Is there a better way to execute car projects

[XLexusTech]

Disclosure: For several years I have been having this internal dialog with myself about mixing an early semi-retirement with car building. Specifically how to retire from the business that I am in and taking a significant salary reduction but getting the opportunity to work in a custom car building environment.

I have spent the last 15 or so years building teams that design and implement custom software solutions. Prior to that I spent 10 years with Lexus 2 years with Jaguar and a few of my formative years at a race engine shop and a corvette restoration company.
In the last 5 or so I have been using Lean/Agile methods to deliver custom software solutions to big banks and financial institutions. The adoption of these practices has increased quality, customer stratification and profit while simultaneously reducing time to market. I would love to explore if I could replicate these successes in the context of custom car projects.

It got me thinking... could these principles help solve the problems that plague the custom car customer? Over budget, scope creep.... body shop hell... call it whatever you like... typically what you end up with is paying too much for less than you expected and getting it later than promised. Meanwhile the builder feels like he lost money...

Problem 1: I will be far too old and unskilled to be a hands on craftsperson.
Problem 2: The business itself is plagued with bad business practice (the ole better craftsmen then businessmen issue)
Problem 3: Every build by its nature is custom and as such subject to lots of uncertainty.
Problem 4: To my knowledge no structured project management principles have precedence in the custom car world.

So on to my question.. Is this pipe-dream something that the pro-builders and customers would have an appetite for?
Is there a problem here worth solving?

My experience and reading on this forum and others leads me to believe that from the customers point of view there has to be a better way of doing things. From a shop point of view the idea of increased productivity, higher profit and more satisfied customers is a win win. I was wondering if something like doing a project in a “Lean or Agile” structured way via these methods would be attractive to anyone?

Referance Lean in the construction buisness: http://ennova.com.au/blog/2011/09/agile-lean-compared-applied-construction

[68Cuda]

Just some random thoughts and my observations based on watching places operate, and my prior experience running an auto service shop. I have also thought about this path for "retirement".

I am a former ASE certified Master Tech, have an Auto Tech Associates degree, have a Bachelor and Masters in Mechanical Engineering, and 19 years experience in a variety of development, design, manufacturing, and project management roles on top of my 8 years as an auto mechanic. I was heavily involved in round track and drag racing when I was younger and even worked at MSD (Autotronics Corp - El Paso, TX) for a short period in the 80's when I was a student.

This business is hard to model in the traditional sense, the body, paint and fabrication work still require some level of craftsman / artist type work which is difficult to estimate. The variation in the work is also hard to get a handle on, most vehicles need to be taken down to bare metal before you have a good idea of the scope of work. With sufficient experience base I think one could get reasonably good at estimating. I think the problem also lies in the fact that if you have to do a large amount of sheet metal replacement, bodywork, and paint then your time and materials will quickly outpace the value of the vehicle in most cases.

I think some of the really big operations have good project managers / shop leads. The problem is that in order to be efficient, you would have to have some scale and have a group of workers with a variety of skills and some flexibility. The issue this creates is that you need a workload that can keep this machine fed. The few shops that seem to be able to pull this off and do well have a customer base with deep pockets and run a large number of big projects with long timelines. Then you can fill with smaller projects and schedule work around the bigger ones. That kind of customer base only seems to be available to a few shops with reputations of building top level show winning cars. Kindig, Foose, Strope, Trepanier... and I think the common denominator on these guys is that they are artists first.

Other shops, like DSE, have a core business that involves selling a product. The builds in their shop seem like partly R&D for their products.

Finding and keeping good tradesmen is a difficult task. Having a good recruiting practice and good people management skills would be key, it would also be helpful in dealing with customers. At some level you may also have to make a call on what you can do in house and what to farm out. For example, I know a local shop that does custom upholstery, headliners, and convertible tops that would be hard to beat.

And you forgot about Problem #5: A lot of customers have cash flow issues... real or perceived. I have seen a lot of projects stall because the customer stopped paying.

[Munssey]

Great topic!

I have lead team and projects using a great deal of methodology from the PMBOK for years and have had the same thoughts\ observations. I think its a great idea if the details are worked out. There is CLEARLY a small PMO presence in many of the shops we've dealt with, which leads to missed deadlines, unexpected costs and fuzzy expectations.

A small story of one place I did see it in action:
In my business travels, I have only see one shop use a formal methodology and was so interested in the process that I had a one on one with the owner to share his thoughts and see how well it works from his prospective.

It was a custom paint shop, which was shocking since body guys are notorious for having creeping completion dates.

He had a calendar on the wall in the main shop area and it was outlined in a 2-week sprint layout. When I saw it, I knew there was a SCRUM methodology in play at his shop.

At our lunch meeting, he explained that it works as long as you can have what he called 'heavy resources'. More specifically, your customers have to have committed payments made at the end of every 2 week sprint. The other part of the heavy resources that he was constantly in need of was qualified paint and body employees. He explained that attrition was a problem by nature of mixing body and paint guys and structured project management because of 2 observations he's made:
1. Very good paint and body guys like structure and quickly move from working for others to working for themselves because of their own self-motivation.
2. Less accomplished paint and body folks who do the daily grind are usually not driven by structure so applying PMBOK methodology to their work day would be met with push-back and typically, loss of employment.
He accepted that attrition is something that comes with his labor community.

The car we had in was not only painted and returned ahead of time (by two days but hey, that's great) but the project schedule was hammered out with us before the car went in and we had to sign a commitment to deliver the car on X day in order for him to honor the schedule and payments were made at the end of each sprint or the work done in that time. It worked great and at the end of each sprint, there were picture updates sent and description of what the next sprint would include. Needless to say, we were impressed and incorporated small parts of their process into our own.

I think you're on to something and it's needed in the industry on a larger scale. Helping customers realize the advantage to the added cost that implementing formal PM processes may take time. Seeing that time is our most valuable resource on Earth, I could see how others would pay a bit more knowing that when you set a delivery date, it will be met.

Cant wait to hear what others have to share on this topic. Good one!

[ironworks]

This is a great topic and something I have really tried to put my total effort into for the past couple years. I feel this is the most important aspect of any business. But I'm not convinced you can have a solid pre planned program when so many variables can be out of the shop owners control.

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.

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.

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

Lack of Communication on the Builder or Customers part. The builder needs to know before he does the work, you can't pay your bill this month and the customer needs to have some idea why a certain aspect may have taken longer. Now I realize the builder can work on their responsibility, but they cannot control the customer.

The lack of actual knowledge the customer may have in the process, even though they want and do act like they know just as much as you do. This is the reason car builders get some kind of undue rock star status, cuz its in style to be knowledgeable about how to build cool cars. When really car builders do anything redeeming for society. We are kinda like Paris Hilton, famous for being famous for nothing important.

The Hot Rod shop model relies all it's revenue on a few customers so the percentage of revenue is much higher per customer, not a bunch like an autobody shop or auto repair shop that has tons of invoices for much lower amounts.

The other thing about this industry is that this is a not a necessity in life or survival so peoples desire to spend money can change much quicker, with the down turn in the stock market or just the fact their wife found out how much it really costs. If your car breaks and the stock market crashes, you still have to fix your car.

I think it just takes some one to actually run their shop like a business, not a hobby and work to the executive or management side with great importance. So many builder hate paperwork and just don't do it or leave it to be handled by some one that does not deal with the customer directly. And this is where the break down begins.

[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.

:cheers:

[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. :thumbsup:

[ironworks]

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. :thumbsup:

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.

[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:

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:thumbsup:

[68Cuda]

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


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.


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

See above comments...


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...


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.


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.


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.


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. :thumbsup:

[ironworks]

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. :thumbsup:

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]

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.

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]

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.

[GregWeld]

I didn't read every post here so I may be redundant.... but I have now had THREE cars professionally built. All three are at high end nationally recognized shops. So perhaps I can lend some "thoughts" to the question.

#1 - Thing that I've become aware of is having customers that can actually AFFORD to build what they're building. Why is this important? Because the shop can order parts - stay on the build - get paid on time.

#2 - Project creep. This is fine if #1 is met. Otherwise - it leads to too many "oh sh!t" moments by customer and shop. Project creep is inevitable. Your buddies stop by and say - hey! You know what would really be cool.... or the way something was supposed to look, doesn't work right... and that leads to brainstorming which leads to more work.

#3 - Working with customers based on upfront "price" for the work. This is IMPOSSIBLE. These projects always take more time and cost more money.. why? Because it's custom. Custom hasn't been done before - or often - and thus nobody really knows what it's going to take to pull off.


Here's my own REAL WORLD experince:



SAR experience.... Now -- this is not about "ME" -- I'm just using my own experience. The SAR build started as a rear end and tranny swap... and finding out what was wrong with the motor. Once the body was off the chassis ---- it turned in to a full on build. I never asked what it was going to cost. I know that I can afford to do the job whatever that is. This is certainly not true for most people.... even if they have plenty of money - they didn't get their money by just throwing it around. Sometimes the guys with the most money are also the most demanding and difficult! Think about this scenario.... the car goes into the shop... a very small scope of work... which turned into a $200K plus build. This happens more often than not. Did the shop have the time and people in place to take this on --- or is it going to sit and wait for available time?


BRIZIO experience.... This was a discussion which began in a hotel lobby. A stop at the shop and some more detailed discussion. A basic plan was put on to paper and a general discussion about cost to completion. A "quote" which was just a casual discussion was "somewhere around $225 to $300K depending on how custom you want to go. Here's my point here. If a guy can't afford to discuss these kinds of numbers. He has no business even starting a project. BRIZIO has a waiting list to get a build done... he doesn't need to quote some BS number to get a customer hooked into the shop. Many shops under-estimate on purpose. They don't really know what their costs are going to be and they don't want to scare off a potential customer. THEY need a customer because they have rent and salaries due next week. The problems start when both the customer and the shop are BS'ing each other!! The shop says -- $125K and the real deal is far closer to $250K or more! The stupid customer is fine with the $125K because he's also BS'ing himself into thinking it can be done for that. If he went home and added up the "hard costs" - body - motor/trans - wheels - upholstery/paint... he'd know he has $100k in just hard parts ----- no way it's built for $25K in labor. DOH! That isn't going to end well.


Pinkee's Rod Shop experience.... This build started with me trying to buy Eric's personal '40 Ford pickup. HE did a comparo of building out his truck including the purchase price - vs - buying a clapped out truck and starting new. While it was closer than you'd think - it made more sense to buy a body somewhere. Just the labor wasted on taking something apart has to be included in the "build". This is a rather straight forward simple build. Body - some mods - frame - motor/trans - paint - upholstery - tires and wheels. A "number" was discussed - and that number is a good starting point because it was a REAL number. Around $150K+ to start. NOW -- the other day I email him and ask if he has some "ideas" for some "Pinkee's" style to be done on the truck... and here ya go.... what is that - does it require a re-do of work already done? Where does that lead... how much time did it just add? What does changing one thing do to something else? NOBODY KNOWS.


