Help With Pricing Handyman Services (TEXAS)

Txbassboy

I'm looking to advertise for handyman services. Not sure what a good pricing model should look like. I've got my overhead figured at $14\hr for a one man out fit. I try to make $1k net (40hrs). Any help in advertising, how many calls a day\week you make, ANY info. would be very helpful. I'm in Rockwall, TX (RICHEST county in TX per person)

Thanks

Bob Kovacs

A few questions:

- When you say "$1k net" per week, are we talking after taxes, or just $1k/week salary?
- Are the "employer contributions to taxes" in your $14k overhead? If not, are they in your "$1k net" number?
- Are you really talking about only working 40 hours/week in your business, including sales calls, billing, accounting, material pickup, etc., or are we talking about 40 hours/week of actual hammer-swinging? If the later, you do realize that you'll be working 60+ hours to get in 40 hours of hammer time, right?

Without that info, it's tough to figure out of the numbers/calls/hours work.

Bob

Hammatime

You can not figure your overhead for 40 hrs/week. You have to figure it on billable hours, I think the average is 28 hrs/week.

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mahlere

http://www.signcraft.com/cahilld.pdf

Just one of many resources available through google.

Txbassboy

I'll be the first to admit that I've been doing things wrong for sometime. So bear in mind I'm hear for advice. I would like the $1k figure to be after taxes!! I haven't really ever figured that into my prices since what my wife pays in and our interest on the house takes care of the rest. I know that's not the way to run a business and I am trying to rectify it. I am the C.E.O (Chief everything officer). Calls, estimates, the chief nail driver etc.....The $14/hr overhead includes everything except taxes. I'm trying to grow my business the right way and not make the headaches of a business anymore than what they ought to be. So far this year I've grossed $55k and have netted $38K. The $38k does not included indirect costs only vendors, materials etc...I play both sides of the fence when I look at the $net numbers....Seeing as I work out of my personal truck, out of my personal home\office use the electricity and such that I would have any way if I quit the construction business....But I get all the benny's at tax time for working out of my personal properties. I definitely need to figure in the taxes though (stupid on my part...I know)

As far as a handyman service why wouldn't I use those 40 hours as a working number? It's an hourly business. And at some point I would like it to be a full 40+hr work week and possibly add some employees.

Trying to get to that $50k net goal line for a one person operation.

I appreciate the info. and comments keep 'em coming!!

North Country

You are correct, it is an hrly business, and if you are working 40 hrs a week for the whole year, you shouldn't have a problem reaching those numbers, BUT, do you really end up working 40 hrs/week 52 weeks of the year? In actuality you could probably expect to work 40-45 weeks of the year depending on how much business you are getting. If you are getting every job you estimate, I would consider your pricing.

Bob Kovacs

Alright, so let's look at this a little closer now.

You want to net $1k/week, so with taxes, FICA, etc., that's roughly 70% of your gross (depending on your exemptions). Therefore, you need to gross around $1425/week, or around $72,000/year. If we add $14/hr x 2,000 hours for OH, that's another $28,000, so we're at a nice round number of $100,000/year gross, withiout accounting for any materials, subs, etc.- just $100k to cover salary, taxes, and overhead.

If you were able to "bill" 40 hours/week, that would work out to $50/hour as a labor charge- not impossible by any stretch of the imagination in most parts of the country (I can't comment on Rockwall, TX specifically). However, to "bill" 40 hours/week, you'll probably be working more like 60 hours/week, between estimates, bookkeeping, travel to jobs, etc., and that's assuming that you're billing for hours spent picking up materials for jobs, which most handymen "forget" to do.

In reality, you're probably going to end up billing around 28-32 hours per week because your jobs are smaller, and you're not always going to get 8 hours in at one location (your mileage may vary). If that's the case, you've got 1400-1600 hours to bill against, so your hourly rate required to cover the $100k is going to jump to between $62 and $72/hour. If you can get that kind of money in your area that's great, but you're likely going to have to do some major marketing and branding to set yourself apart from the yahoos who don't understand the concepts we're talking about and are billing out at $25/hour.

DecksEtc

Excellent Post Bob!

mahlere

Bob, but if that is the case, I can guarantee he just jumped himself up to $70-$80/hr due to the extra cost of marketing and advertising that will be needed to get the work required.

Man, this business stuff is hard

Gordo

Agreed.

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Looks like some pros were here.

john elliott

Well, expect Tx will avoid sharing his new charging rate with his prospective customers by working fixed price bids instead of T&M

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

mahlere

only if he is smart

Txbassboy

Sounds like you definitely do not like the handy man service arena?!

I appreciate all the info from everybody
I'm going to digest as much as I can and see what happens...thanks again to all for responding.... That's what makes everyone a little bit better....hopefully!!!

john elliott

I don't remember saying that! To make my point a little clearer, though, what I am saying is that the best way to make a good rate for your time is not to tell your customers what that rate is, but to use it when you calculate how much to charge for any given job.
John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

Gordo

Bid on cut and dry jobs.

T&M for can't see the end jobs.

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Looks like some pros were here.

Txbassboy

I'll try and look at it that away. I guess I figured I was basing my estimate on how long a particular job will take I figured why not skip the hassel of it all and just charge by the hour so there weren't as many headaches.

How many of you went from a small operation (1-2 man ) to actually running the business side of it with a larger crew either employees or subs? I havent' been able to make the jump yet to the other side...sure want to though What prompted you to make the transition? e.g. "To much work" "Physical limitations" ????? Maybe I should make this question a new topic<------- lol

fez-head

Bob is right on target about the hours you bill for and the branding aspect. I live in an extremely conservative city (mostly Old German Catholic) - but I am still able to charge $65 per man hour and will raise it to $69 in January. If you give them their moneys worth in customer service with a 100% Satisfaction Guarantee they will gladly pay.

Shoot me an email if you want. I’ve got pages of Handyman links and other stuff I will send. I copy it from the internet and use the ideas to build my business.

Also look at the handyman franchises and copy everything you can from them. Even the uniform…..we wear Dickies Khaki uniform pants with Dickies white uniform shirts, nice boots and a photo ID from Kinkos. If you are serious about handyman work - and want to make top dollar - do these things. Believe me ….future clients WILL take notice and treat you with much more respect.

Chris G

Bob and Jesse are right on.

FYI. In Toronto, (expensive city) for residential handyman work I have a minumum charge of $150 for the first two hours. $70'hr after that.

For commericial handyman work I have a $50 minimum call charge, and then $85/hr after that, with a one hour min. So that's $135 for the first hour, and $85 after that. If I show up and can't fix it right there, (need to go get materials or whatever), I'll put the clock on a $1 per minute shopping charge. When I return to the site, it's back to the $85/hr, minimum hour.

I have a different system for commercial, because most of the time, it's a quick emergency repair. Whereas residential is more planned out, and I'm usually there for a while.

My residential rates will go up soon. Probably $160 min, $75/hr.

I think you should keep raising your rates until you can't anymore. Before I joined this site I was at $40/hr for everything. No mins. No shopping charges. I came across a thread four months ago that said to charge $80/hr. I told my colleague about it and we just laughed at how insane that was. Little did I know...

fez-head

That sounds almost exactly like my story. These boards are a life saver.

handyhoppe

Jesse, would you mind sharing the data you mentioned with me also. I have also spent hours on research and gathering data from the net, that is how I stumbled accross this site. We are a Remodeling and handyman company located in St. Louis, MO. I enjoy reading your posts they are very informative and your web site is very impressive. Thanks for all the information.