Is there a better way to execute car projects

[Kurt Penner]

Great insights. We use an excell spreadsheet thing as well that I developed after a pointless search for something that was simple enough for a gearhead to use, but flexible enough for the constantly changing scope of work on some projects. Helps alot, but like has been said, if you actually show the whole thing to a prospective customer, they get scared.
Part of the planning problem too is that it is very time consuming [expensive] Doing it before the project is approved can mean tons of time down the drain if the customer gets scared, not doing it makes it really hard to be fair to someone asking about the cost of a project.
How detailed do you guys get on your invoices. Is time broken into segments? We do a list of stuff accomplished this week and a total # of hours. I keep pretty good individual record for in house but don't show it to the customer. It's sort of like the 2 week sprint but customer sees stuff in writing every week after it's done.

[XLexusTech]

Thoughts inline:

Originally Posted by ironworks

So my question is who pays for the Written Detailed Estimate?

Nobody.. Estimates should be absorbed as part of doing buisness ... Experts should be able to do so without too much opportunity cost. If they can't then their buisness cannot and will not scale.


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?

I wouldn't ..... "spot on" and estimate are mutually exclusive ... In my buisness for example we estimate work and +- 20% is expected.

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?

If it's a customer supplied part the customer...

If the customer is neither involved in the part nor the install he should be insulated from it... If you paid a guy to do an extension on your house and he handed you a bill for 2x the original materials cost because the lumber was crap so he threw 1/2 of it away you would tell him to go to hell.


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.


Build it into your estimate and stay within 20%... Communicate with the customer and change order if needed and agreed to and this problem goes away.

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.

Good communication is only achieved when the intended message is received as intended...
Get familiar with and implement a change order process and this problem also goes away. You will be surprised how much cooperation and understanding comes from this...

Hope this Helps

[68Cuda]

OK... having just put my car through the modification / body / paint mill I want to make some remarks from a customer perspective.

Originally Posted by Munssey

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.

Oh, I wish... never found a shop that was willing to do this in three years of looking. I could not find ANYONE willing to give me an actual written quote. One shop I visited the owner told me not to visit unless I called in advance because he may not be open if he had something to do that day, had no idea how long it would take, and had a car that he stripped six months previously sitting off to the side without any primer on it. Best I found was "as long as you keep up with the bill we keep working on your car" and "just stop by occasionally so we can discuss the next step, otherwise I do what I think you want" combined with the fact that I visited the fabricator who was actually working on the car and took him out to lunch once to make sure he understood what I wanted because the boss would tell him something else. Either he sometimes got customers mixed up or the two of them had communication issues. The fabricator started texting me questions occasionally when something the boss told him did not sound right or did not sync with what I had told him. My final choice on this shop was made seeing some of the completed work, talking to a few prior customers, and observing the shops practices. I took the "personalities" of the owner and the tradesmen involved in to account also. Overall one of the better places I visited, was relatively close to home and work, and I had a good level of confidence I could get the car back in less than a year.

Originally Posted by Munssey

2. MOU (Memorandum of Understanding) I explain this as the 'rules to the game'.

See above comments...

Originally Posted by Munssey

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.

Once again...

Originally Posted by Kurt Penner

How detailed do you guys get on your invoices. Is time broken into segments? We do a list of stuff accomplished this week and a total # of hours.

One of the things I liked about the shop I chose, they had a folder for each car, written inside the folder was a daily number of hours billed. All receipts were kept in the folder. I paid about two weeks ahead on labor. I could come look at the folder anytime I wanted, and whenever my balance approached zero I would write another check. The last two weeks I let them run negative and I paid the balance on delivery day.

Originally Posted by ironworks

Customers cash flow - This has no relation to the the depth of the customers pockets. This has to do with the urgency of the customer to pay for the agreed bill during and at completion of the project.

I think about half the customers I saw during the 9 months my car was in the shop had this issue. The boss had to stop work on their cars or at least threaten to do so occasionally. I actually gave him permission to slow down on my car to get other small, paying jobs out as long as he did not come to a complete stop on my car. I knew mine was going to sit for periods of time after it got home so I was not in a big rush.

Originally Posted by ironworks

Project Creep - Customer wanting more and more from the initial project scope. And after the project was torn down or fit up work really begins, finding parts don't fit like they should. Or the car had more bondo then was expected.

I think this happened on a majority of the projects I saw... the extreme was the car that came in for a few minor touch ups and left with an LSA and a paint job.

Originally Posted by ironworks

Flaky vendors - Outside vendors with parts or services that that don't do what they say.

