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Partnering with local handymen for lead gen?

youngtrep

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Hi everyone. I had a long, interesting conversation with a handyman yesterday that really has me interested in the local lead generation space. He has been working for a local handyman franchise for the last 12 months and has been doing handyman and carpentry work for the last 20 years so he really know his stuff. He told me that the local handyman franchise is absolutely booming with most of the handymen (who are 1099 contractors) averaging about $1500-2000 per week in net earnings. What he and his fellow contractors don't like is that the franchise takes 60% of every job (which does not include materials, they are a separate charge to the customer) and gives them little flexibility to negotiate with homeowners if necessary in order to win the project.

The franchise generates the leads for the handymen, arranges for them to head to the home at a given time to do an on-site estimate followed immediately by starting the project and takes the payment from the customer over the phone once the job is done.

The handyman who I met with is ready to take more jobs tomorrow if I could send them his way. He would be thrilled with me taking a 20-30% cut instead of the current 60% and has 3-5 guys that he works with who would similarly jump at the chance for more work if it was available.

With all that said, this seems like a great opportunity to try to go win some business for them. I am thinking build an attractive, effective landing page (unlike most of the competition which sucks) and then testing traffic from various sources to see what converts. If someone requests an estimate, I send the one guy out who I know based on his schedule and take payment via stripe. If demand exceeds his schedule, I can ask to bring other guys into the fold based on his relationships and figure out a way for him to make money as well to incentivize his involvement.

What do you guys think? My e-commerce business is somewhat on auto pilot right now and I would really like to diversify my revenue streams.
 
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Scot

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This could be a very simple yet profitable venture for you.

It goes without saying this is actually @Andy Black's specialty. If you haven't read his lead gen threads, do it now.
 

youngtrep

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This could be a very simple yet profitable venture for you.

It goes without saying this is actually @Andy Black's specialty. If you haven't read his lead gen threads, do it now.

In the process of reading it now, it is fantastic. I am still trying to find the holes in the idea, but it seems like it is at least worth a try because I already have the skilled workers lined up to handle the initial jobs.
 

Jon L

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In the process of reading it now, it is fantastic. I am still trying to find the holes in the idea, but it seems like it is at least worth a try because I already have the skilled workers lined up to handle the initial jobs.
Why does the franchise take such a large cut?

This is an important question because you might be missing a few things. For example:
1) Does the franchisor carry their own insurance?
2) Do they have a contractor's license?
3) What other services do they provide to the homeowner / handyman?

I'm not saying that this isn't a good idea, but answers to those questions should be part of your due diligence. It will also help you compete against them
 

MidwestLandlord

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What he and his fellow contractors don't like is that the franchise takes 60% of every job (which does not include materials, they are a separate charge to the customer) and gives them little flexibility to negotiate with homeowners if necessary in order to win the project.

Big incentive to bypass them and do work under the table.

What keeps the handyman from building a relationship with the home-owner and bypassing your service?
 

Andy Black

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This could be a very simple yet profitable venture for you.

It goes without saying this is actually @Andy Black's specialty. If you haven't read his lead gen threads, do it now.
Yep... this is right up my street.



@youngtrep...

Check out the first bolded radio interview in my signature for how I got started.

Check out the local lead gen thread in my signature.

Check out the recorded chat with @Random_0.

Check out a LOT of the posts linked to in my "Andy's AdWords Posts" thread.
 
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youngtrep

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Why does the franchise take such a large cut?

This is an important question because you might be missing a few things. For example:
1) Does the franchisor carry their own insurance?
2) Do they have a contractor's license?
3) What other services do they provide to the homeowner / handyman?

I'm not saying that this isn't a good idea, but answers to those questions should be part of your due diligence. It will also help you compete against them

This is an important question and one I am going to delve into more with him. On the surface it sounds like simply an overreach on their part, but it may be necessary to run the operation. I do know that all of the handymen are considered 1099 contractors and have no benefits, but I will find out about the insurance. Also, he said the company seems a bit bloated with a large office and an excessive number of employees who handle scheduling.

I have used the company three times now and can tell you the complete flow of using them.

