Welcome to our latest blog post on the critical KPIs for every handyman business owner. As a serial entrepreneur who has started and run various businesses, I am always on the lookout for the most important metrics to measure business growth and success. Keeping track of key performance indicators is crucial for making informed decisions that can take your business to the next level.
- Average revenue per client: This KPI is essential in determining the average amount of money generated by each customer. By tracking this metric, you can focus on increasing profits by encouraging repeat clients and offering additional services that align with their needs.
- Percentage of client complaints: Keeping your customers happy is one of the most important aspects of running a successful handyman business. By tracking the percentage of client complaints, you can identify areas for improvement and address customer needs effectively.
At our company, we have identified several other core KPIs that we track regularly such as the number of repeat clients, average response time for service requests, and average time to complete a service. With a comprehensive understanding of your business KPIs, you can take actionable steps to optimize your customer service, increase revenue streams, and ultimately achieve long-term success.
- Average number of services per client: This metric helps identify profitable services that customers need. By tracking this KPI, you can identify which services provide the highest level of profitability and offer them to your customers more frequently.
- Percentage of new clients from referrals: Having more clients from referrals means that your customers are satisfied with your service and they recommend it to others. Referral marketing is critical for gaining your customers' trust and having loyal clients.
In conclusion, tracking and analyzing your business KPIs can help you identify strengths, weaknesses, opportunities and threats to your business. Focus on tracking your KPIs regularly and make changes to improve business performance at all times.
Average revenue per client
As a handyman, it is important to keep track of your average revenue per client. This KPI allows you to understand how much money you are making per client and helps you make decisions about pricing.
Average revenue per client is the average amount of money you make per client over a certain period of time.
Tracking your average revenue per client can help you identify areas where you can increase profits. If you notice that your average revenue per client is decreasing, it may be a sign that you need to increase your prices or find ways to increase the value you provide to your clients.
How To Calculate KPI
To calculate your average revenue per client, you will need to divide your total revenue by the number of clients you served during a specific period of time.
Average revenue per client = Total revenue / Number of clients served
Let's say you made $10,000 in revenue and served 50 clients over the last quarter. Your average revenue per client would be:
Average revenue per client = $10,000 / 50 = $200
- Helps track performance over time
- Allows for pricing optimization
- Identifies areas for revenue growth
- Does not account for cost of goods sold or overhead costs
- May not be applicable for all types of businesses
KPI Industry Benchmarks
According to industry benchmarks, the average revenue per client for a handyman service is between $150 and $300 per job.
Tips & Tricks:
- Consider offering additional services to increase your average revenue per client
- Regularly review your pricing to ensure it is competitive but profitable
- Track your average revenue per client by service type to identify areas for growth
Handyman Financial Model
Number of Repeat Clients
Repeat clients are among the most valuable assets in the handyman industry. A repeat client is someone who has used your services in the past and returns for more.
Tracking the number of repeat clients is essential to determine the level of customer loyalty, establish long-term customer relationships, and identify areas for improvement.
The number of repeat clients is a Key Performance Indicator (KPI) that measures the percentage of customers who return for additional services. It is a key metric for determining the effectiveness of customer retention strategies.
The KPI is particularly useful for identifying customer satisfaction levels and milestones. By tracking the number of repeat clients, you can determine if your marketing strategies and customer service initiatives are working effectively.
How To Calculate KPI
To calculate the number of repeat clients, use the following formula:
Suppose you have 100 clients in a month, and 30% of those clients have already used your services in the past. To calculate the number of repeat clients:
- Helps to identify opportunities for improving customer loyalty.
- Indicates a healthy customer retention rate.
- Doesn't take into account the frequency or value of returning clients' services.
- May be influenced by outliers, such as repeat clients who experience bad service.
KPI Industry Benchmarks for Number of Repeat Clients
Industry benchmarks for this KPI in the handyman industry range from 30% to 50%, depending on the specific services being offered and the quality of the service.
Tips & Tricks
- Offer loyalty discounts and rewards to encourage repeat clients.
- Provide excellent customer service to establish trust and build long-term relationships.
- Solicit feedback from returning clients to identify areas for improvement in your service.
Average number of services per client
The average number of services per client KPI measures how many services a handyman performs for each client. It is used to track customer engagement and satisfaction levels.
