My Monthly Report – September 2012

Welcome to my September monthly report!  This marks my 10th month in business and I can’t believe that it’s been that long already.  What an amazing ride!

If you are new to the blog, I write these every month detailing how much money I make and what marketing methods I gained my business from.  I also share insightful stories and lessons that I learned along the way.

I’m not doing this to boast about my income, but only to share what it’s actually like to start a one man service business such as a handyman business.  It’s meant to help others and hopefully inspire them to leave their jobs and do something they love.

I hope it motivate you to do something you love.

September was a rough month for my handyman business.  I got a really bad review on Service Magic that was completely uncalled for, I went on a vacation for a week, and hardly did any marketing.  That being said, I’m surprised I made any money at all!

Even with the negative things that happened, I did meet some new customers that make it all worth it.  You know those people that are totally stoked on your service and can’t wait to tell their friends?  Just when you think you’re going to get another phone call from somebody searching for the cheapest service, you get one of those customers that actually gets it.  That is my favorite part of this business.

Charging too little???

Two weeks ago I had one of my customers tell me that I was charging too little.

When she asked for the bill, I told her $75.  She then replied, “are you sure?  That seems really cheap.”

“I can charge you more if you want me too.”  I replied.

Keep in mind that this was for a job that only took me 30 minutes and about $15 dollars in parts, so I definitely wasn’t giving her a deal.  I even included a $20 trip charge.

Needless to say, this put a smile on my face.  She basically told me that I was providing her with a really great value, even more than she was paying for.  It got me thinking about how many other customers may be thinking the same thing.

Now the question is, how much should I charge?  This has been the hardest thing for me to determine thus far.  When I first started my handyman business, I was working for as low as $25/hour and I thought this was a lot to ask customers.  Now, I typically give estimates based on $40/hour plus a 25% markup on materials.

So, I decided to experiment a little bit.  I’m planning on testing a $50/hour rate for certain customers to see how they react.  I believe I’m really going to have to back this up with some efficient, quality work, but that’s what I do anyway.  I can further justify an increase in rate by the fact that I’m getting better at my job.  Almost everyday I learn something new that makes me that much better and more efficient on future jobs.  So, if I’m 20% faster at my job, then why not ask for 20% more money?

One of the key things that I’ve learned from dealing with a couple hundred customers is that some people suck at life and some people actually know how the world works.  The people that suck think a handyman should charge $20/hour.  The other side of the spectrum understands that there are costs to doing business and running a professional operation.

Understanding this fact and actually realizing in everyday operations is different, however.  In the beginning, I’d let the bad customers get to my head.  They’d make me feel like I was charging to much and didn’t deserve a decent rate for my services.  They messed with my self-esteem and made it tougher to ask for a higher rate with confidence.

If this is something that your currently experiencing, I recommend that you don’t let them get to you.  If they can’t afford your services, let them hire lower quality labor.  This way, you can spend your time finding customer that you actually want to deal with.  

How NOT to deal with bad reviews

I don’t care how awesome you are at your job, how well you execute a home repair, you will run into those customers that are complete idiots.  Such as the lady that I dealt with recently.

You can’t control what other people do, but you can control your reaction.  Remember that.

This was a particularly interesting situation to me, because I was actually very helpful to the lady that gave me the bad review.  She originally asked for me to reinforce her vinyl gutters.  So, I told her it would be $20 for the trip charge and $40/hour.  She then went on explaining that she was retired, living on a small pension, and she really needed some help.  So, being the nice guy that I am, decided to help her for a flat rate of $40.

She then went on wasting my time, asking me a million questions and I ended up being there for well over an hour.  Not even close to worth my time but I stuck it out with a smile.  Upon leaving, she even thanked me with a hug.

Three weeks down the road, and I recived an e-mail from ServiceMagic (now Home Advisor) saying that I received a review.  I read it and was blown away.  The lady said that I didn’t seal her gutters well enough and they were leaking, even though that wasn’t part of the job she hired me for!  She gave me a 1 star review to top it off!

I was so pissed off that I called her on the phone right away.  Trying to sound as nice as I could, I explained that I was sorry for the bad experience and I would have gladly come out to fix the issue for free (even though it wasn’t really my fault).

Things started to heat up and I ended up going off on the lady, which I high recommend NOT doing.  But seriously, she was being completely unreasonable and irrational.

This situation taught me a couple of very valuable lessons.

1. Follow up with your customers to make sure they are happy with your work.  This probably would have prevented the bad review in this case.
2. Some people are completely irrational and you can’t control what they do.  The only thing you can do is control your reaction.

Luckily Service Magic let’s you comment on the review.  I did leave what I feel like was a good response.  I didn’t get personal, I just apologized and let any other readers know that I stand behind my work and will fix any issues I cause for free.  That is really all you can do in that situation.

Has anybody else had a similar experience?  If so, please share it in the comments below.

Income and Expenses

Income:

• Existing Customers: $1,639.48
• Google Searches: $462.94
• Craigslist: $180
• YP.com: $80
• Referrals: $75
• Neighbors: $54

Expenses:

• Direct job costs: $339.39
• Phone: $69.81
• Mileage: $250.31
• Insurance: $94
• Bank Fees: $2.35
• Service Magic: $58.86
• Angie’s List: $83.83
• Other:  $12.38

Total Income:      $2,491.42
Total Expenses:  $910.73
Net Profit:             $1,580.69 (last month: $3,380)

I profited less than half as much as I did last month, and I’m not gonna lie, it’s a little demoralizing.  So, why was it so low?

The primary reason for my income being so low this month is that I took 2 vacations this month.  One was a week long vacation and the other was a 3 day vacation.  I don’t make any money while I’m on vacation.  That’s the bad part of being a handyman.  On the flipside, I get to take as much vacation as I want, which to me is far more important.  If money was all I was after, I wouldn’t have quit my engineering job.

Another reason that my income was significantly lower was that I wasn’t puting a whole lot of effort into getting customers.  I only ran a craigslist post for a couple of days out of the whole month.  I also didn’t follow up with any of my Service Magic leads.

The truth is, I’m getting used to dealing with existing customers which is so much easier and more enjoyable.  I guess I just have to step it up in the future.

My Handyman Hourly Rate

Billable Hours: 47

Income from labor: $2067.18

Hourly Rate: $2067.18/47= $43.98

I’m happy with this hourly rate.  I shoot for $40/hour average.  So, this means I did a good job quoting customers.  I didn’t make much money this month, but at least I made a really solid hourly rate.

Click here to see how I determined my hourly rate.

October Goals

As my may know, I’m currently writing a series of posts on how to build a handyman website.  To read it now, click here.  This has motivated me to improve my website.

Goal #1:  $1500 of income generated by leads from my website in November.

I plan on achieving this by make making several small changes to my website.  Here is my plan of action.

1. Evaluate statistics from google analytics.
2. Optimize my homepage for the keywords that are generating the majority of my traffic.
3. Post 3 articles related to other keywords that I’d like to rank for.

The reason I have set this goal is because I beleive that I should be getting much more business from my website.   by implementing this strategy, I hope to increase the amount of traffic that comes to my handyman website, and also increase the conversion rates of that traffic.

I’ve set the goal for November because it will take some time to implement and I most likely won’t reap any of the benefits for at least a month.

Setting goals is extremely important to success.  Like I’ve said before, how do you know if you succeeded if you don’t have a goal?  I strongly encourage you to set measurable goals on a regular basis as a method to keep yourself on track.

For more on setting goals, read this post.

So, what are your goals?  Please share them in the comments below.