In the end -- the point of my long winded ramble is that it all depends on the type of customer you can attract and KEEP... and you're not going to attract a "me" when you're just starting out. Nobody is going to walk in and have you build a car for them when there's The Roadster Shop - or Brizio's - or Trepanier - or Jessie Greening.... So you're going to start off with the BS builds where you don't know what the cost is going to be and you really don't know if the customer can pay the freight.

Now -- let's add the "small shop" syndrome. You're just starting out - you can't define who you are - or what is coming thru the door. You might have a remodel of a '32 Ford -- or it might be a full on custom '70 Ford. YOU are going to have to spend an inordinate amount of time trying to find parts suppliers. Learning what works and what doesn't... AND waiting for the parts to arrive... and you can't do X without Y being on hand... Fine if you have half a dozen cars going at any given time... but what if you only have 2 and you don't have the parts to go forward on either of them. Or you get the parts and they're shipped wrong - or don't fit....

A shop like Brizio's builds the same "style" of cars over and over - they have suppliers that will bust their butts to keep them happy. They'll get the last set of headers on the shelf before some guy they've never heard of before gets them.... They've built the same stuff so many times they know what is going to work and what combo doesn't. They have customers that are experienced and they trust the shop to make adjustments as they come up. When I needed a replacement water pump and nobody had one - they made a call deep inside to a supplier -- all the way to the Dyno room at that supplier and got one. Normal shops don't have those connections. Many times it's not what you know it's WHO you know.


IMHO -- many of the "bad" experiences start with a customer that is a dumbass... who has chosen a shop based on an unrealistic quote/cost basis that suits what he thinks it should be done for. The shop is all to happy to take on the work = maybe honestly or maybe just because they need that work right now. Many times that shop might be a body shop and now you're asking them to be a mechanical shop and a suspension shop. Many times that shop is used to doing spot paint and the occasional whole car paint job... and you're expecting SEMA quality paint and bodywork.... on a body shop quote.

In the end -- it's a MESSY BUSINESS.... period. I don't know that anyone is capable of making it a simple well run machine - because you're dealing with people and I think it's the people that are the messy part - not just the cars. If that makes sense.

[bentfab]

Greg,

So when do I/We :y0!: get to start on your next project ? :mock: :G-Dub: :lmao: :rofl: :lolhit:

Oh shoot! I must have been thinking about the wrong Greg :snapout: Sorry !!

[Ron Sutton]

I didn't read every post here so I may be redundant.... but I have now had THREE cars professionally built. All three are at high end nationally recognized shops. So perhaps I can lend some "thoughts" to the question.

#1 - Thing that I've become aware of is having customers that can actually AFFORD to build what they're building. Why is this important? Because the shop can order parts - stay on the build - get paid on time.

#2 - Project creep. This is fine if #1 is met. Otherwise - it leads to too many "oh sh!t" moments by customer and shop. Project creep is inevitable. Your buddies stop by and say - hey! You know what would really be cool.... or the way something was supposed to look, doesn't work right... and that leads to brainstorming which leads to more work.

#3 - Working with customers based on upfront "price" for the work. This is IMPOSSIBLE. These projects always take more time and cost more money.. why? Because it's custom. Custom hasn't been done before - or often - and thus nobody really knows what it's going to take to pull off.


Here's my own REAL WORLD experince:



SAR experience.... Now -- this is not about "ME" -- I'm just using my own experience. The SAR build started as a rear end and tranny swap... and finding out what was wrong with the motor. Once the body was off the chassis ---- it turned in to a full on build. I never asked what it was going to cost. I know that I can afford to do the job whatever that is. This is certainly not true for most people.... even if they have plenty of money - they didn't get their money by just throwing it around. Sometimes the guys with the most money are also the most demanding and difficult! Think about this scenario.... the car goes into the shop... a very small scope of work... which turned into a $200K plus build. This happens more often than not. Did the shop have the time and people in place to take this on --- or is it going to sit and wait for available time?


BRIZIO experience.... This was a discussion which began in a hotel lobby. A stop at the shop and some more detailed discussion. A basic plan was put on to paper and a general discussion about cost to completion. A "quote" which was just a casual discussion was "somewhere around $225 to $300K depending on how custom you want to go. Here's my point here. If a guy can't afford to discuss these kinds of numbers. He has no business even starting a project. BRIZIO has a waiting list to get a build done... he doesn't need to quote some BS number to get a customer hooked into the shop. Many shops under-estimate on purpose. They don't really know what their costs are going to be and they don't want to scare off a potential customer. THEY need a customer because they have rent and salaries due next week. The problems start when both the customer and the shop are BS'ing each other!! The shop says -- $125K and the real deal is far closer to $250K or more! The stupid customer is fine with the $125K because he's also BS'ing himself into thinking it can be done for that. If he went home and added up the "hard costs" - body - motor/trans - wheels - upholstery/paint... he'd know he has $100k in just hard parts ----- no way it's built for $25K in labor. DOH! That isn't going to end well.


Pinkee's Rod Shop experience.... This build started with me trying to buy Eric's personal '40 Ford pickup. HE did a comparo of building out his truck including the purchase price - vs - buying a clapped out truck and starting new. While it was closer than you'd think - it made more sense to buy a body somewhere. Just the labor wasted on taking something apart has to be included in the "build". This is a rather straight forward simple build. Body - some mods - frame - motor/trans - paint - upholstery - tires and wheels. A "number" was discussed - and that number is a good starting point because it was a REAL number. Around $150K+ to start. NOW -- the other day I email him and ask if he has some "ideas" for some "Pinkee's" style to be done on the truck... and here ya go.... what is that - does it require a re-do of work already done? Where does that lead... how much time did it just add? What does changing one thing do to something else? NOBODY KNOWS.


In the end -- the point of my long winded ramble is that it all depends on the type of customer you can attract and KEEP... and you're not going to attract a "me" when you're just starting out. Nobody is going to walk in and have you build a car for them when there's The Roadster Shop - or Brizio's - or Trepanier - or Jessie Greening.... So you're going to start off with the BS builds where you don't know what the cost is going to be and you really don't know if the customer can pay the freight.

Now -- let's add the "small shop" syndrome. You're just starting out - you can't define who you are - or what is coming thru the door. You might have a remodel of a '32 Ford -- or it might be a full on custom '70 Ford. YOU are going to have to spend an inordinate amount of time trying to find parts suppliers. Learning what works and what doesn't... AND waiting for the parts to arrive... and you can't do X without Y being on hand... Fine if you have half a dozen cars going at any given time... but what if you only have 2 and you don't have the parts to go forward on either of them. Or you get the parts and they're shipped wrong - or don't fit....

A shop like Brizio's builds the same "style" of cars over and over - they have suppliers that will bust their butts to keep them happy. They'll get the last set of headers on the shelf before some guy they've never heard of before gets them.... They've built the same stuff so many times they know what is going to work and what combo doesn't. They have customers that are experienced and they trust the shop to make adjustments as they come up. When I needed a replacement water pump and nobody had one - they made a call deep inside to a supplier -- all the way to the Dyno room at that supplier and got one. Normal shops don't have those connections. Many times it's not what you know it's WHO you know.


IMHO -- many of the "bad" experiences start with a customer that is a dumbass... who has chosen a shop based on an unrealistic quote/cost basis that suits what he thinks it should be done for. The shop is all to happy to take on the work = maybe honestly or maybe just because they need that work right now. Many times that shop might be a body shop and now you're asking them to be a mechanical shop and a suspension shop. Many times that shop is used to doing spot paint and the occasional whole car paint job... and you're expecting SEMA quality paint and bodywork.... on a body shop quote.

In the end -- it's a MESSY BUSINESS.... period. I don't know that anyone is capable of making it a simple well run machine - because you're dealing with people and I think it's the people that are the messy part - not just the cars. If that makes sense.

This is so accurate it's not even funny. Well ... it's a little funny. :lol:

When we did Greg's 65 Mustang Track Car "Make over" ... Greg (the customer) made it easy on us (the builders). I had a very comprehensive plan & cost estimates. Greg said, "Do it right, the way you think it needs to be done ... and here's the money." So we were able to basically rebuild everything in the entire powertain, suspension, wheels & brakes in 8 weeks. (The body, interior & cage stayed the same)

And like Greg said, there was scope creep ... 20-30% I think. I hate scope creep. I had laid out a plan that was very comprehensive up front. But when you find things you weren't expecting ... what do you do? Your choices are to leave them alone ... to the detriment of the car ... or fix/improve them & add cost. When we got in there, I saw things I didn't like & Greg said to make them right. We found some things that needed rebuilt & we found some things we could improve.

In a full muscle car rebuild ... where you don't really know what the body work needs until you get into it ... whew! Or if you don't know what the customer really wants ... or they don't know ... that's impossible to know exactly how much work it will take. This is where I think planning & quoting a range is the best strategy. Like Brizzio ... here is the price range. If you can't afford that, then this isn't going to end well. I hate to see good guys have a falling out over a car build ... but it happens all the time ... because of the flaws in this process.

[Blake Foster]

This is so accurate it's not even funny. Well ... it's a little funny. :lol:

When we did Greg's 65 Mustang Track Car "Make over" ... Greg (the customer) made it easy on us (the builders). I had a very comprehensive plan & cost estimates. Greg said, "Do it right, the way you think it needs to be done ... and here's the money." So we were able to basically rebuild everything in the entire powertain, suspension, wheels & brakes in 8 weeks. (The body, interior & cage stayed the same)

And like Greg said, there was scope creep ... 20-30% I think. I hate scope creep. I had laid out a plan that was very comprehensive up front. But when you find things you weren't expecting ... what do you do? Your choices are to leave them alone ... to the detriment of the car ... or fix/improve them & add cost. When we got in there, I saw things I didn't like & Greg said to make them right. We found some things that needed rebuilt & we found some things we could improve.

In a full muscle car rebuild ... where you don't really know what the body work needs until you get into it ... whew! Or if you don't know what the customer really wants ... or they don't know ... that's impossible to know exactly how much work it will take. This is where I think planning & quoting a range is the best strategy. Like Brizzio ... here is the price range. If you can't afford that, then this isn't going to end well. I hate to see good guys have a falling out over a car build ... but it happens all the time ... because of the flaws in this process.



And There you have it. I have worked with Ron and let me tell you when he says comprehensive, it probably included the 1/4" flat washers. If there was creep then it is going to be almost IMPOSSIBLE to not have it.

Greg is right on the mark when he talks about shops not padding the estimate and Customers THINKING it can be done for less.

[GregWeld]

Greg,

So when do I/We :y0!: get to start on your next project ? :mock: :G-Dub: :lmao: :rofl: :lolhit:

Oh shoot! I must have been thinking about the wrong Greg :snapout: Sorry !!




HAHAHAHAHAHA - Get in line! You have no idea how many people approach me wanting to build something. That and the last two were accidental builds. LOL

You would be on my very short list of who has the potential though! XOXO

[GregWeld]

This is so accurate it's not even funny. Well ... it's a little funny. :lol:

When we did Greg's 65 Mustang Track Car "Make over" ... Greg (the customer) made it easy on us (the builders). I had a very comprehensive plan & cost estimates. Greg said, "Do it right, the way you think it needs to be done ... and here's the money." So we were able to basically rebuild everything in the entire powertain, suspension, wheels & brakes in 8 weeks. (The body, interior & cage stayed the same)



I should have said FOUR "experiences"! I didn't think about the Mustang as a normal project -- but frankly -- it was no different than any other project except that it didn't entail body and paint work.

