Knowing how to price handyman jobs is an art and possibly one of the hardest things to do in your handyman business, especially when you are first starting your handyman business. I have had a lot of wins in the realm of pricing handyman jobs but I have also had a lot of loses, I feel like the times when I have lost the most in regards to under charging handyman jobs were the times when I learned the most on how to accurately price handyman jobs. I want to share with you my detailed steps to pricing out handyman jobs so that you can start making money and stop spinning your wheels as a handyman.
You can watch my in-depth video on How to Price Handyman Jobs here:
Determine your hourly need as a handyman
Determining your hourly need is one of the most important things that you can do in your handyman business and this is the thing that most people just look over and never do. This single calculation can literally make or break you handyman business from the get go.
When I first started out my handyman business, I was very naive, I was simply excited to be making more money than my last employee job that I didn’t even think about calculating my handyman need and just pulled a number out of thin air to start charging.
The number that I chose out of thin air was $50/ hour. I decided, without calculating my needs or my expenses, to start charging $50/ hour.
In this choice to charge $50/hour I made two mistakes:
The first was I was charging hourly so I was controlled by the time clock and not my skill level.
The Second was I had no clue if $50/ hour was even covering my expenses as a handyman. (Spoiler alert , It wasn’t!)
The problem with charging by the hour
I learned many times that charging an hourly rate was not the way to go and in the end didn’t benefit anyone.
One job, when the customer contacted me and asked me how much I charge, I told her $50/ hour, and then I came out to her house to inspect the work that she needed, she had needed her gutters cleaned. I told her that I could do the job for $50 and that I could start on this job the next evening. The next evening I preceded to clean the gutters out, in the dark (see I had a full time job at this point and was doing handyman work on the side), Once I finished the job I went for payment and she asked me what the final bill was.
I told her $50, She seemed set back and responded to me “Do you charge up?” I didn’t know what she was asking and then she said to me ” You have only been here for 30 minutes and you said you work for $50/ hour.” I was shocked but in the end she was right, I did say that I work for $50/ hour at the beginning so I told her well you can pay me $25 if you want, I think she felt bad for me and wrote me a check for $35. This was the first of many times I had to learn about handyman pricing the hard way.
That handyman job taught me that no good can come from controlling your handyman salary by the hour, But the full picture of how to price handyman jobs didn’t come into play until I sat down one day and figured out my expenses as a handyman.
The problem with not knowing your hourly need
I was shocked one day as I sat down and listed out all my expenses as a handyman and what I needed to make to support my family. A lot of people think that a handyman should charge $15/ hour because they are thinking in the mind set of what an employee makes but in reality it costs so much more to run your own handyman business.
I sat down and listed out all my expenses that my family had and how much “take home” pay I needed to make from my business and then I listed out all the expenses that my business has and how much it needs monthly to stay afloat and make a profit, Yes I said it, Make a profit.
If your handyman business is not making a profit, you are charging to little. A business needs to make a profit to secure its future and the future of the peoples it employs.
I came up with an equation to figuring out what my hourly need is as a handyman, it is simply: Personal expenses + Business expenses + 20% Business Advance + 20% Profit Divided by Hours worked per month.
We go really in-depth into this equation in the Pricing 101 course over at handymanjourney.com
Its is important to know your hourly need but that doesn’t mean you need to share it, I always charge by the job but use my hourly need to help me figure out my prices.
From that example and many other jobs I learned some key benefits to knowing your hourly need as a handyman and not charging by the hour.
Benefits to knowing your hourly need as a handyman
Salary is skill based not hourly based
When your salary is controlled by an hourly base you have no motivation to get better and evolve as a handyman, I believe it is the limitation of the hour that holds us back in life and business, When we start focusing on making our skills better we will have more time in the day to do other things. If we focus and hold ourselves back by the hour we will never have more time.
Confidence in your pricing
When you know exactly what your hourly need is as a handyman and that comes from a place of honesty and the hard work that it took to figure that out you will respect your pricing and stand more firm with it that ever. Also you do not need to feel like you are ripping people of because you have done your homework and you know that you are giving them the best deal possible!
Market to your ideal customer
We have talked about finding your ideal customer a lot at the handyman journey because it is so important. This is especially an important topic when you are talking about pricing handyman jobs.
We mentioned before that a lot of customers think a handyman should make some where around $15/ hour because that is a good employee pay, but it is not a good business owner pay.
If you are going to take the time and establish your hourly need and be as fair as possibly wouldn’t it make sense to only work with customers who respect all the work that you have done for your business on their behalf?
When you are looking for your ideal customer it is important to know exactly who you are looking for or targeting as a customer. It is even helpful to create an avatar of your ideal customer. Really search for who your ideal customer is, what they do for a living, whats their average age, do they have kids, and most importantly where do they hang out and look for handyman? This is a very important question because narrowing down your search for a customer will help you find them the easiest and most efficient.
For instance, if your ideal customer is say a family where the parents are in their 30’s and they are really busy with 3 kids, you can start to target where you might find those people and market to them, Possibly on Facebook in a neighborhood chat group or on Nextdoor.com, you get the picture.
Benefits of marketing to your ideal customer
Better customer sales potential
When you are working for a customer who respects you and your business needs they are going to want to work with you more and therefore keep their business in your court.
Lower marketing costs
When you can market to a select few people because you know they are your ideal customer you are going to save money because you wont need to advertise to everyone, just your ideal customers. If you can save time by not having to deal with the people who only want to pay $15/ hour then you can spend more time actually making money!
Track your expenses and incomes
Its all great to determine your hourly needed from the front end but how do you know that after a few weeks or even months if you are still covering your expenses and making a profit?
The only way to know for sure that you got all your calculations right at the beginning is to track your incomes and expenses on the back end and compare notes. When you get a good tracking system down for your business you will become more productive because you will know that your business is not only looking good on the outside but looks great on the inside!
I always like a good system of checks and balances, Creating an efficient way to track your business from an economics stand point will over all help every aspect of your business.
Benefits of Tracking
Peace of mind
When you have figures to sit down and look at that show weather or not your business is heading in the right direction it makes you feel good. You can easily look at a tracking sheet and see if you need to adjust any of your hourly need numbers, and if needed you make an adjustment and you can instantly tell if it is helping through your tracking sheet.
Better profits
Who doesn’t want more profits?
When you track your income and expenses you will inevitably make more profit because you are essentially seeing where there is fat in your business and cutting it out and leaving room for more profit.
In conclusion: The first step to knowing how to price handyman jobs is determining your hourly need as a handyman and using that to determine your price per job. The next step is marketing to your ideal customer, When you figure out who your ideal customer is and who you want to work with you will have a much better mutually beneficial relationship with your clients. Your clients will not only respect you and your pricing needs but they will desire to work with you. The last step and possibly the most important in knowing how to price handyman jobs is to set up a good tracking system for your income and expenses. It is all fine and dandy to determine your hourly need but if your don’t follow up on that and make sure it is accurate it can be utterly useless.
You can watch my in-depth video on How to Price Handyman Jobs here:
Want more information on starting up your very own successful handyman business?
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