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Handyman Business #2

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  • G Fresh
    started a topic Handyman Business #2

    Handyman Business #2

    I was considering this business venture... and after reading all the input from the original Handyman business thread, an hourly rate is not the way to go. That being said, understanding that depending on location and the fact that every market is different, I was hoping the more experienced contractors could help me out with pricing.

    I have always been the one slinging the hammer for $10-20/hr and never the one pricing the jobs. What are some of the average prices on average jobs? Ex. Hang and Case a door - $60-75? a door, $1.00 a linear ft for baseboard?

    Any pricing could be discussed - anything from hanging a sheet of drywall, to framing in a small bathroom, to installing door knobs, and hanging kitchen cabinets.

    Open for discussion...

  • Sonny Lykos
    replied
    Re: Handyman Business #2

    Both of you guys are right on!

    Yes, it's a shame.

    Leave a comment:


  • parkwest
    replied
    Re: Handyman Business #2

    Heres one for the books:

    I was looking at acquiring a small business. The owners had told me it had been profitable since day one. I took a quick look at their financials. Showed they were generating a "profit" of $30-$40K a year for the past 5 years. After noticing that there was no salary listed under expenses, I called and talked to the wife. I asked her how many hours did she and her hubby average working in the business... together they avg 75/week. I asked her why no salary in expenses. She said their salary came from the "profit" I asked her if she and her hubby "made" $40K a year and she said, "OH NO we split that with our partner who also worked full-time in the "business." I pointed out that they were making before taxes $6.69/hour.

    I felt sorry for them but I knew why they were selling now.

    It's sad that with all the technology today that our public schools can NOT do a better job of preparing our citizens for "real life" But then our "teachers" are only book smart themselves.

    Leave a comment:


  • Mueller Construction
    replied
    Re: Handyman Business #2

    [QUOTE=Sonny Lykos;344156]

    At $52/hr for him and his son, if they do work 40 hr/week generates $2080/week. If he pays himself $30/hr and his son $15/hr, that comes to $45/hr. That means that all overhead, net profit, FICA taxes, unemployment taxes, liability insurance, workers comp. insurance must all be paid from the remaining $7/hr or $280/week.


    Sonny,
    This guy is easy to figure out. He has no overhead beyond gasoline. He cashes the checks to avoid declaring an income and paying state and federal taxes. He is unlicensed with no workers comp. or liability. He possesses minimal tools and skills and does not generate a net profit. As for his hourly wage he is probably overcharging, because what it takes him 60 hours to do a pro could probably do in 20 hours, and he knows it.

    The $52/hr is probably his rate of consumption at the local bar while he is charging for shagging materials.

    Leave a comment:


  • m beezo
    replied
    Re: Handyman Business #2

    Keep reading here for lots of good stuff. One of the most important is to know some of your numbers. Hourly rate does not really work for me on some things, on other things it is the best. Consider two different items.

    Install a new door and frame for a customer. One is a new door in an old opening. Another is a new door in a new opening. Another is a new door in either opening where the house if full of stuff. Another is a new door in an empty room. Another is... you get the point. For one case you could quote a price per job and be fine. On another you might want an hourly rate depending on what you have to do. The job is more than just installing a door.

    I like to charge a combination of ways. If a job takes 6 hours I feel you need to charge for a day rate. I mean what else are you going to do for the rest of the day? Not that you want to gig them but I figure my business needs to generate so much per week or per day to keep going. If I have a short day my business suffers. But 6 hours is most of a day and so I prefer to get a day rate. The other thing is the average worker in an office gets paid for an 8 hour day. Their productive time is something like 5 hours a day.

    Some jobs I look at like the door installation. I would say a new door in a new opening is a $75 to $150 job. the variations would be for things like access, type of door (solid door versus hollow core, stain grade versus paint grade), lockset installation or not, one door or multiple doors. For the additional work I figure it is going to take another 1/2 hour or multiple hours and add the amount to my base rate.

    As to what folks charge, forget about that. Everyone charges something different. I live in a small house, have only two kids, do not live in a big way. I work out of my home, my garage/shed is my storage and worksite area. I have good tools but nothing extravagant. I can get by on less than someone else. Therefore I could charge less than someone who has Yellow Page ads, a receptionist or answering service, funds the local bowling or little league team, has a booth at the trade shows. all of those types of things cost money and it has to come out of some part of what you charge. But I know that if I charge less I have to work more to make what I need. So I try to charge as much as I can, make as much as I can so when the slow times hit I can make it.

    In fact that is why I am here this morning. This time of year until about mid to late January is my slower times. I will cut down to probably less than 30 hours a week and maybe 20 some weeks due to holidays and folks not wanting things done. But the good weeks in the past have helped me weather these times. Remember just because you had a good week one week does not make every week a good one. And the idea of storing a little away is not a bad one to have.

    Plus remember that there are things like office work, computers to buy, trade magazines to pay for, insurance, tools, bids, travel and gas etc. If you figure these things alone you will be amazed at what it costs to operate a business. Then the $20 an hour is not enough. For a guy that is wanting to supplement his income, has no insurance, works with DIY tools and hours and speed, does not really care if he gets the job or not since he can fall back on other things, $20 an hour could very well be more than he is making in his other job. But if you are doing this full time, trying to support a family, build a business and a reputation it is not enough. Maybe if you are new and just starting out, have no experience that might be too much to charge.

    Bottom line, define yourself, your skills and your needs to not be put on the welfare or foreclosure rolls.