Yes - constantly, and you Chevy guys have it good! I pretty much expect any work, part or restoration detail work to take at least twice as long as quoted and then need to be significantly modified to fit the car. Even "off the shelf" cylinder heads from Edelbrock which I ordered in June and received in October were only supposed to take 3 weeks to get. I almost fell over in shock when a K-frame I sent to have modified and powder coated arrived sooner than expected and was done exactly as specified!

[glassman]

Its always "in the details". I think time in=experience. I've always said "hard work= good results", even in financial faiure, if you were sincere in your heart, you've still gained invaluable experience.

Tommy Silva of "This Old House" fame, said "when you build a house there are 7000 things you need to know, when you rebuild/remodel a house there are 70,000 things you need to know".

Backing into a relm of variables brings an unknown, remodeling as opposed to building new. Houses and contracting are much more expensive, but man hours are man hours, however, a much more appreciatory asset, so there are more rewards. Rebuilding a car is very similar to rebuilding a house, but the house will probably go up in value...

I love building, whether its housing or automotive, "if you find something you love to do, you'll never have to work a day in your life", but then the business gets involved.....and that gets tricky. Every customer is different,, every job is different, Us leaders are "supposed" to be flexible, and i don't know how to bend lol.
Great topic, love listening too the different opinions on how we do things.....

Hope some of this makes sense.....

[robnolimit]

Great thread !I agree with Ron 100% about the labor rate, but custom shops may be forced into it, so to speak.
If you walk in the dealership garage, you see the newest diagnostics computers, top quality equipment, skilled and trained (ASE) techs, who have made major investments in their own tool sets. The training and equipment gives them the ability to get something done in an hour. Like wise, the investment these techs have made in them selves demands a higher pay scale. The dealership has to charge a rate high enough to cover these costs, but, the customer gets the job done right in a timely manor.
Now walk in to many Hot Rod shops, and you may see a welder or two, a few old tool boxes, a drill press and a grinder, ..... It's also quite common that t he employees here have had little or no formal training, and have made little or no investment in their own skill set and future. In effect, they are not acting in a "Professional" manner. They do not get much done in an hour, and they labor rate suffers in turn.

I know that this is not all shops, but many of you would have to agree that this setting of a Hot Rod shop is the most common, and that the Professionally run shops are a rarity. Management is the key, and for the long term, we have to look at the management of our industry as one area that needs help, a lot of help. Have a great day guys.

[RDuke]

A lot of great items for execution and operational challenges are already listed so to add to the conversation I'll focus a little more on the business strategy.

If you look at the auto repair business (mechanical, paint, etc.) the business models are similar in the general strategy. They attempt to streamline the processes or areas of expertise. Diagnose, repair, repeat. The goal is to just like a restaurant in a lot of ways. The more turn over they can manage in a given period the more revenue they can bring in. Streamlining the process can help control costs, reduce process time, and increase the bottom line / allows them to operate in the black. The best general managers / owners are the ones who can manage to the model and manage the execution/operational challenges already listed.

The business model for a custom car shop is by it's nature an inefficient processes. Each car is a one-off build requiring multiple sets of talents (metal fab, paint/body, wiring, plumbing, interior, engine/mechanical). As your business becomes more specialized or less streamlined your costs increase which drives up your prices. If a auto repair hourly rate is at $110-$140 having already built in the efficiencies into the rates then your custom car shop would be much higher. This rate is a basic calculation: Annual (Overhead (rent/insurance/etc) + labor + parts + marketing/advertizing + unexpected overage ratio + profit percent) / (Number of units (cars) per year). With your cost per car baseline you can then figure out your hourly rate by dividing your available labor hours by number of units per year, then divide it by the cost per car.

Many of the successful shops I believe started on a shoestring approach with one or two people who had a wide variety of talent sets required. As they were able to build a customer base they quickly compartmentalized the build process as quickly as possible to streamline and reduce build time. You see this with many of the successful shops though you may not recognize it. There are designated areas and resources for each step of the process.

I believe many of the unsuccessful shops failed because they never moved beyond one or two people trying to do everything. If you are a two man shop your cost per hour has to be extremely high in order to break even and keep your doors open. As a customer, would you pay double the rate of a national know/name build shop to support your local builder with 2 resources? Probably not. The only caveat here I can think of is the retired/hobby shop owner who does it out of 'fun' with the sole purpose of trying to stay out of the red at the end of the year while having fun in the process.

As a business model the custom car shop is something you really would never want to invest in. The most successful shop isn't going to bring in more than a few million at most for the owner, it's not replicable (you can't easily franchise or open multiple locations due to the highly skilled talent required), and the market of people who want a custom car is very small and of those who can afford it it's even smaller.

Hat tip to this thread being started.

[ironworks]

Originally Posted by RDuke

A lot of great items for execution and operational challenges are already listed so to add to the conversation I'll focus a little more on the business strategy.

