Editor’s Corner: Builders Discuss State of the Industry at Restoration Roundtable

May 21, 2012

Builders from all over the country met up at this year’s Restoration Roundtable at the Hotrod & Restoration Trade Show to discuss what’s happening in their shops and share best practices.

One of the perks of attending the Hotrod & Restoration Trade Show is having the opportunity to meet and talk shop with other builders from around the country, and the roundtable was perhaps one of the best example of this.

Over 25 builders, restorers and shop owners joined HRR‘s Managing Editor Devlin Smith and I to discuss important business topics, ask each other questions and get advice on how to handle issues that come up at their shops.

If you weren’t able to attend this year’s Restoration Roundtable, be sure to put it on your schedule for the 2013 show! Each year it continues to grow in size and seems to really help those that attend.

State of the Industry

At last year’s Restoration Roundtable, it seemed that most shop owners were struggling to get customers in the door. While the builders at this year’s roundtable said that things have dramatically improved since last year, the struggles they’ve had recently aren’t getting customers in the door, it’s getting those customers to spend money.

According to many of the builders, the down economy is making the clients expect to get a lot more for the money they are spending.

“Everyone seems to be very busy but they’re not staying ahead because of all the extras they have to do,” said Frank Seme of Seme & Son Engine Builders in Euclid, Ohio. “People expect more and more from us but aren’t willing to pay more.”

The builders discussed the ways that they’ve spread the word about their shops, including by attending more events and car shows.

“Having my clients go to shows with the cars I have done for them actually gets me more customers,” said John Meyer of Clean Cut Creations in St. Louis, who added that oftentimes he’ll take clients to shows on his dime in order to give his shop a presence at the events.

This practice helps to build a good reputation for his shop. “Word of mouth is everything in this industry,” agreed Jon Hantsbarger, client service manager for Precision Restorations in St. Louis.

Pricing & Billing Work

As the builders discussed the ways they bill and price their shops’ work, many agreed that the amount of man hours they bill doesn’t accurately reflect the actual amount of time that’s spent on a customer’s car.

“I now have to charge for all of the time I spend on the telephone for a job,” said Meyer of Clean Cut Creations. “Still, no one is getting all of their hours billed each day.”

Several of the builders said that oftentimes they aren’t able to bill for the actual number of man hours put into a client’s car, as the price true would be out of their client’s reach. This is especially true with the time they spend on the Internet or phone locating parts. How and when to bill for work was a topic that the builders discussed at length. Several shop owners shared how they keep track of billable hours by providing the client with a detailed work order. Although the shops all had different time frames for billing (from weekly, to biweekly to monthly), all agreed that maintaining good communication is the key to having a satisfied customer and a smooth build.

“The client gets to see pictures every day that back up the work that’s being done based on his work order,” said Hantsbarger. “If they are able to see proof that what we say is being done is actually being done, it tends to make things go a lot smoother.”

The builders talked about the tactics they use to weed out the “dreamers” who end up wasting their time and won’t commit to a job from the actual potential customers.

“We started charging $75 to go out and look at somebody’s vehicle at their location, and we tell them that if they bring us the job, we’ll take that first $75 off their first invoice,” said Aaron Cole of Cole’s Classics in Barberton, Ohio. “If they’re not willing to pay $75, then you know that they’re not a serious customer.”

Several of the other builders in the room said that they also charge a consultation/vehicle inspection fee (some as high as $350) to see if a customer is really serious about getting the job done, in addition to helping them compensate for gas and the time that they have to spend out of the shop. The builders also talked about seeing an increase in clients wanting to bring in or buy their own parts in order to attempt to save money on the build.

“The economy now is making us deal with a lot of those clients that we wouldn’t have had to deal with, say, eight years ago,” said Hantsbarger of Precision Restorations. “We have a 30-percent markup on parts but to most of [my customers] it doesn’t matter, but there are still some that want to cut $500 or $1,000 out of your job.”

According to Joann Kuehl, also of Clean Cut Creations, “the majority of the people that walk in are looking for a cheap price.”

“The [car restoration] TV shows are great for the hobby but horrible for a shop,” Hantsbarger said. “Every week there’s at least one person that comes in and quotes a price they saw on one of those shows. They see something done on TV for next to nothing, and in two days, and they expect us to be able to do that. They never really say how much time actually went into that vehicle on the shows.”

Looking to the Future

While the roundtable attendees shared the struggles they face as shop owners in the car restoration industry, most said that things at their businesses are going in the right direction.

“It still bounces and we have a lot of lull but it’s trending upward,” said Hantsbarger. “We’re higher for our first quarter than we have been for the past four years.”

Several of the shops said that they’ve had a lot of success using social media sites like Facebook and Twitter to promote their businesses. Although many of the builders say they’re still skeptical of using social media because it takes away valuable time they could be spending in the shop, others argued that the time spent on the computer helps bring in new business.

“That’s really helped our business a lot, getting both big and little jobs in the door,” said Kuehl of Clean Cut Creations. “The little jobs really help us. The little jobs help fill in the time in between the big jobs.”

“We’ve always had a waiting list,” said Cole of Cole’s Classics. “We’ve never been without work, which means we’re in a great place.”

You can see more coverage of the 2012 Hotrod & Restoration Trade Show in the May issue of Hotrod & Restoration.