Engine overhaul finances

[Tom-D]

I would think most mechanics have to keep an eye on cash flow and timing of bills/receipts.

I would gladly pay for the parts with either a credit card on file, or an upfront cash deposit. I hate other people borrowing money to perform my work.


What is the ratio of Parts $$$ / Labour $$$ on an overhaul?

That will vary a lot. make model of the engine, mark up on parts and the shop labor.

I charge $2500 for my labor. I get half of that up front, I use that cash to pay for shipping chemicals and consumables. then add those costs to the final payment of the other half of my $2500.
the parts and machining is the customers to pay for. we make the arrangements prior to the start of the process.

It is a vary rare occasion I'll finance any parts on my card.

 

[Henning]

I would think most mechanics have to keep an eye on cash flow and timing of bills/receipts.

I would gladly pay for the parts with either a credit card on file, or an upfront cash deposit. I hate other people borrowing money to perform my work.


What is the ratio of Parts $$$ / Labour $$$ on an overhaul?

Depends how much you are paying, but from typically advertised prices I'd say close to even up.

 

[Chip Sylverne]

It has to do with you needing to have it because you can't accept payment from it, and don't want to/can't float the bill. In Aus you would would call me, tell me you need $1500 to order parts, I would pop $1500 into your account over the Internet in 15 seconds for the cost of $1. Now the money is there for you to spend.

How it relates is by eliminating the issue with a better banking system.

Why not use Paypal or a similar service? IIRC, the charge for simply sending someone cash outside of a vendor transaction is minimal.

 

[Tom-D]

Why not use Paypal or a similar service? IIRC, the charge for simply sending someone cash outside of a vendor transaction is minimal.

In order for me to order your parts on your Pay-Pal account I would have to have your Pay-Pal log in..

that could get scary.

 

[Henning]

Why not use Paypal or a similar service? IIRC, the charge for simply sending someone cash outside of a vendor transaction is minimal.

PayPal charges a ****load of money, so do all the other methods. EFT is $1 not a percentage plus a transaction fee.

 

[Henning]

In order for me to order your parts on your Pay-Pal account I would have to have your Pay-Pal log in..

that could get scary.

He means I PayPal you the money. Slightly less expensive than Western Union.

 

[Luvrv8]

Before I was working at a shop I would meet up with the mechanic and get the parts list. I would then order the parts on my card, I want my cash back on the card. If he wanted the number so he could order himself I most likely would have given it to him.

 

[comanchepilot]

Personally I'd rather the A&P tell me what I need and I'd order it myself. Not because I wouldn't trust the A&P just because that's how I prefer to do things.

Not trusting your A&P with a credit card where you're not liable if anything bad happens makes no sense when you're trusting them with your life already.

Most A&P don't want anything to do with your information if they gave it a seconds thought -

plus, if you order the parts yourself - then you know when they were ordered, when they got shipped and when they got delivered -

When I do it - I send the parts to me - c/o my mechanic - this way - he knows whose airplane the parts are for . . . .

the true pita is when you need to go to three different locations because spruce does not have all of them, nor does chief or anyone else - so you end up paying 3 different shipping charges for basic supplies -

hence - I ALWAYS have two oil filters, 2 cases of oil, air filters, vac filters and misc crap always on hand in the hangar - whenever I see one of the usual suspects with a free shipping option or spruce has their 20% off deal -

if you are an owner - you need to do that as well.

 

[Henning]

Most A&P don't want anything to do with your information if they gave it a seconds thought -

plus, if you order the parts yourself - then you know when they were ordered, when they got shipped and when they got delivered -

When I do it - I send the parts to me - c/o my mechanic - this way - he knows whose airplane the parts are for . . . .

the true pita is when you need to go to three different locations because spruce does not have all of them, nor does chief or anyone else - so you end up paying 3 different shipping charges for basic supplies -

hence - I ALWAYS have two oil filters, 2 cases of oil, air filters, vac filters and misc crap always on hand in the hangar - whenever I see one of the usual suspects with a free shipping option or spruce has their 20% off deal -

if you are an owner - you need to do that as well.

I use the tail number c/o mechanic for the same reason.

If you have a hangar, you can buy oil in a drum and sell to your neighbors to pay for your oil.