This KPI is essential for measuring customer loyalty and identifying upselling opportunities. If a client has only used one or two services, it means there is potential for more service offerings to meet their needs. This KPI also highlights the need to improve the quality of services to increase customer loyalty.
How To Calculate KPI
To calculate the average number of services per client, divide the total number of services provided by the number of unique clients during the same period.
Suppose your handyman business provided 100 services last month to 25 clients. The average number of services per client would be calculated as follows:
average number of services per client = 4
Therefore, the average number of services per client is four.
- Helps identify upselling opportunities
- Measures customer engagement and satisfaction levels
- Highlights the need to improve the quality of services
- The KPI does not measure the profitability of the services provided
- May not be useful for businesses that only provide one or two specialized services
- The KPI can be skewed if a small group of clients require a large number of services
KPI Industry Benchmarks for the KPI: 'Average number of services per client'
As the industry benchmarks for this KPI vary widely depending on the type of handyman services provided, there is no universal standard for the average number of services per client. However, successful handyman businesses often have an average of six to eight services per client in a year.
Tips & Tricks
- Encourage customers to leave feedback and reviews after each service provided to increase customer satisfaction levels and engagement
- Offer bundled services to increase the overall number of services provided to each client
- Focus on building long-term relationships with customers to increase the likelihood of repeat services
Percentage of client complaints
The percentage of client complaints is a KPI that measures the number of complaints received by a handyman business per total number of clients served.
Tracking this KPI is important for any handyman business as it gives insight into how satisfied clients are with the services provided. It can also help identify areas where improvements need to be made to increase customer satisfaction.
How To Calculate KPI
To calculate the percentage of client complaints, use the following formula:
- p = number of client complaints
- t = total number of clients served
Let's say a handyman business received 10 complaints out of 100 clients served:
The percentage of client complaints for this business is 10%.
- Helps identify areas for improvement
- Provides insight into customer satisfaction levels
- Can lead to increased customer retention
- May not account for clients who don't voice their complaints
- Complaints may not always be the fault of the handyman business
- Can be influenced by external factors such as the economy and seasonality
KPI Industry Benchmarks for the KPI: 'Percentage of client complaints'
Industry benchmarks for the percentage of client complaints vary depending on the type of handyman business and the region it operates in. However, a general benchmark is to keep the percentage of complaints below 5%. Anything over this benchmark may indicate areas that need improvement.
Tips & Tricks
- Regularly survey clients to get feedback on services provided
- Address client complaints promptly and professionally
- Track the reasons for complaints to identify common themes
Average Response Time for Service Requests
Average response time for service requests is the amount of time it takes for a handyman company to respond to a client's request for services. This KPI is important because it measures the time it takes for the handyman company to show its responsiveness to a new customer or an existing one.
The average response time for service requests is a critical KPI for various reasons. Firstly, it determines the level of customer satisfaction, which is essential in building a good reputation for the handyman company. Secondly, it helps identify areas of inefficiency in the company's operational processes, such as communication, organization, and capacity. By tracking this KPI, the company can make data-driven decisions to improve its service delivery.
How to Calculate KPI
The formula for calculating the average response time for service requests KPI is as follows:
Average Response Time = Total Time Taken to Respond to Service Requests / Number of Service Requests Received
Suppose your handyman company received ten service requests last week and took a total of 180 minutes to respond to all the service requests.
Average Response Time = 180 Minutes / 10 Service Requests
Average Response Time = 18 Minutes
Therefore, the average response time for service requests last week was 18 minutes.
- Measures customers' perception of the handyman's service delivery
- Identifies areas of inefficiency in the company's operational processes
- Helps improve the company's reputation and customer experience
- Enables the company to make data-driven decisions for improvement
- Does not track the quality of service delivered
- May not reflect the actual level of customer satisfaction with the service delivered
- Not suitable for comparing the performance of companies operating in different industries or markets
KPI Industry Benchmarks for the KPI: Average Response Time for Service Requests
Benchmarking average response time for service requests KPI depends on various factors, such as business size, location, and the industry in question. However, on average, the benchmark for this KPI is less than one hour for most service-oriented companies.
