Starting a handyman business can be a lucrative venture for those with repair skills. However, transitioning from being handy around the house to running a successful business requires careful planning and execution. In this comprehensive guide, we will walk you through the step-by-step process of starting a handyman business, from narrowing down your services to establishing an online presence and everything in between.
Step 1 – Define Your Specialty Services
One of the most critical first steps when starting a handyman business is taking the time to thoughtfully define and narrow down the specific service offerings you will provide. It can be extremely tempting to market yourself as an all-purpose handyman who can tackle any project under the sun. However, trying to handle every possible job that comes your way makes it virtually impossible to develop true subject matter expertise or operate efficiently.
Instead, concentrate your handyman services around 5-7 core specialties that play directly to your greatest skills, interests and experience. For example, an electrician by trade could offer electrical repairs, lighting installations, home generator connections, wiring inspections and more. A builder might specialize in decks, fences, drywall, tile, and finishes. Cater your suite of services around proven competencies.
When determining your service mix, analyze the jobs you complete quickest and most profitably based on your talents. Seek out gaps in your local handyman market for underserved niches. You can always expand vertically into complementary specialties once your operations mature. Additionally, limiting the scope helps minimize equipment needs and material costs early on for bootstrapping your venture affordably.
By showcasing specialist expertise through your personal handyman brand name, website services page, marketing collateral and online profiles, you can establish authority in high-demand areas better than generalists can. This helps attract ideal prospective customers and enables charging higher hourly rates aligned to premium qualifications. Executing projects flawlessly and efficiently within your domains then fosters referrals and repeat business. So thoughtfully highlighting niche services counterintuitively expands options rather than limiting revenue sources long-term.
Step 2 – Establish Your Business Entity
Creating a legal business entity is crucial for a handyman business. It not only provides an extra layer of liability protection but also legitimizes your operation in the eyes of potential customers. One of the most popular options for small businesses is to form a Limited Liability Company (LLC).
To form an LLC, follow these steps:
- Choose a name for your LLC that reflects your business and is unique.
- Select a registered agent, who will receive legal documents on behalf of your business.
- File your articles of organization with the appropriate state agency.
- Create an operating agreement that outlines the management and ownership of your LLC.
- Obtain an Employer Identification Number (EIN) from the IRS for tax purposes.
To simplify the process of forming an LLC, consider using a business formation service like ZenBusiness. They offer a guided formation service that will handle all the paperwork and ensure your business is legally registered in your state.
Step 3 – Organize Your Finances
One of the biggest yet most overlooked steps for handymen transitioning into entrepreneurship is establishing organized, streamlined financial systems from day one. Before taking on your first job, set up a dedicated business checking account and credit card to keep all transactions separate from personal finances. This simplifies tracking deductible expenses and cash inflows for tax time. Select a bank that offers tailored solutions for service contractors like integrated payment processing, financing options, and automated categorizing of expenditure sources.
Additionally, adopt user-friendly accounting software like QuickBooks or Xero to centrally manage everything from proposals to invoicing, expense reporting, profit & loss statements and cash flow. Track receipts digitally including supplementary photographs to classify hundreds of transactions per quarter by type for deductions. Regularly reconcile bank accounts. These habits will provide clear insight into the financial health of your budding handyman operation to analyze profit margin, identify cash crunches early, spot areas requiring pricing adjustments and present all necessary documentation come tax season.
If tackling administration independently feels intimidating as a tradesman getting started, don’t be afraid to call in reinforcements. Hiring an accountant or bookkeeper for just a few hours per week or month costs pennies compared to the penalties and complexity out-of-control finances invite. Over time you can evaluate bringing aspects in-house strategically.
Carefully locking down financial tools and processes gives handymen peace of mind that accounting remains simple. This further enables concentrating energy on perfecting craftsmanship, maintaining 5 star customer service, properly insuring the business and reinvesting profits to support growth in a scalable yet sustainable manner.
Step 4 – Obtain Licenses and Insurance
Research the handyman laws in your state to determine if you need any specific licenses or permits to operate legally. Some states require a contractor’s license for certain types of jobs, such as HVAC, electrical, or plumbing work. Obtaining the necessary licenses and permits will help you comply with the law and avoid fines and penalties.
In addition to licenses, it’s crucial to have business insurance. While an LLC offers some liability protection, it doesn’t cover claims or damages. Investing in proper insurance coverage can protect your business from potential lawsuits or accidents that may occur on the job.
Step 5 – Acquire Tools and Equipment
One of the most common handyman startup costs comes from adequately acquiring fundamental tools and equipment to confidently complete client projects spanning your specialty service offerings. While it may be tempting to try delaying big investments, lacking the proper gear will significantly hamper quality, efficiency, and overall professionalism.
Start by ensuring you own essential tools like hammers, wrenches, screwdrivers, pliers, tape measures, levels, utility knives, cordless drills, saws, sanders, and more. Source ladders, scaffolds, generators, and any big ticket domain-specific machines if your services demand them. Quality matters greatly here — well-maintained commercial grade products may carry higher upfront costs but also enhance durability, lifespan, and output capabilities over consumer variants.