This was another -- "just happened" project. I asked Ron to take a long look at the car and to assess what improvements it could use. That lead to a complete re-do, and I couldn't be happier with the outcome. And yes -- there were additional work items - but once again - who would expect to NOT have additional work once you get in there and see what's what?!?!?! Only somebody that's a complete dumbass would think he's only going to do exactly what was discussed and it was going to cost exactly what was talked about. Complete BS! These are cars... they have issues. We don't know what the issues are until people rip into them.

Now - in fairness to Ron... The discussion was also along the lines of WHAT IS OF VALUE based on the cars use -- and my expectations. HE gave me reasons and options all based on what I described to him as my expectations. There was no budget discussion until we first had the expectations/use conversation. Then he came up with a plan and quoted a cost. From there we moved forward. Was it done on the cheap? NO! Was it done right, and fair, and exceeds expectations? YES!

A QUALITY shop won't do "on the cheap" builds... they'll simply come up with an excuse to NOT work on your car. I remember asking Roy Brizio if he'd build me a chassis for my '37 Ford... and he said "sure we can! But you won't want to pay me what it's going to cost. There are too many businesses that will build you a chassis for 10 grand -- and I'm going to have to charge you time and material and that's going to cost you way more than it's worth... but if you want me to I will?" That's the kind of shop I want to do business with.

If Ron wanted me to put rockets on the car - I would have done that.... but he knew what the intended purpose was - and the goal... and then only did the amount of stuff that was required to get it to that point. He could have doubled the amount of work and parts -- but his business sense says - no - that would be "cool" but wouldn't be worth the cost. That's a person that gets my recommendation and repeat business.

[MeanMike]

It's an old saying: Quick, cheap or good. You can only have two. The shops that only deliver one go out of business. Some shops just need to learn when to fire their customer.

Adding project managers and business experts won't magically make all three happen. In fact because they do not produce, it will likely cut out cheap. I don't think everyone should be able to have a car built. It used to be that if you wanted a cool car, you had to build it yourself.

I've worked in a few custom car and race shops. They all payed less than half what a decent mechanic, machinist, welder or fabricator would make, but I did all three. I got tired of it, went back to school and got an engineering degree. Now I build parts and cars on the side. I am very picky about what I do and who I do it for and I don't work cheap anymore.

[Ron in SoCal]

Rockets? Hmmm...:idea:

:D :cheers:

[Vegas69]

Business is business to a large degree. They all have inherent challenges. X amount of dollars invested leads to x amount of potential profit. That ratio is dictated by the type of business. There are always the 20% that make it in the industry and the 80% that struggle. Blake mentions $80 an hour but there are guys in the industry that are pulling in 4-5 times? that with Greg Weld type clients. Just like the best attorney's, doctors, businesses, there's always someone making a killing in each field. It's typically not magic either. They progressively gain skills, operate with integrity, provide great customer service, and can run a business. Eventually it all snow balls into a Brizio or Ring Brothers where the demand is so high, they can pick and choose their clientele at a high rate.

[GregWeld]

Business is business to a large degree. They all have inherent challenges. X amount of dollars invested leads to x amount of potential profit. That ratio is dictated by the type of business. There are always the 20% that make it in the industry and the 80% that struggle. Blake mentions $80 an hour but there are guys in the industry that are pulling in 4-5 times? that with Greg Weld type clients. Just like the best attorney's, doctors, businesses, there's always someone making a killing in each field. It's typically not magic either. They progressively gain skills, operate with integrity, provide great customer service, and can run a business. Eventually it all snow balls into a Brizio or Ring Brothers where the demand is so high, they can pick and choose their clientele at a high rate.



Brizio's posted hourly rate is $105 an hour. Your math is a bit fuzzy....

That sounds "expensive" until you get the bills and see how QUICKLY they do a common job such as run brake and fuel lines - or build you a custom exhaust. They've done it so many times they're fast at it. In the end - THEIR shop rate is not expensive at all. What's expensive is the guy that quotes $35 an hour and takes 3 times as long and doesn't do as nice a job... or never finishes your car and you end up ripping everything they did out and paying someone else to do it over. THAT is expensive.


This is the other thing that I've come to figure out. I've built and repaired more cars than I care to remember. I've personally done all of this work. I have a ton of tools - I have all the time in the world - I have space to work in. But I can never build something as QUICKLY or as NICELY as a guy that specializes and does the same type of work day in and day out. At shops like Brizio - they have guys that only do plumbing and exhaust. Another guy does sheet metal etc. In my little shed - I have to do the brake lines - and the TIG welding and the patch panel and figure out the axle width.

When you look around at a shop like The Roadster Shop... they have specialists. They have fabulous tools... they have in house machining... they have guys with serious skills. They have two or three (IDK) guys MANAGING the shop and ordering parts and billing and maybe a guy that just drives around picking up and delivering stuff. If you're a small shop -- you have to do all of that yourself and that time costs money. There's only so many hours in a day. Can you manage the shop - do the bidding - fetch the parts - shop for parts - do the bookkeeping and payroll etc. Can you earn enough money quickly enough or have the CAPITAL to go out and buy a $16,000 Eckold Kraftformer if you need one...

Why can a shop like Brizio or The Roadster Shop or The Ring Brothers build such "EXPENSIVE" cars? Because they have the skills required -- and the customers required to foot the bills to build unlimited budget cars. People look at these cars and then gasp at the numbers thrown around.... but they don't apply the corresponding amount of hours it takes to do the enormous amount of HAND BUILT EVERYTHING.

Roy B will tell you that it took him 25 YEARS to get to where he's at, and for many years it was tough sledding.... Not sure how long it took Phil and Jeremy - but it wasn't rags to riches in 6 months.... and Ring Bros had another business and the fancy stuff was born from that.

I think most guys that are doing this line of work are doing it because they love it -- and they can eke out a living doing something they love to do. If you really asked them - they probably made a better / easier living when they just worked for someone else. BTW -- if you want to check out something where real actual MANAGEMENT is in the works -- make an appointment to tour Brian Hobaugh's body shop! Now there is a place where you could apply your (TO THE OP) productivity skills. You've never seen such a well oiled machine!

[Vegas69]

I had no idea, it was a wild ass guess. Were you charged by the hour or set window price to build it?

[GregWeld]

I had no idea, it was a wild ass guess. Were you charged by the hour or set window price to build it?




I know - but I had to give you some crap.

Brizio works by the hour. But they know what it costs to build this stuff. I was much closer to the higher price range of the quote... but I knew that. I added stuff and did little things here and there and it all adds up.

[EBMC]

Thanks Greg for putting things in perspective from a clients point of view whos been there, I have so many things to say about this subject, BUT I have a shop to run. Gotta go!

[Chevy Kid]

I worked as a mold maker for 10 years. We built class 101 plastic injection molds for OEM's. It was a small shop with 5-7 employees, including the owner. All of the issues mentioned( project management, ordering parts, dealing with customers, bookkeeping, etc.), were handled by the owner.

I would say the two biggest issues were maintaining a profit margin and hiring and retaining skilled employees. As a highly skilled employee, there was and is easier ways to make a living. Ultimately, the business closed when our work( I had all ready left) was being outsourced to China. There are many similarities between building molds and hot rods.

I do side machining jobs for my Dad's small custom wiring shop and others. I've been involved in the car hobby since I learned to ride a bike( long time...). While it sounds romantic to strike out and just build hot rods, I know the reality of how hard it is. I am always intrigued how guys make it.

This is a fascinating read!

Tim

[Vegas69]

I know - but I had to give you some crap.

Brizio works by the hour. But they know what it costs to build this stuff. I was much closer to the higher price range of the quote... but I knew that. I added stuff and did little things here and there and it all adds up.

That's lower than I thought but it's still 25% higher than what Blake charges in St. George. Of course, you have the CA tax which probably eats up a nice chunk.

How many Greg Weld's do you have funding projects and at what consistency? It seems to me that hourly rate is important, just not as relevant as the quality and consistency of clientele.

It seems you need to find the balance that fits your skills, clientele, and bottom line. Good luck! ha

After building a custom car, I have to say that I learned a few lessons. One, there are many terrible businesses associated. Two, you are better off spending the money on quality parts, first. Third, you are better off hiring a reputable shop than bargain shopping. You end up with quality work and a bill that doesn't hurt as bad as you thought. Plus, you don't have a do over.

I can see why so many projects end in ruin. If you don't possess the skills or time to manage and work on your project, it's a serious challenge. If I ever build another car, it would be Weld style. Either you can afford to build it right or you can't.

[GregWeld]

That's lower than I thought but it's still 25% higher than what Blake charges in St. George. Of course, you have the CA tax which probably eats up a nice chunk.

How many Greg Weld's do you have funding projects and at what consistency? It seems to me that hourly rate is important, just not as relevant as the quality and consistency of clientele.

It seems you need to find the balance that fits your skills, clientele, and bottom line. Good luck! ha

After building a custom car, I have to say that I learned a few lessons. One, there are many terrible businesses associated. Two, you are better off spending the money on quality parts, first. Third, you are better off hiring a reputable shop than bargain shopping. You end up with quality work and a bill that doesn't hurt as bad as you thought. Plus, you don't have a do over.

I can see why so many projects end in ruin. If you don't possess the skills or time to manage and work on your project, it's a serious challenge. If I ever build another car, it would be Weld style. Either you can afford to build it right or you can't.



I said for YEARS that people that had their cars built were IDIOTS... Hot rodding was about building your own sh!T..... But I've gotten so busy doing other stuff -- that it's been kinda fun building one where all I have to do is point my finger and say - let's do this or that. The experience with Steve's Auto Restoration not being one of the better experiences... but I still got a very nice hot rod out of it. It just took some extra effort. Brizio - Sutton - Pinkee's have been some of the best experiences EVER. A real pleasure!

When you pick the right builders -- it's really a fun deal to do. However... I'm working on the shed daily -- a little more gets done each day -- and that's in an effort so I can crank another one out on my own again. I love every aspect of this hobby.

[Vegas69]

I hear you buddy.. The time I had when I built my car is long gone. ha It's been replaced with great things. I think it would be fun to have one built and just use it, tweak it, and maintain it. For now, I'm focused on diapers and financial independence. :G-Dub:

[GregWeld]

I hear you buddy.. The time I had when I built my car is long gone. ha It's been replaced with great things. I think it would be fun to have one built and just use it, tweak it, and maintain it. For now, I'm focused on diapers and financial independence. :G-Dub:

Was wondering if you had it in you! Good to hear! I'll bet Kelli is on the moon about that!

[youthpastor]

Good discussion.


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???

Haven't read all the posts yet!! but this one struck me as all to true- Nail on the head

[Vince@Meanstreets]

Haven't read all the posts yet!! but this one struck me as all to true- Nail on the head

Sad, and makes me cry.

