Thread: How to price a job?

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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)

Not to differ too much here....but I would get a fixed price because when he comes over and you are not working at his assumed pace or happen to be fooling with something while shootin the breeze with your buddy or having a cold one and not working at a break neck pace,he will assume you are screwin him over by only geting 45 mins worth of work done every 60 mins. With a fixed price you can take 10 hrs on the side mirror and no one complains.Take that long at a hourly deal and hes going to freak out.
The hourly thing gives them too big of a lever.......pro shop 55 bucks an hour and it takes them 2 hrs to set the rear end......your garage at 30 an hr and it takes 6 hrs,......see my point.The hourly deal gives them a lever to try and bust you down by saying it takes 110 dollars for the pros to do it and it took you 160 dollars to do the best you could.......see how things can get funky when you have a scale to be judged against.Say you asked 15,000 to do the job and a pro shop wants 35,000 you have a lever now by having a favorable scale to compare it too and bottom line no matter how much time is spent on each component you are still giving them a good deal.
This may not be the most profitable avenue to go down,but it keeps things from getting too far outa hand by having a base number for the restoration and no gauge on how long each step should take or cost ,only that it should be like this when complete....not how long it should take to complete or how much it takes to complete or whether you were working at a certain pace to complete.
This is what has worked for me in the construction field for many years,auto industry may be different,I dont know.

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.