Give similar consideration to personal protective equipment, storage solutions, job site safety tools, branded signage, customized work vehicles, fuel costs and digital admin tools. Your goal is to equip technicians to consistently complete assignments safely, reliably and profitably. Partnerships with rental equipment agencies enable scaling inventory appropriately with project pipelines without excessive ownership burdens. Consider financing options to spread costs over time as well.
The key is striking the optimal balance between being adequately prepared for diverse gigs with having excess items depreciating away unused. Analyze utilization patterns of current equipment while tracking emerging needs of incoming jobs. Proactively communicate any new machinery or accessory requirements expected for upcoming projects based on initial scoping calls before arriving on site. Invest back a reasonable percentage of handyman revenue into tools over time — this fuels greater quality, capacity and responsiveness that together drive growth.
Step 6 – Identify Your Target Customers
One of the most strategic moves handymen overlook is clearly delineating their perfect customer avatar based on specialty services and target market environment. Avoid generically marketing to everyone in your region. Instead, paint a detailed picture of the ideal customers you most enjoy working with and niche down.
For instance, if you specialize in building custom decks, patio covers and fencing, your prime prospects likely include upper middle-class suburban families aiming to enhance their properties. These customers value upgrading their outdoor living spaces with gazebos, pergolas and high-end landscaping. Use demographic and psychographic filtering to hone in on their pain points and priorities. Think expanded budgets, appreciation of fine craftsmanship and desire to keep up with neighbors.
An HVAC and insulation specialist may prioritize forging relationships with general contractors and home builders to install systems in new constructions from the framing phase onward. Or if focusing on roofing, siding and window upgrades, real estate agents, architects and interior designers make great partners for referrals.
Drill down on the types of residential, commercial or industrial projects most meaningful to take on. Get extremely clear on where your specialties intersect with favorable profit margins and an enjoyable workload. This clarity helps inform your rates, operational decisions, hiring criteria, lead generation campaigns and online presence. Over time as positive word spreads through your community and partners, you attract more of those ideal customers automatically through your sharpened reputation.
Step 7 – Establish an Online Presence
In an increasingly digital era, establishing a solid online presence marks a mandatory milestone for handymen rather than an optional nice-to-have. Your website and profiles serve as virtual storefronts available for prospects to vet your services and portfolio 24/7.
Start by securing your unique domain name and launching a customer-friendly website. Maintain simple navigation highlighting your specialty services, previous project examples, online booking tools, service area, and contact information. Develop useful FAQ and tips pages to attract visitors through search and demonstrate expertise. Don’t overlook mobile responsiveness, loading speeds and ADA compliance either — little frustrations add up.
Expand visibility by claiming and optimizing free profiles on widely used directories like Google My Business and Yelp. These profiles display key details, allow customers to request quotes or book appointments, and compile reviews over time. Given over 80% of handyman customers reference online ratings and testimonials prior to hiring, focusing on cultivating a robust 5-star reputation pays dividends.
Proactively accelerate toward the top of local searches by incorporating strong SEO foundations covering title tags, meta descriptions, alt text, schema markup and internal linking. Over time as your domain authority improves, aim to appear on the first page of Google results for commonly used queries in your geography like “Affordable electrician near me”.
An exceptional digital presence conveys professionalism and credibility for prospect’s browsing options. It also demonstrates your capabilities to adapt to meet modern customer expectations and preferences. So dedicating energy upfront to polish these virtual assets makes attracting and impressing ideal handyman customers much easier.
Step 8 – Determine Your Pricing
One of the trickiest balancing acts when launching a handyman operation is determining accurate service pricing that affords healthy profit margins while remaining regionally aligned so prospective customers find rates reasonable.
Thoroughly research what competitor handymen in your area charge per hour or per common project types. Survey friends and neighbors on price points they consider fair. Leverage aggregated data from services like HomeAdvisor that share average costs reported in your region. Evaluate ranges for general handyman tasks vs specialized trades like electricians or plumbers that warrant higher premiums.
From this baseline understanding of local standards, establish your hourly or project-based rates factoring in your level of expertise, professional certifications, efficiency enabled by top-notch tools, liability insurance policies carried, and stellar track record demonstrated through online reviews. As a rule of thumb, talented handymen with several years of experience serving residential and commercial clients can command upwards of $70 per hour. Those newer to running independent ventures generally start closer to $40-50 as they build capabilities and trust.
Remember to incorporate adequate margin beyond base operating costs to continually re-invest and scale the business smoothly over time. Avoid eroding income quality chasing every last lead on price alone. Instead attract premium customers focused on quality workmanship and seamless service worthy of slightly elevated rates compared to Craigslist jacks-of-all-trades.
Step 9 – Create Service Contracts
While investing in overwhelming legal paperwork sounds boring, taking the time to develop standardized contract templates for your handyman services pays dividends long-term. Start by adapting free templates from reputable sites like HomeAdvisor to adhere to current regulations nationwide plus the intricacies of local jurisdictions such as requiring sales tax visibility.
