How to Start a Handyman Business

Start a handyman business by following these 10 steps:

1. Plan your Handyman Business
2. Form your Handyman Business into a Legal Entity
3. Register your Handyman Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Handyman Business
6. Get the Necessary Permits & Licenses for your Handyman Business
7. Get Handyman Business Insurance
8. Define your Handyman Business Brand
9. Create your Handyman Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your handyman business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

Services Contract

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.

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.

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.

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.