    Leave a comment:


  • Sonny Lykos
    replied
    Re: Handyman Business #2

    Eric, the guy charging $52/ for himself and his son, I'm sorry to say is a moron. I'm amazed at the number of people in this industry that have no clue as to the true cost of their labor burden and annual operating costs.

    Suffice it to say that it COSTS you (and the guy you know) a minimum of $45/hr, without overhead an net profit.

    At $52/hr for him and his son, if they do work 40 hr/week generates $2080/week. If he pays himself $30/hr and his son $15/hr, that comes to $45/hr. That means that all overhead, net profit, FICA taxes, unemployment taxes, liability insurance, workers comp. insurance must all be paid from the remaining $7/hr or $280/week.

    And how does this guy pay himself for the time spent looking at jobs, cleaning out his truck & garage (not his shop because at $52/hr he can't afford to rent one)?

    How does he pay himself for maintaining his tools?

    How does he pay himself for returning unused materials to the supplier(s)?

    How does he pay himself for his bookkeeping time?

    He's broke and isn't even smart enough to realize it.

    A while back I met another moron like that guy. He bragged to me that he made $1200 the previous week. When I asked him how many hours he put in that week he said about 60. I asked him if he could add, subtract, divide and multiply and he said "Of course". I said "Fine. Divide $1200 by 60 and what do you get? " $20 he said. I said "Nice You made $20/hr as a business owner and that means all of the potential liabilities associated with business ownership for the huge sum of $20 per hour, and I pay one of my guys $30/hr and the other guy $25/hr. You figure out who the dummy is."

    Leave a comment:


  • wizzer85
    replied
    Re: Handyman Business #2

    Hey, my name is Eric. I was just wondering what the current rate per/hr is for a handyman in the North Jersey area. Also, some people have been saying that an average rate is $75 while some more or less. This might be a stupid question, but is that for one person or two and hour? Im asking b/c i know this guy who does really good work, and charges $52/hr...this include himself and his son who is also very good at doing anything. Sometimes, there is ever a third person, so should he be charging the average rate you guys are stating the $75 per worker,or is the 52/hr good enough for the two to split? I could really use your opinion. Thanks a lot.

    Leave a comment:


  • Sonny Lykos
    replied
    Re: Handyman Business #2

    Minimum of $85/hr, plus mark up of at least 25% on all materials. That's the Proof system - all net profit and all overhead in placed in your labor rate, of which you never tell any customer.

    And if you can get at least a $30 trip charge, just to even look at a job, but definitely for actually going to a job, even better.

    You'd be surprised at your real overhead and actual time spend in the business not on field work.

    Leave a comment:


  • Mark Parlee
    replied
    Re: Handyman Business #2

    Thanks G

    Now don't make me call you G all the time

    Leave a comment:


  • VTNorm
    replied
    Re: Handyman Business #2

    Another factor: "Jack of all trades - master of none" is an unfortunate although appropriate analogy for the handyman biz. If you market yourself as a handyman you're going to get calls for everything; electrical, plumbing, drywall, painting, roofing, gutters, and even some occasional carpentry.

    If there's no hardass licensing issues and you're competent (and have the insurance) to do that other stuff the list of tools and materials you need to have on hand is staggering...what is your skill/comfort level with the other 'stuff'? Do you already own the tools or do you have a good chunk of cash set aside to buy them? If not, what are your plans for handling customers calling for that type of work?

    One way to break into the business is to do it part time; nights, weekends...get your feet wet slowly and decide if you like it. Alot of guys near me jump into it - it seems there's a new handyman add in the paper almost weekly - and then 6 months later they're out of business. I know because I've hired them to help me on occasion; they might be a great tradesman but they're totally unprepared to run a business.

    Just food for thought.

    -Norm

    Leave a comment:


  • carpenter
    replied
    Re: Handyman Business #2

    Originally posted by G Fresh View Post
    profile done
    Thank you.

    You already have my best advice on prices. I learned the hard way that asking others what to charge is counterproductive and possibly hazardous to the health of your business. Your prices have to reflect your costs of doing business and your goals for wages and profits.

    There are many threads in the Business Strategies and Estimating & Markup forums that discuss various aspects of pricing. Check them out and bring your new questions here.

    Good Luck
    Dave

    Leave a comment:


  • bkerley
    replied
    Re: Handyman Business #2

    Study, study, study. It is a big leap from a skilled (or developing skills) tradesman to a successful businessman. Try hooking up with and working under someone else who is successfully doing what you want to first and learn from them. It is absolutely not a part-time gig. 80 - 100 hrs a week is not unusual. Then decide that you love doing it before taking the final leap.

    Dave Gerstel writes a good book.

    Leave a comment:


  • G Fresh
    replied
    Re: Handyman Business #2

    profile done

    Leave a comment:


  • Mark Parlee
    replied
    Re: Handyman Business #2

    C'mon G, give it up, fill out the profile
    you were asked to and you question us, yet you want our advice and to be part of this community
    Everyone that has responded to you has theirs filled out.
    Now do it, it is a professional courtesy

    From your posting so far you seem like a guy that will fit right in here, not trying to come off as a hardass but you know...

    Leave a comment:


  • kreg McMahon
    replied
    Re: Handyman Business #2

    Originally posted by G Fresh View Post
    I It is a small bath, I believe a half bath... so the rates brian disclosed are very helpful.
    .
    since it is a half bath then you need to charge half price!

    Leave a comment:

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