How to Earn £500 – £1,000 a Week From Broken Kettles, Toasters and Washing Machines
Imust confess to a little guilty secret here... Whenever something stopped working in our house, perhaps with just a tiny little fault – well – I’ve just gone out and bought another. The same applies if something was just getting a little bit dated. I just bought another and sent the old appliance off to the local dump. (Sorry, I mean recycling centre!)
Over the years, perfectly good TVs where the picture wasn’t quite crisp enough, washing machines that dared to dribble on the kitchen floor and, yes, even toasters that didn’t quite toast perfectly have all met the same sorry fate!
Shocking really. And it’s not just me. Hundreds of thousands of people have been doing much the same thing in the ‘throwaway society’ of the 21st century.
But times have changed. More and more people can’t afford to replace otherwise perfectly good appliances that just have a tiny fault. What’s more, how environmentally unfriendly are those kind of wasteful practices? It doesn’t bear thinking about!
So what about a business opportunity that will exploit these new thrifty times
I think this could be one... a service repairing appliances and other things around the home that people can’t afford to, or don’t want to, throw away and replace with new anymore.
Now I know this sounds quite complicated. But I’ve worked out a way to turn it into quite a simple home business. Basically, it’s an agency operation, worked from home over the phone. You don’t even need any technical knowledge, or to do any of the repairs yourself.
There are a few good reasons why this opportunity is on the money right now:
• Cash is tight. People are less likely to throw things away and replace them with new. (In the recent past lots of appliances have been bought on ‘easy credit’, which is drying up now.)
• It’s very difficult to get things repaired economically. Years ago every town had a repair shop, but they’ve mostly disappeared now. What repair services there are usually charge an arm and a leg just to do simple repairs. Offer a good value, well organised service and you could make a killing.
• It’s much more environmentally friendly to repair things. Even after the credit crunch ends (and one day it will) this will still be a great reason for starting this business.
Setting up your home repair service
Think of this as being a mainly desk and phonebased agency business. One that you can work parttime if you like. You won’t need a workshop, any tools or equipment, or any staff as such.
You will need a little capital for advertising. You could probably get started with less than £100 using some of the cost-effective methods I’m going to outline later.
But it’s essential to be professional. If your business looks fly-by-night then who’ll trust you to work on their TV or washing machine? Here are a few tips: Choose a proper business name for your business. Print some smart business stationery – good quality leaflets and business cards. Have a separate telephone line or mobile for your business – and always answer it with your business name. Once you’re making some profit a staff uniform would be good too – there are lots of places that will print Tshirts and jackets with your business name.
What sort of things can you repair?
The good thing about this opportunity is that it is very flexible. You can offer to repair almost anything in the home that breaks down.
What you can offer to repair does to some extent depend on what expertise you can get to help you – more about this soon – so you may need to tailor your service to what people you can find in your area.
Here are just a few things you might decide to offer a repair service for (in no order of preference):
• Vacuum cleaners
• TVs
• Cookers and ovens
• Toasters
• Kettles
• Irons
• Other small kitchen appliances like food mixers, bread makers, coffee machines, etc
• Dishwashers
• Fridges
• Freezers
• Washing machines
• Tumble dryers
• Heating appliances
• Personal computers
• Game consoles
• Video and CD/DVD players
• Audio equipment
• Lawnmowers and other garden equipment
• Sewing machines
• Small power tools, such as drills
• Children’s toys
• Bikes
By the way... you don’t need to offer repairs for ALL these appliances! You will probably be absolutely inundated with calls if you do. Just offer repairs for a selection of them. Or, if you want, even concentrate on repairs for just ONE appliance type. (If you do this, be sure to choose a popular appliance such as cookers or washing machines.)
Don’t forget furniture! This could be another useful and in-demand service to offer. Repairing things like broken drawers and cupboards, chairs with wonky legs, sticking doors and windows. Anything along those lines. Maybe there’s not a lot of money in those things, but it’s a great way of pulling in customers for your other more profitable services.
Business repairs. If you wanted you could extend your service to doing appliance repairs for businesses. You know, things like photocopiers, printers, coffee machines and office furniture. In the present climate lots of businesses will be keen to repair things rather than replace them with new... and most small and medium companies don’t have an in-house handyman to do these jobs. But this is entirely optional. There’s plenty of potential in the ‘home’ market to start with.
