In a message dated 30/08/01 7:54:14 PM, mfarrel2@tampabay.rr.com writes: <<"This sounds like a very good thing.">> If by this you mean "rebuilding/rewhatevering"...it is... but there are drawbacks also. Particuarly if you run a one person shop, which I do. The first drawback is lack of contact with other people and having to guard against a 'hermit' mentality! :-) I must say that pianotech helps in this respect.............. Another drawback is a physical limit to the amount of work that can be produced in one year. With one person the only way you can speed up work is to learn quicker ways of doing things or cut out those steps which tend to turn an 'adequate' rewhatever into a 'verrrry' nice job. So short of raising prices a single person shop has limited their income at a certain range level..........'if' they stay busy all year long. In order to make something like this work well you must have the knowledge and a supply of work that you yourself do not have to go out and get. ***I have often said and still believe that one can make more money doing only tuning and simple repair work than running a one person shop.*** <<"Reading your post, it is hard for me to make the numbers add up.">> Which numbers are these? I have only used your numbers as examples. <<"After adding up parts plus markup, adding up projected hours to complete the project at your hourly wage that includes your labor, training, retirement, rent, insurance, equipment, tools, and some profit, you can still add 20% to the total (to pay the referral fee) and get the job?">> First a "referral" fee for me would be 5%, or 500 dollars on a 10,000 dollar job where I got a signed contract. A referral means that someone would call and give me a name/phone number and I would have to......... call the people,...... go do the estimate,..... check my prices,..... work up a formal quote,........ do the work (IF I got the job, and no one that I know of gets all their quotes as contracts) and supply all the needful after delivery services. As a subcontractor I agree to a contract that someone else has gotten, do the work, write a check for 20% and I 'usually' never see the piano again. Let's compare a 3,000 dollar contract first as a "referral" job and second as a "sub-contract" job Referral: Time spent: 1. average 3 phone calls to make initial contact @ 3minutes per call.....9 minutes 2. Talking with the customer making sure that they are in fact a customer (qualifying the customer) and making room for appointment to gather estimate facts.................5 minutes. 3. traveling 20 miles one way to keep appointment.......... 40 miles @ 40 cents a mile...plus 55 minute total drive time. 4. making careful estimate/evaluation checking all the needful items.....60 minutes 5. working up formal quote after checking current pricing on needful items........60 minutes plus 4 long distance calls @4.00??? 5. answering questions from the customer after the formal quote is received. ......10 minutes. 6. making arrangements for pick-up if the quote/contract is accepted...5 minutes. ****Total time expended 144 minutes or 2 hours and 24 minutes plus 16 dollars for auto expenses plus 4.00 for phone calls Not bad..... but since my experience says that I get a signed contract about 50% of the time on "referrals" I expend 4 hours 43 minutes plus 40 dollars for car and phone expense. for each signed "referral" contract. While I am getting this "referral work the shop is just sitting here idly ticking away at the expense ticker and producing nothing. On the light side let's say that my shop expense is 10 dollars an hour for a 'normal' 40 hour week. Considering this I need to add this to the cost of obtaining "referral" work. So adding these up for "referral work I get........................ 4 hours 43 minutes lost shop/labor time @ let's say 25 dollars an hour. 4 hours 43 minutes idle shop time @ 10 dollars an hour. 40 dollars direct cost for car and phone. Oh yes...... and 1 dollar for office supplies and stamps :-) Thus we have the costs of 207.07 plus 150 "referral" fee for each signed 3K contract..Total cost 357 dollars. Using the same figures for a "sub-contract" job 1. answer phone call from prime contractor 5 minutes. 2. answer follow up call from prime contractor 10 minutes. 3. make/answer coordinating call from customer 10 minutes. 4. make moving arrangements 10 minutes. total time 35 minutes (yes this 'is' typical of the time spent and sub-contract work has proved to be almost 100% signed for some reason) lost shop and labor time expense......... 20. 41. total cost for "sub-contracting" this 3,000 dollar job..........620.41 Thus we have a 357 dollar "referral" vs a 620.41 "subcontract". Homework assignment........................................ Where is a/the cost difference/benefit here, for the rebuilder, between "referral work at 3,000 and a "sub-contract at 3,000? Jim Bryant (FL)
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