1. Call handyman franchise and request an estimate. On the call they ask for your name, email and details about the project. They schedule a date for the handyman to come to your house and provide an estimate.
2. Handyman comes to your home on agreed upon date. He provides total cost for the job in writing + materials.
3. Once you agree to the price, handyman drives to local hardware store to purchase any necessary materials. The hardware store calls the customer at checkout to get credit card details so homeowner covers complete cost of materials and knows the exact cost.
4. Handyman completes job. You sign off on the job. Handyman calls the office, hands the phone to the customer and you give them your credit card to pay for the job in full.
5. Franchise sends final receipt for the job to homeowner.
6. The handyman receives his portion of the job's payout within 24 hours via direct deposit.

That seems to be the entirety of the process for both the homeowner and the handyman. He has complete flexibility over when and where he takes jobs and uses his own truck.

Here is what the company lists as benefits for the handymen on their hiring page:

  • Earn up to $1,200/week, depending on your skills and availability
  • Work as Independent Contractor or Employee - part-time or full-time - on your own schedule
  • Professional Office Support - scheduling, customer support, job tracking
  • Free access to custom mobile application for scheduling and communications
  • Successful marketing campaign that brings us well qualified customers
  • Branded apparel and signage

Big incentive to bypass them and do work under the table.

What keeps the handyman from building a relationship with the home-owner and bypassing your service?

This is a major problem and one of the first things I asked about. He said that a lot of the best guys will work for them for a year or two, get tired of the excessive take and move on to do something else. His feeling was that their is a sweet spot where the guys feel like the company is really helping them and alleviating their pain points (customer acquisition, scheduling, billing etc) but not taking advantage of them by taking such a large % of their earnings. His feeling was that a lot of guys, himself included would feel much less inclined to side step the lead gen provider when they bring all of that value but are doing it for 20-30%, not 60%.

Bypassing will always be an issue, but I think there are ways to cut down on it.
 

Scot

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This is an important question and one I am going to delve into more with him. On the surface it sounds like simply an overreach on their part, but it may be necessary to run the operation. I do know that all of the handymen are considered 1099 contractors and have no benefits, but I will find out about the insurance. Also, he said the company seems a bit bloated with a large office and an excessive number of employees who handle scheduling.

I have used the company three times now and can tell you the complete flow of using them.

1. Call handyman franchise and request an estimate. On the call they ask for your name, email and details about the project. They schedule a date for the handyman to come to your house and provide an estimate.
2. Handyman comes to your home on agreed upon date. He provides total cost for the job in writing + materials.
3. Once you agree to the price, handyman drives to local hardware store to purchase any necessary materials. The hardware store calls the customer at checkout to get credit card details so homeowner covers complete cost of materials and knows the exact cost.
4. Handyman completes job. You sign off on the job. Handyman calls the office, hands the phone to the customer and you give them your credit card to pay for the job in full.
5. Franchise sends final receipt for the job to homeowner.
6. The handyman receives his portion of the job's payout within 24 hours via direct deposit.

That seems to be the entirety of the process for both the homeowner and the handyman. He has complete flexibility over when and where he takes jobs and uses his own truck.

Here is what the company lists as benefits for the handymen on their hiring page:

  • Earn up to $1,200/week, depending on your skills and availability
  • Work as Independent Contractor or Employee - part-time or full-time - on your own schedule
  • Professional Office Support - scheduling, customer support, job tracking
  • Free access to custom mobile application for scheduling and communications
  • Successful marketing campaign that brings us well qualified customers
  • Branded apparel and signage



This is a major problem and one of the first things I asked about. He said that a lot of the best guys will work for them for a year or two, get tired of the excessive take and move on to do something else. His feeling was that their is a sweet spot where the guys feel like the company is really helping them and alleviating their pain points (customer acquisition, scheduling, billing etc) but not taking advantage of them by taking such a large % of their earnings. His feeling was that a lot of guys, himself included would feel much less inclined to side step the lead gen provider when they bring all of that value but are doing it for 20-30%, not 60%.

Bypassing will always be an issue, but I think there are ways to cut down on it.

One opportunity I see right away is to cut out the "go to hardware store" step. Instead of them going to Lowes, then having customer pay over phone with their own CC.. Get a company credit card. Have your company purchase all the materials for the job. Potentially work out a contractor deal with a local shop for reduced rates. This way, you can add a slight up charge on materials if you get a discount. This would reduce an awkward step for the homeowner and allow a small margin on materials purchased. Bonus: credit card rewards.

Also, if they have a huge office with lots of employees, I see no reason why you couldn't cut this down to a 1 or 2 man operation and cut the fat. Also, you said its a handyman franchise. If its a Franchise, they're losing A LOT of money in franchise fees, which you won't.