Clearly detail what work will be done, estimated timeline, what’s out of scope, rate and payment expectations, materials costs, how changes will be handled, cancellation policy, and your liability limits. Integrate any permits or specific information needed for specialized services. Outline what happens in event of disputes to avoid costly escalations. Review periodically to keep verbiage current and appropriate.
Striving for well-balanced agreements protects both your clients and your business from failed expectations and miscommunications around requested work. Spending a couple extra minutes reviewing and signing avoids clients verbally adding additional changed scope without formal approval, late invoice payments and other unintentional consequences.
Once templates are established in a compliant manner, consider integrating eSign solutions for universal convenience on dotted lines. Having a fully integrated solution like HoneyBook further simplifies workflows by ensuring the locked-down contract reflects what was quoted, reconciling final owed balances and accepting payments all in one seamless method. Professionalizing your paperwork signals you operate a credible and solid business
Step 10 – Start Small and Grow
When starting a handyman business, it’s essential to start small and gradually scale your operations. Resist the temptation to hire employees or invest in additional trucks until you have a steady stream of work that justifies the expansion. Growing too quickly can strain your resources and potentially lead to a decline in service quality.
Focus on providing excellent service to your customers and building a strong reputation in your community. As you gain more experience and establish a solid customer base, you can consider expanding your team and investing in additional vehicles.
Additional Tips for Success
Here are a few additional tips to help you succeed in your handyman business:
- Provide exceptional customer service: Focus on delivering high-quality work and outstanding customer service. Word-of-mouth recommendations and positive reviews can greatly contribute to the growth of your business.
- Network and collaborate: Build relationships with other professionals in related industries, such as real estate agents, contractors, or interior designers. Collaborating with these professionals can lead to referrals and mutually beneficial partnerships.
- Stay updated on industry trends: Keep up with the latest trends, tools, and techniques in the handyman industry. Attend workshops, trade shows, and conferences to expand your knowledge and skills.
- Continuously improve your skills: Invest in ongoing training and education to stay ahead of the competition. Consider obtaining certifications or specialized training in specific areas to enhance your expertise.
- Market your business: Develop a marketing strategy to promote your handyman business. Utilize online marketing channels, such as social media, search engine optimization (SEO), and paid advertising, to reach a wider audience.
In conclusion, starting a handyman business requires careful planning, organization, and dedication. By following these steps and implementing best practices, you can lay a strong foundation for a successful and profitable venture. Remember to continuously improve your skills, provide exceptional service, and adapt to the changing needs of your customers.
Wrapping Up
Starting a handyman business provides a major opportunity to leverage your skills and experience into a financially rewarding venture. By carefully defining your specialty services, establishing a legal business entity, organizing finances properly, and securing licenses and insurance, you lay the groundwork for success. Invest in reliable tools, identify target customers, build an online presence, set competitive rates, and use contracts to protect all parties.
Focus intently on delivering exceptional handyman services known for quality craftsmanship and professionalism. Build partnerships with complimentary businesses through networking. Continually expand your knowledge and skillsets to remain fully up-to-date on the latest techniques and industry trends. Market aggressively via digital channels and word-of-mouth referrals.
While launching any small business poses challenges, the demand for skilled handyman services continues rising across both residential and commercial spaces. By starting modestly, providing consistently great results, reinvesting revenue into growth-driving areas, and adapting to customer needs, your handyman operation can thrive for years to come. The hands-on work and freedom of managing your own successful company make for an extremely rewarding career path.
Frequently Asked Questions
Are handyman businesses profitable?
Yes, handyman businesses can be very profitable with gross profits typically ranging from 50-100% on labor. As you build up your client base and streamline operations, your net profits can surpass $100k+ per year.
Does the U.S. require a handyman license?
No, there is no federal license required to operate as a handyman business. However, many states and cities mandate registration, permits or licensing for certain specialty services like electrical, HVAC or plumbing. Research your state and local regulations.
How do I market myself as a handyman?
Effective handyman marketing strategies include search engine optimization, paid online ads, flyers, partnerships with complimentary businesses, door-to-door visits showcasing your services, social media promotions highlighting projects, and requesting client reviews.
What type of work can a handyman do legally?
Handymen can provide a very wide range of basic services like furniture assembly, TV mounting, painting, tile installation, basic carpentry, landscaping, and general repairs. Specialty fields often require additional licensing such as for electrical rewiring, major plumbing jobs or HVAC installations.
How much does a local handyman make?
Most independent handymen charge $40-$60 per hour on average. Experienced pros can command upwards of $80 per hour. Based on typical billable hours, gross annual income often ranges $60k-$90k. The most successful operations net well over six figures in profits.
Do contractors need to be licensed?
Licensing requirements for contractors vary widely across states and municipalities. Many locations mandate licenses for work like electrical, plumbing and HVAC. Some have general contractor license stipulations as well. Thoroughly research the regulations in your state and city.
Featured Image Credit: Photo by Theme Photos; Unsplash – Thank you!
