This is fifth of a series of posts that I will be writing each month on my progress with my handyman business. If you are a new reader to my blog, I write these monthly reports every month. In them I talk about any interesting stories for the month, aha moments, marketing strategies that paid off, and then finally, how much money I made with my handyman business during the month.
As I write this, I’ve officially been in business for 5 months. I can’t believe it’s been that long. I have to say that I have really enjoyed the ride so far. When I look back at just started I can still remember the doubt I had in my success at this business. Some days I still have some doubt.
There were several times when I almost decided to give up and just go back and get a job working another 9-5. I am SO glad I didn’t quit because owning my own business has been one of the most rewarding and fulfilling things I’ve done.
If you are still thinking about starting your own business but are hesitant to pull the trigger, just ask yourself what is the worst that could happen? Seriously, write it down on paper. What would you lose if the business failed? Could you gain it back? Chances are, you’ll lose a little bit of money IF it fails, but you’ll gain so much if you’re successful. You can always get another unfulfilling job, but you may never forgive yourself if you don’t try to reach your goals.
If owning your own business is one of your goals, start now. I’m not saying you need to quit your job like me. But you can start taking steps to setting it up and testing the waters. A handyman business is probably one of the best businesses to do this with, too. Anyway, a little off subject so I’ll continue with the details.
Events and Accomplishments
April was a really good month. Gotta love spring time. It was a very busy month for me and I made some pretty solid progress. As with every month so far there were days when I had no business at all, and days when I had more calls than I wanted. I pretty sure that is just the nature of this type of business. I’m starting to really like the days that I don’t have any work because I get to focus on improving my business and working on this blog.
I did have a few interesting things happen this month such as eliminated one source of frustration, finally got my truck tatted up with some decals, learned not to quote under pressure, and took a trip to hawaii.
I’ll start with how I eliminated a time wasting a deflating occurance in my everyday business life…
Pareto’s Law and ServiceMagic = more money
If you aren’t familiar with Pareto’s Law (more commonly known as the 80/20 principle), it’s definitely worth a look. I was introduced to the principle about 2 years ago when I read The 4-Hour Workweek by Tim Ferris. (This is my all time favorite business book and I highly recommend it.)
Pareto’s Law is the mathematical formula that demonstrates the distribution of wealth in society. It says that 80% of wealth and income is produced and owned by 20% of the population. Apparently, this same ratio holds true outside of economics and can be applied to an infinite number of situations. Here are a couple of examples:
- 80% of issues are a result of 20% of the causes.
- 80% of apples are produced from 20% of apple trees.
- 80% of laughter comes from 20% of the jokes.
The ratio isn’t always exactly 80/20 and is sometimes more severe such as 90/10 or even 99/1.
When you sit down and evaluate your handyman business, the results you find may be staggering. You may find results such as 80% of your income is a result of 20% of your time and effort. 80% of your headaches are caused by 20% of your customers. 80% of your customers come from 20% of your marketing.
When I evaluated my leads from ServiceMagic, I noticed that 85% of my leads were from the category “Handyman for multiple small projects” and about 15% fell under a few other categories. I also saw that I only ended up doing business with about 10% of leads that I got from this category. The leads either didn’t answer the phone, were fake leads, or just didn’t even give me a chance to quote.
Other categories I had a closing rate of 50-100%. More than 80% of my business was coming from these other categories which accounted for roughly 20% of my leads.
So, I decided to eliminate the bad category that was causing 80% of my headache and only lead to less than 20% of my ServiceMagic income. Now, I no longer have to deal with those leads and best of all, I don’t have to pay for them!
Quoting under pressure and instant regret
We’ve all had those customers that are looking to get a lot and pay just a little. Usually you will come across these customers while advertising on CraigsList which is exactly where I found the customer I’m about to tell you about.
Joe gave me a call and mentioned that he had found me on Craigslist. Immediately, I can tell that he is one of those guys. You know, one of those people that would spend 8 hours shopping for something to save $5. Not only do these people waste my time, they waste the time of everybody they come into contact with, essentially raising the prices of everyday goods and services.
So, long story short, he asked me to hang some cabinets in his kitchen and patch some drywall. When I got to his house, he showed me everything he needed done and immediately asked for a quote. I think he used the exact words, “come on, give me a good price.” He also mentioned that he had others quote the job already, although he may have been bluffing. Who knows.
Under pressure and outside of my comfort zone, I went through everything in my head and replied “200 dollars.” I immediately realized that I had quoted too little. The job ended up taking me 10 hours and I quoted less than half of what I should have.
The lesson from this is not to quote on the spot because the results are hardly ever ideal. 95% of the time you will end up under bidding a job and regretting the situation. Instead, step away from the customer to your truck or van, and go through everything at your pace. Don’t forget clean up time in your quote and come back with a solid number you can stand by.
