Thread: How to price a job?

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

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

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

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

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

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

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

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

Don

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

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

Kitz

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

mike in tucson

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

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

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

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

Don

Originally Posted by robot

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

mike in tucson

agreed 100%

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

Warning; any references to past history are intended to form a frame of reference, not to wound you in any way.

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

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

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

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

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

Edit, implicit in my remarks, in agreement with others, you don't want to do a fixed price bid, agree on an hourly rate and charge by the actual time involved, and yes, get paid per benchmark (day, week, number of hours, some portion of the total job reached, whatever)

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


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

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

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

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