I am starting a new home repair and handyman business in Central Florida. I
would be greatful if anyone out there that has the same kind of business
would be willing to share their pricing structure as well as any other
business advice. Please feel free to reply to me directly if you wish.
Thanks so much in advance.
Don't have any info on pricing but do have lots of things that need
fixing...as do a lot of my neighbors. If you set up shop in Pinnellas
Co. be sure and post on this board. We are all looking for reliable
help for small jobs.
I live in Charleston SC, so prices are not directly comparable.
I'm an architect.
However, We have had various jobs done recently.
Job one: rebuild two story porch in historic area. Contractor did /
hour + work as allowed by other work for $35.00 / hour + helpers @
$20.00 + material. I consider that a gift price.
Job two: repair gypsum board wall and ceiling damaged by water from
clothes washer connection leak. Past contractor's helper & full time
Lowes employee charged $20.00 / hour + materials. I helped briefly to
position ceiling material. I considered that a fair price.
The work on both jobs was slow, and the result excellent which made the
prices a bargin.
:I live in Charleston SC, so prices are not directly comparable.
: I'm an architect.
: However, We have had various jobs done recently.
: Job one: rebuild two story porch in historic area. Contractor
: hour + work as allowed by other work for $35.00 / hour +
: $20.00 + material. I consider that a gift price.
: Job two: repair gypsum board wall and ceiling damaged by water
: clothes washer connection leak. Past contractor's helper & full
: Lowes employee charged $20.00 / hour + materials. I helped
: position ceiling material. I considered that a fair price.
: The work on both jobs was slow, and the result excellent which
: prices a bargin.
Slow work is just fine with me as often it indicates corners
aren't being cut. As long as they're not -stopping- in between
without reason, I've never had a problem with 'slow work' and
like to see it.
I have done so by the hour and by contract. By the hour, I try to shoot for
$25.00/minimum. Sounds like a lot for home repairs, but to survive nowadays,
that's reasonable. It's just getting the customer to believe it is
reasonable. I prefer contract rates and prices. That way it takes to
pressure off of you and the customer, if the price is a flat rate for
materials and labour. Pricing out the job is tricky, especially on some jobs
where there is a lot of materials and hardware to purchase and deliver. And
often, if you forget one or two items, it can mean spending additional hours
at your expensive driving the old "chug-a-lug" gas guzzler to the hardware
store to get those items and that's frustrating.
The only advice I can get you is to do careful estimates. A short contract
for the customer is always a good idea. On a bigger job, ask for the
customer to pay for the materials up front. There is often no reason you
should have to spend $2000.00 or more for materials, if the customer has the
Basically, some of these reno jobs are a pain in the ass. Take for example
'ma and pa' who want the tile replaced around their bathtub. Well, you
remove the tile and the drywall peals off. Under that, you find the wall
studs have rotted and the interior wall stinks to high heaven. Then you
notice the water damage and mold has gone under the tub and the floor is
starting to rot, too. You show ma and pa. They don't understand. All three
of you stand in the bathroom and scratch your heads to find a new price and
a resolution for the job.
Digging into an older home often has it's pitfalls, as above. I could tell
you a few other stories, if you like. But you may want to include in the
contract that if there are other things that need repair once you start
digging into the home, then this should be a consideration and an additional
expense for the homeowner and a money maker for you.
Basically, I price the job right down to the nails I use. I also factor in
my travel time to pick up supplies etc.. When you are traveling to get items
for the job, you are working for the customer. No free rides, remember. I've
also had customers hang over me when I am working, picking my brain about
every little thing that is wrong in their home, including plumbing, wiring,
chimneys, you name it. That can be a time waster and a pain in the ass.
Also, estimates can be frustrating, as potential customers will often run
you ragged throughout the city asking for estimates and you never hear from
them again. I've spent hours at nighttime writing up estimates all for
nothing. After a while, you get really good at identifying these types of
'time wasters' over the phone. And I try to get rid of them at that point.
They are not usually hard to identify over the phone, because they behave so
misleadingly or like complete dolts.
If you can eliminate some of the above pitfalls, then you have a good chance
at making it. But if you just head into a job blindly, do a rough estimate,
no contract etc., then expect to live in poverty, with unfinished jobs,
pissed off customers and a bad reputation around town.
Some of the people not willing to pay that much are probably earning more
than that at a regular job, plus benefits. My benefits alone come to about
$18 an hour for insurance, holiday pay and other expenses.
When these cheapskates want a discount, ask these people if they'd be
willing to work for you for less than what they make now.
I was a steel erection contractor for nine years. I got started in wrought
iron, then progressed to structural. We still did wrought iron as we went
Policy was half down and half on completion on any custom work. Anyone who
argued on the price or terms got an x on their proposal. When they called
back, it was, "oh, sorry..... some big contracts came in, and I can't get to
that for six months." If they bitched about that, they would pick you apart
on everything that followed.
Many called back with tales of woe of how their brother in law messed it up,
or some illegal alien did a crappy job.
I'd be happy to send a truck and two men for $85 per hour to fix it
Double your price if you want to survive. Remember (if you are a legitimate
business) you are not making 25.00. You need insurance, SS tax, all kinds of
tool/truck expenses. You will be spending more "unpaid" time doing estimates
and material shopping. You will need to cover your own heath insurance. And
set some away for your own unemployment account (there will be slow times)
also forget a "paid vacation". You would be better off working for someone
for $15.00/hr than yourself for 25.00.
