Episode 10: Ben Alexander, Hank’s Handyman

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About this episode

We are back with our first episode of 2022, and you don’t want to miss this one! On this episode of the Handyman Success Podcast we interview Ben Alexander, owner of Hank’s Handyman in Dallas, TX. They are on-track to do $5,000,000 in revenue this year – yes, we got the zeros right! Ben shares his unique insight as a “big business” handyman on a variety of our usual topics: pricing, hiring, his organization structure, technician compensation, and so much more.

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Audio Transcription

Hey friends welcome to another episode of the handyman success podcast. Here we are joined by Ben Alexander of Hanks handyman. And here on this podcast, our mission is to inspire others by listening to other people’s handyman stories, specifically how they started up, how they price how they market. So we’re gonna go ahead and get into it. We got Ben Alexander here, like I said, my name is Alan Lee, one of the CO hosts joined with Jason call the fabulous Jason call. So. So Ben, you want to go ahead and introduce yourself? Tell us a little bit about you your business? And then we’ll kind of move on from there.

Yeah, sure, no problem. So like I said, my name is Ben Alexander. We’re based here out of garland, which is a suburb of Dallas. So I guess we’re 15 minutes northeast to Dallas. My background is home services. So I’ve been doing this. Hard to believe it, but 20 years on the heating and air conditioning side. So I started out in a trade school called lincoln tech. And then I worked new construction doing H vac startups and I did service then I did sales. Then I did some new construction stuff, I decided to start my own H fat company. When there’s a business partner troubles, you know, that didn’t work out well. So this was actually my third business to start from scratch. You learn a lot, the first two for sure what to do and what not to do. But I guess two and a half we have about three years ago at this time, they my current business partners on a heating and air conditioning home service company, I was managing and helping them grow that for five and a half years and I was bored. And they saw a great opportunity in the DFW market to focus on customer service, high quality work workmanship warranty that nobody would dare to write on paper. And they approached me and asked me if I wanted to take a run at it and and here we are two and a half. Yeah, two and a half years later. So I guess we ran our first call in August 2019. And then our second call, we actually ended up having a refund the whole entire thing. The second day of August so I was scratching my head like oh God, here we go. Let’s see how this is going to work and it was a dryer vent cleaning that we messed up on it was like 110 bucks is our second job and we had to refund that lady her money go back and fix it again. So but but that’s that’s me, you know Hanks handyman. I currently have 32 employees, we over the past two months, we’ve lost about six guys in our field. The labor markets extremely tough. People are offering insane amounts of money to come do construction type work in the DFW market. So that’s currently my largest struggle is manpower. But we’re still doing good. We’re still on track to do roughly 4.8 to 5 million in revenue. Dang for this is our third calendar year. So it’s pretty good.

Quick question on so you have 32 employees do you mind shedding a light on like the distribution there? Like how many tags how many office folks you know estimators things

like Yeah, yeah so basically I try to keep one handyman apprentice per five handyman. I’ll kind of start at the bottom work my way all the way up and currently have 13 handyman trucks on the road. So those guys are broke up into tier levels. So I have a level one level two and level three handyman. Alright, so we I was having some issues, primarily scheduling people. So when somebody calls in our call center I needed a way for the person answering the phone to figure out our scheduling availability and way handyman to send to what job so if somebody calls in and says hey, I got a sheet rocker pair, some painting and a ceiling fan that needs to be changed. We know in the guys and girls on our call center know that an entry level level one guy can do that. So that’s when we look see when they’re available and booked a call. Somebody calls in and they got the same thing say they got sheetrock repair ceiling fan, some painting and then they need a shower pan tiled. Well we know our level three guys are the only guys that can do the shower Pam, that’s the hardest skill that we have. So we will sin the level three because he can do all these simpler tasks. So we kind of base that off of the most difficult most complex task. And when we’re taking um Last week, we took 160 phone calls, I think we booked 97 of those week before that was 179 phone calls. So we really needed a way to get the right man to the right job. So

you have it kind of processed out like for your, I’m assuming in house call center, you have customer service reps in the office, they’re with you. Yep. So you have things processed out, like the type of jobs for each tech and then the customer service rep and kind of evaluates on the spot to try and try and get them on the right schedule with the right guy.

Right, for example, my level one guy, you know, they can patch any wall, they have to be able to match our five most common types of texture, they need to be able to paint just about anything, hang anything on any surface. So you know, mirrors brick, you know, mirror TVs on brick and masonry, inside outside, they need to be able to do attic ladders. Let’s see what else I should pull it up front of me. But then they need to be have general carpentry skills. So anything’s with like 90s and 40 fives, not necessarily you know, I’m not gonna go send them to build a bookcase. But you know, if they’re going to replace a baseboard trim around the door or something like that. And then also, they need to be able to, like replace doors. So we have line out criteria for each level level one, level two, and level three. And that’s how we classify the guys. So it doesn’t always work out that way. We’re really kind of at the expense of the customer. And the CPE on the phone pulling the information out of the homeowner as far as what what task are you needing so I can try to identify the most complicated one and get the right guy out there.

That’s good. That’s good. So can you can you tell me a little bit about your apprentice like so what because I know that there’s some guys out there that you know are just one man one man shops but they’re they’re kind of thinking about, you know, maybe hiring on a, you know, younger guy, an apprentice, helping him you know, up and I, it’s it sure is handy to have another hand on the job. So can you tell us kind of like, because you have one apprentice per five technicians, what justifies sending that apprentice apprentice to the technician? And does that apprentice kind of make their own schedule? Or do you kind of tell them where to go?

So we definitely tell them where to go. So there’s two routes that apprentice gets assigned writing with a handyman is either you know, for example, if we have an attic ladder install booked, we automatically send an apprentice to those for safety reasons. We don’t want one guy holding that attic stairs above his head. Or to the handyman, guys, if they sell a job, they know that they’re going to need help. So they’ll do what’s called the job return, go back, you know, the rescheduling of the job go out the following day. And say they got 30 sheetrock patches or man I mean there’s no talent, a lot of lumber to move, they need an extension ladder. So they need you know, additional help for safety reasons. So those are the primary reasons why we we have them that and our hope is that within a year they learn and they try to get into an entry level handyman position and run their own truck. Okay, that

was my question the goal of The Apprentice like they indicate a desire to kind of become that that handyman level one and then move up from there like they they exhibit that kind of desire to you know, they want to learn but they don’t have the experience yet. Is that basically the bill that that’s who fits in that role?

