Buckle your seat belts people, because in a few short paragraphs…
I’m going to teach you a thing or two about running a handyman business.
So sit down, shut up, and enjoy the experience of this 4am, Red Bull induced, self hatred fuelled, writing extravaganza…
We get phone calls at all hours. We have to ‘nip out’ and quote for jobs at all hours (mostly at night). If we are lucky we can quote there and then. But more often than not, we then have to return home and trawl through countless product guides, websites, price lists and the like. All in order to prepare a proper itemised quotation for the customer. Breaking down material and labour costs too. And all of this is unpaid work.
If we’re lucky, we get the job we quoted for…
And we go to work on it. We make shopping lists of what we require to complete that job. Then we drive to the builder’s merchants, and often with our own money, we pick up materials for said job. We prepare for the jobs we are about to start. While in the same day, we are often found finishing off other jobs. That’s more unpaid costs for us to contend with.
Sometimes we have to chase up payments from earlier jobs too. We have to build and maintain systems to help us monitor our cash flow to help ensure a profitable sustainability. We need to employ and keep up to date our book-keeping devices, calendars etc. And keep stringent tax records of all that we do. Again, this all takes time… unpaid time at that.
Then there’s spending time keeping up with best practices, current regulations, health and safety policies and the like. And for good measure, we’ll also chuck in a few more unpaid tasks like driving times, road tolls, feilding sales calls and servicing equipment.
Then there’s all the time it takes for banking, and book keeping. Time with accountants. Time spent maintaining and clearing out the company vehicle. Sorting our yard, paying bills, the list is often endless. Somebody give us a break!
There’s also marketing costs to consider. Time spent on the maintaining of websites, social media upkeep, blogging and the like. And the general making a nuisance of one’s self while out networking. In order to help us ‘stand out’, in an ocean of like minded competitors.
We also have real costs to consider too. That fully equipped van wasn’t free. And nor were the tools we carry and the fuel used in running it. It all has to be paid for. As do our licences (if we need them), insurances, computers and stationery. And then you can add in specialist tools, business cards, livery, uniforms, web hosting, etc.
They all come at a cost and it’s all before we even earn a cent.
We then get to finish off the jobs we have won so that we can get paid for the time we have spent in doing them.
And for that, we charge what is known as, ‘Billable Hours’.
These ‘Billable Hours’ are usually only for the time it took us to complete a job though. Or sometimes, the amount of time we quoted for it (and how many times have you fallen short on your quotes?). Time wise, if a job runs over our time estimations, we don’t just finish at 5 like an average office worker would. We stay until that job is completed. 10:00pm? Then so be it. Whatever it takes to meet your deadlines hey?.
Likewise, if a job runs over our time estimations price wise (and they quite easily can do). We don’t, under normal circumstances, get to charge for any additional hours either.
So as you can easily see, there are probably as many as four or five unpaid hours going on in the background. Along with many other direct costs for every ‘Billable Hour’ we can ever hope to charge for.
A thirty ‘Billable Hour’ week, at this rate could take us well over 100 hours to achieve. And believe me, it is in both our interests for me and you to minimise these costs for all concerned.
But it’s not all bad news, because we handymen also have what is known in the trade as a ‘Rate’. That’s how much we charge for every billable hour.
And for that rate the customer will get her job done to a fully compliant and satisfactory level. As well as covering off all the aforementioned, for want of a better word, ‘unmentionables’. Along with the additional safety net of a guarantee on any works carried out.
So how do we set our ‘Rate’ then?
The more professional among us already know about all the hidden costs to successfully running a handyman business. And we fully factor in all of these costs into our ‘Rate’.
We know what our personal living costs are. And the costs for our business overheads. And ultimately, we know what we have to charge to make this all work. That way, we also know we can fully service our customer’s needs, make a reasonable profit to sustain the business and still be here to guarantee against any future call backs.
The good handymen of the world are here for the duration and wish to offer realistic levels of service today, tomorrow and the next day. So when setting our rate, we are effectively insuring a win win situation for both the customer and ourselves. Covering against all unknown eventualities and buying our way into the future in doing so. And in doing so, we are also adding in value and additional peace of mind for our customers.
Others may just charge what they think is the ‘going rate’.
Usually they do no more research for their business’ costs than just seeing what everyone else is charging. And come up with what they think is an ‘industry average’. Only to be further reduced by a few dollars to create for themselves a false competitive edge. And then they sit back and hope for the best.
This can lead to problems though. What if their assumed rate is less than they actually need to survive? What if it doesn’t cover their day to day living expenses? Maybe their ‘chosen’ rate doesn’t account for marketing costs. It doesn’t matter, they are out there and competing. After all, word of mouth is king right?
But without constantly drawing in a wider customer base, will they still be around next year? There’s only so much any customer could require from us. And if this is your chosen business model, will your customer still have any recourse should the need arise? Or will you they be left high and dry, trying to track down nothing more than another failed business statistic?
These are also usually the guys who will often seem de-motivated in their work. Cutting corners wherever they can just to make ends meet. Often working more and more for less than a reasonable wage rather than running a sustainable business for themselves.
Many other handymen don’t really understand how business works at all. This lack of business knowledge on their part leads many to just “wing-it” with their pricing. Often basing their decisions singularly on trying to be the lowest possible bidder in order to get the work without fully understanding the underlying economics behind doing so.
Their helpful nature often keeps them from charging what they should and leads them to give unnecessary and damaging discounts away. Not realizing that it’s actually hurting them and their ability to provide a quality service in the long term.
These are the guys that often compete on nothing but price. They have nothing else of any value to bring to the table. They often run themselves ragged, quickly burn themselves out and too easily default to bad practices and even poor service. These are the guys who tend to quit half way through a job never to be seen again and leave the customer high and dry.
You see when the price isn’t right, nobody wins.
For many out there, properly pricing services as a handyman can seem like an impossible task. But it is doable. I have therefore knuckled down, studied the true costs of running my business and firmly set my ‘Rate’ to accurately reflect it. Along with including modest markdown structures to sufficiently compensate the customer for any larger amount of works undertaken. And I stick to it. I won’t get out of bed for less and why should I?
My pricing policy is particularly important to me. It’s important in getting me quality new customers, keeping my existing customers, and perhaps just as importantly, making myself a long term and sustainable living!
Believe me, having been able to figure such things out before even hoping to trade. Has already saved me many more unforeseen and un-quantifiable costs. Like the cost of everyone’s wasted time, lost profits, too many unhappy customers, and many other equally frustrating time, money and effort consuming experiences.
So please, accept that the price I put on a billable hour, my rate, is an accurate cost for the services I offer.
Don’t ask for any further discounts if you don’t expect any corners to be cut. Because in asking for discounts would result in me running at loss. And how will that be a saving for my customers if I wasn’t here to back any guarantees on my work?