Start a handyman business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your handyman business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a handyman business?
Assuming you have a reliable vehicle to transport tools, your start-up costs will be fairly minimal. In fact, experienced business owners indicate you can start your business with less than $1,000. The only items you need are standard home repair tools, marketing materials, and insurance. Insurance costs vary, depending upon your experience and scope of projects you plan to take on. Average cost is $361 to $792. To escalate your business’ growth, consider having a simple website built, where customers can find out basic information and locate contact information.
What are the ongoing expenses for a handyman business?
While your ongoing expenses will be higher than initial start-up costs, most handymen report fairly minimal overhead costs. You will need to maintain the necessary licenses and carry proper insurance. Ongoing maintenance, repair, and replacement of all tools, including your vehicle, will be your largest expense. If you employ a crew, you’ll also need to consider Workers’ Compensation costs, as well as costs associated with payroll.
Who is the target market?
In this industry, you have a large pool of potential customers to choose from. Most consumers don’t have the knowledge, time, or desire to perform home maintenance and repair. Identify your target audience by considering the type of jobs you plan to take on and the customer base you feel drawn to work with. For example, single women over the age of fifty who live alone is a standard target market. They often lack the skills to complete most home repair tasks and are willing to pay to employ a honest, hard-working repairman.
How does a handyman business make money?
Fees vary, depending upon the complexity of the job you’re hired for and are collected once the job is complete.
How much can you charge customers?
Your fees will vary, depending upon location and size and scope of each project. Some handymen charge a standard hourly rate, while others set their fees on a per-job basis. Average hourly rates range from $60 to $125. To avoid under and/or overcharging, professionals recommend setting cost-based fees. For more information on this, consider downloading this handyman hourly rate calculator.
How much profit can a handyman business make?
While the standard, one-man operation averages just around $40,000 annually, there are many handyman businesses that report earning as much as $3,000 per week. Your profits are directly tied to the types of jobs you take on and how accurate your fee structure is.
How can you make your business more profitable?
To maximize your profits, it’s recommended that you employ multiple workers with a variety of skills. The more quality workers you employ, the more jobs your business is able to take on. Those reporting the highest profits also indicate that working with property management companies yields the highest profits.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Handyman Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your handyman business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a handyman company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Handyman companies should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions and service level expectations. Here is an example of one such services agreement.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a handyman business
The first item on your marketing checklist is to get your business listed in all local, online directories such as Yelp and Google My Business. Some handymen have reported success advertising on free job listing sites such as Craigslist. Unfortunately, this often generates leads for consumers on a small budget, so you may want to set some parameters before taking advantage of this free resource. Small ads in community websites and local publications should also help bring business until you’ve established a name for yourself.
Industry leaders indicate they found the most success through reaching out to property management companies in the area. This is an effective way to ensure a steady stream of jobs.
As indicated previously, it’s important to understand the local handyman laws. There are often rules regarding how and what you are allowed to advertise, which varies depending upon the size of jobs you take on. To avoid the headache and costs associated with breaking these rules, conduct thorough research on the front-end.
How to keep customers coming back
If you have ever been in the market for help with a home repair project, you’ll know that price is only one of the factors. When meeting with a prospective client, make sure you maintain an air of professionalism and are able to educate the customer on their needs. Show them how your work is a step above the rest.
Try to set fair prices, comparable to others in the area. Ignoring this unwritten rule undervalues not only your work, but everyone else’s in the industry. Additionally, always strive to be on time and on budget with your projects. Quality customer service will help spread the word and assist in long-term growth.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Handyman Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you are in great physical condition and are ready to take on a career that allows you to set your own hours and be your own boss, starting a handyman business might be the perfect fit. In addition to having the knowledge and skills to repair and replace household items, a passion for helping others would help ensure your new career takes off.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a handyman business?
Unless you decide to focus on just one or two services, each day will vary tremendously. One day you might be drywalling, while another day might be spent fixing a washer and tearing down popcorn ceiling for a rental company you service. A portion of each day will be spent traveling from site to site and purchasing the items you need to complete the work. Those who have realized the greatest success indicate at least one day a week should be dedicated to marketing the business and networking within the community.
What are some skills and experiences that will help you build a successful handyman business?
In addition to being skilled and knowledgeable in home repair, it is critical that you be organized, patient, and possess strong interpersonal skills. Each day will offer up a new set of challenges. You must be confident enough to make decisions without hesitation or guidance, eager to face the next challenge as it arrives.
No amount of home maintenance knowledge can prepare you for running a business. The primary reason for most businesses’ failure isn’t their lack of hands-on skill, but rather the inability to make sound business decisions. If this isn’t your strong suit, consider taking a business course online or at your local college. The information gained will benefit you for years to come. The United Handyman Association can offer guidance regarding how to properly run and market your business. They can also assist in standard start-up needs, like insurance and legal assistance.
What is the growth potential for a handyman business?
The growth of your new business venture will depend, largely, on your overall vision and drive to meet those goals. Many handymen enjoy working alone and choose to keep their business’ small and local. With the right knowledge, skills, and crew, however, there is significant growth potential in this industry. If you possess a background in business, starting a handyman franchise would be a very lucrative way to grow your business.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a handyman business?
It always helps to have insider knowledge from the industry’s leaders:
- Most individuals just starting out feel as though they have to do it all. This is simply not the case. Stick with what you’re most skilled at. Your business has great potential to be profitable, even if you offer a limited range of services.
- There is no way of knowing exactly what tools you need for every job. Rather than wasting money on something you may never need, purchase tools on an as-needed basis. This will increase your ongoing expenses, but tremendously reduce your start-up costs.
- Prior to offering your services, make sure you understand applicable laws in your region. This is absolutely critical to your business’ success. Consulting with an attorney and an investigator from the contractor’s board in your area is highly recommended.
- While not required, being licensed, bonded, and insured is recommended. It displays an air of professionalism that is sure to gain you a larger customer base.
- Once you qualify, consider becoming a certified handyman professional. The Association of Certified Handyman Professionals offers a great program.
How and when to build a team
No matter how much you charge, there is never enough time or money to do everything yourself. Consider employing a team of hard workers. Hire team members that are skilled in areas you aren’t, as this will make your business eligible for a greater pool of jobs. Once you’ve built a skilled team, your schedule will open up some, allowing you to focus on administrative and marketing tasks.
Due to the complexities regarding local and state laws, many experienced handymen suggest retaining an attorney. This should give you the peace of mind of knowing that research is done thoroughly and help safeguard against issues later on down the road.