A small job costs more per hour than a large one

Every job costs something before it begins

A job does not start when the work starts. It starts at the enquiry, and between that moment and the money arriving there’s a conversation, a quote, a decision, some scheduling, a set-up of one kind or another, an invoice, and often a reminder about the invoice. Depending on the trade there may also be travel, a packing-up, and a phone call afterwards that nobody is billing for.

That sequence has to happen whether the job is worth a small amount or a large one. It is a fixed cost per engagement, and in most very small businesses it is somewhere between half an hour and half a day of real time that has never once appeared in a price.

Fixed costs dominate small jobs completely

The arithmetic is unforgiving. If the overhead of running a job is two hours and the job itself is eight, the overhead is a fifth of the total and easily absorbed. If the job is one hour, the overhead is twice the work, and the effective rate is a third of what you thought you were charging.

This is why a week full of tiny jobs can feel productive, look busy and produce a disappointing month. Nothing has gone wrong. The business has simply spent most of its week on the parts of a job that don’t get invoiced, and the invoices reflect it.

A minimum charge is arithmetic rather than attitude

The instinct is to treat a minimum as unfriendly, or as something only established businesses are entitled to. It is neither. It is a statement that below a certain size, the cost of transacting exceeds the value of the transaction, which is a fact about your process rather than a judgement about the customer.

Nearly every established trade has one, often unstated. The reason it appears in some businesses and not others is not confidence. It is that somebody sat down once and worked out what a call-out actually costs before any work is done.

Work out what it should be

Start from the honest overhead of a single engagement: the time from first contact to payment received, excluding the work itself, plus any direct cost of turning up. Add the smallest amount of actual work that would make an engagement worth having, and price the whole at your normal rate. That number is your floor.

Most people are surprised by how high it is, and the surprise is the point. Anything below that figure has been subsidised by the larger jobs, which means your regular clients have been quietly paying for the twenty-minute favours you did for other people.

It is worth recalculating the floor whenever the process changes. Anything that shortens the distance from enquiry to payment lowers it, which is a genuine argument for tidying up quoting and invoicing rather than simply charging more.

What happens when you start enforcing it

Some enquiries disappear, and the ones that disappear are disproportionately the ones that were going to consume a morning for very little. That is the mechanism working rather than failing.

Some customers accept the minimum and then bring more work, because a person told that the minimum covers two hours will usually find two hours of things worth doing. And a few will be annoyed, mostly the ones who have not been told before. A short, unapologetic explanation — that there is a fixed cost to attending at all, so there’s a smallest job worth arranging — handles nearly all of it.

Keep the ability to waive it deliberately for a good long-standing client. What matters is that waiving is a decision you make rather than a default you have never examined.

The alternatives are worth knowing about

A minimum is not the only response. Small jobs can be batched, so that several are done in one visit or one session and the fixed cost is shared between them. They can be standardised into a defined small offering with a fixed price and a deliberately simple process, which cuts the overhead rather than charging for it.

They can also be passed on. Somebody at an earlier stage of their business will happily take work that no longer suits yours, and referring it costs you nothing while making you useful to both parties. The one option that does not work is continuing to accept small jobs at a rate calculated as though the overhead did not exist.