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Quoting shop and field repairs

Discussion in 'Shop Talk' started by Wes J, Feb 24, 2016.

  1. Wes J

    Wes J Senior Member

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    Jan 24, 2016
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    649
    Location:
    Peoria, IL
    I own a machine shop currently, but I'm looking to branch out into repairs. I've worked professionally as a truck mechanic and I have the tools and equipment in my shop to take on most jobs including major engine rebuilds and line boring. I'm not really set up to work in the field, but we'll get there. Plenty of insurance and that good stuff.

    Anyway, I'm wondering how you guys handle quoting repairs. Does a customer expect you to estimate the repair cost without seeing the machine? How much are you held to the quote?

    When I worked in the truck shop, estimating the cost of a repair was usually possible and we were usually close on the straight forward stuff. Service, inspection, brakes, wheel seal, clutch, water pump, etc were unlikely to have a lot of surprises. Even an inframe overhauls was usually easy to estimate unless there was a spun bearing or broken crank or something unusual.

    In the machine shop world, I'm usually quoting making a new part or multiples of a new part. I give a quote and that is exactly what the customer pays. If I screw up, I take it on the chin. If I somehow come out ahead, I keep it really quiet. Things are very rarely done on "time and materials" terms and the customer is mostly shopping on price and sometimes lead time. Quoting so that we can make money and still get the work is the hardest part of my job.

    I'd like to hear what others are doing.
     
  2. John C.

    John C. Senior Member

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    Toughest part of any repair process i think. If all you work on are trucks it isn't all that hard as you know. The yellow iron is a lot different. If you completed a straight forward job in the past your experience will allow you do an estimate. If there is troubleshooting or other unknowns a quote will be pretty risky. Most tend to keep the cost parts of a project pretty loose until all the unknowns are discovered. A straight engine or pump swap is pretty easy until the unknowns come out. Maybe they only want the engine swapped but they didn't tell you that all the ancillaries also need to be swapped. Starters, bell housings, alternators, air conditioning compressors, pump drive couplers, different cooling fan systems, radiator connections and wire harnesses have blown more than one quote to pieces. More than anything you have to establish your business as doing good work up front. Once the trust is established you will get a lot of free reign.

    I like do not to exceed estimates with plenty of possible outs up front. Troubleshooting has always been time and materials. I have quoted a few things with the understanding that a check will be in hand at the completion of the project.
     
  3. ship660

    ship660 Well-Known Member

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    Location:
    KC MO
    Biggest factor i look at when quoting a repair is the customer. Does he know exactly what he wants done and needs? If he really has no idea I will work with him to find the best and most cost effective solution. It helps me if he can text me some pictures or video of what is going on before I show up to give me a better idea as well. I have quoted undercarriage repairs anticipating changing pads and removing broken bolts to find out customer ordered rails with pads installed and got lucky with only 2 broken roller bolts. Made good money on that job. I always do electrical problems time and material. Diagnoses is by the hour. Most of the time I give the customer a break on it if I do the repair.
     
  4. td25c

    td25c Senior Member

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    Feb 14, 2009
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    Location:
    indiana
    Never had a customer ask for an up front Quote or cost estimate for in field repair ? Mine are more concerned about getting the machine back in action .When can you get there & that kind of stuff ? After the dust settles they ask " what do I owe ya? "

    I Love in field repair jobs , never boring and feel somewhat like a paid tourist on vacation at times .

    http://www.heavytruckforums.com/showthread.php?263-Some-Holmes-750-action
    https://www.heavyequipmentforums.com/showthread.php?13239-Wrecker-call
     
  5. Wes J

    Wes J Senior Member

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    I need some customers like that.
     
  6. Truck Shop

    Truck Shop Senior Member

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    Occupation:
    star gazer
    Location:
    SE Washington St
    Where I'm at the outside customers rarely ask for an estimate, they just want it running now. But I always find out parts availability and prices first.
    If costs are going to change I call and let them know. For call outs it is strictly time start time finished plus mileage, and that varies depending on
    the customer. We have one customer that never questions repair costs, especially during harvest. I never bend them over because they always
    pay on time. And I always try my best to be fair, but somethings just don't fly together as they should.

    Truck Shop
     
  7. nowing75

    nowing75 Senior Member

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    I avoid anyone that's what's a price up front. The few customers I have are big enoug to know the drill. I stay away from the little guy with the gray market excavator.
     