Chris, I'd love to get into what makes your business click and how you got there. Its a tough market but at least I have spenders around me. What is your secret.
I have on the average 6-7 simultaneous projects and getting the right quote and deposit is the hardest part since most builds take 7-8 mo to complete. Some even longer.

[GregWeld]

Sad, and makes me cry.

Chris, I'd love to get into what makes your business click and how you got there. Its a tough market but at least I have spenders around me. What is your secret.
I have on the average 6-7 simultaneous projects and getting the right quote and deposit is the hardest part since most builds take 7-8 mo to complete. Some even longer.




Chris got into the business because he told me one day (at my house working on Jason Rushforth's car) that he was thinking about going out on his own.... and I told him he was a nut job if he didn't at least give it a try. At his age - what did he have to lose (besides everything).... LOL

This is not all "quite" true (except the part about wrenching on Rushforth's car at my house). :>)

[snappytravis]

This is a cool post, The way I see it the guy that is getting $105.00 an hour, He has been in the business a long time, Regardless if he just started his business 5 or 10 years ago, He was a car guy working on rusty junk before he started his own high dollar shop. Yes your going to pay, but it's going to be done right, or you go to the guy half the price and it will take twice as long, and still probably be a sh#t job in the end.

Another thing is most people that have not worked in good old dusty bodyshops, Don't realize that there is some serious health issues that I would imagine every 20 year plus bodyshop tech is going to have, It also is a trade that most people have learned through the school of hard knocks, (that's how I have learned everything). I don't care what tech school you go to or how good the guy was you worked with, You either have the talent or you don't.

I started a 1999 a dealership bodyshop in 1994 and the labor rate was $32.00 bucks an hour, I left in 04 and it was $48.00. The people reading this post need to ask themselves before they start on a project, Can I really afford it, Make a budget, Would it be fair to say a $100,000.00 car pIroject 50 would be for parts and 50 for labor? I have over 40 in my Camaro and I have done all the work.

I guess where I am going with this is It is a dying trade, I would put money on it there are less techs coming in to the trade, then there are going out.

Sorry if my english is not right on I was reading hotrod magazines in that class!

[DBasher]

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.


I'm not a customer, can't afford to be. I work for a company but have my own accounts and deal directly with the customer. Sometimes it's a property manager often times it's a building owner. The relationship and trust is what makes the combination work. I have customers that I've had for the last 8-9 years and they've followed me from the original shop I was at. I'm not the best mechanic, not the fastest or even the prettiest. What I've got is my word, honesty and integrity go along way when dealing with people.

I'm actually surprised that the high end shops aren't more than $105. Are the guys doing the work, say a journeymen fabricator, making $50-$60 an hour?

Great conversation!

[Vince@Meanstreets]

This is a cool post, The way I see it the guy that is getting $105.00 an hour, He has been in the business a long time, Regardless if he just started his business 5 or 10 years ago, He was a car guy working on rusty junk before he started his own high dollar shop. Yes your going to pay, but it's going to be done right, or you go to the guy half the price and it will take twice as long, and still probably be a sh#t job in the end.

Another thing is most people that have not worked in good old dusty bodyshops, Don't realize that there is some serious health issues that I would imagine every 20 year plus bodyshop tech is going to have, It also is a trade that most people have learned through the school of hard knocks, (that's how I have learned everything). I don't care what tech school you go to or how good the guy was you worked with, You either have the talent or you don't.

I started a 1999 a dealership bodyshop in 1994 and the labor rate was $32.00 bucks an hour, I left in 04 and it was $48.00. The people reading this post need to ask themselves before they start on a project, Can I really afford it, Make a budget, Would it be fair to say a $100,000.00 car pIroject 50 would be for parts and 50 for labor? I have over 40 in my Camaro and I have done all the work.

I guess where I am going with this is It is a dying trade, I would put money on it there are less techs coming in to the trade, then there are going out.

Sorry if my english is not right on I was reading hotrod magazines in that class!

Not to mention that Riverton accent. LOL

I'm not a customer, can't afford to be. I work for a company but have my own accounts and deal directly with the customer. Sometimes it's a property manager often times it's a building owner. The relationship and trust is what makes the combination work. I have customers that I've had for the last 8-9 years and they've followed me from the original shop I was at. I'm not the best mechanic, not the fastest or even the prettiest. What I've got is my word, honesty and integrity go along way when dealing with people.

I'm actually surprised that the high end shops aren't more than $105. Are the guys doing the work, say a journeymen fabricator, making $50-$60 an hour?

Great conversation!

Most of the ones I know are doing $30-$35 an hour. The good ones. But the good ones are always cooky or on meth. And the even better ones move shop to shop looking for a better wage.

I remember when I was working a gas station at 16 thinking what I would do to work at a hot rod shop. Where are those guys, those are the guys I want working for me. The hungry and passionate.

[DBasher]

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.
this is a good thing!

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.

You've got to learn to qualify your customers. That first meeting when they're asking you all sorts of questions, interviewing you, you've got to be doing the same. Last thing you need is what you describe above. That outcome isn't good for anyone on either side.

[DBasher]

Not to mention that Riverton accent. LOL



Most of the ones I know are doing $30-$35 an hour. The good ones. But the good ones are always cooky or on meth. And the even better ones move shop to shop looking for a better wage.

I remember when I was working a gas station at 16 thinking what I would do to work at a hot rod shop. Where are those guys, those are the guys I want working for me. The hungry and passionate.

That $30-$35 is at a shop that charges around the $80 mark?

The hungry and passionate guys got into IT or Porn, pays better!

[Blake Foster]

Not to mention that Riverton accent. LOL



I remember when I was working a gas station at 16 thinking what I would do to work at a hot rod shop. Where are those guys, those are the guys I want working for me. The hungry and passionate.

YEA I'm with you same deal working at a gas station for 2.50/hour and trying to hotrod a 53 Ford puck up. Can you imagine on 2.50 an hour!! I started the truck when I was 14. sadly I never did finish it, but Where are those guys??? send them my way.

[GregWeld]

So here's my question for THE SHOPS with finding and keeping TALENTED people....

Brizio has guys that have been with him for 20+ YEARS. What's his secret? IDK - but I'd guess that it's a combination of things... a good living wage / insurance / steady work / nice warm dry place to work that is well lit / fun customers and projects / great personality to work with and for / proper shop tools... no drama queens... PRIDE in working there etc.

Now -- I know how I am -- and doing something a few times over and over makes it so much easier and less stressful. So maybe it's also that they mostly build similar projects which makes life easier. I'm not saying any or all of these ARE the reason - I'm just tossing it out there for discussion. They also have so much work that is steady - that guys get to "specialize" which also makes life nicer? They don't have to be installing a rear end in the morning and then asked to do a full wiring job in the afternoon. The wiring guy gets to wire... the mechanical guy gets to do mechanical... the sheet metal guy isn't asked to suddenly be a bondo spreader.

[EBMC]

YEA I'm with you same deal working at a gas station for 2.50/hour and trying to hotrod a 53 Ford puck up. Can you imagine on 2.50 an hour!! I started the truck when I was 14. sadly I never did finish it, but Where are those guys??? send them my way.
Dont want to get off topic but,your going to have to look in old scrap books of yourself to find those guys. My daughter is 14 and her friends, boys or girls, have 0 interest in what her Dad does for a living or those "old" cars he drives around.:shakehead:

So here's my question for THE SHOPS with finding and keeping TALENTED people....

Brizio has guys that have been with him for 20+ YEARS. What's his secret? IDK - but I'd guess that it's a combination of things... a good living wage / insurance / steady work / nice warm dry place to work that is well lit / fun customers and projects / great personality to work with and for / proper shop tools... no drama queens... PRIDE in working there etc.

Now -- I know how I am -- and doing something a few times over and over makes it so much easier and less stressful. So maybe it's also that they mostly build similar projects which makes life easier. I'm not saying any or all of these ARE the reason - I'm just tossing it out there for discussion. They also have so much work that is steady - that guys get to "specialize" which also makes life nicer? They don't have to be installing a rear end in the morning and then asked to do a full wiring job in the afternoon. The wiring guy gets to wire... the mechanical guy gets to do mechanical... the sheet metal guy isn't asked to suddenly be a bondo spreader.

What would you say is the average age there at Brizio's? I have 4 fulltime guys out in the shop now, three are in their late 40's and one is in his twenties. The work ethic tends to be so much better the older they are and seem much more loyal. Weve all been busting ass for years to have what we have and truly appreciate it. Most younger guys wont hesitate to jump ship for another 50 cents an hour, not looking at the big picture. Not saying all of them are like that, (my twenty something year old I have in the shop isnt) but its just been my observation in general.

[Vegas69]

One of the major differences has to be leadership. Employees must know you appreciate them and have their back. You lead with integrity and their place is secure within your business. It's also important to help them with their personal lives. When you do these things, it's much more likely to create loyalty. You must manage them, but leadership is the key.

However, it's a fact that you can't make a duck into an eagle. You can only hone and shape people so much. They must have the rough qualities you require up front.

[Build-It-Break-it]

The reason you can't find any youth interested in the car hobby is technology and laziness.

Things come to easy to kids now and kids aren't as tough. For any little thing that happens in schools new laws are passed. You can't even sing the national anthem anymore in schools?

I work as a leadman for a heavy equipment company and love it,but I'm more passionate about cars. Problem is when I was in my twenties looking for a hot rod shop to hire me they didn't want to offer much money because of my age so I found a line of work that would pay well, a diesel mechanic. I would love to work at a company that would pay for my welding and fab skills but would they pay me enough? Want to pay? Is the money steady? 401k? Life insurance? Bonuses for deadlines met? All those things are offered at most companies. I've been doing fabrication work at home for myself and friends now for years but could I make better money for a Hot rod shop ?

I agree that you have to treat your workers as family and not employees. I work graveyard shift with 3 other employees under me and they LOVE working for me. Most of them have been waiting years for a day shift position to open so they could work a "normal" schedule and guess what, a spot just opened up and was offered to me and I passed on it. All the guys on my shift passed on it as well because they love working together.

My point is most places now are focused on newer methods which do work but have forgotten about the old school ways that made people ; stronger, loyal,honest,respectful and care about the quality of there work.

[Ron Sutton]

Part 1 of 2

I've been in business my whole life. Just different stints or "adventures" as I refer to them. While there are a lot of keys to a successful business, attracting, developing & keeping good people are the top of the list.

While I don't claim to be the Wiz of Biz, I've had some success in this area of business & keeping key people long term.
• My key fabricator Lloyd Moore was with me 8 of the 9 years at Ron Sutton Race Engineering.
• John Musto was with me 13 of the 15 years at my consulting biz & bought the biz.
• Randy Chastain (who some of you met) was with me all 8 years at my multi-car race team operation.

While I know I'm FAR from perfect as a person, leader or business owner, I'd felt I should share a few key things I learned from my mentors, business training & experience ...
1. Business is about people. Period.

