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Discussion Starter #1
I dont know if my rates are to high, I'm not doing enough advertising correctly or its the economy.
I mostly perform handyman work now. Up untill the economy crashed I was doing house rehabs for a couple of investors which have since left the market. Since then I have been very fortunate to work for my dad who basically maintains the exterior of apartments (about 20 complexs carpentry work mostly) which allows me to take time off to work on my own.

While working for the investors I didn't need alot of customers they were right at 50% of my business. Now that they are gone I found my self hunting out customers. I started a web site, ad campaign with Google and added truck signs and hand out business cards at every opportunity.

Statistics from my web site says I am getting 1-5 new visitors a day. The few customers that do call or email say that they don't remember where on the internet that they found me whether it is from google maps or from the sponsored ads. So I really don't know what kind of ROI I am receiving from on line advertising.

My conclusion is :
1. My rates are to high (all though it appears to be in line with others I have found)
2. The economy is still tough.


If it is that my rates are to high how much would you initially reduce them?
 

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Number two.

Although it seems June is a funny month. Sometimes I get tons of calls, sometimes not.

Keep your rates up, this will keep you making money on the jobs you do have.
 

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The economy still stinks--It's getting better----slowly.

You took your self out of the public eye by having one customer(and your families business) account for
more than half of your trade.


When that happens you are in a bad position--Little more than an employee--you loose that chunk of your income and you are unemployed.

This can happen when an independent tradesman does 'sub' work for only one or two contractors.-
When they go away so does your business.

It's time to get your face out there----call on any(or all) old customers---tell them that you have a hole in your schedule--let them know that you are open for a few smaller jobs.

Do not drop your rates,bad timing--bad precedent to set.--offer to wave the minimum("I have another job in the area--so I won't charge the usual travel time.") You know the line of chatter ----

Your problem is not your price---your customer base is to small---Advertise--See your old customers and ask them to tell their friends.

The kind of people who want cheap not quality make BAD customers. You want the ones that thank you when you find and fix a problem --and gratefully pay--because you made their house better,safer and headed off a future failure.

Keep plugging away---The most sure fire way I have found to get quality new customers is a referral
from a quality old customer.


----Mike----
 

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I am in kind of the same boat right now. I worked for and investor that was 70% of my business. flipping houses slowed down huge with him and he got into insurance. Now I am lost and I think I forgot how to sell to a normal customer. I still have 1 other guy that I deal with and some home owners but nothing like last years work.

I am trying to do the same that you are advertise, flayers, signs, and a new web site. Here in Michigan everybody and there brother is a contractor right now. I have been busy almost every day looking and estimating, then I give a price and they tell me their friend is out of work and can do it for less. :blink: of coarse he can why the :censored: did you waste my time, I could tell you that over the phone!

I go over all the reasons they don't want to have a unlicensed and uninsured contractor, why it is important to blah blah blah.

it bad up here in Michigan. I am about to go to little rock and work with a good friend of mine. They can't get materials fast enough
 

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Discussion Starter #5
I think June is just a tough month. Start of summer vacations etc. When I first started my web site (first of spring) I thought that was the answer to everything. Calls and emails were coming in at least 3-5 per day wanting work. I even told a few customers that wanted me to come out for an estimate for a small job (an hour and a half at best) no. I wasn't making money by coming out for an estimate only. It was a standard $45/hr plus $25 service call period. Nicely of course but no.

I put my price in my google adword to avoid alot of those calls. I'm thinking of just going to a flat rate to see if that will increase customer interaction. You know $70 for "Just a handyman to come out for an hour??!!" must be what they are thinking. What do you think?
 

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WICKED WOODCHUCKER
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I think June is just a tough month. Start of summer vacations etc. When I first started my web site (first of spring) I thought that was the answer to everything. Calls and emails were coming in at least 3-5 per day wanting work. I even told a few customers that wanted me to come out for an estimate for a small job (an hour and a half at best) no. I wasn't making money by coming out for an estimate only. It was a standard $45/hr plus $25 service call period. Nicely of course but no.

I put my price in my google adword to avoid alot of those calls. I'm thinking of just going to a flat rate to see if that will increase customer interaction. You know $70 for "Just a handyman to come out for an hour??!!" must be what they are thinking. What do you think?


Its so hard to compare prices from different areas. like where I am from (northern Maine) is one of the lowest rates in the country I believe. around here handyman services are 20 per hour (legit ones). General contractors are only 28-35.

