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Charge by the Hour, or by the Job?

Whether to charge by the hour or by the job is a job by job decision. You'd be doing yourself a disservice if you made it a hard rule either way. Here's how to do the on-the-spot calculus that will put you in the best position.

Charging by the Job

Your customers will like it better if you to charge by the job. This can put you at a serious disadvantage, and can easily turn into a situation where you get paid $100 for a full week's work because you had no clue how long the job was really going to take. If you've never done a job like this before, go for an hourly rate.

That's the downside to charging by the hour. The upside is that if you're familiar with the work and you've inspected the site carefully enough to know there won't be any surprises, you can actually end up making more money by pricing by the job than you would have pricing by the hour. How so? Give yourself a buffer zone.

A buffer zone could be interpreted as overcharging, but in the real world things almost always take longer to do than we expect. So if the job looks like 5 hours, price it for 7, or anywhere from 20 to 30% above what you think it will take. In other words, if your hourly rate is $50, and the job looks like its 5 hours or work, or worth $250, tell your customer you'll do the job for $300. The buffer zone will ensure you're covered and it will give the customer a hard number to rely on. An added benefit is that you have the freedom to do an extra nice job if you've got the spare time. Your customer will be extra pleased (maybe you'll get a tip) and you'll still be able to knock off early.

Charging by the Hour

If you've never done a job like the one your pricing before, definitely go with a flat hourly rate. Your client may not be as comfortable as if you'd given them a flat cost, but you can mitigate that by honestly walking them through the phases of the job and showing them why you're not sure how long the work is going to take. If you can walk through all the work and end up with the most optimistic finish time being 3 hours, and the most pessimistic finish time being 9 hours, pretty much any client worth having is going to agree that an hourly rate is only fair.

If you get push back about the hourly rate, you can still stick with an hourly rate, but put a hard cap on the max price. So for the 3 to 9 hour job, you could quote your hourly rate of $50, but promise that you won't charge more than $400 (8 hours or work) no matter how long it takes.

When specing any kind of work, be sure to put yourself in a good position, even if you need the work pretty badly. Don't say you'll do something for a bargain-basement price, then end up working 2 weeks on a job that paid barely $100. Almost all handymen and other constractors have had experiences like this. If the customer doesn't like the price you've quoted, that's fine. Say thank you and move on. There's plenty of work, and after they've had another handyman quote them a higher price, or had another handyman abandon the job, you may get a phone call from them asking you back.

More articles about starting a handyman business:

How to Start a Handyman Business

Are You Cut Out to Be a Handyman?

Tools for a Handyman Business

Payment Options for Handymen

How To Advertise a Handyman Business

Customer Service Tips for Handymen

Choosing a Name for a Handyman Business

Record Keeping Basics for Handymen

Being a Handyman Versus Having a Handyman Business or a Franchise

Getting a Website for Your Handyman Business

Getting Paid Upfront: Deposit Policies for Handymen

How Much To Charge Per Hour

Should You Charge by the Hour, or by the Job?

Insurance for Handymen

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