when you charge by song and not time, whats the procedure?

I've never been in a recording studio before, but I know some people that have, they said they basically recorded there songs like two or three times each and added a few over dubs mixed up all the best parts and paid an hourly rate. How do you do things? I ask because a mate of mine and I want to record a song he wrote... but not to sure where to look?

so basically if you have time, take me through you're process... like do you provide instruments or do we have to use our own? what does it take to record the one song? how long? (say for a 3:30min song)