 

[JoseCuervo]

That will vary a lot. make model of the engine, mark up on parts and the shop labor.

I charge $2500 for my labor. I get half of that up front, I use that cash to pay for shipping chemicals and consumables. then add those costs to the final payment of the other half of my $2500.
the parts and machining is the customers to pay for. we make the arrangements prior to the start of the process.

It is a vary rare occasion I'll finance any parts on my card.

Thanks.

Would the length of the project likely cross multiple billing cycles for the mechanic that financed the parts on his own credit card?

 

[JoseCuervo]

Depends how much you are paying, but from typically advertised prices I'd say close to even up.

Seems like a lot of professions are that way. Mechanics, carpenters, Dr's....

Parts=Labour


Kind of like restaurants: Average Bottle of Wine = Average Entree'

 

[Tom-D]

Thanks.

Would the length of the project likely cross multiple billing cycles for the mechanic that financed the parts on his own credit card?

Some times it can go long on the shipping when the company back orders the parts. or I forget a part on the order. When I do that, I pay the over night shipping to get it here in time to build.

 

[gkainz]

How does your club finance your engine overhauls? do you do them in house or send them out to a overhaul shop?

We replace with factory reman engines, and we pull the old and hang the new ourselves, under A&P supervision. We cover that cost with maintenance reserves so we have cash for the replacement.

 

[Chip Sylverne]

PayPal charges a ****load of money, so do all the other methods. EFT is $1 not a percentage plus a transaction fee.

Just checked it out on the Paypal site. Sending funds from one PayPal account to another is free in the US. so Tom opens a PayPal account, client sends cash to Tom, Tom goes the the bank for cash, or purchases parts out of his account.

Don't cost nuthin', except to the parts vendor.

 

[Henning]

Just checked it out on the Paypal site. Sending funds from one PayPal account to another is free in the US. so Tom opens a PayPal account, client sends cash to Tom, Tom goes the the bank for cash, or purchases parts out of his account.

Don't cost nuthin', except to the parts vendor.

That's not a card payment though.

 

[Tom-D]

Just checked it out on the Paypal site. Sending funds from one PayPal account to another is free in the US. so Tom opens a PayPal account, client sends cash to Tom, Tom goes the the bank for cash, or purchases parts out of his account.

Don't cost nuthin', except to the parts vendor.

Except Pay-Pal places a hold on funds just in case there is a bad deal going down.

 

[Henning]

Except Pay-Pal places a hold on funds just in case there is a bad deal going down.

Yeah, don't they hold like 10 days no matter what? That's how they make money off those transfers. I remember not being able to use that process due to the time delay to get funded.

 

[Chip Sylverne]

Except Pay-Pal places a hold on funds just in case there is a bad deal going down.

I believe that's only for private transactions. I use PayPal a lot for buying from real vendors, never had a problem with holds, stuff ships right away. Even for ebay purchases, the vendors are paid immediately and stuff ships. Only used it once for a private transaction, and had no problem there either.

But if your client makes a substantial deposit at the start of the project, why should that be a problem? It would make your record keeping easier, because all your transactions would be tracked by a single PayPal statement, and nobody would have anybody else's credit card number.
Seems pretty simple to me, but it's your business.

 

[Chip Sylverne]

Yeah, don't they hold like 10 days no matter what? That's how they make money off those transfers. I remember not being able to use that process due to the time delay to get funded.

One of my clients was a Paypal big wheel. They have at any one time hundreds of millions of dollars in accounts that people just leave there, interest free, for months at a time. They don't need float, people give them interest free loans willingly.

 

[Henning]

One of my clients was a Paypal big wheel. They have at any one time hundreds of millions of dollars in accounts that people just leave there, interest free, for months at a time. They don't need float, people give them interest free loans willingly.

Doesn't change the fact that it takes multiple days to gain access to the money. Besides which, there is nothing about need that stops greed. They might not need it, by they sure as hell take all of it the law allows.

 

[Chip Sylverne]

Doesn't change the fact that it takes multiple days to gain access to the money. Besides which, there is nothing about need that stops greed. They might not need it, by they sure as hell take all of it the law allows.