Yeah, so all hire guys with absolutely no relative trade experience. They have a little bit longer road. I typically look for somebody with six months to a year of painting drywall carpentry, some relative experience to build off of. I like it if they have painting skills or sheetrock skills or carpentry because I know they at least know how to read a tape measure. And we do a lot of drywall work. So you know, it’s a good base to build on.

As far as a like fitting handyman into the you know, apprentice I feel like that’s a pretty straightforward, you know, he’s a good fit for that. But one, two, and three, is that based on their experience, is it based on like a skills test? Is there training that goes through then level up or a combination of all those like how do you kind of work someone through that?

Well, so during the interview process application process, we have a list in no specific order of all the skills that are based in ad a one, two and three. And it says at the top, you know, Mark every box of what you can do today proficiently by yourself and there’s no right or wrong answer for the applicant. It’s more of us having a baseline of questions to ask during the interview process. So if they mark drywall repairs, I’m going to ask them in the, in the interview process. So tell me, tell me how you go about a 12 by 12, drywall, drywall repair, like, what tools do you use? What materials do you use? How long does it take you to dry? Do you do it one trip or two? Because we do drywall pairs and one trip. But so I just asked relative questions. And listen to what the, the guy I’m interviewing has to say, if he knows what hot patch is 20 minute mud is if he knows, you know, he can wet sand at dry sand it like is he telling me stuff that’s accurate? Or is he saying I go get that tool from the truck. And he doesn’t even know the name of the tools? You know, all those are big red flags. When we first started doing this, everybody was showing me like all these great pictures that I swear they took off home Better Homes and Gardens because they their work didn’t look like the work that they showed me in the interview. So I gave up on looking at pictures. I just decided that I’m going to ask questions and listen to your responses. So if a guy says you know, he’s done more attic stairs, I’ll ask them what their process is and what tools you use it. Can you do it by himself just relevant questions to get them talking and get them telling you know, what they can and can’t do and see. Does this guy actually know what he’s talking about?

Yeah, that that makes sense. You said one thing earlier, which I was interested in is how do you guys do your sales? Because I think you had mentioned possibly it sounded like that your technicians actually sale the jobs or do you have estimators in the office?

Well, let me let me finish running through the kind of how we got the company structured. So we got the handyman apprentices then we have the three different levels of handyman, then I have a service manager for them in the office. I actually have two now. So I have the level three guys under one manager and the entry level one and twos under another service manager. So I’m currently overstaffed. But I’m preparing for growth. So I had to

make sure that those guy is kind of the middle person between the customer service reps and, and the actual technician going out.

Yes, yep. And then we have a remodel side, which we call it remodel, we don’t do home Whole Home remodels, we might do a bedroom, we might do two bedrooms, you know, painting, patching walls, kind of just bringing things up to date. Now we do quite a bit of bathrooms. And we have some don’t some kitchens, but we’re doing kitchen refacing not kitchen remodeling, okay, the margins are substantially better because I don’t have to buy all the cabinets. So with that being said, the way that’s structured is I have a supervisor which I called a remodel director. And then I have currently have three leads. So I have three trucks. Each truck has a lead and then a remodel apprentice, which is essentially a helper slash trainee. And the goal with those guys are within you know, six months to a year they’re ready to take their their guy’s job, and hopefully their guy moves up to something else. Or we multiply you know, we currently have three The plan is to end the year with five of those trucks. So actually, I don’t know if you can see it on this board. It’s hard to see but that’s kind of planning for the whole entire growth of the remodel. We do a lot of planning but when you grow this fast you better and then let me think here I think that covers remodel that covers handyman side

distinction, if I recall correctly said 13 Total trucks so three are the remodel dedicated that remodeling kitchen refacing side and then 10 handyman.

  1. Handyman, three remodel, okay. And then my feel my remodel supervisor. He has a company vehicle. He is in the office about an hour and a half to two hours in the morning. The rest of the day. He’s making his rounds through each of the remodel projects. Sometimes he’s picking up materials, sometimes he’s putting out fires, he’s talking to customers, you know, sometimes if our guys get hung up on a job, he can run by and help them out. Get on hung up. That’s primarily what he does all day long. And then he’s also capable of running an estimate if needed. These guys are really rude. Sorry. I have a window right For me, they’re dancing for me. I’m in my computer you know, if they’re, if they’re, if they’re me, I’m gonna make Austin come in and talk on the podcast, he’s gonna service managers. And then he’ll hate me

see the level one and two or level three,

he’s the level three. So he’s, I promoted him from the field. And he was actually my first service manager besides myself. Okay. So he’s actually just been promoted to field director. So he’s overseeing the service managers, the remodel managers and all the crews underneath him. So we’re just kind of moving people around changing directions a little bit. He also manages the estimators who go out, which I currently have one full time and then and then my remodel director, he goes and takes the overflow estimates. So okay, you know, but then I have a full time estimator named Daniel, if somebody calls and says that they need to, you know, they want something done, I’m really just trying to get an estimate, for next week, next month, or whatever it may be, we try to not send the handyman, guys, we try to send them on stuff that they can quote, and get started on right away. And if we feel like that, this is a customer who’s really just wanting to get a price, or their project is something that can be scheduled out for a few weeks down the road, we’ll send the estimator, the estimator is a much better communicator than most of my handyman guy is. So you know, his closing percentage, and his average ticket is higher. So we want to send him to as many of those jobs as we can. So we typically run him three or four of those a day. Okay. So I don’t know last year, he produced about 750,000 in revenue. So I imagine this year, I think his goal is about 850, to 900. So it’s been a little slow start, but we’ll see how that goes. And that, that makes up my whole field, essentially. Okay, on the office side, so I have an accounting manager, and she has two part time people that work under her. Right, so they do anything with money, payroll, taxes, invoicing collections. Man, if it involves money, it goes to Sarah, who’s my Accounting Manager. And then I have Sarah, I’m sorry, Erin, who is my call center manager. So she has herself answering booking calls, dispatching technicians. So she, they run the schedule every day. And then we have a guy named Gary, who does the same. And then man, Dustin, who also does the same, but his primary role is that he is the Project Coordinator. This is a new role that we started in January of this year. So he’s taking all of the bigger estimates. Everybody loves me, I’m gonna make you get on this podcast. So he takes all the estimates, he types them up into our format, he emails them out, we use a service that we can see when the customer actually opens the email and sees the proposal. He does all the follow up calls on the proposals. So you know, our deal is that we promised the customer we’ll get them their estimate within three business days. So we try to be Johnny on the spot with that Dustin coordinates, the remodel crews, the estimators, where they’re going, what they’re doing, how many days they’re gonna be in a job, if they’re running ahead of schedule, behind schedule, he collects the deposits for the bigger jobs. He’ll order materials if if instructed to buy the remodel director. So he he does a lot of that. And that’s been very useful having him primarily function on that part of the business because that’s roughly about half of our business roughly this year, two and a half million of it will be what we call remodel, which are just our little bit lengthier projects, typically over four or five days. And then the other remaining two and a half million come from handyman type jobs, wow, two to three day little jobs, one day jobs, whatever, they may be as simple as hanging a TV to, I’m going to paint three or four bedrooms and do a bunch of patches. And then I guess that leaves me