‘But Nick I don’t know the first thing about repairing a vacuum cleaner!’
Well, you don’t need any skills yourself. In fact, it’s very important you don’t attempt to repair any electrical or gas appliances if you’re not qualified to do so. Instead, you can tap into an existing pool of technical expertise to run this business, by recruiting experienced and qualified people to work for you on a part-time business. Let’s call them handymen for want of a better word
Then it just becomes a simple managing-andorganising business worked mainly over the phone: Do the marketing. Take customer enquiries and give quotes. Then pass on the job to the most experienced handyman. Make a profit on the difference between what you charge, and what you pay the technical guys.
You see, this is another aspect of the credit crunch that can work in your favour: With unemployment rising right now, and more cashstrapped families, you can bet there are lots of people with the necessary skills who would be willing to work for you in their spare time. These might be unemployed engineers, technicians or fitters. Or ones who have taken early retirement. Perhaps they have previously worked for an appliance maintenance or repair firm. Or have worked in a factory repairing industrial equipment, but can easily transfer their skills to home appliances. Or those who have fulltime jobs but want to make some extra money in the evenings and weekends.
How to find help. Advertise in local newspaper ‘Jobs’ columns, and add an ‘Engineers Wanted’ section to your other advertising. Job Centre Plus might also be able to find part-time staff for your business free of charge (www.jobcentreplus.gov.uk).
In the first instance your handymen should have their own tools and transport. Although once your business takes off you could consider buying the tools they need, or hiring/leasing a van for them, if they don’t have their own.
Interview prospective handymen carefully. Ask them what sort of things they can repair. Not only what types of equipment, but what makes and models they are familiar with. Keep all this information in a simple card index system.
Add to this details of when and where each individual wishes to work. For example, those who already have a job will probably only want to work in the evenings and weekends. In a way, this is better... because that’s when most of your customers will be at home anyway.
Checking credentials. When signing up tradesmen ask for details of their qualifications. You shouldn’t employ anyone to do any safety-related work if they are not qualified to do so. Make a photocopy of any certificates and keep them for your files.
(Very important – if you intend to offer a service fixing any kind of gas appliance any engineers you use MUST be registered with CORGI – for more details see here: www.trustcorgi.com.)
You might also ask your new ‘recruits’ to do some test repairs for you, so you can double-check the quality of their work. Ask your friends and relatives if they have anything they need repairing to help you do this.
Insurance. One final bit of red tape and then you can get started. Take out liability insurance to cover your customers’ homes and property while your handymen are working there. Most insurance companies offer these policies, including AXA – which costs from £15 a month. For details see here: www.axa-insurance.co.uk/businessinsurance/ tradesmen.html. (Get an insurance broker to help with this if you are unsure about what you need.)
Employing people. Incidentally, if you pay each member of staff no more than £90 a week you do not have to pay or account for any income tax or national insurance contributions on what you pay them whatsoever. (You can find out more about this on the Government website at www.direct.gov.uk.) By keeping under this limit you can keep your own admin work as simple and straightforward as possible.
I’ll talk more about what you should pay your handymen a little later.
Sourcing spare parts
One thing you will need when running a home appliance repair service is to line up some sources of spare parts for the repairs that your handymen will be doing. What will be needed varies depending on what is being repaired. It could include things like a new element for an electric cooker, or a new motor for a vacuum cleaner.
What I suggest you do is track down a few different sources of appliance spare parts and arrange to open an account with them. As and when your handymen need a spare part they can order it direct from your supplier.
To find appliance parts suppliers have a look in your Yellow Pages – www.yell.co.uk. There is a good selection in most areas. I’ve also listed a few mail order parts suppliers at the end of this blueprint.
Advertising your home repair service
This is a critical part of this whole business. With a bit of clever marketing and advertising you can turn what is essentially a very simple service into something that is a lot more profitable than you probably thought.
What you need to do is a good mix of advertising to get your name known. Don’t rely on just one method. Then, when people have some kind of appliance breakdown, they’ll know that you’re available. Here are the main ways of advertising:
Posters. Put up some posters or cards in shop windows in the area you want to cover. These are usually very low cost. But be sure to place plenty of posters – not just one or two – if you want a good response.