Best thing to do is find out what other handymen are getting in your area.

But as always we have alot of guys who throw a hammer and skill saw in the back of there truck and call themselve in buisness. no insurances, no workmans comp etc. They are the ones who can do the job for 30-50% less then me. If your legit you'll never be able to compete with there prices. but dont worry they will be gone when the summer ends and a brand new batch of hacks will come out of the woodwork next spring!!!

Dont lower your prices, keep ur chin up and keep pluggin away. It will get better.
 

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Last couple of years I've been raising my rates on March 1st and June 1st.
Then I drop them in the late fall or winter if I have a week or more of down time.
That's been working pretty well.
Also, I have a "preferred customer" rate (20% off) for people I've done work for for more than five years.
This has a few benefits:
A- They call me for every little thing
2- I can usually do those jobs at my convenience, between the full price jobs.
D- Good PR, good word of mouth.
 

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1-888-Y-ATTICS
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Never ever charge by the hour....hmmmm....nope not ever. When you tell some one on a fixed income or someone making 15 dollars an hour that you will be charging them 70..... enough said. what you need to do is make an alliance. Its not about independence so much as interdependence. You need to make a powerful conection with a strong hardware store that can throw you some real business. Now dont go making yourself an employee or anything, but offer a mutual respect where you commit your purchasing loyalty to the store in exchange for the right to put up a decent sign and referals. And dont hammer on their pricing, let them make their money, and you will in turn be a store favorite. Plus, really good ROI is bringing in donuts and such on a regular basis to the staff at the building desk counter. This is your front line sales staff, and you dont have to pay them a commission.
 

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I agree with a lot of the folk above, you've got yourself into a rough spot by only having one main customer. It will take some work to get out but should not be too bad.

Some good points I've picked up over the years. Go back to old customers and see what you can do for them and see if they have anyone they can refer to you. Set up a referral program, $50-$100 for anyone they send your way.

I have one guy in my in-laws neighborhood doing that with skylights and triangle windows. All the houses were build about the same time so they are all going bad 'bout now. This guy just keeps getting referred from one house to the next. Booked out until mid July..not bad for a slow economy, we are in Ohio, bad here. And to top it off the guy is not the cheapest, far from it, upper end of the price range.

Next, as you just saw, if you have to find new customers go for the higher end ones. It is easier to find one customer who needs 10k of work rather than find 10 who need 1k. It takes about the same amount of effort to find a customer regardless of who they are.

For your website make sure you are capturing info on all the visitors. Offer them something in exchange for name and email. a "buyers guide" or paper on how to find good handyman services works great. Of course you are the true answer to the problem, but it makes you the expert and helps explain why they shouldn't go with the cheapest bid or the brother-in-laws out of work friend.

Listen we can all sit around and complain about the economy and people or realize there is work and lots of it.
 

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Take everything you read here, including what I say, with a grain of salt.

Did you notice how nobody asked you what your rates were compared to your local competition, but almost everyone told you not to lower your rates? That's not because they're omniscient and knew your rates weren't too high for your market, it's because nobody wants a skilled competitor undercutting them and driving their own profit down :whistling

It sounds like you're starting up, so you pretty much HAVE to be judicioius with how much you charge in order to compete with the larger, more established guys. Figure out the minimum you need to make on each job to cover your costs and make at least what you'd get working for someone else - and charge that, and no less. If you do that, you should have no trouble crushing the bids from the larger guys who have to pay for office space, a fleet of trucks, etc.

Once you get going and you have more work than you can handle, THEN raise your rates... :thumbsup:
 

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Breaking out Labor + Materials

P.S. - There's nothing wrong with charging by the hour. In fact my experience has been that the more transparent you are as to how the bid is calculated, the more likely you are to get the job, repeat business, and word-of-mouth referrals.

To avoid the $70/hour problem as a handyman, change your policy to $45/hour (or whatever the best rate you can charge) or any portion thereof. So if you go out to fix a gate that takes 30 minutes, tell them you can do something else that will take up the other 30 minutes. You'd be surprised how quickly you'll get handed the husband's "honey-do" list and end up turning 1 hour into 6. Otherwise, at least you're collecting $45 instead of $25, and it's not giving the customer sticker shock.

Also, in case you're not already doing it, don't lump your material costs into the hourly rate, break those out separately. This helps ensure that you won't eat any costs for materials (you just hand them the receipts and the leftovers) and helps keep your rate competitive.
 
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