For my kitbashes, I basically decide what character I want to do and go get a plastic vehicle model kit in 1/24 scale. I then sketch out various designs and have friends add their input as well. The first thing I work on is the head... I try to get a cool look to the robots head, not copying the original G1 design, but making it my own. I have various parts in my junk boxes, old model kit parts, Gundam parts, Bionicle pieces, other Transformers bits... basically whatever fits. And, if it doesnt fit, I make it outta styrene plastic. Then I just go to work on cutting up the model kit and designing the inner workings of the bot.
Sometimes a kitbash will take a week, sometimes two, depending on my other projects, as I paint resin and vinyl character models for people. I never tried looking for work as a designer... but I'd like to give it a try! I usually design the robot's "look" first... then, as I work on the physical piece, I work from vehicle mode to robot mode.
PS. Look for the newest issue of Kitbuilders magazine [this was written in 2004 -Ed]... I have a small article in there as well, on making the Bumbleebee kitbash... it should be at bookstores in a week!