Introduction:
This is Part 2 of our 5-part series on pricing strategies for painting and handyman businesses.
Read Part 1: Understanding Your True Costs & Break-Even Analysis
In Part 1, you calculated your true costs and discovered your minimum profitable hourly rate—the foundation of all pricing decisions. Now comes the critical question: How do you actually present pricing to clients?
The way you structure and present your pricing dramatically impacts whether clients say yes or no, whether they perceive you as expensive or valuable, and ultimately, how much profit you keep. There's no single "best" pricing model—the right approach depends on the type of work, the client, and your business goals.
In this guide, we'll explore four main pricing models used by successful contractors, the pros and cons of each, when to use them, and how to implement them effectively. By the end, you'll know exactly how to price different types of jobs for maximum profitability and client acceptance.
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| We will now begin part two of this informative article. |
Important Legal Disclaimer
Please Note: The information provided in this guide is for educational and informational purposes only and should not be considered financial, legal, or business advice. Jurisdictions significantly vary in pricing practices, contract terms, and consumer protection laws.
Before implementing any pricing strategies based on this information, you should:
Consult a business attorney regarding pricing disclosures, contract requirements, and consumer protection laws in your area.
Work with a CPA or business advisor about pricing strategies and profitability
Research competitive practices in your specific market
Ensure compliance with any state or local regulations regarding contractor pricing and estimates.
This guide helps you understand different pricing approaches and their applications, but it cannot replace personalized professional advice from qualified experts familiar with your specific situation and jurisdiction.
The Four Main Pricing Models
Before we dive deep into each model, here's a quick overview: The first model is cost-plus pricing, which involves adding a markup to the cost of production. Next, we have value-based pricing, where prices are set based on the perceived value to the customer rather than the actual cost.
1. Hourly Pricing—Charging a set rate per hour of work, plus materials.
Best for: Small repairs, undefined scope, service calls, and time-and-materials contracts.
2. Flat-Rate/Per-Project Pricing—One price for the complete job.
Best for: Well-defined projects, painting jobs, and standard installations.
3. Value-Based Pricing—Pricing based on the value delivered to the client, not hours worked
Best for: Problem-solving, emergency repairs, specialized expertise
4. Hybrid Pricing—Combining elements of multiple models.
Best for: Complex projects, phased work, and ongoing relationships. Each pricing model has its strengths and can be tailored to fit the specific needs of both the service provider and the client. By understanding the nuances of these approaches, businesses can better position themselves in the market and enhance customer satisfaction.
Let's explore each in detail.
Model 1: Prices by the hour
How It Works
You charge a defined hourly fee for all work, like the $120/hour you charged in Part 1, and the cost of materials. Clients receive a bill that details the total hours worked multiplied by your fee, along with a list of the products used.For example:
$120 per hour for 8 hours of work = $960
Cost of materials: $340
$1,300 in total
When to Charge by the Hour
Small fixes that aren't sure how big they are:
"Fix the leaky faucet"—you won't know whether you need to replace the washer in 30 minutes or the valve in 3 hours until you start.
General handyman service calls
Finding and resolving problems
Ongoing maintenance relationships:
Property management businesses that hire you oftenCommercial clientele who need things on a regular basis
Clients that call you throughout the year to do little jobs
Contracts for time and materials:
When the client asks for hourly billing in writingWhen the scope is really unclear and the price of the project would be too high
When you want to create trust with a new client who wants to be open
Benefits of Pricing by the Hour
Transparency: Clients can see exactly what they're paying for and comprehend the cost.Flexibility: The scope can alter without having to talk about the whole price again.
Fair for labour that isn't defined: If the job takes longer than planned, you're safe.
Easy to figure out: There is no need for elaborate breakdowns or thorough estimates.
Less risk for you: You are compensated for all the time you spend, no matter what happens.
Problems with hourly pricing
Punishes being efficient: You make less money the faster you work. This makes it less likely that people will buy better tools or learn new skills.Client anxiety: Clients may fret about the ultimate bill and watch the clock, which can make things uncomfortable.
Limits how much money you can make: You can only make your hourly rate, no matter how much value you add.
Price shopping: Customers can readily compare your $120/hour to another contractor's $90/hour without knowing the difference in quality.
Slippery scope: Clients could ask for "quick extras" and think they would only cost a few dollars more.
Best Ways to Price by the Hour
Set a minimum fee: For servicing calls, you should always have a minimum of 2 to 4 hours. This includes the cost of your car, your time spent driving, and your administrative fees. "$120/hour with a 2-hour minimum" is an example.When giving estimates, indicate a range of rates: "This repair usually takes 2 to 4 hours at $120 per hour, plus materials that cost between $150 and $250." The total anticipated range is $390 to $730.
