Should a Handyman Charge Per Hour or Flat Rate for Jobs?

When starting and running a handyman business you are going to run into the question of how to charge for your services. Should a handyman charge a flat rate for jobs or should a handyman charge per hour? How about both? How much per hour? These are all questions that you are going to need to answer for yourself. Answering the how much question is actually pretty easy; how ever much you want to make. Let’s dig a little deeper and examine the more important question of how to charge.

Should a Handyman Charge Per Hour or Flat Rate for Jobs?

There is a lot to think about when determining whether to charge flat rate or per hour but the short answer is to use both. Keep in mind this is your handyman business and you ultimately decide what to do. No one can tell you either way and there are advantages to each method of charging for jobs so why not just use both methods? The great part about running your own handyman business and any business for that matter is that you can try anything you want and use what works for you. Lets dissect each method and compare the advantages and disadvantages.

Per Hour Billing (Set Your Rate and Compute the Final Cost After the Job is Done)

Pros:

Charging by the hour is great for starting a handyman business. You are inexperienced and you are not sure how long a job is really going to take. You are going to underestimate your first 50 jobs or so until you can get an idea just how long certain tasks take. This is good to build up the experience until you can safely estimate how long a job will take to complete.

All you have to do is come up wit an hourly rate that you would like to make and let your customers know what it is. They will either use you or pass and use a competitor at a cheaper rate. If they go with you then you get to work in their home and clock your time. At the end of the job you tally up the time and total the cost to the customer.

Another advantage of hourly rate is when there are a lot of little jobs to be done in a house. It may be tough to accurately estimate how long it will take to complete 10 little jobs in a house. You can then explain to your customer that this job will be hourly and explain to them that it is often tough to give a flat rate for a bunch of small projects. If they are decent people at all they will agree with you and everything will be fine.

Cons:

There are a few negative aspects of charging by the hour that just do not crop up with flat rate charging.

Once your customers get used to your hourly rate it may be difficult to increase your rate in the future. Especially if you are increasing your rate every month or so which can easily happen in the beginning stages of your handyman business. Maybe in the beginning you did not value your time as much as you should have and therefore have been increasing your hourly rate as you see fit. If you have been working with a regular customer for all this time they will definitely notice the increases and you may have to explain. This wouldn’t necessarily be a problem for new clients because they would have no way of knowing what you used to charge so they may just think that this new hourly rate is what you always charged.

Another disadvantage to charging by the hour with a handyman business is the fact that you may start to actually fall into the trap of taking more time on jobs because you get paid by the hour. You really would not have any incentive to get a job done quicker because you would make more money if it took longer. This is a disservice to the customer and yourself. Do not fall into this trap.

Customers often get worried when they hear of your hourly rate (especially if it is creeping up to the higher end) because they aren’t really sure what they will be paying in the end until the job is finished and they get the bill. This may not be such a big concern for most people if you are only charging $20 an hour because one more hour is just not that significant. However, if you are charging $50 an hour then one more hour on the job could really add to the bill. These customers will prefer flat rate pricing on projects.

Flat Rate Pricing (Look at the Job and Give Them a Flat Rate – No Matter How Long it Takes You)

There are a lot of advantages to charging flat rate for not only you as a handyman business owner but also for the customer. Additionally, there are customers who will only work with this method; and for good reason. It will be beneficial for you to learn how to estimate jobs and price them on a flat rate as soon as possible. Customers like knowing how much they are going to pay for a job beforehand. It is comforting for them to know what the total bill will be before you even start it. After you give them the cost they can either accept it and have you complete the job or pass and use someone else if they want.

Pros:

When pricing jobs using a flat rate approach you have the ability to earn a higher hourly rate without actually saying what your hourly rate is. This is a huge advantage because it will enable you to make up to $100 an hour or more at times.

It’s exciting to know that you can raise your hourly rate without anyone noticing.

You can change your required hourly rate at any time and your customers won’t even know. For example, lets say you want to earn $25 an hour for the month of January and later realize that your time is more valuable than that and want to change it to $35 an hour. That would be a big jump in one month if you were charging by the hour and your customers would definitely notice and probably say something. On the other hand, if you were charging flat rate they would never notice because they don’t know exactly how long a job will take you and they definitely won’t try to compute your hourly rate after the job is completed. It’s exciting to know that you can raise your hourly rate without anyone noticing. Now it is up to you to estimate the job correctly and make sure you get it done in time to realize that hourly rate.

Flat rate pricing encourages you to get a job done quicker. After all, your price is already set for the job but your hourly rate is not. That means if you get the job done quicker then your hourly rate increases for that job.

Your customers will appreciate it much more. The more affluent customers won’t really care which method you use to bill them but the price conscious ones will like to know the total cost before you start a job.

Cons:

The main disadvantage of using flat rate pricing is that you may overestimate the work and not get the job or underestimate the job and not realize your required hourly rate. However, gaining experience in estimating jobs will diminish this disadvantage greatly.

TOP SECRET TIP: Estimate a job using a flat rate for how long it normally takes then complete the job in half the time. This can raise your hourly rate drastically.

Have Fun with Pricing and Change it Whenever You See Fit

Running a handyman business doesn’t have to be all business. Have fun with your pricing and change it when you see fit. You are the owner and the decision maker and if something isn’t working at any given time you can change it in a heartbeat. Don’t feel like you are locked into a set pricing. Don’t feel like you are capped at how much you can earn. If you choose to implement a flat rate pricing model have fun with it and do your best to complete jobs quicker to increase your true hourly rate.

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