Okay, so you sit on top of all that and kind of keep the ship moving. And, and yeah, we talked before you this was, you know, you are doing so much and paving the way for the handyman industry and getting it up to up to what age back is what plumbing is what a lot of most other home services are. And so I imagine because of that, you know, it’s not like you can just reach out to another handyman company that you know in town or, you know, town next door and that group somewhere that’s also projected to try and do 5 million like, Hey, how are you structuring things? So I get the feel like, you know, you’re kind of just adjusting based on kind of what’s coming into the business. And then also your experience in previous home service businesses, I’m guessing that has a lot to do with how you’re structuring, like, the look planning the future growth of the business.

Yes. So to me, you know, my backgrounds H back, so you have your service side, and then you have your install side. And this what we do is handyman, light remodeling, whatever you want to call it, is very, very similar. It’s primarily customer service. And I think that’s the biggest thing that handyman guys miss, is customer service aspect of it. Because, you know, I’ll tell you, I took a notepad when we, when we came up with this idea, and I said, what do people hate? What do people not like about doing business with contractors and handyman? You know, my list consisted of, they don’t answer their phone. They never call back. They don’t show up when they say they’re going to show up. You don’t know who’s coming to your house, their vehicles aren’t clean. The list goes on and on. But primarily it was communication types, issues, right? Because the typical handyman guy, it’s really not his fault. He’s in a truck. He’s by himself. He’s trying to answer the phones, buy the materials, price, the jobs, do everything himself, and there’s just not enough bandwidth. I mean, I’ve done it, it’s my third business to start from scratch. So it’s very, very, very difficult. Being bigger like this, and having all these employees is difficult, but in a completely different way. So when we started this, and kind of go back into the handyman and industry, I was like, I need to build systems and processes that are scalable, and I need to make sure that this list of stuff people don’t like about doing business with us, my processes keep us from doing this. Right, we’re still it’s still gonna happen 5% of the time, we didn’t call somebody back you know it it’s gonna happen you’re gonna book 600 calls a month, you’re gonna forget to call somebody back it’s just gonna happen. But know the this industry that we’re in, in in like, what you guys are talking about isn’t a wide open market. Everybody watching this podcast should be super excited. Because nobody is in this industry doing it. Ah, facts built up, electricals pretty built up. You know, I got in the APAC world. I got 150 competitors, and many of them are doing millions and millions of dollars a year in the Dallas Fort Worth market in heating and air conditioning. How many are doing millions of dollars a year in the Dallas Fort Worth metroplex and in handyman work? Mr. Handyman? Yeah, not a whole lot yet. I can’t find anybody else. And I’ve looked. So going back to what you guys said. My first post in the handyman network was a business mastery.

Handyman mastermind group on Facebook. Yeah,

thank you, your your group there was me asking if anybody knows of anybody with a large handyman business that could go visit and man having low love everybody death, but they beat me up pretty hardcore, telling me I was insane. And that doesn’t exist. You can’t do it. Yeah, yeah, in my age vet career, I’ve always network with other large H fat company, owners, managers, and I will get on an airplane and fly to California and go ride with their texts, fill my brain with their processes, and come back and implement and see what I can build in. And, you know, that’s why I’m kind of an open book now, is because I’ve built my whole career off other entrepreneurs being open books, and helping me with learn, because there’s no college to learn home trades. Right? You have a business degree, that’s kind of useless for what we do unless you get into, you know, marketing and a whole bunch of math stuff. But what we’re doing, it’s wide open, we can build it, however big you want. I imagine the next three years this will be a $10 million dollar your handyman business. And I say that at a pure shock. Because my goal originally was hey, in the next maybe in the next 15 or 20 years, by the time I retire, this thing can do $10 million in revenue. And I think we’ll do it in six years six is if I can find the manpower.

Yeah, that’s fantastic. So

my advice really to anybody watching this is you really have to decide what you want to do. Okay, do you And there’s nothing wrong with your decision. If you’re retired and you want to do handyman stuff, to supplement your income, that’s great, that’s perfect. That’s the best for you. If you wanted to have one or two guys, because you hate managing people, which I get it, it’s absolutely exhausting. That is the route you gotta go. But if you want to scale a business like this, and there’s pros and cons to it, the risk, there’s a lot more risk. The pros is that I can go on vacation for two weeks. And it runs like a champ. I don’t have to be here. Last time, I went on vacation for 10 days, I left, I took two phone calls, I check my email, I came back, there was $100,000 More in the bank. And when I left, they fired a guy hired two guys put another guy in his truck. Wow. And I was like, Who’s that guy? He works here. Now? What’s his name?

Wow, that’s awesome, man,

which is great. But if you’re going to scale a business, any business, you have to come into it with going, that’s the plan, I’m gonna scale it now how am I going to do that. And there’s a lot of planning involved, you have to build a scalable pricing structure, you have to build a scalable call center, you have to script stuff, you have to get your policies and procedures, on paper pretty tight, they’re never going to be perfect. You can’t leave it up to the individual in the truck to come up with his own pricing structure, that you will be in the poor house, you have to come up with a compensation plan that incentivizes your team out in the field to be as productive as possible, and price jobs accordingly. If you are relying on hourly employees to go out and be as productive as possible, and make the company profitable, I just don’t see it happening.