The keys to sales are finding outside people (prospective clients) who have a want or need ... getting crystal clear on their want/need (consultative process) ... and if your products and/or services truly fit ... make it easy for them to buy from you. (If your products & services are not a good fit ... pass ... even if they're willing to buy. Otherwise it will not end well.)

Crappy people provide crappy products, services & customer service. The keys to providing great products and/or services ... as well as great customer service ... is having great people. The keys to recruiting are finding great people to come inside our organization (prospective employees) who want to work somewhere rewarding & positive ... and have a place that is rewarding & positive to work (workplace culture). Then balance recruiting people (marketing/selling) with vetting them (making sure they are right for your team). We want to make our operation attractive to quality people, but not too quick or easy to get in.

2. We can't hire the people we need. Get over it. We need to hire good people, with the right beliefs & develop them into the people we actually need. To expect people ... any people ... to show up & do work they way we want & need is unrealistic. The key I learned was hiring sharp people with good attitudes & the correct aptitude for the position ... and provide them with training & hands on experience in a fashion they can learn ... and over time ... become the productive person we need them to be.

FYI: At my racing teams, I knew we couldn't hire people that worked at the high level we needed, so we had a full blown training program that consisted of 29 training classes. We trained a LOT of guys ... and watched them "sort out" over time. Most washed out ... some stayed a while & contributed ... and a few really shined. Those we nurtured & kept long term.

P.S. I had a guy ask me one time … “What if you train them & they leave?” My response was, “what if we don’t train them … and they stay?”

3. I found the 45/45/10 rule my Mentor taught me about people to be pretty accurate, in that:
a. 45% of people have negative mindsets, don't care & sabotage themselves & others.
b. 45% of people are conformers & will conform to the culture they are in ... negative or positive. they will work up to, or down to, the standards of the organization.
c. 10% of people flat out care ... about themselves, their career, their world, other people, the company they work for, etc.

Positive minded people hate to hear 45% of the population is that way. But in my experience & observations of the world & life, I have found what my mentor said to be true.

My Mentor taught me to shoot the 45% that don't care … and bury the bodies. Hire the other 45% that conform & build a positive culture for them to work & learn to care in. And of course … hire the 10% that care ... get them engaged in our overall visions ... and develop them into key assets inside our organization. My mentor taught me that we build a successful enterprise around these 55% ... if we provide them what they need ... and keep the cancerous 45% that don't care OUT.

During the hiring process, I occasionally found great people with excellent mindsets, attitudes, outlook, motivation, etc ... that did not have the aptitude for the position I was filling. These are 10 percenters & I looked hard to see if could build a different position around them, knowing they would make a positive difference in my company. Accept the fact we can't build our company out of 10 percenters only. There are not enough of them ... they don't fit well into all the roles we need ... and they're not perfect by any means. They're good people ... but just people ... with strengths, weaknesses, pros, cons, wishes, hopes, needs, etc. But I tell you ... I've gone to extreme lengths to recruit them.

I met a gal named Bobbi Bradley at a trade show once & after spending a half hour talking business (she worked for a company selling trade show booths) I knew she was a gem ... even amongst other 10 percenters. I didn't have an open position ... but I asked her anyway if she was open to a job offer ... and she said no. So I stayed in touch every month or so ... for two years. No exaggeration … not even a little … two years. When I heard she was in the job market ... I took her to lunch, toured our business with her, sent gifts to house for her & her husband, invited them both to dinner with my wife & I, etc, etc. She ran the office & operations of my consulting company for nine years until she retired. Directly & in-directly she was responsible for a 20% growth in my business. I sold that company soon after she retired.

4. A positive culture matters ... and it doesn't just happen on its own. We have to work at building a great place to work. The 55% want to work at a place that is fun ... so make it fun when we can. They want to be rewarded, so reward them when it merits. They want to be recognized for their contribution ... so recognize them every time it is worthy. They want to be respected ... so always treat them with respect. And this is key … encourage our people to do that with each other.

5. Low standards lead to failure. We don't get what we want ... we get what we tolerate. We don't always achieve every goal ... but we always achieve our "standards." We don't usually set out to define our standards. Our standards are defined by our action ... or inaction. If someone comes in late several times & you don’t deal with it … IT MUST BE OK to come in late. If you tolerate it … that becomes the standard. If your folks produce products with inconsistent quality … and you don’t rally the troops to address it … IT MUST BE OK … and the standard is set.

If we have a lot of waste, inventory shrinkage, customer turn over, complaints, etc, etc, etc. … and we don’t tackle these problems with the team … they become the standard. If we have a person, or persons, treating other people in our company with disrespect … it must be ok … because we allow it. We can’t stand idly by and expect the business, team, culture, sale & profitability to improve themselves.

Page 2 in the next post.

[Ron Sutton]

Page 2 of 2 - Continued from the previous post.

6. Tough decisions. A company with good culture, good people, profitability, etc ... just doesn't happen. It only happens when the leader & team are committed to it. And this is where it gets tough. If someone is not helping make this a better place ... they gotta go. I don't care if they are good at their job or not. If they are cancerous to the organization as a whole ... they gotta go. You get the roll of carpet & I’ll grab a shovel. No individual is more important than the whole team. If cancer had taken over your leg … you’d cut it off … and move on. Tough choices need to be made & good leaders make them.

I've fired "stars" several times when their self-centeredness was detrimental to the team. And the team rose as a whole when they all saw they mattered more to me than one star. Frankly I am very good at firing people. I hate it, but I’m good at it. When I am clear someone is detrimental to the team, to our vision & goals, to the financial livelihood of my family and all the families that work for me … that SOB is outta here. (P.S. You don’t have to be a jerk about it. I like to make people feel good about their newfound freedom & job opportunities. LOL)

7. Communication is critical. Our people are not mind readers. If we have bad people ... they don't care what we think, what we want or what we expect of them. But if we have good people ... they do care. But they don't know if we don't communicate it. If they are "on board" and have bought into our vision, goals & purpose ... then they need to know what we're thinking from time to time. Don't keep them in the dark. Talk about the goals & objectives. Talk about the strategies & direction to get there ... with them. Talk about the challenges & hurdles in the way ... with them ... and they'll feel a part of the team ... and help us solve them.

They can't meet our expectations if they don't know what they are. Communicate in positive ways what you want & expect from them. I’m not suggested we be sugar-coating Polly Annas … just don't be a jerk. When I ask my people to step up their game or improve at something ... I also ask them what they need to achieve that ... and I provide it … if it's realistic. Once they learn you’re all about improving & not just riding their backs, the good ones will “get it” & rise.

8. Chaos is no way to live or work. The 55% ... and our bottom line ... DEMAND organization. A company that lacks simple systems, smart structure and clear leadership ... will always struggle. Smooth running businesses have both smart people & smart systematization. From simple systems & training to make jobs easier ... checklists so people don't have to remember every detail & things don't get missed ... to clarity on how we do things.

9. The fish stinks from the head down. All businesses have problems & challenges. But if we the leaders (head of the fish) don't address & fix them ... that is on us … the leader. If we don't have a good culture ... that is on us ... get to work. It isn't going to fix itself. If we don't have good people ... that is on us ... get to work. If we don't have good teamwork ... it's because we haven't built them into a true team.

No one else is going to build the organization into a great company FOR us. But if you are a positive leader that your people respect, they will HELP you build the company. Just remember them ... with reward, respect & recognition along the way.

10. To be successful we need to work on our businesses … not just in them. To understand this, let’s define “working on the biz” & “working in the biz.” Working in the business … is doing the daily job that must be done to pay the bills. Making sales, taking care of customers, building & shipping product, billing & collecting, accounting, paying bills, etc. etc. All of this needs to be done to exist in business. But none of these things “improve” the business long term or big picture. In fact, if all of the leader’s time is working “in the business” … how CAN it improve?

“Working on the biz” is doing projects that have long lasting positive effects. I would like to say permanent, but nothing is permanent. Even a great system will become outdated & be replaced. Working on the business … is investing some of your four limited resources (time, energy, focus & tangible resources) for a long lasting return. Think ROI … Return On Investment.

The key areas are:
1. Learning (yourself)
2. Training (your people)
3. Systemization (of business activities)
4. Marketing (to create ongoing streams of business)

If you learn how to do something better … you will achieve more results in less time with less effort. This is the foundation for improving productivity. Achieving more in less time … and potentially with less mistakes, less risk & less cost. When you master how to do something key to your business … like hiring, marketing, time management, organization, etc … your results will be greater. If it took us 10 hours to learn excellent hiring practices … and it served us for the next 20 years of your business … we consider that a good ROI. If we take 2 hours to create a simple, repeatable system for an activity that happens in our business weekly … and it saves an hour a week … that’s a pretty good ROI. If we allocate one hour every week to train our staff to do their jobs better … and in the other 39 hours they improve their results 20% … that’s a pretty good ROI. If we learn about marketing & implement marketing strategies … one after another … that creates ongoing streams of new and/or repeat business … that’s a good ROI of our time.

I like to think of it this way. If I don’t work on improving my business … who will? Gnomes & Elves will not be coming in at night to systematize my operation. I know … because I asked them to … and they said their union contract forbade it. I reached out the Tooth Fairy & the Easter Bunny … but they said that was outside their scope of skills. I was going to ask Santa to build my business … because he has a pretty smooth running joint … but we all know he is busy nine months out of the year & vacationing in the Bahamas the other three. I asked my customers to help fix my business & that spooked them & they took their business elsewhere … creating new problems. So eventually I learned it was up to me.

My mentor taught me that all top business leaders work “on their business” most or all of the time. But they got there one step at a time. In small business we need to get there a step at a time too. He suggested I start at 90/10 … meaning I spent 90% of my time doing the things that paid the bills … so I could continue paying the bills. And 10% of my time dedicated (even scheduled in my calendar) to working on projects that would improve my business. This was when I was a VERY young man running my own chassis building business. I was working 80 hours a week then. He wasn’t suggesting I work 88. He was suggesting I work “in it” 72 & “on it” 8. I thought … “Heck, if I can’t make a living working 72 hours a week I guess I better quit” … so I bought in & did it. Over a surprisingly short time … I improved my business in every area … turning it from a “break-even & pray” situation to a very profitable operation. Over time, I shifted the work “in’ vs “on” ratio from 90/10 to 80/20 then 70/30 … and so on until I was 100/0 … and worked less hours. That is when I really made money. I went from zero profit to making $10k a month … in the 80’s … building race cars. For a young guy, I was on cloud nine.

There's more keys my mentors taught me that I'm forgetting ... but these 10 key things helped me build good businesses … that I felt would be worthy of sharing.

:cheers:

.

[Ron Sutton]

One of the major differences has to be leadership. Employees must know you appreciate them and have their back. You lead with integrity and their place is secure within your business. It's also important to help them with their personal lives. When you do these things, it's much more likely to create loyalty. You must manage them, but leadership is the key.

However, it's a fact that you can't make a duck into an eagle. You can only hone and shape people so much. They must have the rough qualities you require up front.

So true!

[Vince@Meanstreets]

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.

An experienced estimator will know what to look for and also read the customer.

