African Muscle Cars - Forum

jmvv wrote: ↑

Thu 23 Aug 2018, 13:31

Rassie,

The way I do it is as follows:
I am a one man show with one workshop assistant.
I calculate what my total workshop overheads are (workshop rent, insurance, utilities, workshop fuel bill, my salary, my assistant's wages etc)
This amount I divide by 99 (22 hours per week times 4.5 weeks)
This gives me an amount that I have to generate per hour in order to make ends meet.
This amount forms the basis for my hourly rate.

When I have to quote on a potential project, I can only give an estimate based on the projected number of hours that I am going to spend on the project. Overtime is factored in to the total amount of time estimated.

I require a 25% up front payment with monthly progress payments invoiced based on time spent and dedicated purchases.
If he stops paying, I stop working.

If I run into snags as you open the can of worms, and it has an impact on the duration of the project, I discuss this with the customer and get their buy-in to the situation.

Third party work (engineering shops etc), I handle on a cost plus basis.

If a project is going to take up space in my shop while I have to wait for third party work, I factor in the area that the car will occupy as a fraction of my total floor space and that gets added to the cost. My reasoning is that the car occupies space that can be used by another income generating car.

I have space for four vehicles in my shop. Those four bays must generate 25% of the rent each per month.
If I am too busy to get to a specific car sitting in the shop, that is for my loss. The customer cannot be expected to pay for me not being able to work on the car.

I do not charge extra for travelling for a project, as that cost is included in my overheads calculation. I do charge for the travel time, though, as that is part of the project.

Special purchases are handled and invoiced on a cost plus basis where I require full payment up front.
Overseas orders are handled the same way.

I do not include shipping charges in the quote for overseas orders, as I have no way to quantify that.
I do give an unofficial guestimate of shipping, based on previous experience.

Shipping and Customs charges are for the customer's account. I do not add anything.
I send him the courier's quote, which he must pay in full to me before I arrange for collection by the courier at my supplier.
The same for customs duties.
Having been paid up front for the parts, I can pay my supplier when I place the order.

I hope this helps.

jmvv wrote: ↑

Thu 23 Aug 2018, 13:31

This amount I divide by 99 (22 hours per week times 4.5 weeks)

jmvv wrote: ↑

Fri 24 Aug 2018, 11:40

Thanks I J, for pointing out the error.

It should be 8x5x4.5
for 180 billable hours

First V8 wrote: ↑

Fri 24 Aug 2018, 20:25

That is were a lot of business owners doing work that needs to be billed out per hour and not per job make the mistake . THey look at each job and see a profit of X but then don't have the next job in place so your X becomes X minus Next Job . Plan , plan and more planning .

Burnthosetyres wrote: ↑

Sat 01 Sep 2018, 17:08

Yes the theory makes sense from a ‘business principle’ perspective.

Where I have an issue as a customer, and I’m playing devils advocate. So Rassie has 4 bays. My car is in one and I’m easy. Say Bay 2’s owner is anal. He visits 3 times a week and phones twice a week. He takes up almost 2 hours of Rassies time.

Every time Rassie is side tracked he is supposed to be working on my car and I get ‘billed’ for it but Bay 2’s owner is cutting into my hour.....

Every time Rassie has a smoke, goes to make coffee and goes to the loo, I am paying for it....

But I suppose that’s how the cookie crumbles.
And in the end if the job is done
On time and too a good standard we will buy another project and go the same route....:

Some shop owners employ no labor. I understand why but when he is driving around to pick up a part or sweeeps the floor it’s expensive labor.....

I suppose there’s no perfect business model here.

But if you want to get my back up is when I pay top dollar for crap work and have to have it redone.