Handyman Profits: A Handyman Struggled to Stay Profitable
Handyman profitability is often misunderstood, especially by busy owners who feel booked solid but still struggle with cash flow. In fact, handyman profits are among the most common reasons service business owners feel stressed despite steady work. A few years ago, a handyman business came to us because the owner couldn’t understand why cash always felt tight. He was busy and had steady jobs lined up, yet it seemed money was constantly slipping through his fingers. From the outside, the business appeared healthy, but the numbers told a very different story once we looked more closely at the handyman’s profitability behind the scenes.
The owner was charging one long-term client $60 per hour for handyman services. To help complete projects, he hired part-time workers at $23 per hour. At first glance, the math looked reasonable. Sixty dollars in revenue minus twenty-three dollars in wages left thirty-seven dollars per hour in gross margin. Many business owners assume this kind of calculation is enough to ensure handyman profitability, and they stop their analysis there.
However, the reality changed once we looked at a real job. One project took two hours to complete and required $200 in materials. The total revenue for the job was $120. Labor costs for those two hours came to $46. When the materials were added, the job resulted in a $126 loss. And that loss didn’t even include the employer portion of Social Security and Medicare taxes, which are paid in addition to employee wages. Even with just labor and materials, the job was already unprofitable, clearly undermining handyman profits.
This is where many service businesses run into trouble. Handyman profitability often breaks down when hourly rates look good on paper but fail to account for all direct costs tied to the work. Materials, payroll taxes, and overhead add up quickly. When revenue does not fully cover these costs, the business may stay busy while slowly draining cash. Over time, poor profitability for handymen creates stress, confusion, and burnout for the owner.
When you run a business, every dollar of revenue should support the true cost of producing that income. Improving handyman profitability usually starts with pricing work by project whenever possible and understanding what each job actually costs before agreeing to a price. It’s also important to know what the market supports. Trade associations, competitor estimates, and modern tools like ChatGPT can help business owners research typical rates in their area and avoid underpricing their services.
In this handyman’s case, we asked whether there was any flexibility to increase the client’s hourly rate. The answer was no. That left him with a difficult but necessary choice. He could keep the client and carefully limit costs by assigning only his lowest-cost labor, or he could walk away from the work and focus on finding clients who were willing and able to pay profitable rates. Sometimes, protecting handyman profits means letting go of work that no longer makes financial sense.
The biggest takeaway is this: being busy does not mean being profitable. Handyman profitability depends on understanding job-level margins, not just staying booked. If cash is always tight despite steady work, pricing is often the root of the problem. Understanding job-level margins and asking the right questions can completely change the financial direction of a handyman business.
Perform Your Own Assessment
If you are a handyman or are thinking of starting a business like this, consider these prompts as you evaluate your own handyman profits and profitability:
Do I know the actual cost of each job, including labor, materials, and payroll taxes?
Am I pricing work based on hourly rates or actual project costs?
Which jobs or clients consistently make money, and which ones don’t?
How often do material costs wipe out my hourly margin?
Do my rates cover overhead and leave room for profit, or just wages?
Am I staying busy but still struggling with cash flow?
What are other handymen in my area charging for similar work?
If I can’t raise my rates, am I willing to replace low-margin clients with better ones?
Do I review my pricing regularly, or am I using numbers from years ago?
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