As of now, in CA, vehicle reconstruction falls into a grey area as far as the BAR is concerned. There are no set times for most of the work that we we do. That is why I try to stay within an industry standard. If Blake over at Speedtech, Steve over at EBMC charges 40 hours to do a mini tub, that's what I charge.
Early on we did a time study and most seems standard.

Right now the thing that kills a business is the for mentioned creep. The customer wants to add or increase modifications. That little added step may push 3 of the next customers in line back a month and increase my profit/loss into the red for that period of time.

OP...make a good accurate project plan, stay the course and keep the jobs coming in no matter how small the job.

[Munssey]

[B]8. Chaos is no way to live or work. The 55% ... and our bottom line ... DEMAND organization. A company that lacks simple systems, smart structure and clear leadership ... will always struggle. Smooth running businesses have both smart people & smart systematization. From simple systems & training to make jobs easier ... checklists so people don't have to remember every detail & things don't get missed ... to clarity on how we do things.

.

Ron, this item in particular reminds me of something read a few months back from Jesse James, the previous owner of West Coast Choppers. What you are saying embodies so much more than just this specific area of organization but thought it was good enough to share.

PopeofWelding (instagram post) Preparation is the Key. It's not just about just having a shop and the right tools. It's about being prepared Mentally, and physically to do your best work. At the end of every work day, clean up, put tools away, make lists, wipe down your machines(even your welder). Make sure you have material for tomorrow. Now Take it a step further. Before you go to bed lay out your work clothes and boots so you don't have to fish for them in the dark. Because your getting an early start. This is the path to doing your best work. Clean Shops and Clean Minds produce the cleanest Work. #jessejamesFollowing

While life indeed gets in the way some times and keeps us from the clean up and prep processes, the spirit of the note is fantastic.

[ccracin]

Thanks for posting Ron. This thread is great. For someone starting a business in this field, I appreciate this type of honest feedback. Alot of what you posted are principles I have picked up over the years looking at good and bad businesses. You however added so much more to it with your post. I feel like printing it and making it a wall hanging for my office.

When I look at shops in this industry that always tend to blame the customers for their inability to make money, I see why they are where they are. I think you can apply some of your keys regarding employees to choosing customers as well. In alot of cases, you can tell almost immediately what kind of customer you are dealing with. One of my most respected colleagues from the past gave me a piece of advice that I think is worth adding here. When I told him I would have a business one day, he said "Remember, It's OK to say NO". He meant that with regard to customers. You don't have to work with anyone you feel is not a good fit for your business.

Thanks to the OP and to all who are posting in this thread as well. This is a very timely discussion. At least for me. :thankyou:

[Vegas69]

Killer stuff Ron. Thanks for sharing that with us..

Churned a couple thoughts...

1. Many top companies are now testing their applicants to see where they fit into your 45/45/10. Here is a test that determines optimism vs. pessimism and hope. http://web.stanford.edu/class/msande271/onlinetools/LearnedOpt.html

Pessimists aren't all bad, I was one. However, they don't belong in many positions. An accountant being a good example of the right fit. Optimists fit into the culture, bounce back from adversity, and are more productive over time. They also tend to reduce turnover in the company.

2. Work on yourself EVERYDAY:

Physical: That means your physical health through exercise and nutrition.

Mental: Your mental attitudes of mind through learning and the right influences. Gaining and refining new skills like leadership. The awareness of your tendencies, strengths, and weaknesses. Managing your emotions.

Spiritual: Your deepest values like Faith, Family, Love, Integrity, etc.

The greater person you become, the higher your company can climb.

[snappytravis]

An experienced estimator will know what to look for and also read the customer.

As of now, in CA, vehicle reconstruction falls into a grey area as far as the BAR is concerned. There are no set times for most of the work that we we do. That is why I try to stay within an industry standard. If Blake over at Speedtech, Steve over at EBMC charges 40 hours to do a mini tub, that's what I charge.
Early on we did a time study and most seems standard.

Right now the thing that kills a business is the for mentioned creep. The customer wants to add or increase modifications. That little added step may push 3 of the next customers in line back a month and increase my profit/loss into the red for that period of time.

OP...make a good accurate project plan, stay the course and keep the jobs coming in no matter how small the job.

Read the customer Vince,, 8 years in the Snap On Tool Business,, You learn to read the person real fast, I could quiz them in the tool truck for about 5 minutes, Where you from, Why you hear, Where you going, not exactly like that but you can learn a lot from a person just normal conversation.

[4mul8ion]

This is a great thread and some fascinating posts.

So, what are you looking for in a customer? What signs show a good fit or a poor one?

Kevin

[4mul8ion]

Whoa :wow: :wow:

qtK0KMH-8xs

http://i703.photobucket.com/albums/ww33/raven622_2009/thread_killer.jpg

Bad question?
Kevin

[Ron Sutton]

This is a great thread and some fascinating posts.

So, what are you looking for in a customer? What signs show a good fit or a poor one?

Kevin

Hi Kevin ...

I am as interested as you to hear some of the shop guys chime in. I think being Sunday, they all took a day off from the thread. I have an opinion, based on my experience, but it may not match up with other builders.

IMHO ... there are a small percentage of bad customers & a larger percentage of good customers ... but just because they're a good customer doesn't mean you two (shop & customer) will fit well together.

I think the list of things that might make someone a bad customer for the shop is pretty obvious:
A. Can't afford what needs to be done
B. Unrealistic of what they should pay for what they get
C. Doesn't pay on time
D. Changes scope of project often
E. Not clear on what they want
F. Clear on what they want, but unclear in communicating it

I think the list that makes good customers not a good fit for the shop or vice versa is a little more cloudy for the customer & shop owner:
1. Style of build wanted differs from what shop is really good at
2. Level of build ($$$) wanted differs from what shop offers
3. Timeline wanted/needed by customer differs from what shop wants/needs
4. Involvement level desired by customer differs from what shop owner wants

I recently had a prospective customer that REALLY wanted a Street-Warrior from me. But the more we talked, the more I got clear he wanted a lot of personal involvement in the build and what I consider a "full custom" Pro-Touring style build where every detail is discussed with & decided on by the customer. I don't build full custom Pro-Touring cars. I consider my Street Warrior cars to be "semi-custom" race cars with street amenities ... where the client picks body style, colors, powertain options, interior & exterior options ... and we build it. Frankly if the customer is picking the parts, it may not perform as well. And if we have to stop & discuss all the little details like rivet color, A/C vents, switch style, etc ... we can't build & deliver it in 12 months, like we guarantee.

I am positive he will be a GREAT customer for a shop that builds full custom Pro-Touring cars. But he & I would have been frustrated with each other, because I don't do ... couldn't do ... what he really wanted.

I think where a lot of shops get in trouble ... and where customers get in pickles with shops ... is they didn't really figure out if they were a good fit for each other. Those situations usually end bad.

Just my 2¢


:cheers:

.

[ironworks]

I try to see if the customers expectations can line up with their reality. It amazes me how many people want their car to be the best of the best and really have no concept of just the parts cost of what they want. Usually what they expect to invest in the entire project is way less then the parts total.

Dealing with the customer is the biggest and most important element. Employees are a close 2nd. Customers provide the work, Communication Education and Efficiency provide the profit.

Like Ron said, not every customer is a fit for every builder. You need to find a builder you like and you feels understands you and you feel they want what you want. After all it is you car. Every person thinks differently and experiences each situation from their perspective. And I think it goes the same way with a customer. You have to pick some one you think you can make happy. I think that same 45/45/10 percent has to also work out with customers.

[XLexusTech]

Something to chew on... and this is a hypothetical example but not too far from reality.... A customer comes in and has completely reasonable expectations, a good starting point, say a running driving rust free car as an example....

Spends North of 200K building a PT car with mostly off the shelf (insert vendor of choice here AME, TCI DSE) parts..... and A+ paint job..... A+ interior... ect...

What's that car worth..? 100K..... why would anyone do that? In this thread I see several shop owners basically saying I need customers with either pretty clear expectations and deep pockets.. or unclear expectations and bottomless pockets....

I am looking to solve the equation where a customer has reasonable expectations timeline and budget... Yet, can't seem to find a shop that won't either not deliver... deliver late, deliver poor quality or try to put out a lien on a build ballooned into 3X the budget ...

The way I am hoping to get to that place is to help builders become better at business process..

[ironworks]

I am looking to solve the equation where a customer has reasonable expectations timeline and budget... Yet, can't seem to find a shop that won't either not deliver... deliver late, deliver poor quality or try to put out a lien on a build ballooned into 3X the budget ...

The way I am hoping to get to that place is to help builders become better at business process..


I would say that person does not exist. The reason being is that there are a ton of shops that deliver on time and with great quality. If said person cannot find that shop there is some reason why they have not been able to find that shop. They exist all over the country and may not be in your area. They are not the cheapest and the may not be able to put some one at the front of the line waiting list to meet their time line due to a waiting list. If the shop does quality work they were probably busy long before you called and have prior obligations to deal with. When it's your turn they will give you the same treatment they give all their other customers if you treat them the way most of their customers treat them.

A complete build does not get to 3x over budget over night. A small job like rust repair or some kind of small task can quickly get to 3 times the budgeted amount as it might have been thought the task could be handled in 1 day and it took 3. But if a guy expects to spend 200k and there is final bill of 600k, that does not happen either. There is no shop that sends the owner only one final bill at the end. It gets to that point one bill at a time, We bill our customers every 2 weeks. And there is no possible way to build even a 200k car in 2 weeks. For a car to go that far over budget 1 of few things has to happen.

1. The end result of the car is not what the customer wanted.
At some point the customer has to ask, Did I really order that triple decker spoiler and twin turbo LS engine when all I wanted was a nut an bolt resto.

2. The original budget was not feasible.
This can be the builders fault and should also be a customers fault. Lots of shops do the bait and switch. We pass on quite a few jobs due to the fact I'm brutally honest in the fact this stuff is expensive.

I had a guy not to long ago want to build a 100k Chevelle after seeing the black Fairway Chevelle. The Fairway Chevelle has a Billet Custom dash, Grip Equipped Wheels, Mini tubbed, triple adjustable shocks, huge brakes, the whole deal. I said I can probably build a 100k Chevelle, but it may not be the Chevelle you think 100k should get you as the Fairway Chevelle costs more then 100k to achieve that result.

I had another lady come in that wanted to build a nice driving 67 Camaro. She did not care about all the pro touring stuff, but she had to have this old Camaro she had had in high school. She really should have bought a done Camaro. But she had history with the car, so in a way she was committed. I told he 100k was a pretty reasonable number for what she wanted complete and turn key she could drive any where. Her and her husband thought I was out of my mind, so they went on down to road to another local shop that does the bait and switch and in the end the car probably now has 125 or more for a much less of a car that now another shop is fixing what the bait and switch shop lacked. The bait and switch shop totally over sold her on stuff she did not need and really ruined what she had.

