Welcome to my eighth monthly report! I write these reports each month to help give some insight into what it’s actually like to start a handyman business. In each report, I include a detailed analysis of my financials, interesting events that took place, and lessons that I learned over the past 30 days.
If you are anything like me, jumping in head first and starting a business can be a little scary. I write this content each month so people can get an idea of what it’s really like. Enjoy.
July 2012 Events
I think the saying goes “Even the worst day fishing is better than the best day in the office.” Close enough, anyway. I believe this saying pretty much sums up the month of July for me. I didn’t have the best month and had to deal with some things that slowed me down a bit. But, whenever I think that I’m having a bad day or week, I just think about being back at my old office job and it puts a smile on my face.
I’ve come to the realization that I can live perfectly comfortable on less money than I was making as an engineer (at least during this startup phase), and the freedom that comes with owning my own business is priceless. I mean, taking two vacations in one month like I did in July would be unheard of at a normal job.
Stinging Back – Not Backing Down to the Contractor’s Board
In June’s Monthly Report, I told the story of how I got stung by the state contractor’s board. Since then I’ve found a new lawyer and I’m going to sting back.
The first attorney that I talked to explained that I had a really good shot at winning and was he going to charge me a flat rate of $1,500 to fight it. I thought this was a little expensive, but if it means that I can start advertising what I do again, it’s worth it. So, I hired him.
A few weeks later I was talking to one of my best customer’s assistants about the case, when she mentioned that I could have hired her boss for the job. I’m not going to mention names, but let’s call him Bob for the purpose of this story.
Bob is an awesome attorney, but I knew his specialty wasn’t construction law, so I didn’t even consider asking him. But, it turns out he is more than willing to help me out and he’s will to do it essentially free!
Not only that, but he mentioned that I would probably lose, but it would be overturned in appeals court. If that is the case, my other attorney would have charged me even more to appeal the case. It definitely pays to get two opinions on issues like this.
So far, I’ve plead not guilty at the first hearing and my first trial date is schedules for late August. I’ll be sure to keep you updated on the progress.
Experimenting with New Services
When most people think of a handyman, they think of somebody that can and will do anything around the home, whether it is remodeling a kitchen, fixing plumbing issues, or repairing a fence that blew over in the wind.
The truth is, however, that some services pay much healthier than other services. Customers just don’t see value in certain repairs, and put too much value on other services. It’s just the way it is.
As your handyman business grows and you begin to have the ability to turn down jobs, your business will naturally start to specialize in certain services. I believe this is a really good strategy and you should be proactive about choosing which services you specialize in.
In order to figure out which services I want to specialize in, I like to test. Testing your ideas is a strategy that will tell you more than any book out there ever can. You’ll find little secrets that either nobody else knows, or nobody is willing to share.
Here is my method for testing services to see if I would like to continue to offer them:
- First, I’ll take a quick look at the online competition for that service. Sometimes I can find pricing. This gives me a good baseline of what I can charge and how profitable a service might be. It also gives me a feel for what customers are looking for with that particular service.
- Second, I advertise the specific service that I’m testing. I’ll add the service as one of my categories on Google Places. I’ll post an add to craigslist featuring the service. And, I’ll put that service on my featured services list on the home page of my website. In some cases, I’ll write an article and post it on my handyman businesses blog about that specific service.
- Then, I just wait to see what happens for about 60 days. This gives google enough time to start to rank your website for that specific service.
- Whenever I get a phone call or quote request for that specific service, I begin to analyze the customer, the profit, and how much I enjoy performing that service. If the service provides me with a really good profit or tends to attract higher end clients, I keep it around for longer. If all I get are jobs under $100 and a lot of people wasting my time, I’ll remove the services from my online presence and try another one.
- Rinse and Repeat.
Income and Expenses
- Existing Customers: $3,043.32
- Craiglist leads: $125
- Angie’s List: $261.80
- Network: $600
- Direct Job Costs: $778.14
- Advertising: $112.91
- Vehicle Mileage: $339.11
- Phone: $69.82
- Tools: $593 (I bought a power washer and a gigantic ladder)
- Insurance: $94
Total Income: $4030.12
Total Expenses: $1986.93
Profit: $2043.19 (last month: $2,116.97)
This is the second month in a row that my net profit actually went down. I’m not bothered by these numbers, though. This month I gained a couple of new clients that should pay off in the long run and my income from existing clients is higher than it has ever been at over $3,000. This is really good because I didn’t have to put any marketing efforts into gaining that business. They just call me up, I go provide a service, and they pay me.
Also, due to the current legal situation I’m in, I haven’t been able to advertise some of my most profitable services. Until I get that hole thing straightened out, I’m going to continue to hold back on adverting in those questionable areas. Once I see what happens in court, I can make decision on how I will advertise in the future.
I made the decision this month to make a few upgrades to my toolbox. In the last 6 months or so I have needed a pressure washer at least 6 times. It costs $55 plus a trip to the rental store to rent one, so I figured $340 was a good investment. Now, when I put together a quote for a jobs that requires power washing, I add a power washer fee of $32.50 to the bill so I can recoup my initial investment. This adds value to the customer and puts more money in my pocket. Great investment.
My Handyman Hourly Rate
Billable Hours: 84
Income from Labor = (Total Income) – (Materials x 1.25) = $3057.45
Hourly Rate = $3057.45/84 = $36.40
My goal is to have at least $40/billable hour in income. Unfortunately, one job ruined that for me this month. I gave a customer a flat quote on a job that I was fairly confident on, but the job ended up taking more than double the time and materials that I had quoted. Next month I will make sure this number is above $40/hour.
Last Month’s Goals:
Last month I set 2 goals. One was to have a net profit of over $3,000 and the other was to get 4 customer reviews on Angie’s List. Since I decided to take 2 vacations this month, I ended up missing my profit goal by quite a bit.
My other goal was successful, though. I was able to get 3 A reviews on Angie’s List. I was aiming for 4, but I’m happy with the results so far. I’ll just have to keep working getting more reviews so I can accurately review Angie’s list as a method for marketing.
July in Review
Overall, I consider July to be a successful month. I did feel a bit hectic and scattered throughout the month due to excessive calls for quotes and my dealings with the law, but I also overcame some challenges and gained some new customers. Additionally, I learned some new skills that I can profit from in the future. Every month I become a better handyman.
One thing that I’ve realized is there is always something new to learn. Each and every month I think I have it figured out and the next month is completely different. It’s all good though because I enjoy the challenge!
Until next time, have an awesome month!