If you look at the auto repair business (mechanical, paint, etc.) the business models are similar in the general strategy. They attempt to streamline the processes or areas of expertise. Diagnose, repair, repeat. The goal is to just like a restaurant in a lot of ways. The more turn over they can manage in a given period the more revenue they can bring in. Streamlining the process can help control costs, reduce process time, and increase the bottom line / allows them to operate in the black. The best general managers / owners are the ones who can manage to the model and manage the execution/operational challenges already listed.

The business model for a custom car shop is by it's nature an inefficient processes. Each car is a one-off build requiring multiple sets of talents (metal fab, paint/body, wiring, plumbing, interior, engine/mechanical). As your business becomes more specialized or less streamlined your costs increase which drives up your prices. If a auto repair hourly rate is at $110-$140 having already built in the efficiencies into the rates then your custom car shop would be much higher. This rate is a basic calculation: Annual (Overhead (rent/insurance/etc) + labor + parts + marketing/advertizing + unexpected overage ratio + profit percent) / (Number of units (cars) per year). With your cost per car baseline you can then figure out your hourly rate by dividing your available labor hours by number of units per year, then divide it by the cost per car.

Many of the successful shops I believe started on a shoestring approach with one or two people who had a wide variety of talent sets required. As they were able to build a customer base they quickly compartmentalized the build process as quickly as possible to streamline and reduce build time. You see this with many of the successful shops though you may not recognize it. There are designated areas and resources for each step of the process.

I believe many of the unsuccessful shops failed because they never moved beyond one or two people trying to do everything. If you are a two man shop your cost per hour has to be extremely high in order to break even and keep your doors open. As a customer, would you pay double the rate of a national know/name build shop to support your local builder with 2 resources? Probably not. The only caveat here I can think of is the retired/hobby shop owner who does it out of 'fun' with the sole purpose of trying to stay out of the red at the end of the year while having fun in the process.

As a business model the custom car shop is something you really would never want to invest in. The most successful shop isn't going to bring in more than a few million at most for the owner, it's not replicable (you can't easily franchise or open multiple locations due to the highly skilled talent required), and the market of people who want a custom car is very small and of those who can afford it it's even smaller.

Hat tip to this thread being started.

Agreed.

Plus in the custom car world your trying to give each car a different personal feel for the owner. In auto repair, you just fix it properly and send it down the road. There is no personalization or emotion in the process. It's either fixed and working or its not.

The simpler and less custom you make each build the more you can scale that business model. The is no way to scale the high end side of the custom car world. The bigger the scale the less options. Until pretty soon your considering a Shelby Mustang custom.

[Blake Foster]

Originally Posted by robnolimit

Great thread !I agree with Ron 100% about the labor rate, but custom shops may be forced into it, so to speak.
If you walk in the dealership garage, you see the newest diagnostics computers, top quality equipment, skilled and trained (ASE) techs, who have made major investments in their own tool sets. The training and equipment gives them the ability to get something done in an hour. Like wise, the investment these techs have made in them selves demands a higher pay scale. The dealership has to charge a rate high enough to cover these costs, but, the customer gets the job done right in a timely manor.
Now walk in to many Hot Rod shops, and you may see a welder or two, a few old tool boxes, a drill press and a grinder, ..... It's also quite common that t he employees here have had little or no formal training, and have made little or no investment in their own skill set and future. In effect, they are not acting in a "Professional" manner. They do not get much done in an hour, and they labor rate suffers in turn.

I know that this is not all shops, but many of you would have to agree that this setting of a Hot Rod shop is the most common, and that the Professionally run shops are a rarity. Management is the key, and for the long term, we have to look at the management of our industry as one area that needs help, a lot of help. Have a great day guys.

this is a bit off topic

I would agree for a lot of shops, but let me put it this way.

If your a lawyer you went to school for ...... say 7 year? right.
I have been doing this since I was 13 and have been paying my way to learn, buy tools, and learn and learn for 33 year, so I have effectively been going to school for 33 years, how does that make a lawyer able to charge 300+ an hours and me only 80. I have a 20,000 sqft shop with likely 250,000 worth of tools and equipment. what is it that he does that a custom shop doesn't do?
I will tell you my lawyer cant open the hood of his BMW and I cant decipher the laws any better.
What I am getting at is that they are both PROFESSIONS. one cant do the others job. So I don't have a sheet of paper saying I went to school, I have a BUNCH of pictures and completed cars and happy customers of past work that PROVES I went to school. oh and when your lawyer looses in court............. YOU STILL PAY THE BILL!!! no bargaining.

All I am saying is that there ARE shops that are PROFESSIONALS and if you choose to take your car to someone who isn't then expect the same results

[Munssey]

One point that may help in other's considerations of what recipe might work to formulate a better way to execute car projects is to repeat a pretty good summary of application for the Project Management Book of Knowledge (PMBOK) that I once heard.