3. OR Project Creep.
Project creep happens with every single project. Times change, Tastes change, technology changes.

We built a truck for an owner who wanted it to be a basic driver for his wife and 20 months later was a Goodguys Truck of the Year winner. That cost many times more then we thought in the beginning. That same customer went on to build many more cars with us and has many more for to do in the future. Heck right now we are building some crazy steel fire pit structure for his back yard.

I think to no ones fault, sometimes customers don't realize what they really want until its starts to take shape in front of them.

[XLexusTech]

I would say that person does not exist. The reason being is that there are a ton of shops that deliver on time and with great quality. If said person cannot find that shop there is some reason why they have not been able to find that shop. They exist all over the country and may not be in your area. They are not the cheapest and the may not be able to put some one at the front of the line waiting list to meet their time line due to a waiting list. If the shop does quality work they were probably busy long before you called and have prior obligations to deal with. When it's your turn they will give you the same treatment they give all their other customers if you treat them the way most of their customers treat them.

A complete build does not get to 3x over budget over night.


So not to over generalise... but in in Cali and a few other parts of the US like the south east there are lots of shops and that supply side of the equation adds to the customers "power" be elsewhere... as in the other 90% of the country.. its not the case.... Trust me the scenario were a customer is happy to spend what is required and expects a specific outcome is not just real.. its common.

A complete build does not get to 3x over budget over night.... Correct...
But far too many times shops don't bring that issue forward until its too late of the $$ is spent..

[CornHusker4Life]

So not to over generalise... but in in Cali and a few other parts of the US like the south east there are lots of shops and that supply side of the equation adds to the customers "power" be elsewhere... as in the other 90% of the country.. its not the case.... Trust me the scenario were a customer is happy to spend what is required and expects a specific outcome is not just real.. its common.

A complete build does not get to 3x over budget over night.... Correct...
But far too many times shops don't bring that issue forward until its too late of the $$ is spent..

I guess, I do not follow. I get billed weekly or every two weeks depending on the amount of work done on my car. I only pay when I see pictures of the work and progress so I know exactly where my $ went. I do not see how the spending could get out of hand if you see a bill weekly or bi weekly. If you see that bill and it is higher than you expect for the amount of work done...pull the car out and maybe you are out a couple thousand bucks and not 100s of thousands. Seems pretty simple

[XLexusTech]

I guess, I do not follow. I get billed weekly or every two weeks depending on the amount of work done on my car. I only pay when I see pictures of the work and progress so I know exactly where my $ went. I do not see how the spending could get out of hand if you see a bill weekly or bi weekly. If you see that bill and it is higher than you expect for the amount of work done...pull the car out and maybe you are out a couple thousand bucks and not 100s of thousands. Seems pretty simple


For example.. you as a customer budgeted for 100k which was driven from an estimate which encompasses tasks 1-25. For simplicity sake lets assume the 100K is broken into equal tasks @ 4K per task and you put down 25%...... 25K.

You get an invoice after 1 month that indicates that 4 tasks are complete but all of the 25K is gone....... which based on the simple math.. your 100K project is now a 156K project... ~60% increase in cost with no increase in scope... :G-Dub:

Edit: the same thing can happen in smaller increments.. (weekly invoice) in fact I would suggest that when it does the variance from estimate will be larger in the end... you will just know about it sooner.... Death of a thousand cuts :-)

[CornHusker4Life]

For example.. you as a customer budgeted for 100k which was driven from an estimate which encompasses tasks 1-25. For simplicity sake lets assume the 100K is broken into equal tasks @ 4K per task and you put down 25%...... 25K.

You get an invoice after 1 month that indicates that 4 tasks are complete but all of the 25K is gone....... which based on the simple math.. your 100K project is now a 156K project... ~60% increase in cost with no increase in scope... :G-Dub:

Edit: the same thing can happen in smaller increments.. (weekly invoice) in fact I would suggest that when it does the variance from estimate will be larger in the end... you will just know about it sooner.... Death of a thousand cuts :-)

I follow what you are saying but there are safe guards built into the weekly or bi weekly bills. First, I never would put down any amount of money for labor! The shop should only bill you for labor DONE not labor that is going to be done so NO 25k is out of pocket. If a shop bills me $5,000 for a task that was suppose to cost $2,000...my car is gone and I am only out $3,000. If I keep paying these bills that are higher than agreed...that solely lies on me

[ironworks]

So not to over generalise... but in in Cali and a few other parts of the US like the south east there are lots of shops and that supply side of the equation adds to the customers "power" be elsewhere... as in the other 90% of the country.. its not the case.... Trust me the scenario were a customer is happy to spend what is required and expects a specific outcome is not just real.. its common.

A complete build does not get to 3x over budget over night.... Correct...
But far too many times shops don't bring that issue forward until its too late of the $$ is spent..


So if a customer goes to Sizzler for dinner, is it fair for him to bitch and complain that his juicy New York Steak ( as advertized on tv ) does not taste the way the juicy steak did that he had at Tahoe Joes or Ruth Chris last week. The steak at Sizzler is 8.95 with sides and salad bar, the steak at Ruth Chris was 39 bucks without any sides or salad bar. But they both say they taste great on TV. Just because some one does it cheaper does not mean its the same result for the same item.

I guarantee the guy who eats at Ruth Chris would never even give Sizzler a second thought for a good steak even after seeing the commercial. And the guy who thinks the steak at Sizzler is amazing would be angry at the prices at Ruth Chris.

There is a market for every level of service. You don't expect a great burger of the year quality burger at Burger King do you? Even though it says you can have it your way on the sign.

[XLexusTech]

If a shop bills me $5,000 for a task that was suppose to cost $2,000...my car is gone and I am only out $3,000. If I keep paying these bills that are higher than agreed...that solely lies on me

And here is the Rub... look up a couple of posts.. if you had a shop that sourced an ill fitting quarter and as such spent 3X the time budget fitting it.. then you would have this exact scenario.... this is exactly the point I am making....

Looking for a process where projects are delivered on time, on budget and with quality...
:poke:

[ironworks]

And here is the Rub... look up a couple of posts.. if you had a shop that sourced an ill fitting quarter and as such spent 3X the time budget fitting it.. then you would have this exact scenario.... this is exactly the point I am making....

Looking for a process where projects are delivered on time, on budget and with quality...
:poke:


That's the point exactly, Quarter panels all fit each car in a totally different way. The spec for new cars today is totally different then they were in the 50's 60's etc. You may be dealing with a car that was wrecked or jumped across the river at some point. These cars all saw a different life and in obvious response are all going to fit differently.

If a guy does not want that attention to detail on their car they should go find a shop that sees no issue with a replacement quarter panel that does not fit perfectly or look exactly like the stock part and will just weld it on an get it close because that is good enough to satisfy the customer. Heck that is what bondo is for RIGHT.

OH THAT"S FINE WE CAN JUST PUT BONDO ON IT.

Or the other one.

NO ONE WILL EVER SEE THAT ONCE IT'S DONE. SO IT DOESN'T MATTER.

My customers demand more and understand that bolt on parts don't always bolt on and that reproduction sheet metal almost never ever fits like it should even though it's brand new. And parts almost never fits any 2 cars the same way.

My customers expect more then a "Sizzler" Mentality on their projects. Many Many people are happy the car car just runs and drives descent.

[CornHusker4Life]

And here is the Rub... look up a couple of posts.. if you had a shop that sourced an ill fitting quarter and as such spent 3X the time budget fitting it.. then you would have this exact scenario.... this is exactly the point I am making....

Looking for a process where projects are delivered on time, on budget and with quality...
:poke:

I track what you are saying but on the flip/reverse side...if a shop quotes/estimates a job for you at $3,000 but they do it for $2,000(rust was not as bad etc.) do you still pay them the $3,000 estimate?

[Vince@Meanstreets]

And here is the Rub... look up a couple of posts.. if you had a shop that sourced an ill fitting quarter and as such spent 3X the time budget fitting it.. then you would have this exact scenario.... this is exactly the point I am making....

Looking for a process where projects are delivered on time, on budget and with quality...
:poke:

This is where experience will come into play.

The way I see it. If I inspected your car, you were handed a recommended list of work and parts required then issued a quote than I am obligated to that quote. If something goes array because I ordered an ill fitting part then within reason that is on me and my shop. Will not be passed onto my customers.

If a customer supplied a part, I will then quote for fitment and charge accordingly to what I know from past experience.

The only way a customer may go over budget is if they add or expand on that job. Either way it should not be a surprise at the end.

Total cost, customer expectations and payment plans should be settled at the time of deposit and increases should be discussed at the times they are necessary.

There are instances where you may have an open repair order with a customer because they are not sure what direction they are going to go. Most times they figure it out real fast after the project gets to a certain point. These should be handled carefully and make sure the customer knows what may happen and is aware of possible cost.

[XLexusTech]

This is where experience will come into play.

The way I see it. If I inspected your car, you were handed a recommended list of work and parts required then issued a quote than I am obligated to that quote. If something goes array because I ordered an ill fitting part then within reason that is on me and my shop. Will not be passed onto my customers.

If a customer supplied a part, I will then quote for fitment and charge accordingly to what I know from past experience.

The only way a customer may go over budget is if they add or expand on that job. Either way it should not be a surprise at the end.

Total cost, customer expectations and payment plans should be settled at the time of deposit and increases should be discussed at the times they are necessary.
.
Yes yes yes agree 100%. :G-Dub: as you see your practice is not universal :king:

[MeanMike]

I read this every time it comes back up and it gets me to thinking for a while. I really want to get back into building cars full time, but I won't do it like any of the shops I worked for. So, it's a worthwhile discussion for me.

I though about what was the original question again and I think it's these snips.
...
It got me thinking... could these principles help solve the problems that plague the custom car customer? Over budget, scope creep.... body shop hell... call it whatever you like... typically what you end up with is paying too much for less than you expected and getting it later than promised. Meanwhile the builder feels like he lost money...

Does anyone ever want less than they can afford or want to pay more than what they think something is worth? In this day and age, are there any craftsmen/artists that make what they should or businesses make more money than they need to justify staying in business? The people that have the disposable income to build at $250K car didn't get there by being frivolous with their money. Everybody shops for the cheapest deal to get more bang for the buck. The only shops that get away with charging to much are the ones that have "status symbol appeal" mostly because they are on TV.

If someone had their car planned out 100% before they got into it and stuck with it over the one or two years required to build, they would grow bored and sell the car before completion. Technology changes quicker than cars can be built, financial situations change over the course of a year or two, things don't always work in reality like they do in your head. Scope creep is inevitable.

Body shop hell is tradeoff for wanting cheap and good. If you want it quick it costs money or it's shotty work.


Problem 1: I will be far too old and unskilled to be a hands on craftsperson.
Problem 2: The business itself is plagued with bad business practice (the ole better craftsmen then businessmen issue)
Problem 3: Every build by its nature is custom and as such subject to lots of uncertainty.
Problem 4: To my knowledge no structured project management principles have precedence in the custom car world.

Problem 1: While this is understandable that you wan't to try to contribute. Unless you can save more money than you cost it isn't going to work. You are going to have to justify your salary by saving money elsewhere and I just don't see that happening if you don't produce. The money in this business just isn't there to justify more overhead. But you haven't given a good enough description of how you could save a shop money. How will you sell yourself?

