subdivision was completely planned out, down to the trim color on each and every house in the subdivision...well before the first pile of dirt was ever pushed. I've never seen anything like it before.

This approach to home building is very similar to what is being discussed in this thread, but it leaves very little wiggle room for changes and everyone involved has to stay on pace and deliver what they promise in order for it to work. I don't know the numbers but I can imagine that volume purchasing and pre-scheduling greatly affects the margin in this type of product and surprises are kept to a bare minimum since everything is so planned out before you start

I'm not sure how you integrate new building policies and procedures into a remodel type industry, but I'm watching to see the ideas bantered about. There has to be a way to do things better than currently done at a lot of shops I'm sure, but I'm not sure it gets to the totally pre-planned approach before the building ever starts.