This seems like a great opportunity. It's knocking at your door, you better answer it.
 

MyronGainz

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Interested to see how this pans out.

I know people that do this, one of the big issues is in order to make a lot of money you need volume (I assume the CLTV is probably pretty low for a handyman service). With volume comes a whole host of problems, that if you are not experienced in the business (beyond just internet marketing) it will be debilitating.
 
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Random_0

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You're not going to be able to copy the model of lead gen that your competitors use and simply undercut them. Your competitors pricing scheme is probably a kind of market rate for their business model in that area.

In my business:

Hourly rate = £130/hour
Wages to contractors = £45/hour
Daily overheads = £200-300+
My wages + time = X

Do you think I'd be able to half my profit by simply paying my guys more? Do you think it will earn my company more money by paying my guys more? Will customers swarm to my business when they hear that I pay my guys 20/30% more than the big players in my area?

You need to be competitive in getting the leads, not competitive with your rates of pay.

You need customers rather than handy men.

(You could even pay less/the same than your competition. If you've got enough guys you can pass work to you can be sure at least one of them has a free slot to earn some money from you)

Be specific: what is your perfect job? Estimate based work = multiple visits, slow paced & at the mercy of your customer accepting/declining your estimate in their own sweet time. You'll be massively overworked.

Why not just tell people over the phone how much the job will cost. Remember, those free estimates you're giving out are costing you and you guys money. They are expensive and FAR from free for your business to provide.

Reactive repairs: emergency situations and same day repairs have quick turnover.
 
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youngtrep

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You're not going to be able to copy the model of lead gen that your competitors use and simply undercut them.

You need to be competitive getting the leads, not competitive with your rates of pay.

You need customers rather than handy men.

I agree. Without being better at getting leads the whole idea doesn't work. But having the workers ready to go is certainly a key piece and I wouldn't even have considered the whole concept without the enthusiasm from the handyman who was expressing a lot of discontent with the current setup. After doing some more reading tonight, I think the key is getting leads for the right type of jobs. You don't want to be attracting a lot of $100 tv mount jobs but rather need the $500 light carpentry jobs like I originally hired the handyman for. Not sure how feasible that is yet.
 

Random_0

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I have been in your position, but I worked in the trade that I started my business so I understood a little bit more about pricing

It will take you about a week to work out the costs etc of what to charge


I agree. Without being better at getting leads the whole idea doesn't work. But having the workers ready to go is certainly a key piece and I wouldn't even have considered the whole concept without the enthusiasm from the handyman who was expressing a lot of discontent with the current setup. After doing some more reading tonight, I think the key is getting leads for the right type of jobs. You don't want to be attracting a lot of $100 tv mount jobs but rather need the $500 light carpentry jobs like I originally hired the handyman for. Not sure how feasible that is yet.


The only real advice that is gonna be of any help is for you to start right now.

Don't wait til tomorrow.

How far are you with your landing page? Will it be done by tomorrow or what?

Have you got money for ads spend? If not, do a weeks work and get the ball rolling.

After a few weeks you'll have learnt the lessons necesssary to start earning money.

All of your questions will be answered by starting asap.


Edit: get insurance that covers your guys, whether they are employed by your company or not (and make sure your guys have solid liability insurance with a contract in place stating that they will stay within their insurance terms at all times) Also, incorporate your company.
 
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Andy Black

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Don't over complicate this.

Check out my local lead gen thread and see the model I used for a window repair guy in Dublin.
 

youngtrep

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I have been in your position, but I worked in the trade that I started my business so I understood a little bit more about pricing

It will take you about a week to work out the costs etc of what to charge





The only real advice that is gonna be of any help is for you to start right now.

Don't wait til tomorrow.

How far are you with your landing page? Will it be done by tomorrow or what?

Have you got money for ads spend? If not, do a weeks work and get the ball rolling.

After a few weeks you'll have learnt the lessons necesssary to start earning money.

All of your questions will be answered by starting asap.


Edit: get insurance that covers your guys, whether they are employed by your company or not (and make sure your guys have solid liability insurance with a contract in place stating that they will stay within their insurance terms at all times) Also, incorporate your company.