That’s, you know, Can Can you speak a little bit to that? I mean, first, can you speak to like your pricing? Because I know that your pricing is probably way different than many other people do. If you could talk a little bit to that. And then also, I would love to hear about your compensation plan and how you encourage people because I know that that’s one common concern is, hey, if I hire someone, how do I make sure they, you know, are efficient, and they actually do the work that needs to be done. So if you could talk a little bit to those two things, that’d be great.

So my pricing structure for the handyman system, one page? Hmm, this is my pricing structure. So I do not like billing hourly. I know I’ve seen this topic 100,000 times, you know, I’m sure you have been in the middle of plenty of those conversations. Yeah, yeah. Billing hourly works great if you’re one or two men, okay. But as you scale your business, and you want to be the most attractive employer, you can to hire the best talent, you have to provide good vehicles 401k health insurance, paid vacation paid holiday, like all that stuff is substantially expensive. And then buildings and auto insurance and $9 a gallon gasoline. You know, my fuel bill last month was $10,000.

Man freaking out.

But that being said, I built a pricing structure. It’s literally, you know, different levels. It’s pretty blurry, but it is based off time. But hourly. Hourly, is the taboo word here at Hanks handyman, if I hear you saying hourly is not mentioned on the script, it’s not on the phone. My handyman guys are told not to ever say the word hourly. I hear everyday people call and say, Well, what do you charge hourly? And my call takers are like, you know, we don’t charge hourly, we do charge a $69 Dispatch fee to come out. We do waive that if your services done same day. We use that dispatch fee to rule out the tire kickers. We are a more expensive company. So chances are if they won’t pay 69, that’s going to be waived, which essentially makes it irrelevant, right? If you’re going to have the work done, the 69 goes away, then they’re probably not going to be a customer that is really going to be attractive to us as a business. Yeah, they’re

just looking for a free estimate. Right? And we

may not be attractive to them once we actually give them their prices. So we use that dispatch fee for that reason. Now, the pricing structure, we’re selling time. That’s what we do is handyman. You know, you can make a price for the 15 different components of a toilet if you want. But how are you going to train? How are you going to train somebody on the 2000 different tasks that we could do as a handyman day to day? Like you know you’re going to need a book and after In this and in other industries, HVAC electrical, where they have a flat rate price book and it’s literally like 200 pages long. And you have to go through and find, okay, plumbing. Okay, toilet. Okay, this part, right, this just overcomplicated you can’t scale that. So essentially what I did is I track everything. Everything, numbers materials, I know how much we spent on screws at this job, we track everything. That being said, I knew that my material cost was about 10.5% last year as a whole. So I built in 12%, into my pricing structure for all truck stock items. So if it comes off a truck, it’s included here. No, the reason I did that, is because several things. I don’t like having the conversation with customers about marking up my materials, right? I don’t want the customer going and shopping for my materials because they always buy the wrong stuff or they don’t buy enough. I want to take out as much negative communication as possible out of the experience. So if I tell you that I’m going to you know, it’s $647. To paint this room includes up to one patch includes paint, materials, labor, plastic caught, like all your truck stock items, plus the two gallons of paint, whatever it may be, there’s a lot of perceived value with that. Most homeowners don’t know what all that stuff cost. For one, they don’t know if it’s $50 with material or $200 for the material. On top of that, they don’t feel like you’re going to nickel and dime, like, Hey, I had to charge $3 for two o’clock, right? I gotta mark it up 30% Well, why do you mark it up? 30%. Right, I’d rather just avoid the whole conversation. And just we build that stuff in. So my guys know that. You know, I literally run through what we do. So we we go into the home. Okay, we do what we call a to do list. And if you see you know the pricing says your to do list at the top, which we all do, we walk into the house, we make notes of what the customer wants done, then from there, we figure out how to price them. So from there, we we do what we do different bundles. So if it’s, you know, three items in a room, we may do all a cart, we may bundle different things together. If we bundle all of it together, we kind of give them a reduced rate because they’re doing more work with us. We also offer financing on our bigger bundles, as well. So we have 12 and 18 months finding zero interest financing options, which is probably a whole nother ballgame in the handyman world. But if you’re gonna live in the house for 10 years, where you’re going to have me out here four times over the next year, why don’t we go ahead and take care of all these items. Now it’s $3,500, we can do 18 month zero interest, it’s $125 a month, whatever it may be, how’s that sound? Would you like to go ahead and get started? type situation, wow. But you know the pricing structure based off the skill level, and the time that it’s going to take to do the job. That’s how we figure out what level we do. So if I go through, and we’ll use the same scenario, I’m going to paint a bedroom, install a ceiling fan and patch a wall. Okay, that’s going to take me eight hours on average is going to take me all day. So what I’m going to do is as a handyman, I’m gonna charge a level eight here, which for us is $1,799. Right? That includes all your materials, except for the ceiling, what we call decor items, which would be ceiling fan, anything pretty, that the customer it’s going to be to the customer’s taste. But that would include this installation of the ceiling fan with a three year workmanship warranty. So if any reason that ceiling fan falls down gets loose or anything else we’ll come back,

paint the walls, we’ll use all the truck stock items like I said earlier. And you know Mr. homeowner, if that sounds good to you, I go ahead and go get materials and get started today. So we have them sign off on that 1799 And we will get the materials and get started. Now, if it’s say they sell a two day or three day job, we typically don’t start that same day. Especially if it’s in the afternoon we’ll just call the office we’ll set up a date for me to come do what we call a job return and we’ll set that up and then that same handyman will go back out there at a further date and do the job over whatever timeframe that he sold. Okay. My compensation structure ties directly with these. So each one of these items has a At a pay base based on skill level, so my level one handyman he gets paid $30 per task hour that he bills. Yeah. 30? Yeah, I think it’s $25 per billable hour from level one. And I can’t remember. Yeah, it’s 25 per task hour from a level to $30 per task hour from my level. Yeah, my level two, and 35 from a level three sets of $5 increments. So as it as you increase your skill level, and the way you get promoted, the way you earn more money, is by increasing your knowledge, increasing your communication skills. And as you move up from a level one to a two and a two to a three, you kind of develop a career path for somebody who is inevitably going to come and say, How do I make more money? Well, we increase your skills. Right? You wouldn’t make $35 per billable hour, increase your skills, let’s get you up to level three. What does that take? What skills do we need to do? We kind of have that conversation. And then we kind of develop a training plan. For example, if a handyman wants to learn some tile skills, we may put him on a remodel job that is hourly base pay for a week, or two, or two or three jobs, you know, however long it takes to put them on the job and get hands on training, to increase the skill base

hourly base pay that’s different from the billable pay.