Problem 2: Yes, this definitely happens. I think there are more shops than there need to be. So for the lower quality shops, whether through inexperience or dishonesty, they sell jobs way under their realistic cost just to keep money flowing. I worked for a guy that failed even while covered up in business and investors.

Problem 3: When you know there is uncertainty, you plan for the worst. This is an area where experience shines. Let's say you bring in an old body covered in paint. Who knows what hides underneath. Quote replacing every panel on the car. If the cost scares of the customer, you saved yourself grief. If they stick around and you end up only replacing half the panels, you save money and please the customer.

Problem 4: They do, you just don't have dedicated project managers or time to keep a project schedule. Good employees and shop owners look ahead and plan things out in advance without devoting all their time to it. If a car costs $250K to build, how much of that money can be dedicated to a project manager. There are books on this subject about what percentage of a budget should be allocated to what. I think it's less than 4% for all management on a project. You do the math, but at 4% you have to turn 1.25mil to justify a $50K salary if that's all you do.


So on to my question.. Is this pipe-dream something that the pro-builders and customers would have an appetite for?
Is there a problem here worth solving?...

Sure, there are always problems worth solving when the ends justify the means. With what a business expert or PM demands for salary these days it isn't going to happen in the car world. Most shops can barely afford to pay a craftsmen/artist what they are worth.

In the end, the car is not a money maker. There is no return on investment, so there is no justifying anything that is done, especially not extra managers.

Through my own frustrations at work, I have plenty of "stories" about how project managers add so much cost and confusion to a job. I've done jobs (engineer side) where the physical work took 2 days and $100K in labor and parts. But there were 7 PM's, two executives, 2 engineers, 3 contractors with PM's and engineers and the months of worthless meetings and indecisiveness that cost $500K. Honest truth, that really happened recently. It took me longer to make drawings and revisions than it would have taken to do the actual work. No mangers added value, in reality they took away from any value.

I think lean and agile work well in high volume mfg. When everything is special, how can you be lean with equipment of labor? Most shops are already lean on parts inventory, they keep none and order only when it's needed. The machinery required to build a car is as flexible as possible. Farming out all the machining, laser cutting etc.. will not save time and eventually it will cost more than owning the machines. You can't rent the equipment required and you can't pick up employees at home depot in the morning. Most employees in this field are very flexible. There might be specialists in sheetmetal, machining and other areas, but they can usually do assembly, wiring and other things also. Where would you lean out a car shop and still do real work there? I have my own opinion about what lean and top heavy management has done to manufacturing in the US and it isn't good.

[96z28ss]

If you want to start a shop. Go ahead and start one. It will take you years to build up to a full build for a customer. Your going to start with small jobs, to keep the lights on. You most likely will have to do a shop car build to get your name out there. And a talking point for future customers. That will give you plenty of time to hone your project management skills, before you get into big builds.

$250k keeps getting tossed around here as a pro-touring build. I don't think I saw a car at SEMA built by a shop for that cheap.
I personally think that high end shops are oversaturated here in the U.S. I think you'd have more success opening a shop building nice quality drivers.

[MeanMike]

More thoughts after recovering from the book I just wrote. Can you generalize your principles, theory and practices putting it together in the form of a two day workshop? You could have a class before or after SEMA or PRI. That may be the best way to contribute. Put some spreadsheets and canned schedules together and offer it as a software package. Sounds like you have that one covered.

[Blake Foster]

That's the point exactly, Quarter panels all fit each car in a totally different way. The spec for new cars today is totally different then they were in the 50's 60's etc. You may be dealing with a car that was wrecked or jumped across the river at some point. These cars all saw a different life and in obvious response are all going to fit differently.

If a guy does not want that attention to detail on their car they should go find a shop that sees no issue with a replacement quarter panel that does not fit perfectly or look exactly like the stock part and will just weld it on an get it close because that is good enough to satisfy the customer. Heck that is what bondo is for RIGHT.

OH THAT"S FINE WE CAN JUST PUT BONDO ON IT.

Or the other one.

NO ONE WILL EVER SEE THAT ONCE IT'S DONE. SO IT DOESN'T MATTER.

My customers demand more and understand that bolt on parts don't always bolt on and that reproduction sheet metal almost never ever fits like it should even though it's brand new. And parts almost never fits any 2 cars the same way.

My customers expect more then a "Sizzler" Mentality on their projects. Many Many people are happy the car car just runs and drives descent.

I would have to agree, when a shop quotes a 1/4 panel install it is what 32hrs??? depending, I think the depending part is the KEY, how is the shop to be responsible for an ill fitting 1/4?? maybe the car doesn't fit the 1/4??

Heres an example we are working with right now.

69 Camaro customer wanted all the glass changed, wanted it tinted, cool before installing the glass we had them tinted (this makes sense ) you get a better quality tint job right??? install the windows, begin aligning, goes ok they are a bastard to get right.....right???
customer picks up car on a trailer, drives it a week later and washes it there is a leak on the pass side door window. brings it back, start realigning it. hummm, take the window out lay it on a FACTORY side glass, the replacement is Bowed in the upper rear corner by 3/8 of an inch. call customer to get another side glass no problem, shows up EXACTLY the same, call customer he calls supplier, supplier doesn't know what to do sends another glass from a different manufacture......... still waiting to get the window.
so who covers all that time???
I am interested to hear.

[XLexusTech]

I would have to agree, when a shop quotes a 1/4 panel install it is what 32hrs??? depending, I think the depending part is the KEY, how is the shop to be responsible for an ill fitting 1/4?? maybe the car doesn't fit the 1/4??

IMHO they are responsible for the output which needs to account for +- X% variance from the estimate based on experience..... Again using the lumber example... if you hired a GC to build you a home... they showed up with 2X material cost because the lumber they bought was 50% rotted you would tell them to pound sand...


Heres an example we are working with right now.

69 Camaro customer wanted all the glass changed, wanted it tinted, cool before installing the glass we had them tinted (this makes sense ) you get a better quality tint job right??? install the windows, begin aligning, goes ok they are a bastard to get right.....right???
customer picks up car on a trailer, drives it a week later and washes it there is a leak on the pass side door window. brings it back, start realigning it. hummm, take the window out lay it on a FACTORY side glass, the replacement is Bowed in the upper rear corner by 3/8 of an inch. call customer to get another side glass no problem, shows up EXACTLY the same, call customer he calls supplier, supplier doesn't know what to do sends another glass from a different manufacture......... still waiting to get the window.
so who covers all that time???

Again.. you own the output... personally I would treat customer supplied materials like cancer.... and if you HAVE to accept them... then the customer needs to own any time spent making parts they supplied work..

[Vince@Meanstreets]

I would have to agree, when a shop quotes a 1/4 panel install it is what 32hrs??? depending, I think the depending part is the KEY, how is the shop to be responsible for an ill fitting 1/4?? maybe the car doesn't fit the 1/4??

Heres an example we are working with right now.

69 Camaro customer wanted all the glass changed, wanted it tinted, cool before installing the glass we had them tinted (this makes sense ) you get a better quality tint job right??? install the windows, begin aligning, goes ok they are a bastard to get right.....right???
customer picks up car on a trailer, drives it a week later and washes it there is a leak on the pass side door window. brings it back, start realigning it. hummm, take the window out lay it on a FACTORY side glass, the replacement is Bowed in the upper rear corner by 3/8 of an inch. call customer to get another side glass no problem, shows up EXACTLY the same, call customer he calls supplier, supplier doesn't know what to do sends another glass from a different manufacture......... still waiting to get the window.
so who covers all that time???
I am interested to hear.

I worked in a hot rod shop for 7 years and a dealership for 11 and I have learned that no matter how much you test, something will always show up. Both shops has us water and air test for leaks. G-F Auto, we took it to the car wash on the corner after doing an air test at the shop. Dealership was air and water test with a shower head on a stand. Worst thing is a customer to discover a problem.

Unfortunately that would be on my me if I did the install.

Im not baggin on you Blake, I don't know what steps you took before the car left. Just my experience. I have found that most aftermarket glass fits like poop. I believe Prodigy found this out a few years back.
As a caveat, we always match new parts to the replacement before it goes in. That way if you do find an issue you can contact the supplier and find a better piece. And also communicate with the customer about delays.
But I hear you. It happens. Another reason why I like to supply the parts on a job. If there's an issue, its easier and faster for me to fix it. Customer supplied parts will always have some sort of issue and I communicate that with them before the order gets drawn.

Here's one we had last year.

A customer who tracks his car lunched his engine. We needed a replacement. We gave him a quote parts and labor. It was a bit high so he found a place on line that had rebuilt 383's and dyno sheets with 500 HP.
He ordered the engine and had it shipped here.
Going over it we found a few loose bolts. No problem. Let the customer know and we didn't charge him.
We installed the engine and ran it in, no problem. After running 300 miles, he took it to Thunderhill for a track day. Called complaining of an oil leak. No problem, his sessions were done and the leak wasn't too bad.
Towed it to the shop and we found that the two piece timing cover installed by the builder was not sealed properly. It was put on dry. We called the builder and they wanted us to pull the engine and send it back for inspection. Also they would only pay for shipping, the repair and not the cost or R&I. We then prodded on why it didn't show up after two dyno run and our 300 mile break in. Beyond me.
So with a little back and forth we agreed that the builder would pay me half the cost to reseal the cover, the parts required replace the water pump gaskets and front crank seal.
We ate 50% of the cost which was around $175 but the customer was surprised and happy that we "took care" of it. Two days later I get a $300 gift certificate dinner for two.

He is now a great customer that trusts me and he'll tell a few friends, so in the end it was worth it but you still have to cover your ass-ets.

[Blake Foster]

IMHO they are responsible for the output which needs to account for +- X% variance from the estimate based on experience..... Again using the lumber example... if you hired a GC to build you a home... they showed up with 2X material cost because the lumber they bought was 50% rotted you would tell them to pound sand...



Again.. you own the output... personally I would treat customer supplied materials like cancer.... and if you HAVE to accept them... then the customer needs to own any time spent making parts they supplied work..

That is an interesting analogy. I just built a new house. hired a contractor had an Estimate and I was on the construction loan so I had to approve all the invoices. well had a quote for al the lumber when it was said and done the final cost was double. had the contractor check the quote to invoice and the quantities were all good, the supplier just said to bad that the price went up . so suck it up. not like you can return it!! and that was the end of it contractor didn't do anything and neither did the supplier. the funny part.... the price on the trusses never changed and I bet there was as much material in them as the rest.

I agree 100% I tell customers you supply the parts your on the hook for them no warranty you pay all the labor it takes to make them work. like the issue I talked about, so the guy saved 40 bucks on the glass. he is now into 2 replacements and time to figure it out. it is NOT my problem at that point. I like Vince bend for customers as well and sometimes it pays off and some times you just end up bending forward for no good reason.

Like I said earlier this is abut the only business where you have to make deals after the fact.

[Boss 5.0]

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.

:cheers:

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:y0!:

[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