  8. ETER

    ETER Well-Known Member

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    Location:
    Upstate New York
    I think that in the 8 years that I have had the repair shop open, I have had one company ask for a repair "quote"...and they never followed up for the repair anyway. I agree with you nowing75, I don't get a warm fuzzy from a "shady type" "one trick pony" machine owner wanting to know how much the diff repair on the 40 year old backhoe is going to be before the lube is ever drained. On the flip side, I don't have a problem with giving a good customer an "estimate" before the repair begins because a good customer knows that most repairs are not always straight forward and "murphy" usually finds his way into the equation most of the time.
    I do try to stick to "industry standards" for repair times (if there is one) and will not bill the customer for my time spent banging my head against the machine trying to figure out WTF I'm supposed to be doing (it's funny how fast you can do something the second time). I guess if a customer is looking for a "quote" they must be looking for the cheapest bid/price for a repair (kind of like the government) and I would probably not be inclined to do business with as a repair shop.
    Regards, Bob
     
  9. theironoracle

    theironoracle Senior Member

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    Occupation:
    OWNER/OPERATOR MOBILE HEAVY EQUIPMENT REPAIR
    Location:
    PACWEST
    I agree with most replies here. Rarely do inget someone wanting a quote. If they insist I be sure to put lots of money in it for my risk and return. Most customers want a discussion of what things can cost and scenarios of what they could cost so they can plan accordingly for payment. The last quote I did was for an excavator I had worked on before for a good existing customer. They wanted a quote to r&r the motor with a take out. Generally speaking this is one day worth of labor, but then I went into if it's not an exact match add hours for injection system r&r, oil pans, exhaust manifolds, bell housings, probably a pump drive coupler, oil pump maybe, the list goes on and on and on until they can trust me because I know what I'm doing and I know what I am talking about. A simple "engine swap" can go from $1,000 dollars of labor to easily $6,000 in labor!!! The other thing is to add value to your pricing by getting repairs done with less down time. I quoted a grouser weld on job, the customer needed the machine to be running with little to no downtime I proposed getting the job done in 2 days using 3 guys and 2 welder a on site, the cheaper way which I knew was for another guy to weld them on with one guy which was going to take 6-7 days. I was a better value at twice the expense because uptime was very valuable for this key piece of equipment. One of the guys on the forum has the the tag line " a good mechanic is not expensive but priceless" I strive to be the priceless guy and it attracts the priceless customers.....TIzo
     
  10. Wes J

    Wes J Senior Member

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    Interesting info. So, if getting the machine running ASAP is the primary concern and money is basically no object, how do you independent guys compete with dealers? Seems like the dealer is in the best position to get the thing running since they have the parts or can get them easily.

    When I worked in the truck shop, we could easily get work because we were cheaper than the dealer in terms of hourly rate. Also, we were 40 or so miles from the closest dealers so we could get a lot of local customers. We could do just as good a job as the dealer at a lower cost, but the trade off was time. We had 6 guys working one shift, not 40 guys working 2 or 3 shift.

    If you brought your truck in for an in-frame, you had to wait until we could get it in the shop. Then, a 40 or so hour job could easily take 2 weeks since we had to wait for parts or outside services like head work if we didn't swap for a reman. At a dealer, a guy would certainly pay more, but he could probably be back on the road in 3-4 days. Plus, he had that warm fuzzy feeling that people get when they spend more than they should have and need to justify it by telling you the dealer does it "right".
     
  11. Seabass

    Seabass Well-Known Member

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    Location:
    Canada
    I run my repair truck hourly, from when it leaves the driveway till it returns to my house/shop. Everyone else does the same around here. I don't charge for miles driven or a fuel surcharge but some do, dealers mostly. Keeps my math quotes simple.

    Finning and Brandt are an hour away at $206 an hour plus plus so its going to cost $500 bucks or so for them to just come out. Its not hard to undercut their prices and still make money.

    Parts are easy to come by, many aftermarket and excellent couriers,
     
    Last edited: Feb 28, 2016
  12. ETER

    ETER Well-Known Member

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    Location:
    Upstate New York
    I would agree with Seabass, as an independent shop I can usually get parts just as quick as the dealer (I just don't have them here on the shelf) but a lot of the time a dealer will have to order the repair parts in too. Half my work is truck repair and half equipment...half the jobs need to be done "yesterday" and the other half are ASAP or "when you can work it in" time frames. It seems like for every job there is a "sweet spot" for the cost of the repair and time down, the hard part is trying to find it and make everyone happy (customers and myself). I don't like to cut myself short, but sometimes it seems like you have to if you want people to call you again. My ramblings here are nothing that you guys haven't already figured out years ago, but I am still pretty "green" at this self employment thing and am still interested in these aspects of the business, and like you Wes J like to hear other's perspectives.
    Regards, Bob
     
  13. Oxbow

    Oxbow Senior Member

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    I think this problem is universal to most business.
     