Yes, so that everybody does have an hourly base pay, the only time they really work on that is training, for example, you know, like I just said, we sending them on a tile job for a week to learn additional skills, or if they’re on a warranty job. So we have a call back and they gotta go back, then they work off their hourly pay base. Typically, if they’re producing revenue, the company can afford to pay more money than if we’re working on a warranty where we’re losing our tail on it every single hour.

So is that is that based on that per billable hour? Is that based on a certain metric? Or is it just per hour that they’re out there working? Because how do you know that they are efficient for that hour? Right? Like, they could be hammering a nail for an hour, but they’re not necessarily making you an hour’s worth of billable hours? Right? Like you got to have a certain metric for that.

So considering that their pay is tied to their billable hour. If you’re dumb enough to stay in there for an hour and hammer and nail, you’re actually losing money as the Handyman in the hole. Right? Because I learned that people autocorrect way faster if it’s if they’ve got some skin in the game, right? Right. If I’m an hourly technician, and it takes me an hour to hammer a nail, I really don’t care because I got my $25 right. If I if I said that this was going to take me anywhere from seven to nine hours to complete so I build a level eight and it took me 11 hours. I got paid for eight because that’s what I say the customer I think if it took me 11 Then in my mind as the technician the field ongoing me and why did this take so long? Did I underprice it? Was there something unexpected that come up that I couldn’t really overcome? You know, if I did underprice it next time I see this situation, I know that this is gonna take me longer than what I thought. So the human nature with this pay structure guys seem to autocorrect way faster

tuner there, Ben, just want to point out for everybody is like your technician, these handyman they’re going on. They are the ones that are saying like this is an eight hour job. So that’s because in most kinds of setups you have the estimator goes out and then the handyman is a whole different person that was not involved until they got the job or is the owner bidding and then the technician goes out so they have that authority and the Bucks kind of on them.

Yes, correct. Yeah. So you’re right. The biggest difference is that these guys go out there making their to do list and as they’re doing this, like if you know, hey, Mr. Allen, you want this bedroom painted here. Do you already know what the paint color is? Yes. Okay. What do you already have the paint? Well, if they say yes, how much paint Do you have? And in my mind, I’m making a good trying to get an idea of what it’s good. How long is this going to take me to do this? If Mr. Allen says that I don’t have the pain Okay, well, that’s no problem, I’m gonna get that for you do you have your color picked out, oh, you’ve got your paint sample, great, I know that I’m in this town in the place nearest place for me to go paint, it’s gonna take me an hour to go get paint come back. So I’m going to count that into my estimated job time. You know, if it’s gonna take me four hours to paint this and an hour to go get the materials, I’m gonna quote this as a minimum of a level five job. Because that’s how long it’s going to take me. See, we don’t tell the customer is going to take five hours, we say, you know, Hey, Miss Mr. Allen, in order to get this done with all your materials and everything else, this is $1,077. Okay, it’s gonna take me anywhere from four to six hours to complete. This is about the standard time to do this. And, you know, sign here, I’ll get on my way and go get materials. So we always give a ballpark? Because in reality, is it really going to take you five hours? I don’t know, could take me four, it could take me six. And that’s just the reality of what we do. i You have to be able to come up with a scalable pricing structure. I mean, that’s the real big pinch. Is the pricing structure.

So so if you’re paying your handyman per billable hours, right, and say, say they sell a job for eight hours, whatever it is on that sheet, and it takes them 11 hours to do they only get paid that eight hours at say the $25 an hour per billable hour rate? Or do they get those extra two hours on their non billable hour rate? You know, like how does that work? Like especially with Labor Board and all that?

Well, in Texas, they can get paid the eight hours. Okay? Right. And that’s one of the things but here’s the flip side of that. If they sell something for 10 hours, and it takes them eight, and they still get paid the 10. Right, because I do allow them to oversell time on higher skilled jobs. In our area, finding a high skilled tile guy is extremely difficult, especially one that can pass a drug test and it has driver’s license. Extremely to me 18 months to hire a tile guy that I could keep that has a higher skill level, there is more perceived value with that skill set than a guy who can paint a wall, at least with our customer base. So, you know, a lot of times, if it’s going to take eight hours, we’ll sell it for 1011. Because it is a more difficult task. And people are happy to pay it. Because if I can’t hire a tile guy, no, the customers can’t either. They’ve already had two or three people they didn’t show up everything else. So you know, I know some people are gonna say you’re, you’re ripping the customer off. Here’s my theory. I’m in business for profit. I’m providing a high level service, right? I have lots of overhead. My customer paid are approved our price up front, paid our price. They have a three year workmanship warranty and no hassle. If you call and say you’re you’re unhappy with it. Anybody who answered the phone will book a warranty call and send somebody out. You don’t have to talk to a manager. On top of that. You You left me a five star review somewhere saying how great we were Yes, we are expensive, but we answered the phone we showed up on time and the technician was awesome. That is a win to meet all day long. Definitely, you know, so is it ripping off your customer for a higher skill set? A happy customer who’s gonna leave you a five star review and use you multiple times? I don’t think so. That’s a happy customer. You know, I like to compare ourselves to the Mercedes Benz of handyman. It’s a car. It has four wheels. Why do people pay more money for Mercedes Benz than they do a Ford?

Come on. It used to be Kia. I used to use Kia. He is

right there. Mercedes Benz or Ford? Right. I’ll take the Ford all day personally,

I’ve had a bunch of them in the parking lot. And two of them in my garage. So yeah, I mean, so not every customer is going to pay for the Mercedes Benz price. They just want a car. Right? So not every customer is going to pay Hanks handyman price and that’s okay. Because there’s 15% 20% of the population that that’s what they want. They want to have a one phone call, they want the guy to show up, they want to get the job done. They’ll leave you a great review and then they’re done with you. Then you got the other customer who will call five different people to save $22 And then complain about the service.

So they’re not going to be happy no matter what. You know, they’re not

gonna be happy Get about $100 and they’re not gonna be happy at $500.