Local press. Local newspapers and freesheets. This is a cheap way of targeting customers in your local area. Most local newspapers have a section for ‘Home Services’ which is the best place to advertise.
Leaflets. Dropped from door to door. This is a great cheap way of getting a lot of publicity quickly. Again, make sure they are good quality or people won’t read them. Dropping them yourself is the cheapest way. If you use a leaflet distribution service make sure they are reliable.
Yellow Pages and other service directories. It’s worth running a small ad in these. The only snag is that it can take a few months until your ad appears, so don’t rely on them when you start up.
Word of mouth. This is one of the best ways of bringing in business for this kind of home service. Get some business cards printed. Have your handymen hand out a stack to every customer they visit. Ask them to tell their friends about your service and help spread the word. People are usually happy to do this if they’re satisfied with your service.
Letting agents. One of the jobs letting agents do for their landlords is arrange maintenance and repairs for any appliances in their properties. So contact all your local letting agents and tell them what you do. You could get regular work every week from letting agents. (The property letting business is booming right now.)
Four top sales points to stress in your advertising
When you’re putting advertising together it’s a good idea to stress what’s so good about your service, and why your customers should use you. Here are the key reasons which you should push in your advertising:
1. Save money (and save the planet). It’s cheaper, much cheaper – and more environmentally friendly – to repair otherwise perfectly good appliances than throw them away.
2. We’re more competitive! Because your service is home-based using self-employed handymen you can charge less than any competing services yet still make a good profit. For example, the existing repair services that advertise in the Yellow Pages often have SKY HIGH charges and MASSIVE call, out fees. (Try them if you don’t believe me!) Using this system you can do a good job for much less.
3. Convenient call outs. This is another great plus for your service. Because you’ll (probably) be using many part-time handymen you can do call outs at all times to suit them, and suit the customer. For example, if someone needs a repair on a Sunday, or late at night, chances are you will be able to accommodate them when other repair services are closed. (By the way, as long as the call out isn’t at a ridiculous hour such as in the middle of the night, don’t charge extra for this. That will be another good ‘plus’ for your service.)
4. Offer free quotes. This is a good way of pulling business in. Rather than asking for a ‘silly’ call, out fee like some existing repair services do, offer to prepare a quote for free, with no obligation.
And here’s what’s really clever about that: Because your prices will be competitive you shouldn’t get too many requests for repair quote that don’t lead to an order.
Ready-to-use sales literature!
To help you get started, I’ve drawn up some suggested copy and a layout for promoting your home appliance repair service. You can use it either as a window poster/card or a leaflet. All you need to do is download it, adapt it to show which appliances you want to offer a repair service for and print it off. If you’d like a copy just go to www.canonburypublishing.com/homeappliance.
How to co-ordinate everything and offer a professional service
I don’t think I need to say very much about how you run this service. It’s fairly self-explanatory. As calls from customers come in, simply select the most appropriate handyman for the job. This should be one who is experienced and qualified for that appliance, and available most quickly. Then send them out to the customer to do the job.
A few tips here will help you run a more professional and efficient service:
• Don’t take appliances away for repair if at all possible. This involves transport problems and extra expense. Do repairs on site, in the customer’s own home. This is more convenient for them, and for you.
• Offer a guarantee. This will be a big sales point and make you look much more professional. A three months parts and labour guarantee is about right for work on used appliances. If you set this up carefully it won’t actually cost you anything! Arrange with your tradesmen that they will guarantee the work they do for three months. Any parts you use will be guaranteed for much longer than this anyway (usually 12 months). So, in the unlikely event they fail within that time, the supplier should cover the cost.
• Call up the customer afterwards and ask if they’re happy with everything. This will give you good feedback on the service your tradesmen are providing. You’ll also get more repeat business this way as your customers are bound to be impressed by your customer service.
• Don’t give credit or mail out invoices. This creates extra admin problems and expense. Have your tradesmen collect payment for the work from the customer at the time they do the job and send it on to you. You can then pay them at the end of the week or month.
What to charge: your pricing and profits strategy
This is very important right now. The secret to success with this sort of credit crunching business is to charge enough to make a profit. But not so much that it is unaffordable for customers... or uneconomic compared to the cost of buying new appliances. It’s important to get the balance just right.