  14. hetkind

    hetkind Senior Member

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    Location:
    Unicoi, TN
    I think time and materials is the best way to START an estimate, combined with flat rate tables, plus over and aboves. Coming up with good estimates is almost an art form. Insurance adjustors have excellent reference materials on parts and flat rates, and they still have allowances for "over and above" or what they call hidden damage. Plus you also have to account for "non-standard configurations" or previous poor repairs. Sometimes, manufacturing plants have undocumented changes and the drawings and diagrams are wrong. My favorite is when a wiring harness gets damages and a field repair is done with big roll of machinery wiring, one color and whatever crimp connectors were in the kit that day!

    So, I would start out with the expected scope of work, say a clutch job on a Class 8 tractor, to include appropriate engine and transmission seals, known wear parts and friction materials, and have over and above for things like starter ring gears, bent driveshafts, stuck bell housing bolts and the like. Once you build up a personal database of actual times for these jobs, you can tailor your estimates a bit better.

    And communication is the key...the owner/operator of the equipment needs to stay aware of staffing shortages, parts delays, hidden damage and worse yet, parts suddenly costing much more than expected. The more informed they are, the better they can plan their work and finances.

    Howard

    PS: I stopped accepting paying work decades ago and now just keep my skills up and help friends out.
     
  15. Seabass

    Seabass Well-Known Member

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    Location:
    Canada
    Another tid bit I will add. Communicating with the customer is important. You get sent out to fix the obvious but notice issues 2,3 and 4. Inform and ask for permission to repair to save customer money in long run. If a hose blew apart but you find 3 more where the steel is showing drop them a line. They will appreciate it even if they choose to put it off till later.

    Something else I have learned. As you deal with field break downs, customers are panicking and want you to stop what your doing and work for them right away. All they see is down time and money being lost every hour their machine is down. We Mechanics, welders, fixers of things needing fixing, need to teach them how WE want to be treated. We are not slaves that will work 24/7 or nights, weekends to accommodate them. Sometimes yes, but those who are good to you and respectful of you. Faster you pay the faster the fix. You want it fixed now? But don't want to pay for 3 months? Guess who's going to make you wait a week next time you call? Weeding out cheap and slow to pay buggers will make your life much happier. Just my 2cents.
     
    Last edited: Feb 29, 2016
  16. kshansen

    kshansen Senior Member

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    Occupation:
    Retired Mechanic in Stone Quarry
    Location:
    Central New York, USA
    Like the company I retired from if you were to buy a load of stone or what ever from them they want it paid for before you leave the yard. But if you sell them parts or repair work they put you on a 90-120 day payment schedule.

    I had the need to replace a pump on a 980G about 2 years ago. I priced it through the local dealer $1,000.00 did some research online and found an outfit that had new genuine Cat pump on the shelf for $500.00. Just needed someone with a company credit card to make the call. My boss tried talking to his bosses and finally gave up and we ordered the $1,000.00 pump. When we tried asking why we were given the old story about "You don't see the big picture!" and "It has to do with cash flow, it's cheaper to pay the extra $500.00 in 90 days than pay the $500.00 less today! I even asked that boss if I could give him $500.00 and wait 90 so he could hand me back $1,000.00, did not get an answer on that!

    I live near an area that has many pretty wealthy people living in the area. A guy I knew about 20 years ago who did electrical and plumbing work as a private contractor often said how he would rather work for the farmer who lived from milk check to milk check as they would pay for the work as you were finishing up a job. The millionaires, or want to be millionaires would need to pass the bills onto their accountants for approval and argue about every little thing they could then make him wait for his money.
     
  17. kshansen

    kshansen Senior Member

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    Occupation:
    Retired Mechanic in Stone Quarry
    Location:
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    Just thought about another thing. Many years ago I was talked into swapping in a set of injectors in my brothers father-in-law's over the road tractor. It had some version of the NT855 Cummins. I was not asked to trouble shoot it if it even had a real problem I did not know. Any how this guy sent his son to pick up the exchange injectors and while he was gone he mentioned he figured it was not to bad as the injectors were only $35.00(I did say it was many years ago!). I replied that's a piece, he was sure that was for the set of six! Well lucky for me his son was the one who was paying for them, not me!
     
  18. thepumpguysc

    thepumpguysc Senior Member

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    Good one Hansen..
    I love your post #16.. as I too ran into that problem.. my company ALWAYS HAD a 60 day pay period on their invoices..
    Then things went "south" around 08' and it went to 30 days.. NOW its 15 days .. or.. its 1.5% of the total bill..
     
  19. Seabass

    Seabass Well-Known Member

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    I, like many of us, have had to deal with guys you need a 42 inch pry bar to get the money out of their hands, but have found the smaller companies very good. One person I do work for makes a point to cut me a check the day the job is done or the very next day. He never bickers about price, shakes my hand and says 'No, thank you' every time he hands me a check. Doesn't get better than that.