Time Equals Money
Small jobs are one thing; maintenance and repair another. How to make money at it? For companies such as Get Dwell, the key to profitability involves:
Well organized staging, where all tools and supplies are in the truck before the carpenter or technician knocks on the client’s door.
The ability to move quickly because small jobs are often more urgent, meaning you need to get started within the week or, sometimes, immediately.
A contract, spelling out scope of work and labor and materials charges, including an estimate of how long the work will take.
A process for collecting at the end of the job, preferably by the technician performing the work.
A system to generate leads. That could be your website, newsletters, direct mail, home shows, or flyers. Even if existing clients are your bread and butter, the size of the jobs dictates the need for many of them to create the volume you need to have a fully equipped truck and dedicated technician.
Most of this won’t be easy for companies used to larger projects. But what if there are too few big jobs?
“I think right now we will do anything anybody calls us for,” says Alan Hanbury. In the last three years, the House of Hanbury Builders, in Newington, Conn., has done one addition. Prior to that, the company built three or four a year. “In our market, home builders are building additions and full basement remodels,” Hanbury says. Not so long ago, “they would’ve given our name to the client.” Today, the company’s work is likely to consist of replacing windows, weatherizing houses, and doing minor kitchen and bath remodels. A recent phone call found Hanbury finishing up a $16,000 porch enclosure. The homeowner had seen House of Hanbury Builders working in the neighborhood and had asked if the remodeler would change a soil boot. The porch enclosure followed two weeks later. “In busier times, I would’ve said no, we can’t do it,” Hanbury says. He makes such jobs profitable by charging 5% to 8% additional margin and by careful staging to avoid the mishaps that make for delays. Minor delays don’t matter in a remodel. In handyman work, they can cost you whatever money you might have made, and then some. “Five hundred things could go wrong,” Hanbury says. Which is why not only should the carpenter or technician be fully equipped and ready to go, but homeowners must be made aware of their responsibilities, too. The wrong light fixture on a two-month project is no big deal, Hanbury says. “I just go do something else.” On a one-day job, it’s a killer.
In the Service Business
What’s a handyman job as opposed to a small job? Shirey used to define “handyman” as anything less than $50,000. Today it’s whatever doesn’t need to be designed. “I have cut down coffee tables, moved furniture for people,” Hanbury says. “Stuff they were in a bind for, and that they know they’re going to be charged for. We’re in the service business.”
At Dutchess Building Specialists, handyman jobs get treated as remodels when the scope of work justifies doing so. On small jobs, DBS dispatches a technician. For clients with a list of small maintenance tasks — in the $3,000 to $10,000 range — an estimator will come out first. To address the smaller (as opposed to small) jobs market, DBS has put together a program it calls Budget Bath, which offers a basic bath template with options, starting at $16,000.
Lutz says that DBS charges time and materials for handyman jobs, fixed price for remodels. “We let [the homeowner] know there’s a certain charge per hour and that that includes time spent evaluating needs, and lumberyard visits,” he says. That charge per hour began as $70, increased to $75 and, DBS management has determined, will need to be $80 per hour if the company expands into servicing customers who are not past clients.
Get Dwell charges clients a flat $75 per hour, with no markup on materials. Shirey Handyman Service started out with a four-hour minimum, and reduced that to two hours. Get Dwell will send a carpenter to the house for an hour.
All that work for so little volume? That’s what has kept most remodeling companies out of maintenance and repair. Those who dabble in it do so because small jobs contain the possibility of becoming large jobs down the road. Those companies proficient at it have both the people on staff to do the work and the process — pricing, administration, and marketing — to make money on the work they do. Creative Concepts Remodeling, for instance, will suggest that clients divide a long list of handyman jobs in two so that they prioritize, Klitsch says. “If there are 15 items, we suggest they have us take care of the first nine, then come back in 60 days and do items 10 through 15.”
Repeat and referral business is the name of the game, Rose says. The one-hour job to install a toilet-paper hanger “gives us a chance to get a new client. And we know they’ll call us back with a broken door or an attic that needs insulation.”
—Jim Cory is editor of REPLACEMENT CONTRACTOR, a sister publication of REMODELING.
This is a longer version of an article that appeared in the January 2010 issue of REMODELING.