That is excellent advice. One of the biggest reasons for business
failures has to be not charging enough to cover overhead and also pay
for medical insurance and retirement. If you don't charge more all you
have done is bought youself a low paying job added the business risks.
If you email me your email address I will send you back a spreadsheet
that I used when I started my business. It has sample prices and
costs. It includes overhead expensec, both fixed and variable. It has
expected hours worked and percentage of billable time. It includes
expected profit from materials, major equopment and subcontracts.
The whole thing is set up in a MS Excel spreadsheet with 7 pages. If
you input your own data, it will tell you what you need to charge per
hour. It is set up for a small HVAC business, but with some minor
modifications, should work for any service business that can charge by
If you have a computer and Microsoft Excel, This should help.
Please note: You must charge enough to cover your own time, overhead,
profit, and a little extra to set aside for a rainy day. Profit should
be at least 10% if you plan on staying in business. The national
average is only 2-3 percent profit, but the 5-year business failure
rate is about 80 percent.
Some business are making as much as 20% to 30% net pretax profit. If
you don't know what that is, take a couple of basic business and
accounting classes at your local technicsl college. Remember, you must
be a business person as well as a handy person if you are going to
You should also get a good accountant to handle your taxes, if you are
busy, you won't have the time.
Don't know if the statutes are the same in your state as mine, but here
In my state, if you are a handyman, repair person, you work by the hour. At
any time either you or the homeowner can call it quits, and settle up.
If you agree to do a job for $500, that's contracting, and it opens up a
huge bag of snakes with regards to licensing.
If you are looking to get big, contracting is the way to go. You will also
look forward to an 80 hour workweek, the headaches of whinyass employees,
equipment, overhead, and on and on.
If you are looking to just make a one man operation, a repair service is the
way to go. You get a reasonable hourly rate, and don't get tied up long on
There are companies now that hire handymen, and send them out on short jobs,
just like maid services that come to your house. But, again, you get big,
and then you have to have a human resources department, a building, an
expensive accountant, an attorney on retainer, vehicles, advertising, etc,
Investigate and understand the differences. Plot out where you want to end
up instead of jumping into fast moving water and having it take you God
I have known many men who have gone into contracting, they went back to work
for someone, or who shaved it back to a one man band operation. Getting
bigger may mean you take in more money, but it surely doesn't mean you get
to keep a proportionately larger amount.
Ask around, and see what handymen in your area get. Start there. If you
are good, your business will grow from referrals. I prefer referrals,
because good people refer other good people. In a couple of years, someone
is calling you all the time to fix something. If you advertise a lot, that
costs, and you have to deal with irrational cheap Charlies. If you get a
nutcase from a referral, you just say you're too busy to get to it this
If you get a good referral business going, especially in Florida where the
average person has a decent income, you can charge more, and people are
happy to pay your rates because they have someone knowledgeable that they
can trust to show up and solve their problem. Then you get the really
simple jobs that you get a full hours's service call on, too. And once
someone finds a trustworthy worker, they probably will have you do things
they have been putting off.
Be competitive. Be reliable. Be honest. Be professional. You will have
more business than you can handle.
Keep your overhead down. Don't do expensive advertising. Buy good used
trucks, not used ones. Don't have a big expensive operation. Do have
shirts with your name on them. Do everything you can by yourself.
Employees are the kiss of death.
Can we assume you have the basics like a license and liability insurance?
Two things determine pricing:
1. Cost of materials, overhead, and your time.
2. What people are willing to pay
Overhead can be a little tough to figure, but look at some basics. How many
billable hours per week do you expect to have? Many tradesmen work 45 to 60
hours a week, but lets take 40 as an average, or 160 per month.
Figure the cost of your insurance, truck payment, fuel, wages (sub
categories are health insurance. employment tax, vacation pay, etc.) phone
bill. tools, (depreciated in some cases), etc. Divide that total by the
expected 160 hours a month that you can possibly work. That is the base
hourly rate. Add some profit and you have a good start. There are many
easily overlooked, but real expenses. Truck repairs have to come from the
business. Your customer may not give a damn about the brakes on it, but yes,
they are the ones paying to keep it on the road. Truck expenses are part of
the business, but your wife's car comes from your earnings.
You total up all the expenses, divide by 160 and have an minimum hourly
rate. Is this what you charge the customer? Maybe, but not always. If
the total comes to $80 per hour, people will not pay that for your services
so you find another line of work and move on. But if they come to $15 an
hour and people are willing to pay $40, that is what you charge and you make
a good living.
You need to do a few things for yourself. Answer these questions:
How much for a license?
How much for insurance (liability, worker's comp with helpers or subs,
business coverage for your truck)?
How much for indirect expenses?
How much for direct expenses, excluding materials?
How much do I need to earn per week?
Realize that a 60 hour week = 40 billable hours if you are lucky.
Gross billable of $50 per for a single operator might net you $20 before
Are my costs and needs within the current billable guidelines for this area?
I hope I did not rain on your parade; but all of the above are things you
must consider if you are to succeed.
If you simply return phone calls and show up on time, and be
respectful of your client's home and their time, and I suspect you'll
do very well.
Charge 1.5x the competition, and this will still be true. Because the
competition isn't doing these simple, common sense things.
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