How to Estimate Home Improvement Jobs

Are you a handyman new to the small business game? Learning how to accurately estimate your home improvement jobs will not only impact your profit, but ultimately how your business grows. Once you understand the basic handyman tools and tricks for pricing, your small business will be set up for success!

In this handyman financing guide, we will discuss how to decide what services to offer your clients, tips for handling competitors, calculating business costs and determining your home improvement pricing system. Here are four questions to ask yourself before establishing the value of your handyman jobs.

What Services Will Your Handyman Business Offer?

Before you begin talking to clients and advertising your business, you should determine what services you will offer. Some things to think about are:

  • What technical skills do you possess: have you completed training in plumbing, carpentry, painting or another area?
  • What real-world experience do you have: did you undertake an apprenticeship or volunteer your time and knowledge to help people with handyman jobs in the past?
  • What other handymen in your vicinity are offering: how can you differentiate yourself from your competitors?
  • What tools for handyman jobs do you own: do you need to buy or hire particular equipment in order to carry out some tasks?

You may be wondering, what tools does a handyman need? This will depend on the type of jobs your home repair business specialises in. If you choose to focus on carpentry, you may need to invest in a wider range of tools than if you were to specialise in painting. One thing to consider is whether you need to buy brand new tools, or if you can purchase them secondhand. There may even be options to rent certain equipment when needed. This can save on costs in the long run.

Your tools are one of your most valuable business assets. If they were to get lost, stolen or damaged, would you able to afford to replace them? With handyman insurance, you can rest easy knowing that your equipment is protected if things don’t go according to plan.

What Are Your Competitors Charging?

The next step to determine your handyman estimate is to see what other similar businesses are offering, and for what price. By researching what other handymen are charging, you can more accurately estimate your jobs and compare your quality of work.

Some places you can look online include Facebook Marketplace, Airtasker, Hipages and a simple google search. Remember to limit your scope by area – stick to researching handymen in your local community.

There may be a large difference in the range of prices handymen offer for the same tasks. Remember that more established handymen may be able to charge more based on their years of experience, whereas those starting out will be on the lower end of the price scale. Nonetheless, it’s important to estimate your home improvement pricing with your bottom line in mind. If you can’t cover your own expenses and bring in revenue, your business will not succeed. At the same time, it is important not to overvalue your services.

Understanding what handyman jobs are most advertised for in your area will also prove useful. If a lot of people are searching for bathroom renovators, it may be a good idea to pursue training or upskilling in this area. This way you can ensure that your small business is well suited to meet people’s needs, and thus can assist more clients.

What Are Your Expenses?

Another thing you need to consider is your outgoing costs. Before you estimate your jobs, you need to ensure it will be enough to cover your personal and professional expenses, as well as earn a profit. There are many free handyman cost calculator tools and software available online that can help you. You should keep the following in mind:

  • How much do I spend monthly on rent or mortage payments, utilities, vehicle expenses, groceries and other necessities?
  • How much do I spend on business-related items such as tools, building supplies and handyman insurance?
  • How much would I like to earn in addition to affording these expenses? In other words, what is my ideal personal profit or income?
  • How much money do I need to reinvest into my handyman business? This could include print and digital and advertising campaigns, running an online website, taking additional skills courses or hiring staff once your business grows.

Keeping track of these costs will also be useful when it comes to the end of the financial year. If you do not use bookkeeping services, you will need to accurately calculate your business tax and profit.

Keep in mind that your expenses could grow considerably as your business expands. If you employ other handymen to work for your small business, they will be added to the payroll. Investing in signage for your work vehicle or social media ads are effective ways to spread the word about your handyman services, but they come at a cost. Make sure to factor this into your pricing.

What Are Your Salary Expectations?

The next thing you should think about is your ideal salary. Entry-level handyman positions bring in about $51,000 per year, whereas more established handymen can earn up to $80,000 a year. In other words, the average handyman in Australia makes between $28 and $34 an hour. It’s important to be realistic – if you are new to the game, you can’t expect to be making top dollar.

Once you are established in your area as a reliable home improvement handyman, you can raise your prices. Work on building up your base of clients and positive reviews, and then watch your profit margin grow! This process may take a number of years, but it will be worth it.

Specialising in niche services such as cabinet making, maintenance fitting or electrical engineering may increase the value of your jobs. Offering excellent customer service such as evening and weekend availability may also contribute to higher earnings.

To calculate your home improvement estimates, you should add up your monthly expenses and divide this by the number of hours you expect to work. Don’t forget to take your taxes into account, and add your profit markup on top. The final figure should allow you to live comfortably, afford your business costs and have room to grow into the future.

This beginner’s handyman guide to estimating should help set your new business on path to success. After deciding what services to offer and purchasing your tools and handyman insurance, establishing your prices is one of the most important aspects of your small business. If your work is high quality and you are dedicated to your clients, your value should be reflected in your estimates.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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