Home Services & Handyman Pricing: Hourly Rates vs. Project Quotes
Pricing your physical products is one thing, but setting rates for your home service and handyman skills is another. Your time, material costs, and overhead interact in ways that can make a job profitable for a direct client but a money-loser if you're subcontracting. Here’s how to get your pricing right before you start booking jobs.
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The Quick Answer
Selling directly to homeowners gives you the highest profit per job, but you are fully responsible for finding those clients. Working as a subcontractor or through a referral platform often means less profit per job, but they bring you the work. Build your pricing model to make money and cover your costs, whether you're working direct or through another company from day one.
Side-by-Side Breakdown
When you're first starting, you'll likely encounter two main ways to get work and set prices:
**Direct Client Pricing (Your Price):** This is when you deal straight with the homeowner. You set your full price, like $85/hour for general handyman work, or a flat $3,000 quote for a bathroom vanity installation. You keep all the income, but you also pay for your own advertising, booking tools, liability insurance, and any unexpected call-backs or warranty work. Your total profit per job needs to cover all these business costs.
**Subcontracting/Referral Pricing (Their Price):** This is when you work for another general contractor, a property management company, or through a referral platform (like Angi or Thumbtack). They find the clients and assign you the work, but they take a commission or set your hourly rate lower. For example, your effective hourly rate might drop from $85 to $60 because a referral service takes a cut. You get a steady flow of work without doing your own marketing, but you trade higher volume for lower per-job profit. If you quote a client $500 for a small interior painting job, a referral service might take $100, leaving you with $400.
When to Prioritize Direct Client Work
Focus on getting clients directly when you have a strong local reputation, can generate referrals, or have effective ways to market yourself online (like a good website or social media presence). This approach is best when your personal skills, honesty, or unique specialties (like custom carpentry or smart home automation) are important to the client. Direct sales allow you to build your personal brand, control the client experience, and earn more per job. The higher profit margins can then fund investments back into your business, such as purchasing specialized equipment like a pipe threading machine or professional-grade power tools.
When to Prioritize Subcontracting/Referral Work
Use subcontracting or referral services when you are just launching and need to build a consistent workload, or when you can't find enough clients on your own to fill your schedule. This is valuable if you need to keep your calendar full, even if it means less profit per job. For example, a new HVAC technician might take emergency repair calls from a larger company to fill gaps in their schedule, even if it's at a lower hourly rate than direct client work. This helps cover your fixed business costs like truck payments, tools, or monthly insurance premiums.
The Verdict
From day one, make sure your pricing covers all your operating costs and gives you a healthy profit, regardless of whether you're working directly for clients or through other companies. If you cannot make money at a good rate when subcontracting, it will be hard to grow your business effectively. Start by getting direct clients to prove your skills, build trust, and accurately figure out your true costs and most profitable rates before you rely too heavily on referral or subcontracted work.
How to Get Started
Here’s a practical way to set your initial pricing:
1. **Calculate Your Hourly 'Loaded' Cost:** Add up your desired hourly wage for yourself + employer taxes (like FICA/Medicare) + workers' compensation + your share of monthly business overhead costs per hour (e.g., liability insurance, truck payment, fuel, tool maintenance, advertising budget, scheduling software, office supplies). For example, if your personal wage is $30/hour and your overhead per hour is $15/hour, your loaded cost is $45/hour. 2. **Add Your Desired Profit:** Decide on a profit margin you want on top of your loaded costs (e.g., 20-30%). If your loaded cost is $45/hour and you want 25% profit, you'd add $11.25, making your target direct client rate $56.25/hour. 3. **Set Your Direct Client Rate or Project Base Rate:** This is your ideal price. For project-based work (like deck repair or appliance installation), you'll estimate the hours, add material costs, and then apply your hourly rate to get a total. 4. **Factor In Materials:** For any job where you supply materials (lumber, paint, electrical wire, new fixtures), always add a markup (e.g., 15-25%) to those material costs to cover your time for sourcing, pickup, and warranty. 5. **Check Market Rates:** Research what other local, reputable professionals charge for similar services. If your calculated price is much higher, you need to find ways to reduce your costs or offer more value. If you're significantly lower, you might be leaving money on the table.
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Shopify
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QuickBooks
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FREQUENTLY ASKED QUESTIONS
Do I need different pricing for Amazon vs my own website?
You typically cannot price lower on Amazon than on your own site per most retailer agreements, but you can price the same. Factor in Amazon's 15% referral fee and FBA fulfillment costs when calculating your effective margin on that channel.
What is minimum advertised price (MAP) and do I need it?
MAP is the lowest price retailers are allowed to advertise your product. It protects your brand value and prevents price wars between your retail accounts. Set a MAP policy before you have multiple retail accounts — it is much harder to enforce retroactively.
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