Pricing Small Jobs

Summer grinds on and those who’ve done a good job of marketing their company are as busy as they want to be. It’s nice to be busy, but it’s even better if you’re making money on your jobs.

Too many contractors find out at the end of the year that they’ve made little or no profit. The reason is usually that they aren’t charging enough for their work, but sometimes it’s also because they’re taking on jobs they aren’t suited for.

We received a note recently from a contractor who is concerned about taking on little projects.

“I bought your book and have followed it pretty thoroughly. Its helped immensely. I sometimes get called out to look at these SMALL jobs that are so scattered (change a screen door, fix 3 small different pieces of trim, etc.) and I never wind up making money on them due to the fact it takes me 18 hours to load up all the random tools I’ll need, shop for the random supplies and or materials and then its a 15 minute job. Do I turn these jobs down? Charge an insane price for them?”

If the goal is to do handyman work, you need to do it efficiently, and spending time loading up random tools isn’t efficient. Handyman work requires a thorough knowledge of buildings and construction, and the ability to quickly solve problems. If you’re a slow thinker, if you overanalyze the work to be done, or if your tools and equipment are not quick at hand, don’t take on those projects.

If your goals don’t include handyman work, either turn the jobs down or charge an insane price for them.

Now, I know some contractors say that they will take small jobs with little or no profit because they often lead to larger, more profitable work. Horse pucky, the future work seldom if ever comes along. Don’t do jobs that you can’t make money on. Charge the price you need to cover your time, materials, overhead and a reasonable profit. If the customer doesn’t like your price, don’t do the work.

A homeowner shouldn’t expect you to spend 15 minutes on their job and only charge for 15 minutes. It’s unreasonable. They should expect at the very least a trip charge just for showing up and getting started. It’s my opinion that your minimum trip charge should be at least $150. If they don’t like the trip charge, don’t go.

If you’re going to do the work, charge what you might call an insane price and let them know your rates before you show up. There is a good chance they’ll still want to hire you. That’s because you might consider it an insane price, but they’ll consider it reasonable because they want the work done and they can’t get anyone else to even return their phone calls.

Never forget that you’re in business to provide a service and make a profit doing it. You are not in business to drive around and give out free estimates, and you aren’t in business to do small jobs and lose money on them. You can’t take care of yourself or your family when you’re giving away your knowledge, your time or your skills.

I’m going to close this by sharing an interaction I had with another contractor earlier this year. He sent a question; when I answered, I apologized for sounding like I was preaching at him. His response:

“I’m too nice by nature so please keep preaching, I don’t mind a bit. It keeps reminding me I’m worth what I charge and that I need to keep charging that.

18 or so years ago I was $80,000 in debt, renting a house and driving 12 and 15 year old vehicles. You taught a class in Norwalk CT back then and I went. You said go home and raise your prices 10%. I did and thought no one would hire me. They did so I raised rates again and again. I’m long out of debt, have a decent retirement account. New vehicles and the only debt we have is our mortgage and it will be paid off in 12 years or less.

As always, thanks for all you’re preaching and please don’t stop.”

You’re worth what you charge. Hang that saying on your wall and don’t forget it.