I have a, I have a saying that you don’t negotiate with terrorists, because at the end of the day, you still get blown up. Like,

that’s great. Yeah. So I mean, that’s gonna happen. But, you know, I think our big biggest success is I can take a guy and teach him our pricing structure in a week, essentially, the biggest question is, how long is it going to take you to do it? Okay, correspond that with this are your materials 10% or less, because we will charge for additional materials. For example, the number one repair that we do, where we charge for additional materials is replacing a front or rear door. Like the price is varies widely. You could have $100 door or $2,000 door. Yeah, so typically what we’ll do is we’ll quote labor only, or labor and all materials other than the door. So if the door is $850, and it’s gonna take us four hours, we quote a level for at 958. That includes all the labor, the shims, it includes the moldings and the finish on the moldings, though, and then if you have an $850 door at Home Depot, we charge you 850. And we’ll be happy to go pick it up and bring it

here. That’s great. So

now, I don’t have to know I don’t have to explain that I marked up your 850 door. Dollar door. 30%. Right, right. Right. Yeah, my price is a little higher, but includes all this, I’m gonna pick it up, I’m gonna install it in two and a half years from now, it doesn’t shut good. Call us we’ll come out and make adjustments.

Okay, that’s, that’s awesome. So what does what type of like transitional? But how does that go into? Like, what kind of estimating software you use? Right? Because it’s one thing to tell the people like, Okay, this is the price 756 bucks. But on the estimate, like the actual written estimate that you write on the computer, do you actually break that down labor and materials? Or is it just one line item for the whole thing? You know, what does that look like? And what estimate software do you use? By the way?

We actually handwrite all of our estimates.

Wow, I did not think that okay, yes.

We’re going to change we’re using a service called Success ware, which is horribly outdated. It’s not good. I don’t recommend it. We just made the decision last week, we’re going to switch to something called Sera, S E Ra. Okay. And I have not looked into that too hard yet. One of the other IT guys was with it, because there are five companies and we’re all like in the same compound. So we all share best business practices technology. You know, we meet once a month to go over all of our financials, tell us what’s working, what’s not working, where we’re having problems, because the problems we have are the same problems they’re having. Just like the problems I have as a handyman business. You guys have a lot of them as well. Yep. Yep. And I think that’s why business owners notoriously, it’s almost like you’re soon as you find out, Oh, that guy’s a business owner. You like open your arms and bring them into your family right away? Because

you feel drawn to me? Yes. You immediately

feel for them come cry on my shoulder. Right. Right here, everybody. I know you had a bad day. Nobody appreciate you. So yeah, so we’re handwriting our estimates. A lot of our clientele are older. They have more expendable cash. And that’s kind of who we try to market to 40 and up. We are going to be moving over the next six months to more of a digital Estimating Software. i It’s too soon for me to speak on that. Really.

Okay. So then when you write it up, when they write it up, I guess they just write one line item, right? Like paint this bedroom, blah, blah, blah 675. That’s it. Yeah.

So you know, it could be paint bedroom, two coats of paint, ABC patch this wall fill all nail holes, prep space, like something like that? Three year workmanship warranty, and then additional materials customer supplied door $845. Okay, right. Here’s your total do upon completion.

And do you guys do you guys charge any type of deposit or you just get money when it’s done?

So we charged deposits on jobs over 10,000?

Okay, and what’s that deposit? Is it percentage 10%? Or what?

Yeah, so if anybody quotes a job over 10,000 It goes through a whole it goes through a whole separate process, which is what are estimating processes, so they may hand write an estimate. Dustin, who is our What did I call them? remodel coordinator?

Yeah, I think I think so. Yes. Remember a

fairly new title here. Okay. A lot of moving parts where you want to coordinator he’ll take that proposal he’ll type it up into Are our platform, and then he’ll email it out. And then he’ll kind of do the follow through. If it’s signed, we immediately get a notification saying that, hey, this customer just signing this proposal, he’ll actually call the customer collect 1/3 deposit, once we receive the deposit, we go ahead and put it on the schedule. And then we get with the project manager. We send all the job notes to him, and he’ll start ordering material and prepping for the job. And typically those jobs are two or three weeks out, because we’re almost always two or three or four weeks out on those bigger projects. Okay. So, and then we do 1/3, on acceptance of proposal 130, halfway and remaining balance on completion, which includes any change orders or anything else that happens. Okay, so that’s pretty much standard. And we have, I would say that we’ve had one job where we collected a deposit on that canceled probably in 10 years, okay, once we collect the deposit, and put them on the schedule, it’s pretty firm. Yeah, they’re usually, yeah, everything’s in writing, we use Hello sign, actually, for that, we have a template built in there. And that’s how we can see if a customer has opened it or if they haven’t opened it. If they don’t open it, within 24 hours, we call the customer because chances are that they think we didn’t send it, and it’s in their spam box. So that’s why I like HelloSign. Because we did have a problem in the beginning of where we had send proposals. And we’d never hear back from customers, and we wonder what happened. And then later, we’d send an email marketing blast or our customer base. And then we get all these emails about how these people didn’t receive their estimates. And they literally thought that we just right dental monitor contractor thing, and we left them hanging. Yeah. In reality Hanks handyman. Yeah. In reality, we sent it, they just didn’t see it. Right. Right. So we switched over to the HelloSign. So that way we could see it. They were open. Okay. And then we built a whole entire sales tracking platform in monday.com. So we run all of our estimates, we enter them in there, we have a setup. So if we know the proposal status, whether it’s been sent whether it’s we haven’t received it from the estimator yet, if it was open, when it was opened, how many times when we call them if they said no why. So we have that whole entire system built into monday.com. Yeah. And then we track our whole entire remodel process in there, too.

That’s a huge missed opportunity. I see a lot of a lot of business owners like not taking advantage of especially when they get to that three to five man like Mark, and they’re in there. And they’re trying to scale and figure out the next step is it’s it’s tracking in a project management software. So monday.com, Trello, clickup, those are all really great. I think they have free offerings for a lower level, but just to kind of get you introduced, but it’s a great system to roll out to really track. You know, where those estimates are, especially for Remodelers any kind of large jobs.