Tips & Tricks
- Automate your call center to manage incoming service requests efficiently
- Use a reliable CRM system to track service requests
- Provide training for staff to manage customer requests effectively
Average time to complete a service
The Average time to complete a service KPI is used to measure the average time taken to complete a particular service by a handyman. It helps the owner to assess the productivity of their handyman team.
This KPI is important for identifying how efficient the handyman team is in completing services. It helps the owner to determine whether the service delivery exceeds the estimated time, allowing the owner to find ways to reduce the time taken to complete services.
How to Calculate KPI
The formula to calculate the average time to complete a service KPI is:
Suppose a handyman company has completed ten services in a month, and it took a total of 200 minutes to complete them. The average time to complete a service KPI for this period would be calculated as follows:
- Helps the owner to determine the average productivity of their handyman team.
- Assists in identifying the time taken to complete a particular service and finding ways to reduce it.
- Also helps to assess the profitability of each service, as the owner can determine whether the time taken exceeds the estimated costs.
- May not be useful for services that require a lot of time and effort, such as maintenance or emergency repairs.
- Can be affected by various factors like the complexity of the service, availability of resources, and the skills of individual handyman.
- The owner may need to track the time taken manually if the company does not use a time tracking tool.
KPI Industry Benchmarks for the KPI: 'Average time to complete a service'
According to industry benchmarks, the average time taken to complete a service is approximately 30 minutes. However, the time may vary depending on factors like the type of service, location, and experience of the handyman.
Tips & Tricks
- Understand that this KPI may not be suitable for all types of services.
- Regularly assess and review your KPI metrics to find areas that require improvement.
- Improve workflow and time management techniques, such as breaking down complex tasks and delegating them to reduce the time taken to complete a service.
Percentage of new clients from referrals
As a handyman, you want to attract as many new clients as possible, but how do you measure the effectiveness of your referral strategy? By tracking the percentage of new clients who come from referrals, you can gain valuable insight into the success of your business. Let's dive into the specifics of this KPI.
The percentage of new clients from referrals KPI measures the number of new clients who heard about your business through referrals relative to your total number of new clients.
Handymen and other service-based businesses can benefit from this KPI by understanding how effective their referral strategy is. If a high percentage of new clients is coming from referrals, it indicates that current clients are satisfied with your work and are more likely to refer you to others.
How to Calculate KPI
To calculate the percentage of new clients from referrals, you need to divide the number of new clients who came from referrals by the total number of new clients and then multiply by 100.
Let's say you got 20 new clients last month, and 5 of them came from referrals. To calculate the percentage of new clients from referrals:
This means that 25% of your new clients came from referrals.
- Helps to monitor the effectiveness of your referral strategy.
- Can improve customer loyalty and satisfaction if referrals come from happy clients.
- Great for identifying areas where you can focus more attention on generating more referrals.
- Does not take other marketing channels into account.
- Does not account for referral sources other than clients, such as business partners or industry connections.
- Not applicable or useful for businesses without a referral strategy in place.
KPI Industry Benchmarks for the KPI: 'Percentage of new clients from referrals'
The average percentage of new clients from referrals for the handyman industry is around 30%. However, this can vary depending on location, type of business, and referral strategy.
Tips & Tricks
- Encourage satisfied clients to refer your business to their friends and family by offering incentives or discounts for referrals.
- Track and analyze your referral sources to identify which channels are driving the most referrals.
- Don't forget to thank clients for their referrals. A simple thank-you note or discount on their next service can go a long way.
As a handyman business owner, measuring key performance indicators (KPIs) is critical for driving growth and success. Two essential KPIs to track are average revenue per client, which helps you identify opportunities to increase profits through repeat clients and additional services, and percentage of client complaints, which enables you to address customer needs effectively and improve overall satisfaction. In addition to these two KPIs, other critical metrics to track include number of repeat clients, average response time for service requests, average time to complete a service, average number of services per client, and percentage of new clients from referrals. By regularly analyzing these KPIs, business owners can better optimize their customer service, boost revenue streams, and achieve sustainable success. By prioritizing KPI tracking and analysis, business owners can identify strengths, weaknesses, opportunities, and threats to their business and act accordingly. This requires a comprehensive understanding of their company's KPIs and an ongoing commitment to optimizing their business performance. With this approach, handyman business owners can achieve not only financial success but also satisfied and loyal customers.
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