How to structure handyman prices: bases, minimum, travel

What to take away

The two facts everything else follows from

The unit of sale is small. A visit is an hour or a day, not a project, and every visit carries a fixed load of drive, walk-around, conversation, hunt for the right fastener, cleanup, and payment. In a project trade that load is spread over weeks. Here it is spread over one job.

The day is consumed by things that are not the work. On a typical day a technician is paid for all of it and can bill for part of it. The gap between those two is the single number that decides whether a pricing structure works, and almost nobody measures it before setting a rate.

Everything below is a consequence of those two facts. That is also why comparing your price to a competitor's advertised rate tells you nothing: you are comparing outputs of two different cost structures.

How to measure the gap

Measure it for two ordinary weeks before you set or change a rate. For every day, log two numbers per technician: the hours you paid, start to finish, and the hours that ended up on an invoice. Divide billed hours by paid hours for each day and for the fortnight. Then sort the unbilled hours into four piles: driving, supplier trips, quoting and callbacks, and waiting or cleanup. The ratio tells you how much of each paid hour your prices have to carry; the piles tell you which part of the day to fix first.

None of this is a rate card. The figures come from your own costs: the wage you pay, the burden on it, the drive, and the time the work really takes. That is why what follows is about how a price is built rather than what the number should be.

Five bases a job can be priced on

Most handyman businesses use two or three of these at once, and that is fine as long as each service line has one basis rather than drifting between them. What causes disputes is a job quoted on one basis and invoiced on another.

The minimum charge

A minimum exists because the fixed load of a visit is the same whether the work takes twenty minutes or two hours. It is not a punishment for booking a small job, and describing it that way makes it sound like one.

Say it as what it is: the first block covers arriving, understanding the job, and having the right parts on the van, and that block costs the same regardless of what the job turns out to be. Customers accept this from other trades routinely.

Two rules keep it working. Apply it to everybody, because an exception granted once becomes the price. And make it useful: tell the caller that the block covers a span of time, and invite them to have a second small job ready. That converts a minimum from a barrier into a reason to write a list.

Travel is the cost, not the annoyance

Handyman work is a routing problem wearing a repair problem's clothes. Three approaches, and each is defensible.

Absorb it, and control it by restricting your service area. Simple, invisible to the customer, and it fails the moment you accept a job outside the radius as a favor.

Band it by distance, with the bands stated before booking. Honest, easy to administer, and it makes the geography of your business visible to you as well as to the customer.

Bill it as time. Accurate, and the hardest to sell, because a customer who watches you arrive does not feel they bought the drive.

Whichever you choose, measure it. Drive time as a share of paid time is the number that tells you whether your service area is too big, and it is the input the local market reading is really for.

Materials: markup, fetch fee, or supplied

Three arrangements, and the mistake is having none of them.

Markup. You buy, you carry the risk of the wrong part, and the margin covers sourcing and returns. Standard across the trades and easy to explain.

Fetch fee. You buy at cost and charge separately for the sourcing time. Transparent, and it prices the thing that actually costs you, which is the trip and the reconciliation.

Customer supplies. Cheapest for them, and it moves a real risk to you: if the part is wrong, the visit is wasted and somebody has to decide who pays for it. If you allow this, say in writing what happens when the supplied item is unsuitable.

What is not an option is buying materials, charging them at cost, and absorbing the sourcing. That is an unpaid job inside a paid one, and it scales badly.

Whatever you choose, be accurate about it in your advertising. A price presented as covering everything, with mandatory charges appearing later, is the kind of claim the Federal Trade Commission's advertising guidance for small businesses is about.

The four tests a price has to survive

A price that fails one of these usually has a scope problem rather than a number problem. Fix the definition first, then look at the figure.

Reviewing without repricing everything

Set a review date and change one thing at a time.

Pick the service family with the worst gap between quoted and actual time. Ask whether the fix is the price, the qualification questions, or the scope wording. Change that one thing, run it for a stretch, and compare against your own records.

Doing this needs job level cost data, which needs a record structure decided in advance rather than reconstructed later. The IRS sets out the general obligation in its guidance on what kind of records to keep. The trade specific part is tagging each job with its service family and its drive time.

Two changes that do more than a rate rise. Tightening the questions asked before booking, which reduces second visits. And restricting where a low margin service is offered, which reduces the drive without touching the price at all.

For the wider financial planning this sits inside, the Small Business Administration's business guide covers the managing and growing stages in order.

What pricing cannot fix

A price cannot make work you are not licensed to perform safe to accept, and the scope of what you may sell is settled before any of this, in where the licensing line sits.

A price also cannot compensate for a kit that generates supplier trips. That is a stocking decision, and it belongs with the van and kit setup.

And a price cannot rescue a menu that is too wide to quote quickly. If every job needs a bespoke estimate, the problem is the range of services on offer rather than the pricing method.

Common questions

Should prices be published on the website?

Publish the structure, not the figure. Say whether work is sold by the visit, by the block, or by the job, and that a minimum applies. A fixed number for work whose scope varies with the house invites a disagreement at the door.

How do I raise prices on existing customers?

With notice, a reason, and a date. The reason should be about your costs rather than their value to you. Expect to lose a few, and expect most of the ones you lose to be the ones who were consuming the most time.

Is charging for a quote reasonable?

Where the quote requires a visit, yes, and it is common in trades where the visit is most of the diagnostic work. Credit it against the job if the customer proceeds. Where the job can be qualified on the phone, do not.

What about the customer who wants a ballpark figure over the phone?

Give a range with the assumption attached, and say plainly what would move it. Refusing to give any indication reads as evasion; giving a firm number without seeing the job is how a dispute begins.