My Monthly Report – April 2012

This is the 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 set 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 springtime. 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 and deflating occurrence 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 this principle about two years ago when I read The 4-Hour Workweek by Tim Ferris.

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.

In 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, but they also 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 to be 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 underbidding 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?