Keep a close eye on time: Set a timer or write down the times in detail. Round to acceptable increments (15 or 30 minutes), but keep track of the time precisely.
Talk to each other ahead of time:
Bill for all time: Include time for setting up, cleaning up, running materials, and any other work-related time. If you drive for 30 minutes to obtain a part, you can charge for that time.
Clearly separate the materials:
List labour and materials as separate line items, so clients will know you're not charging more for your time when you buy materials.
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| You have the option to price the job either hourly or at a flat rate! |
Model 2: Flat-Rate/Per-Project Pricing
How It Works
You provide one all-inclusive price for the complete project. Clients know the total cost upfront, regardless of how long it actually takes you.
Paint living room, dining room, and hallway (approximately 800 sq ft)
Includes all prep, two coats, trim, and ceiling touch-ups
All materials included
Total: $2,400
When to Use Per-Project Pricing
Well-defined painting jobs:
Interior room painting
Exterior house painting
Cabinet refinishing
Deck staining
Standard installations:
Light fixture installations
Ceiling fan installations
Door hardware replacement
Standard bathroom vanity installation
Clearly scoped repairs:
Drywall patch and paint (specific area)
Fence section repair
Deck board replacement (defined area)
Competitive bid situations:
When clients are getting multiple quotes
When they need a firm number for budgeting
Commercial or property management work requires purchase orders.
Advantages of Per-Project Pricing
Rewards efficiency: The faster you complete quality work, the higher your effective hourly rate.
Client comfort: Clients appreciate knowing the exact cost upfront with no surprises.
Professional appearance: Project pricing seems more established and professional than hourly.
Value-based selling: You can charge based on outcomes rather than time, potentially earning more for the same work.
Project pricing facilitates an easier comparison when multiple contractors bid, even though clients may not comprehend scope differences.
Incentivizes improvement: You're motivated to find faster methods, better tools, and more efficient workflows.
Disadvantages of Per-Project Pricing
Risk of underestimating: If the job takes longer than expected, you eat the cost.
Hidden conditions: Damage behind walls, additional prep needed, or other surprises reduce your profit.
Difficult scope management: Clients may expect extras included in the original price.
Requires accurate estimating: You need strong estimating skills and job costing data to price profitably.
Less flexibility: Changing scope mid-project requires renegotiating, which can create friction.
Best Practices for Per-Project Pricing
Base estimates on your required hourly rate: Calculate expected hours, multiply by your $120/hour (or your number), add materials, then add a 10-20% contingency buffer.
Example calculation:
Estimated time: 16 hours
Labour: 16 × $120 = $1,920
Materials: $380
Subtotal: $2,300
15% contingency: $345
Project price: $2,645 (rounded to $2,650)
Clearly define the scope by providing detailed written descriptions that specify what is and isn't included. For example, "The scope includes painting the walls and ceiling." The scope does NOT include painting the trim, moving furniture, or repairing any damaged drywall.
Include contingency clauses: "Price assumes normal conditions. Additional charges will apply for extensive water damage, lead paint remediation, structural repairs, etc."
Offer tiers when possible: Give clients options like "basic, standard, and premium" with different scope and pricing. This increases average sales and gives clients control.
Track actual time: Even though you're billing by project, track your actual hours for each job. This data helps you estimate future jobs accurately and understand true profitability.
Build in a change order process: Make it clear that scope changes require written approval and will be billed separately. "Additional work requested beyond the original scope will be quoted separately at $120/hour."
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| Understand this is vital to your profit margin: when to use hourly or flat rate! |
Model 3: Value-Based Pricing
How It Works
You price based on the value the client receives, not the time you invest. This considers urgency, the client's budget, problem severity, your unique expertise, and the cost of alternatives.
Example of Traditional Pricing:
Emergency water heater repair
Time required: 2 hours
Hourly rate: $120/hour
Traditional price: $240 + parts
Example of Value-Based Pricing:
Same repair
The client has no hot water; family with small children
It's Friday evening.
Alternative: a hotel for the weekend ($400+) plus a Monday emergency plumber ($500+).
Value to the client: $900+.
Your price: $450 + parts
You made $225/hour instead of $120/hour because you solved an urgent problem and delivered high value.
When to Use Value-Based Pricing
Emergency/urgent situations:
Water leaks are causing active damage.
Locks that don't work (security issue)
Broken HVAC in extreme weather
Any situation where delay creates major problems
Specialized expertise:
Historic home restorations require special knowledge.