It's usually 3-4 days, not great, but on a par with holds on deposited checks. You're right, if banks would make $1 etf transfers, it would be optimal.but they don't. I think I get 4 a year free, then they are a few bucks each, depending on the amount.

My comment was less about the greed of Paypal than the foolishness of account holders giving them free money to put in the overnight repo markets. I don't blame them. They'd be crazy not to.

 

[Henning]

It's usually 3-4 days, not great, but on a par with holds on deposited checks. You're right, if banks would make $1 etf transfers, it would be optimal.but they don't. I think I get 4 a year free, then they are a few bucks each, depending on the amount.

My comment was less about the greed of Paypal than the foolishness of account holders giving them free money to put in the overnight repo markets. I don't blame them. They'd be crazy not to.

Do you not see the ethical difference in taking the billions that people choose to leave with you for providing service over holding it and encumbering people using your service? If PayPal let me use money freely, I'd park $50k with them, not like the bank gives anything either right now for liquid money. But they don't, they take everything they can get as soon as they have any leverage, and I don't do business with for it. I have a direct draw for when people want a PayPal payment, nothing parks with them.

 

[James331]

Are most A&Ps going to spend time to shop for the best prices on parts, or are they going to go to one or two of their most used contacts and order what's needed? I suspect the latter, as they're on the clock and research takes time.

However, I can put some time into researching parts and prices and a lot of times can find the "good deal" out there and save some $$ on parts.

How many A&Ps balk at installing customer provided parts?

That.

Also many A&Ps won't research the best parts.

Mags screw up, I'll order some new slicks vs getting bendix

Exhaust needs replacing, here's a nicrocraft vs a Heavy Duty Acorn system.

Most A&Ps will also mark up prices.


As for overhauls
http://www.hotwaircraft.com/NO_SURPRISE_PRICING.html

 

[Chip Sylverne]

Do you not see the ethical difference in taking the billions that people choose to leave with you for providing service over holding it and encumbering people using your service? If PayPal let me use money freely, I'd park $50k with them, not like the bank gives anything either right now for liquid money. But they don't, they take everything they can get as soon as they have any leverage, and I don't do business with for it. I have a direct draw for when people want a PayPal payment, nothing parks with them.

When you deposit a check in the bank, you cannot access that deposit for three days. If you use direct pay from your bank, there will be a multiple day delay between the time your account is debited, and the time your account payable is paid. The only time you have direct access to your cash is at the window, or ATM. And even the ATM withdrawal is limited in a 24 hour period.

PayPal isn't a bank. It's a payment facilitator. It depends on the networks, and the time it takes to process a network transaction. You have the right idea, if you want immediate access to Paypal funds, treat your PayPal account like a sweep account and empty it daily. I don't think it's an ethical dilemma, a bank is an apple and Paypal is an orange.

 

[timwinters]

I must admit, I get a kick out of threads like this...

After all, most, if not all, of us have been giving our credit card to minimum wage waiters for decades and letting them walk away with it for 5 to 10 minutes without a second thought. And these days they could quickly take a photo of both sides with their smart phone.

A complete stranger.

But many would hesitate giving it to your A&P. A professional (hopefully anyway).

I don't get it.

 

[Henning]

When you deposit a check in the bank, you cannot access that deposit for three days. If you use direct pay from your bank, there will be a multiple day delay between the time your account is debited, and the time your account payable is paid. The only time you have direct access to your cash is at the window, or ATM. And even the ATM withdrawal is limited in a 24 hour period.

PayPal isn't a bank. It's a payment facilitator. It depends on the networks, and the time it takes to process a network transaction. You have the right idea, if you want immediate access to Paypal funds, treat your PayPal account like a sweep account and empty it daily. I don't think it's an ethical dilemma, a bank is an apple and Paypal is an orange.

No, they are both cherry pickers, PayPal just picks cherries off the ground as well. PayPal could have had my business if they did better. They could have changed the market model, but didn't.

 

[txflyer]

I must admit, I get a kick out of threads like this...

After all, most, if not all, of us have been giving our credit card to minimum wage waiters for decades and letting them walk away with it for 5 to 10 minutes without a second thought. And these days they could quickly take a photo of both sides with their smart phone.

A complete stranger.

But many would hesitate giving it to your A&P. A professional (hopefully anyway).

I don't get it.

No joke.

