I can see both sides of the discussion above – you’ll undoubtedly get the odd basket case knocking you down on price to do something to a bike that’ll be dumped back in the shed next week, but you’ll also gain a growing amount of regular customers that are switched on to the real cost of parts and labour (if you market yourself well).
I’m reasonably handy with a spanner, but use a chap local to me in Chester when I just don’t have time to fix something – work or family taking up the week – or I just don’t know how or have the specific tool for a job. He’s usually very busy and judging from his Facebook page, he deals with some decent bikes. But he also puts time in to helping at local events, free checkovers etc. He deserves the business he’s getting because he’s good at what he does, is honest, accommodating, and a really nice guy.