Match rare paint colours or finishes.
Complex problem-solving others couldn't solve
Specialized certifications or skills
High-stakes situations:
Repairs needed before home sale closing
Work required to pass inspection
Fixes needed before a major event (wedding, party)
Commercial work, where downtime costs money.
Transformational results:
Kitchen cabinet painting that avoids a $20,000 replacement
Exterior paint that increases home value significantly
Repairs that prevent major future damage
Advantages of Value-Based Pricing
Highest profit potential: You can earn far more than your hourly rate when you deliver high value.
Aligns price with value: Clients who receive more value pay more; customers who receive less pay less.
Rewards expertise: Years of experience and specialized knowledge translate to higher earnings.
Better client relationships: Clients who see value don't argue about price.
Differentiation: You compete on value, not price, attracting better clients.
Disadvantages of Value-Based Pricing
Harder to calculate: No simple formula; requires judgment and negotiation skills.
Client perception risk: If not communicated well, clients may feel taken advantage of.
Inconsistent pricing: Similar jobs might have different prices, which can confuse clients.
Requires confidence: You must believe in your value and communicate it effectively.
Not appropriate for all clients: Budget-conscious clients may reject value-based pricing.
Best Practices for Value-Based Pricing
Understand the client's situation thoroughly: Ask questions to uncover urgency, alternatives, budget, and consequences of not fixing the problem.
Anchor on alternatives: Help clients understand what other options cost (other contractors, DIY, doing nothing and dealing with consequences).
Communicate value explicitly: Don't assume clients see the value. Please explain what they will receive: "I can arrive within 2 hours and have my issue resolved before dinner. Other plumbers I know are booked until Wednesday."
Price in tiers: Offer multiple options with different response times or service levels:
Standard: Fix within 48 hours—$300
Priority: Fix tomorrow - $400
Emergency: Repair it tonight—$550.
Use value language: Instead of "It'll take me 2 hours," say, "You'll have hot water by bedtime and avoid a hotel stay."
Have a floor: Even with value-based pricing, never go below your required hourly rate equivalent. If you price a 2-hour job at $450, that's fine. If you price it at $150, you're losing money.
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| Provide an overview of what needs to be done for Part 3. |
Model 4: Hybrid Pricing
How It Works
You combine elements of different pricing models based on the specific situation, project phase, or client relationship. This gives you flexibility while maintaining profitability.
Example 1: Hourly + Project Hybrid
Diagnostic/assessment phase: $120/hour (2 hours = $240)
If the client approves the repair: Flat project rate of $850 (includes the diagnostic fee)
If the client declines, they pay only the diagnostic fee.
Example 2: Menu Pricing
Basic service call: $150 (covers first hour + trip charge)
Common repairs: Flat rates per item ($80 for faucet repair, $120 for toilet repair, $200 for ceiling fan installation)
Complex/unusual work: $120/hour after service call minimum
Example 3: Retainer + Hourly
Monthly retainer: $500 (covers up to 5 hours + priority scheduling)
Overage hours: $100/hour (discounted from the regular $120)
Perfect for property managers or landlords with ongoing needs
When to Use Hybrid Pricing
Phased projects:
The discovery/design phase priced one way
The execution phase priced another way
Ongoing client relationships:
First jobs priced by project to build trust
Later jobs priced hourly for flexibility
Eventually moving to retainer pricing for regular clients
Mixed-scope work:
Defined portion (painting) priced by project
Undefined portion (repairs discovered during prep) priced hourly
Different service types:
Routine maintenance: Flat rates
Emergency calls: Value-based
Complex projects: Per-project pricing
Advantages of Hybrid Pricing
Maximum flexibility: Choose the best approach for each situation.
Risk management: Use project pricing where you can estimate accurately, hourly where you can't.
Client options: Offer different pricing structures for different client preferences.
Optimization: Use the most profitable model for each type of work.
Relationship evolution: Start with one model and transition to another as trust builds.
Disadvantages of Hybrid Pricing
Complexity: More complicated to explain and manage than a single consistent model.
Potential confusion: Clients might not understand why you price different jobs differently.
Administrative burden: Tracking different pricing models requires better systems.
Consistency challenges: Need clear rules about when to use which model.
Best Practices for Hybrid Pricing
Have clear decision rules: Document when you use each pricing model. Example: "Jobs under 4 hours estimated time = hourly with 2-hour minimum. Jobs over 4 hours = project pricing. Emergency calls within 4 hours = value-based pricing."