Yeah, definitely. Definitely. That’s awesome. Well, I know we’re kind of getting low on time here. And we got to hear which questions to ask you like, but so I think we’re gonna definitely have to have a part two for this. For this. We haven’t even we haven’t even talked marketing. I know, dude. Yeah, no, marketing is like the number one question I wanted to ask you. So first,

I know you got to eat lunch, because it’s like 12 o’clock. Our time and we want to respect your time, do you? Yeah, that’s good. Like 510 minutes or? Yeah, go

whatever you got. Yeah. Cool. Cool. Well, yeah, one question I had was, so a typical marketing budget is like seven 8% of gross revenue. And I believe, like, based off your numbers, you’re making somewhere around like, 400 400,000 a month? Correct. Bringing in? Yeah, 300. That’d be somewhere around like 28 30,000 a month spent on marketing, how much do you actually spend on marketing? And where do you spend that?

So we are but our marketing budget is 5%. Okay, that’s fairly low as a marketing budget goes, because the repeat business opportunity with what we do is handyman is huge. If you think of how often somebody needs an electrician, or needs a how often their age back and breaks, it’s not near as often as they could use somebody like us in their home. So we get a lot of repeat business, we get a lot of referrals. And then if you know anybody that works at a home service company that does electrical, plumbing or heating and air conditioning, you need to go talk to the people in charge there and you need to figure out how to go fix all their oops jobs. So we incentivize the partner company which is called milestone electric. we incentivize all their technicians to send us leads. So if a plumber goes into a house and doesn’t reply, it cuts 30 holes. was in the walls. He’s on the phone calling us when he’s at the home, saying, Hey, I just cut a bunch of holes in the wall, this customer estimate to get all this fix, when can you guys come out? So and then we, we partnered with them and we pay each of their technicians a 3% referral fee for any sold work. So if you can work your way in or you have those kinds of connections, we do 300 350,000 a year in revenue just from that one. That one connection.

That’s awesome. That’s great man.

But that is, but the leads are phenomenal. Because, you know, they we run very similar to the other company, as far as our business structure. So if that customer chose to do business with them, they would also probably choose to do business with us. So that is a great, you know, little marketing thing. If you’re around, you know, take a day, if you’re slow, go to the home service companies and and try to, you know, figure out who’s doing their repairs,

right? That’s huge man.

Yep, you should do that. That’s great repeat business. And once you get that established relationship, you just need to maintain it, you know, take him out for lunch every quarter or something like that. What else?

Where else do you spend on marketing,

PPC on Google, so pay per click. LSA has actually been local service ADS has been way more productive and cheaper than PPC. So if you’re on Google, but you are not using local service ads, you should sign up, we’re getting leads for about $35 a lead.

Awesome. Also,

the other thing is, if you’re not getting reviews, you need to get every review, I told the guy a few weeks ago that I was talking to that you as a handyman guy. And if you’re watching this, you need to get on Google and you need to see who everybody in the handyman market is around you. And you need to see who has the most reviews and the highest rating. And then you need to set your

goal to beat them beat them, right?

I have, I don’t know, I probably have 515, Google reviews at 4.9. When we started 24 What

you just like nice job, or another kind of reputation management system to kind of automate that.

We’re using a service called Pulse M. Okay. And it’s automated in our software. So when we dispatch a technician, you get a technician bio, which is his picture. A few things about him personally. And then you get a list of his most current customers and what they said about him, that’s kind of part of building trust building rapport building value, that’s awesome. ever get to the house. And then as soon as he leaves, you get a review link via text message and email asking how we did with a link to our Facebook and our Google.

Okay. So do you do anything else then Google? No, no. Okay.

Matter of fact, we we turned, we have to turn Google off. It’s off right now. We turn it on for two weeks, then we get booked out for two weeks, and we turn it back off for a few weeks. Wow. So we’ve been spending roughly 14 to 15,000 a month. I did learn in January and February, kind of the slower months of the year, we got to spend quite a bit more on marketing to get the phone during I think that just comes back to there’s just less demand in January and February. Then there is the rest of the year when the weather’s nicer. So as soon as middle of March kicked around, we’re like okay, well turn all the marketing off. So all this stuff we spent we overspent in January and February no underspin in probably March, April and May. Dude,

killer, acid gap and supply and demand of like there’s just not a there’s just no supply of professional handyman service. It’s gonna answer the phone show up on time provide that great customer experience. And yes, and is out there. I think you mentioned you know, maybe like 15% 40 Plus, like those are the people that demand they really want to find Hanks handyman and other similar professional companies like yourself.

Yeah, the demand is unbelievable. I can’t really tell you what this business is going to do anymore. I don’t think I understood the demand. When we did this. I was like, oh, yeah, there’ll be some people you know, will grow it will scale it. If I actually went full blast, like marketing, like mailers and radio and everything, man, we’d be so covered up. People will be hanging up. Oh, they’re already hanging up on us because they don’t want to wait two weeks.

Right. Right.

So the one big question I have for you, Ben. Got another five minutes here maybe is hiring like that’s a huge struggle a lot of people have and you and you know you lost six guys over the last couple months. What what are you what is your hiring look like? And also piggyback question is curious what the average tenure of your techs are also understanding your only three years in business Uh,

yeah, yeah, August 1 would be three, three years. Man, if I could figure out that that question. A year, a year ago, was substantially easier than now.

A year ago, I could, I could get pretty good guys for 25 bucks an hour in my market. Everybody wanted 401k health insurance, they wanted all the benefits that you get with typically the bigger organizations. And that was enough to get people to come on board. It does not seem to be the case anymore. I got to the point where like, with just threw out a $2,000 Hiring bonus for top tier guys. I decided, you know, what if I can get people, because my top tier guys, my level three guys, they’re averaging between 30 and $41 per hour. And that’s not just billable hour, that’s per every hour that they’re at work in their van at Home Depot. So I just figured it takes a guy anywhere from six to eight weeks to get in a truck get trained and get in his groove. If he has the experience before he’s making that money. So I kind of desperate so I was like, you know, maybe as try to offer him $30 an hour with a $2,000 Hiring bonus. And I’ve managed to scoop up two or three that way in the past couple of weeks. I still probably need to hire like seven more. I have six empty trucks in the parking lot not producing any money,

which is devastating. Wow.