I don't let anyone disappear with mine anymore.

If it's one of those foo-foo restaurants where that's the only way they do it and I don't have cash, I tell them "I go where this card goes."

 

[Henning]

No joke.

I don't let anyone disappear with mine anymore.

If it's one of those foo-foo restaurants where that's the only way they do it and I don't have cash, I tell them "I go where this card goes."

Why not just set up a "restaurant card" on an account you keep minimum funds in?

 

[James331]

Or better yet get a paypal debit card, like to your normal card but provides a barrier between your card and the merchant, you also get a email with the amount the second they ring it up.

 

[Henning]

Or better yet get a paypal debit card, like to your normal card but provides a barrier between your card and the merchant, you also get a email with the amount the second they ring it up.

Exactly. It's so easy now to set up a separate card for individual projects to limit your exposure. Heck, I just got $100 from Wells Fargo for setting one up. Now you have a card to use for all the expenses on that program. I don't need an accountant or to do any record keeping, the bank does it for me. I just need to keep a running check they got it right.

Boats or planes, they get their own card and the account can be maintained as the conditions require. If the contractor needs to buy something, they can grab the card from the plane or bridge, give me a call with how much they need, I make a quick transfer and they use the card.

 

[Checkout_my_Six]

anyone still pay in cash?.....I know one who does.

 

[James331]

anyone still pay in cash?.....I know one who does.

OFTEN, prices come down with crisp 100s.

Besides IMO it's more patriotic.


1st choice: barter
2nd: cash
3rd: bank stuff, ie cards, checks etc.

Checks are handy for the memo area.

 

[JoseCuervo]

No joke.



I don't let anyone disappear with mine anymore.



If it's one of those foo-foo restaurants where that's the only way they do it and I don't have cash, I tell them "I go where this card goes."

Or just find a reputable credit card issuer that covers any fraud/loss on your account, then you don't have to follow waiters around a restaurant instead of enjoying pleasant conversation and an after dinner liquor.

Following waiters around has to be a horrible way to spend an evening.

 

[JoseCuervo]

OFTEN, prices come down with crisp 100s.



Besides IMO it's more patriotic.





1st choice: barter

2nd: cash

3rd: bank stuff, ie cards, checks etc.



Checks are handy for the memo area.

A lot of businesses don't like cash, and I don't blame them.

Employees steal cash. Cash requires a safe drop on weekends.

Employees required to make bank runs, etc.

 

[James331]

A lot of businesses don't like cash, and I don't blame them.

Employees steal cash. Cash requires a safe drop on weekends.

Employees required to make bank runs, etc.

When it comes to shops, aviation, cars, etc I can say I have had the complete opposite experience when paying cash.

As someone who did a considerable amount of freelance instruction, I always requested cash.

 

[Tom-D]

I must admit, I get a kick out of threads like this...

After all, most, if not all, of us have been giving our credit card to minimum wage waiters for decades and letting them walk away with it for 5 to 10 minutes without a second thought. And these days they could quickly take a photo of both sides with their smart phone.

A complete stranger.

But many would hesitate giving it to your A&P. A professional (hopefully anyway).

I don't get it.

That put me on the floor, and was the major reason I posted this thread. Yet I get all the bad business practices opinions from those who have never rebuild an engine for a customer.

 

[Tom-D]

Or just find a reputable credit card issuer that covers any fraud/loss on your account, then you don't have to follow waiters around a restaurant instead of enjoying pleasant conversation and an after dinner liquor.

Following waiters around has to be a horrible way to spend an evening.

Doesn't that concept go for your every day service providers?

I'm sure your A&P doesn't want to loose you as a customer by scamming your card.

 

[Tom-D]

Agreed, it's a shoddy business practice if the A&P expects to operate on the consumer's credit card for parts.

Aren't they the owners parts ? why should't they pay for them. You'd rather charge the owner list after buying on discount? Is that the way you prefer to treat your customers?

 

[Henning]

anyone still pay in cash?.....I know one who does.

Typically for my own stuff. I am set up for Euro or Dollar.

 

[jesse]

Typically for my own stuff. I am set up for Euro or Dollar.

I carry dollars and pesos in my wallet. Usually run out of dollars..but always have those pesos. You never know when you'll need some pesos...