Before you get started be a little sneaky. Call up some existing repair services. Aim to pitch your charges at about 80% or less of what they charge. You can afford to do this as, unlike them, you’re a shoestring operation. You can then use that insider info to work out your own pricing strategy.
What I suggest you do is have an hourly labour cost on to which you add the cost of spare parts – on to which you can also add a mark up. Here’s what I’ve established: You should easily be able to charge about £20-£35 an hour. That might look a lot, but it is very reasonable compared to a lot of existing services... who usually charge much more than that just for a call out.
Not every repair will need a replacement part. It depends on what the fault is. But my research tells me that you can add around 30%+ on to the trade cost of parts. So a part that costs you £18 will sell out to the customer for around £24.
Now to paying your handymen. I think you should pay them about 60% of the labour charge you charge the customer. So this is going to be in the region of £12-£21 an hour. This seems a lot. But remember that they will be doing the work and will have to provide tools and transport too, so I think it is fair. You’ll still be making 40% for just organising everything.
So let’s work through a few figures...
If you had a simple repair to a fridge that took one hour and didn’t need any parts, that might cost the customer £35, at the top hourly rate. Your handyman would make £21 from that, and you would make £14.
Or for a more complex repair to a cooker that took two hours and needed a part which costs £25 trade. That would cost the customer £102.50 – made up of two hours labour and the part selling out at £32.50. Your handyman would make £42, and you would make £35.50 just for organising everything – 40% on two hours labour and a 30% mark-up on the part.
OK, we’re not talking about massive amounts of money on each individual job. Tight costings to suit today’s belt-tightened times are the name of the game here. This isn’t the sort of business where each order will earn you hundreds or thousands of pounds. But imagine you have just 20/30/40 calls a week – that would be perfectly doable as just a small part-time business run mainly over the phone. I guess you could still make anything from £500 to £1,000 a week or so... from a much-needed service that definitely won’t be short of demand through the recession and beyond.
Another profitable add-on... appliance refurbishing
I hope you’ll agree that, in the economic downturn, an appliance repair service could be a great little money-spinner. But here’s another string you could add to your bow that I think could be very lucrative...
... refurbishing and selling used home appliances.
Think about it for a moment. Once you have set this business up you will have access to your own ready-made ‘service department’ of qualified people. So as well as offering a repair service to your customers you could buy appliances with minor faults, fix them and resell for a profit.
Used appliances with minor faults can be bought in for next to nothing. You might even find people will give them to you for free, just to get rid of them. But in the crunch, there’s sure to be a big demand for used, refurbished domestic appliances from people whose budget won’t run to new – especially those that have been repaired by qualified engineers and technicians like the ones you’ll have working for you.
Here are a few examples I found in the small ads: Second cooker £40 – but a fully refurbished one in a second-hand shop £150. Second-hand freezer £15 – but a fully refurbished one in a second-hand shop £99. Second-hand PC with CRT monitor £25 – fully refurbished from a supplier on the Internet £89.
There are lots of places to buy and sell used and refurbished appliances. The self same ones you’ve been using for your repair service in fact – shop window cards, newspapers, leaflets and so on. Plus eBay has a roaring trade in used appliances too.
There isn’t space in this blueprint to go into more detail, but I think you get the idea. In a recession it’s very much a case of as one door closes, many others open up and present new opportunities for the shrewd entrepreneur!
Useful resources
Some mail order appliance parts suppliers:
• E Spares. Tel. 0845 230 6 230. Website: www.espares.co.uk
• Buy Spares. Tel. 0870 94 22 777. Website: www.buyspares.co.uk
• Partmaster. Tel. 0844 800 3456. Website: www.partmaster.co.uk
• Secret Source Finder at www.secretsourcefinder.com can also be a good way of tracking down suppliers for your business including wholesalers, distributors, manufacturers, auction houses, factory shops, trade counters and importers. Take a look here: www.secretsourcefinder.com
• You can also often get good value appliance spare parts on eBay.
This is a useful website: How Stuff Works at www.home.howstuffworks.com/how-to-repairmajor- appliances.htm.
It will tell you about tracing and fixing many appliance faults. It’s an American site, but the basic principles are the same anywhere. (Please don’t use it to attempt to repair things if you’re not qualified to do so, but it will give you some great background info on what is involved in this business.)