Communicate the structure clearly: Please clarify to clients the reasons for selecting a particular pricing model tailored to their specific situation.
Standardize where possible: Create flat-rate pricing for your most common services (standard installations, common repairs) while keeping flexibility for custom work.
Track everything: Monitor which pricing models generate the highest profit per hour invested. Double down on what works.
Test and refine: Try different approaches and adjust based on results. There's no perfect system; it evolves with your business.
Choosing the Right Model for Your Business
Here's a decision framework to help you choose:
If you're just starting out:
Use hourly pricing while you build estimating skills and job costing data.
Implement minimum charges to ensure profitability
Track actual time vs. estimated time religiously
Transition to project pricing once you have 20-30 jobs' worth of data.
If you have established systems:
Use per-project pricing for most defined scope work
Keep hourly pricing for service calls and undefined scope
Experiment with value-based pricing for urgent situations
Build toward hybrid pricing as you refine your approach
If you want maximum profit:
Lead with value-based pricing when possible
Use per-project pricing for competitive situations
Reserve hourly pricing for situations where other models don't fit
Always communicate value, not just time and materials
If you want simplicity:
Use flat-rate menu pricing for common services (list of standard services with fixed prices).
Use hourly pricing with minimum charges for everything else
This keeps it simple for both you and clients.
Presenting Multiple Options
One of the most effective strategies is offering clients choices. This increases close rates and average sale amounts.
The "Good-Better-Best" Framework
Example: Interior Painting Project
Basic Package: $1,800
One coat of paint on walls only
Basic surface prep (washing, minor patching)
Standard paint grade
Client moves furniture
Standard Package: $2,400 ← Most clients choose this.
Two coats of paint on walls
Standard prep (patching, sanding, priming, as needed)
Premium-grade paint
We move furniture and return it.
Trim touch-up included
Premium Package: $3,200
Two coats of walls and ceiling
Extensive prep (all imperfections addressed)
Premium paint and primer in one
Furniture moving and protection
Trim and baseboard painting
2-year workmanship warranty
Benefits of this approach:
Clients feel in control
Most choose the middle option (your intended price).
20-30% upgrade to premium (increasing average sale)
No one feels it's "too expensive" since there's a lower option
It's easier to justify your regular pricing when there's a premium option above it
Common Pricing Mistakes to Avoid
Lowering prices to win jobs: If you can't win at profitable prices, you need better marketing and sales skills, not lower prices.
Inconsistent pricing: Charging different amounts for the same work based on the client or your mood creates problems.
Failing to include everything: Forgetting to account for prep time, cleanup, drive time, or disposal fees eats into profit.
Without a contingency plan, jobs rarely go exactly as planned. It would be beneficial to build a 10-20% buffer into project pricing.
Competing primarily on price: There's always someone cheaper. Compete on quality, service, and value instead.
Not tracking actual profitability: Without job cost data, you don't know which jobs actually make money.
Pricing based on fear: "They'll never pay that" is often wrong. Test higher prices before assuming clients won't pay.
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| This gives you all the options you have with pricing |
What's Next?
You now understand the four main pricing models and when to use each. You can choose the right approach for different types of work and clients, maximizing both profitability and client satisfaction.
In Part 3 of this series, we'll dive deep into accurate estimating—how to assess jobs, calculate time and materials, avoid costly mistakes, and present estimates that clients accept. You will acquire specific techniques to estimate various types of work and incorporate contingencies into your pricing strategy without sacrificing profitability.
Your pricing foundation is solid. Now we'll sharpen your estimating skills to ensure every quote is both competitive and profitable.
Action Items Before Part 3
Evaluate your current pricing: Which model(s) are you currently using? Is it the best fit for your work?
Analyze past jobs: Look at your 10 most recent projects. Which were most profitable? What pricing model did you use?
Create a pricing decision framework: Write down when you'll use each model (hourly vs. project vs. value-based).
Develop tiered offerings: Create "good-better-best" packages for your most common services.
Test value-based pricing: Identify 2-3 upcoming situations where value-based pricing might apply and try it.
Series Navigation:
Part 2: Pricing Models—Pricing Strategies: Hourly, Per Project, Value-Based
Which pricing model do you use most often? Has it been working for you? Share your experiences in the comments below!
Regards,
JFB Painting and Handyman Services
Has been helping painting and handyman contractors build profitable businesses for 3 years. Follow along for weekly tips on pricing, marketing, and business growth. Stay tuned for insights that can elevate your projects and enhance your bottom line. Together, we can overcome the obstacles facing the industry and unlock new opportunities for success.
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