Leaving my business for Hawaii
When my good friends invited me to stay free in a timeshare in Hawaii, I couldn’t pass up the deal. I’d never been to Hawaii and I felt like this was a once in a lifetime opportunity. But, I also had my business to take care of.
I’d never left my business unattended for more than a day in the last 5 months and suddenly I was forced to leave it for over a week! To say I was a little worried is an understatement. What if somebody called with a really good job and I lost it? What if my best customers called me and decided to go with a new handyman because I wasn’t there? How am I going to reach my goals if I take a whole week off?
Then I came the realization that I would have to take a vacation at some time or another and this was as good of a time as any. So I asked myself, “what is the worst that can happen?” and planned accordingly to minimize the odds of that happening.
Here are the steps I took:
- Changed my voicemail greeting to say “Hi, thank you for calling. I am currently out of town until Friday, May 4th. Your business is very important to me. Please leave a message with your name and phone number and I’ll get back to as soon as I can. Thanks.”
- I set up my e-mail to auto respond to any incoming e-mails in case I got a quote request through my website or via e-mail that said basically the same thing as above.
- Turned off my ServiceMagic Leads for the time I was in Hawaii.
- Turned off all Craigslist adds I had running at the time.
And that’s it. It took me about 30 mins and my business was on autopilot for a week. At the end of the trip I had a couple of voicemails and one e-mail quote request. I called the customer back and scheduled a time to help them.
The point I’m trying to make is that it is OK to leave your business for a little bit. It’s not going to crumble in a week. Make sure that you own your business and your business doesn’t own you.
Income and Expenses
- Existing Customers: $1,238
- Craigslist Leads: $265
- ServiceMagic Leads: $797
- Website and Online listings: $1,310
- Neighbors: $873
- Networking: $100
- Direct Job Costs (materials etc.): $1,024.54
- Advertising: $204.20
- Vehicle Mileage: $358.53
- Tools: $99.47
- Insurance: $342.25
- Truck Decals: $284.37
- Phone: $39.29
- Other: $40
Total Income: $4,583 (last month: $3,745)
Total Expenses: $2,392.65 (last month: $2,442.70
Net Profit: $2,190.35 (last month: $1,302.30)
Looks like another record month! I didn’t quite meet my goal that I set for a total income of $5,500, but nothing new here. I definitely got ahead of my self even setting that goal, especially with a trip to Hawaii in the schedule. I did make a profit of $2190.35 this month which is awesome!
It’s funny because even though I’m making quite a bit less than I was as a mechanical engineer, every dollar I make is so much more rewarding. I also enjoy the thought that I’ve given myself a raise every single month that I’ve been in business. This month I got a 70% raise! Not bad at all. Let’s hope I can keep that trend going.
Taking a look at the income numbers, there are several changes from the previous month that are worth noting. My existing customer income went from $830 to $1,138 – a 37% increase. Also, my online listing and website income went from $435 to $1,310 – a 200% increase!
My ServiceMagic and Craigslist income went down compared to last month slightly. This was probably due to me not adverting as much on craigslist and being out of town for a week.
Last month’s Goals:
I set two goals last month – have a total income of $5,500 and only take jobs that are worth my time. I made some good progress toward both of them, but fell short. I missed the $5,500 by about $900 and there were 2 jobs that I ended up doing that were not worth my time: the cabinet job I mentioned above a couple of small jobs. It’s more difficult than I expected to consistently estimate accurately for each job. Definitely something that I plan to work on so I can provide you with some insight in the near future.
This month’s Goals:
Goal #1: Average $40/hour for all billable hours.
This month I’m going to track all of my time spent working for customers. My goal here is to quote more accurately so that every job is worth it. This is one of my biggest challenges because I still have the tendency to want to help the customer out. There’s no problem with trying to help people, but this is business. If I’m going to be around to continue to provide services, I need to charge enough to survive.
Goal #2: Make one customer experience improvement.
I’m setting this goal because I want to charge a premium for my service. If I’m not offering the best experience for my customers, then I won’t be able to charge what I would like. So, I plan to make one improvement in this area and implement it by the end of May. Not quite sure what that is yet, but I’ll let you know in my next report.
Some Last Words
Another great month and I’m excited to see what the next month brings. I’ve got a lot going on in the next month. I’ll be turning 29 in addition to running this blog and my handyman business.
I’m really excited about my success thus far and I can attribute most of it to really sitting down and thinking about what I want in life and setting goals to achieve those things. If you haven’t had a chance to yet, you may enjoy the posts on Lifestyle Design and Setting Goals. I can honestly say that these two exercises have changed my life.
I just want to thank everybody for reading this! If it has helped you at all, please leave a comment explaining how. Also, if you have any questions about topics I didn’t cover, feel free to contact me directly or leave a comment below. I’m here to help!