Met with the handyman again today for about an hour to further develop the idea. He is fully on board. I have refined the jobs to target based on his feedback which includes things like door repair and installs, deck repairs and replacement, closet design and installation etc as opposed to the lower end handyman tasks which include things like hanging tvs and fixing a couple broken cabinets. Chasing the slightly higher dollar jobs (average $500-600) will need to be reflected in the landing page design and copy.

I also generated a list of customer wants/pain points that will be the underlying motivation behind the landing page copy. These include:

1. FREE, no obligation estimates

2. On time- not even 5 minutes after agreed upon times

3. We work around your schedule. Doctor’s offices may not be open nights and weekends, but we are. Let us know a time that works best for you.

4. Transparent pricing- know what it will cost before work is started

5. Work done right, the first time

6. Prompt customer service (get someone on the phone immediately)

7. Easy scheduling and payment

8. Payment only after job completion

9. 1-year warranty on all work

10. Contractor is insured

11. All work is agreed upon in writing

I am wireframing the landing page tonight and getting the copy fleshed out. Not sure what the full potential is here, but I am certainly going to get it going and see what I can make happen.
 

Random_0

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Those TV installation etc. are easily quotable over the phone. They're lower cost but you don't have to take multiple visits.

Imagine you have a minimum of 6 estimates given per day @ 30 estimates per week.

Are you equipped to deal with all of those estimates?

Home | ServiceTitan

^^^ Services like that are gonna be essential for you
 
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strobe

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Met with the handyman again today for about an hour to further develop the idea. He is fully on board. I have refined the jobs to target based on his feedback which includes things like door repair and installs, deck repairs and replacement, closet design and installation etc as opposed to the lower end handyman tasks which include things like hanging tvs and fixing a couple broken cabinets. Chasing the slightly higher dollar jobs (average $500-600) will need to be reflected in the landing page design and copy.

I also generated a list of customer wants/pain points that will be the underlying motivation behind the landing page copy. These include:

1. FREE, no obligation estimates

2. On time- not even 5 minutes after agreed upon times

3. We work around your schedule. Doctor’s offices may not be open nights and weekends, but we are. Let us know a time that works best for you.

4. Transparent pricing- know what it will cost before work is started

5. Work done right, the first time

6. Prompt customer service (get someone on the phone immediately)

7. Easy scheduling and payment

8. Payment only after job completion

9. 1-year warranty on all work

10. Contractor is insured

11. All work is agreed upon in writing

I am wireframing the landing page tonight and getting the copy fleshed out. Not sure what the full potential is here, but I am certainly going to get it going and see what I can make happen.

Just wondering if the above 11 needs are being met for the customers or if thats just what is expected and the other company is addressing all of these already? And now you want to undercut them but provide the same service with no experience in the field?

So far I just see the value you are adding isn't to the customer, it's just saving money on finding leads for handymen whilst you are taking on all the admin work aswell. Why not just sell the leads to the handymen and they can do what they want with it, reducing your time, money and effort. Lets say for example each lead you sell to them you make $15, whether they get the job or not, that means you can spend roughly $10 acquiring the lead and still make a decent profit without any of the other bs, admin and customer service that goes along with it. Are there lead gen service apps available over there?
 

Andy Black

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Met with the handyman again today for about an hour to further develop the idea. He is fully on board. I have refined the jobs to target based on his feedback which includes things like door repair and installs, deck repairs and replacement, closet design and installation etc as opposed to the lower end handyman tasks which include things like hanging tvs and fixing a couple broken cabinets. Chasing the slightly higher dollar jobs (average $500-600) will need to be reflected in the landing page design and copy.

I also generated a list of customer wants/pain points that will be the underlying motivation behind the landing page copy. These include:

1. FREE, no obligation estimates

2. On time- not even 5 minutes after agreed upon times

3. We work around your schedule. Doctor’s offices may not be open nights and weekends, but we are. Let us know a time that works best for you.

4. Transparent pricing- know what it will cost before work is started

5. Work done right, the first time

6. Prompt customer service (get someone on the phone immediately)

7. Easy scheduling and payment

8. Payment only after job completion

9. 1-year warranty on all work

10. Contractor is insured

11. All work is agreed upon in writing

I am wireframing the landing page tonight and getting the copy fleshed out. Not sure what the full potential is here, but I am certainly going to get it going and see what I can make happen.
What did you think of the window repair model I mentioned in my other thread?

What were your takeaways from the call I had with @Random_0 ?
 

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