May have my first customer

[Jdhiker]

Had a friend approach me asking if her car would pull a teardrop then asked me if I would be interested in building one for her.... Wow... It's been what I had been wanting to do.
Now have to give Her price and hoping I don't under or over figure it.
How have you all approached your first build for someone??

Also I would like to do this and also restore vintage canned hams as I have a few of those I'm working on also.

Thinking of starting an LLC before I do anything for people to protect me??

Thoughts??

[Gage]

The first thing you need to do is Not call your teardrop a Benroy. Then figure out what your time is worth per hour, how many hours it will take to build and what the material will cost. Then how much of a profit you want.

[Kharn]

You might want to charge separately for time & materials, a flat fee could put you in a big pickle.

[noseoil]

Just use your records from previous builds to establish a base-line for the next one. Your time & material costs are documented already, right? If not, you're running a hobby & not a business.

[48Rob]

An LLC is a reasonable step.
You should also concern yourself with securing adequate liability insurance, and a broad umbrella in case someone or something were hurt as a result, direct or indirect, of the trailer that you as the "manufacturer and designer" built, sold, and placed on the public roadway...

If my tail was on the line, or I was considering placing it there, I would pay a good attorney to advise the best/safest method to set up the company and make sure all the bases were covered.

Building a trailer for yourself is one thing (risky enough liability wise) but once you start doing it as a business, you can get in deep very fast.

Rob

[Jdhiker]

Still not sure what I will do. Even though she is a friend you never know down the line what can happen. Great advice from all of you ! Guess I will look into this more before making a rash decision. Heck I don't consider myself that good at it. But your always hardest on yourself.

[David S]

As a self employed guy I dont want to discourage anybody from there dreams but ,,, the real world can can be a rude awakening.
Friends and family can be your worst customers.They expect everything better and cheaper because of the relationship.
Just be up front with everything.
If you dont have an accountant,get one.
My accountant suggested an incorporation to protect my assets and for tax reasons,cost a little more to set up but saves me money in the long run.
Most of my customers understand the risk of bidding a project and will agree to a rough estimate ,then time and material plus 10 or 15 % knowing they will see all the bills.
Good Luck, and remember,the reality shows on TV are not real.Its harder and very few will pay $20,000.00 for a 40 year old 12' trailer.

[wincrasher]

Getting an LLC is a great first step. You can do it for $250. The point of an LLC is to protect all your assets. If you follow the rules, you are essentially shielded from any liabilities.

That said, I would say you don't need any insurance, other than if you need some to cover any employees, or yourself in case of a shop accident.

Pricing, of course is up to you. As a good business practice, you need to quote a firm price to your customer. It can't be open ended, or you may end up with conflicts and disappointments.

Create a work order sheet to show exactly what she is buying and the costs. Get a signature as agreement. You may want to put some conditions on this form - such as termination of the agreement or cancellation, etc.

Get a down payment. Make it 10-15% of the total price. That will keep the customer engaged in the project and not flake out on you hopefully.

Sounds like a fun endeavor. Hope it works out for you!

[4x4time]

October 4, 2014

Dear Sir or Madam:
Be ready to move out of MY HOUSE in 6 mo after you get your LLC . You will be better off to charge by the hour. Be ready to move the trailer when zone show up. You should have got ever one on the street a hooker . If you did not do the 40 are more things that the laws want's. You stop the guy with the chainsaw and hockey mask from using your bathroom. He can use it any time he wants now. It his His . When the jury gives him the house car your dog.... you can't even walk by filing bankruptcy We can call it good just send me $50.000.00 cash
Sincerely, AWDA., DOT

[4x4time]

When getting your LLC you have admitted you are a business. So now you have to get your bs name file with the state ,zoning and you better call D.O.T. You are now a trailer manufacturer. That,s going on the road. But what will get you the fastest is a lawyer and AWDA. If you have not done every thing right. You can be hit with punitive damage behind a crime .You can not have it dropped in bankruptcy

[gatorgrizz27]

While I agree that an LLC can be hugely beneficial in certain cases, there is no need to go through all of the trouble of setting up a "legitimate business" before you sell your first trailer. Make money first, determine if it is viable, then go legit if it is.

Does she like any trailer you've currently built well enough to buy it as is? Most of us have things we would like to change if we had a "do over", it could be your chance to sell it and build another the way you'd like. Even if something happened, a lawsuit is more likely to go in your favor in a case of "I built this trailer for myself, she made me an offer I couldn't refuse, so I sold it to her, telling her it was hand built", than someone trying to skirt manufacturing standards.

If she does get one custom built, get a deposit in the full amount of the materials and let her know she ca pay the "labor" part of the bill when she picks it up and is satisfied with everything. She could change her mind, move, go to jail, or pass away before you complete it, leaving you upside down in it. Not paying in full until she receives it keeps her comfortable that the will be happy with everything and not get taken.

You need a firm price and a written contract, even if it isn't legally binding. List out exactly what it will be made out of, what features it will include, and make it known that change orders will cost extra or be impossible. Adding an extra light before you've wired it is no big deal, it could cost $300 if the wiring is finished and sealed up. Time & materials billing works well when you're doing a restoration and not knowing what you'll find when you get into it, very few people are fine with writing a blank check for a product, even if it is custom made. Figure out your materials cost, add 20%, then add on whatever amount of money would make it "worth your while" to build it. Unless you are doing this full time it is just extra cash, so hourly rate doesn't really matter, and when you're doing one-off projects without templates, having machines set up, and experience it's probably not even going to work out to $10/hr with a reasonable final price.

[Gold5one]

I would direct them to eBay or Craigslist for a camper. The downside on this venture is more than the upside.