But yeah, hirings tough. So I actively recruit. So I go through zip recruiter. And indeed, of course I post on there but I don’t get the response out of the post as near as much as I do is going through the resume database. People Yes, call literally calling them on the phone. Here’s resumes right now. I spent two hours doing that this morning, texting them calling them on the phone actively this market, you’re going to have to actively pursue people. almost be a persistent pain in the ass. Excuse me. But you got to be very diligent right now you just really have to work work through it. It’s really tough.

Real? Well, as we as we kind of get ready to close here. What? What kind of advice would you have for people out there listening? I mean, first for the guy, that’s like just starting? What kind of advice would you have for him?

First and foremost, just starting, know that it’s hard. It is very difficult.

You get what you put into it. You got to figure out what you want. And then you have to plan for it.

If you’re not planning and you’re not taking, you know, take a day or two a quarter and get out of the field with a notepad and think about your business and like what do I want? How am I going to get there? How am I gonna do it? I spend? I spent a whole week in October, I will go work somewhere else. I’ll work at home, working on my budget working my plan, how many trucks do I need? How much revenue can I produce per truck? So if I want to hit 5 million, well, how many guys do I need? Right? Well, how am I going to buy those trucks? How am I going to get the guys? You really, really have to plan? So what’s my overhead cost? By line item by account billing account category. It’s tough. For sure. I mean, this stuff doesn’t happen by accident. It’s it’s very, very well planned and thought out. And then you had to follow your plan, which following your plan means adjusting your plan every single time you hire somebody and then they quit on you.

Right? Like that didn’t work.

Right. I got very, very lucky my first hire is still here. His name’s Guillermo, he’s doing a great job. And then yeah, I’m sorry that probably four guys that have been here two years are over which for only being two and a half years or over two and a half years in business. That’s pretty good. I my higher skilled guys stay longer than my entry level guys is what I’m finding because my higher school guys are making 95 plus 1095 to 105,000 a year with all the benefits and my lower skill guys, you know 45 to 65 and you know in this market, they’re a little bit more approachable than my higher skilled guys who are making more money. So that that seems to be the trend that I’m noticing I don’t have a whole lot of handyman business. Time to notice a lot more trends but that’s just what I’ve noticed so far.

Awesome. And something I want to repeat too, I believe Ben, you mentioned this kind of before we started the episode or just talking but it you really kind of hit on it with with this, like last fuse advices plan out but know what you’re trying to accomplish. Like you mentioned the retired guy that wants to make supplemental income, that’s great. Know that that’s what you’re going to do. And there’s definitely opportunity, you know, do you want to just have one or two guys? And because you don’t want to manage people? Or do you want to be a Hanks handyman? You know, there’s just different sets of problems with each one. But, you know, planning for what kind of what you want setting those goals are super important to dial in what you’re going for. There’s multiple ways to do it.

Yeah, I mean, because if you don’t plan for it, next thing, you know, it’s gonna be 235 10 years down the road, you’re like, oh, you know what, I’m gonna scale my business now. Like, you just spent 10 years doing this, why didn’t you do it? 10 years ago, you know, you you gotta plan if it’s a five year plan, make it a five year plan. But if you don’t write it down, and you don’t think it through, it’s probably not going to happen.

Yep, that’s huge. And I think one thing I took from what you said, way at the beginning of this podcast was track everything. I think that’s such a key. And I think that’s something that people don’t do and they lose out on it. Right? Even your like definitely your expenses. Right? What you spend know if

your price correctly. Yeah, you don’t know what your margin was on every single job.

People are people might be like, Wow, I made I made eight grand this month. Well, how much did you spend, you know, Vegas, come to find out you spend 10 grand right, then you aren’t making any money. I think a perfect

example. Perfect example, January, we did about 400,000 revenue. We made about $75,000. In net profit. February. February is tough. We had some ice and some weather we lost six working days. So what we do, I think about 260, we made about $18,000 in net profit. March we did 357. And it looks like we probably lost like five grand in March. Because I tracked everything. I know that my labor went from 25 to 30%. So I need to go find out why my labor went higher. I know why my labor went higher. I’m short handed and a lot guys work more overtime. You know, my materials went from 10 to 14%. My vehicle expenses went from $2,000. In repairs to $14,000. In repairs. Well, and fuel. Fuel went from 6000 to 10,000. Yeah, so yeah, I’m but I literally can look at report and go, that number is supposed to be there. It’s higher, and then dive into the why. And it may be because I spent all that money. I ordered $4,000 for the uniforms. I hired three guys, I up my spending on my recruiting, like, all the stuff is like, Okay, well, I didn’t really lose money. I’m more so invested in growth, right? We’ll return dividends in three months from now. So, you know, I know people say, Well, it’s a big business and you bet, you know, it’s not worth the hassle. I mean, we can, we can make net profit a half million dollars. And that’s after I get a salary and all the bills are paid this year. That’s that’s worth it. And I could be gone a month. I will be gone a month, but it could happen one day.

That’s awesome. Well, as we wrap up here, Ben, just wanted to say thank you so much for coming on. And I we’ve had we have so much to talk about still. So I want the viewers that are listening here to write in the comment section below. What’s one thing you took away from Ben? And what’s one thing you would like him to talk about on the part two of this podcast? So go ahead and leave that in the comment. And then we want you to join the the handyman success mastermind group on Facebook, you may already be a part of it, I’m not sure. But that’s where we have all of our guests from the podcast, go and join so that the viewers can get on there and ask you specific questions. So one thing I would absolutely love is if you would be willing to post that pricing guide in that mastermind group would be fantastic. And then have people ask you questions about that. I think that that would really help a lot of people kind of understand at least the pricing structure that you presented today. I think that’d be fantastic. So we’ll get you in there. We’ll we’ll send you the link to that. And also the viewers, we want you to know that we appreciate you guys. Join us on that handyman success mastermind group on Facebook. That link will be in the description of this podcast. If you want to watch we have tons of episodes of this podcast, so go on YouTube, Spotify, wherever you listen to or watch podcasts and check those out. So Ben, do you have any final words for the viewers here before we head out?

No, not really. Thanks for any opportunity and I hope that something I said helps somebody or maybe opens up their their thought process to thinking a little bit differently because you the future is what you make it with handyman and you really just have to decide what you want to do with it. And then just go get In the markets not full so that’s it that’s all I got

BAM mic drop thank you guys for tuning in you guys have a fantastic day we’ll catch you on the next next handyman success podcast