If you think of the PMBOK as the Bible and a particular project as a different religion you apply the 'Bible' to. For the most part, the essential pieces remain the same but you pick and pull what will work best from the PMBOK for that project. A different project may require a different 'religion'.

Once I realized that it's more of a dance than a science it made it easy to say were not using X for this project because it doesn't work. Lets try something else out of there.

I think back to managing large IT projects and how the different groups called for different approaches (although the MOU, SLA, Burn-down charts and Sprint backlogs still had to be worked every week) to get everything done.

Infrastructure and platform-as-a-service teams worked best when we applied a large amount of project management. An easy parallel would be your large car maker's assembly line processes. Cookie cutter and lots of checks and balances involved. I think this side of the industry is where we mostly get frustrated with pushed deadlines because hanging new fenders and doing a respray should be pretty straight forward for a professional. I ***think*** this may be the side of things where we could best focus on some good best practices for our industry. They are there but not enough of the smaller shops observe them.

The Web development guys who did front end graphics... oh no, no, no... those are your artists and they'd subconsciously push back on regulation of time and deliveries to the point of being in serious risk of their jobs with as much methodology as applied to the other groups. They were artists so creativity had to flow in a less regulated way some times. This is where maybe most custom car guys are (half of me SO identifies with this group). Creativity is not inspired by a work breakdown chart and a Monday morning due date. Other methods much apply to these types of crafts which makes it very difficult to manage as a project. I think this side of the industry is where we mostly understand and don't get frustrated with pushed deadlines.

Originally Posted by ironworks

Agreed.

Plus in the custom car world your trying to give each car a different personal feel for the owner. In auto repair, you just fix it properly and send it down the road. There is no personalization or emotion in the process. It's either fixed and working or its not.

The simpler and less custom you make each build the more you can scale that business model. The is no way to scale the high end side of the custom car world. The bigger the scale the less options. Until pretty soon your considering a Shelby Mustang custom.

Your point is very valid and brings up a good consideration to applying the execution of car projects (or any parallel trade) which is technical break\fix vs. Customization.

From what I've read so far, we mostly all agree that simple things like paint repairs, engine swaps, Audio installs and interior projects with little customization are more predictable and therefore could lend to be managed using more project management methodologies.

Managing full custom builds that are WAY off the beaten path becomes much more challenging to do and nail the landing on completion dates because we're talking about artists, inspiration, exploration of 4 things that don't work to discover the one that does, etc. Not to say that a good system in place cant help but would create a pretty big paper trail in change orders and resetting commitment on completion dates.

I also want to be the fist to call myself out to say that this is much like discussing diet and exercise: I have some experience in doing it good and also in doing it bad and I fight that challenge every day along with everyone else to get better. I want to run an amazing operation but know that it only comes by going to path of good > great > excellent > amazing.

[CornHusker4Life]

Originally Posted by Blake Foster

this is a bit off topic

I would agree for a lot of shops, but let me put it this way.

If your a lawyer you went to school for ...... say 7 year? right.
I have been doing this since I was 13 and have been paying my way to learn, buy tools, and learn and learn for 33 year, so I have effectively been going to school for 33 years, how does that make a lawyer able to charge 300+ an hours and me only 80. I have a 20,000 sqft shop with likely 250,000 worth of tools and equipment. what is it that he does that a custom shop doesn't do?
I will tell you my lawyer cant open the hood of his BMW and I cant decipher the laws any better.
What I am getting at is that they are both PROFESSIONS. one cant do the others job. So I don't have a sheet of paper saying I went to school, I have a BUNCH of pictures and completed cars and happy customers of past work that PROVES I went to school. oh and when your lawyer looses in court............. YOU STILL PAY THE BILL!!! no bargaining.

All I am saying is that there ARE shops that are PROFESSIONALS and if you choose to take your car to someone who isn't then expect the same results

Blake, I agree with you to a point. I AM NOT A LAWYER!!!! Usually you go to a lawyer, doctor, plumber, electrician etc...because it is a necessity. Personally my 69 camaro and 55 are NOT necessities but wants. If it comes down to getting a plumbing or electrical problem fixed in my house vs putting more money into my cars well you know where I will spend my money. BUT....just because a shop charges a higher hour rate does not mean the job will cost more money. Example:
Shop A charges $50/hour but takes 20 hours to complete a job. Total bill is $1,000
Shop B charges $100/hour but takes 5 hours to complete a job. Total bill is $500.
A shop that does not routinely put in mini tubs will take substantially longer than a shop that does daily.
I personally would not take a pro touring project to a shop that primarily does stock restorations and vice versa. I say charge what you want.