How to Start a Handyman Business

Step 1: Evaluate your handyman skillset

Determine your best handyman skills. Every handyman has their own blend of skills. Some might be experts in plumbing, while others master electrical repairs. It’s pivotal to recognize these skills as they define your niche and market value.

However, claiming to be a jack-of-all-trades doesn’t necessarily make you a master of all. Some areas might need further refinement. Consider seeking additional certifications. Institutions often offer courses ranging from basic to advanced, providing both credibility and enhanced expertise.

But don’t stop there. Engage with peers and industry leaders, attend seminars, and join handyman forums online. Immersion in such communities not only offers a wealth of knowledge but can also spotlight current trends and customer demands you might have overlooked.

Step 2: Create your handyman business plan

Write a business plan for your handyman company. Starting any business without a structured plan is akin to setting out on a road trip with no map. Defining your business growth trajectory is fundamental, and drafting a business plan will help you do that. First, do some market research to establish clear objectives. Maybe you’re targeting a specific clientele, like owners of vintage homes or property management companies, or perhaps you’re aiming for a set income bracket. And be sure to nail down your business location and name, too.

Also, assemble your toolkit, as your tools are your business arsenal. From hammers and nails to advanced electrical equipment, ensuring that you have all the necessary tools of top-notch quality will be crucial in delivering excellent service. Regular maintenance checks, coupled with updates to incorporate the latest in tool technology, can further enhance your service quality.

Step 3: Legitimize your business

Set up your business’s legal footing. If you’re venturing into the world of handyman businesses, it’s essential to legitimize your operation. A legitimate business not only offers a professional facade but also helps ensure that you operate within legal parameters and have mechanisms in place to protect both yourself and your clients.

Register your business (if necessary)

There are several business structures to choose from, each with its own advantages and disadvantages.

• Sole Proprietorship: A sole proprietorship is the simplest structure. It’s an option for individuals who are the sole owners of their business and want full control over business decisions. The advantages include ease of setup, and all business profits are yours. However, the downside is that you’re also personally responsible for all business debts, and there’s no distinction between personal and business assets. This can be a risky endeavor, especially if your business faces litigation. For more information please see: What is a Sole Proprietorship?
• Partnership: If you’re planning on running the business with a partner, this could be the structure for you. Partnerships allow for shared responsibility and resources. Profits and losses are shared among partners as per the partnership agreement. However, like a sole proprietorship, partners are personally liable for business debts. In addition, disagreements between partners can hamper business operations. Check out the partnership definition.
• Limited Liability Company (LLC): An LLC combines features of both partnerships and corporations. Owners, known as members, usually aren’t personally liable for company debts, thanks to the LLC’s limited personal liability. Profits and losses “pass through” the LLC without paying corporate taxes. However, LLCs are more complicated and expensive to set up than sole proprietorships or partnerships. Read the limited personal liability definition for more.
• Corporation: This is a more complex business structure. Like an LLC, a corporation definition is a separate entity from its owners, which means it has its own rights, privileges, and liabilities. In another similarity with LLCs, a corporation’s shareholders (owners) usually aren’t personally liable for corporate debts. However, corporations can be costly to establish, and there’s often a double taxation aspect — the corporation pays taxes on profits, and shareholders pay taxes on dividends.

If you’re unsure about the best structure for your business, it might be worth consulting with a business attorney. They can provide guidance tailored to your business model and long-term goals.

Get business insurance

Insurance isn’t just an added expense for small business owners — it’s a vital shield against unforeseen mishaps. For handymen, the risks of property damage, injuries, or dissatisfied customers are real. Here are a few insurance types handyman businesses might consider.

• General Liability Insurance: This covers legal costs and payouts if someone gets hurt or there’s property damage due to your business operations. For instance, if a client trips over your tool and injures themselves, general liability insurance can cover medical bills and legal fees. See the general liability insurance definition here.
• Workers’ Compensation: If you hire employees, workers’ compensation is typically required. It covers medical expenses and wage replacement if an employee gets injured on the job.
• Commercial Auto Insurance: If you’re using vehicles for your business, whether it’s for transporting tools or traveling between job sites, commercial auto insurance can cover damages from accidents.
• Tools and Equipment Insurance: Your tools are your trade. This insurance can help replace them if they’re stolen or damaged.

Get licenses and permits

In the handyman business, acquiring the appropriate licenses and permits is a crucial step. Some jurisdictions — potentially including the state, county, city, or a combination of the three — require businesses, regardless of their nature, to have a general business license. This license legitimizes your business and allows it to legally operate within your state, county, or city. That said, many businesses won’t need a general business license at all. 

Handyman-specific licenses can vary based on the tasks you undertake. If you’re offering more specialized services, like plumbing, electrical, or HVAC tasks, you may need a specialty contractor’s or handyman’s license. These licenses not only provide credibility to your work but also help ensure that you meet government standards and regulations for these specialized tasks. Always research local requirements, as handyman licensing can differ widely from one jurisdiction to another.

If you’re not sure which licenses will apply to your handyman company, don’t worry. Our business license report can make this step easy for you. We’ll assemble a list of the licenses and permits that your unique business needs so you don’t have to worry about doing the legwork yourself.

Get a business bank account

Opening a dedicated bank account for your business is a crucial step for any budding handyman business. This isn’t just about professionalism — though receiving payments under your business name solidifies your image. More vitally, separating your business and personal finances provides clarity when tracking expenses, profits, and tax deductions. It helps ensure smoother financial operations and gives clients the assurance that they’re dealing with a dedicated professional.

Beyond operational ease, if your business is structured as an LLC or corporation, a distinct business bank account is essential to maintain the personal asset protection these formations offer. Blurring the lines between personal and business transactions can endanger this protection, potentially exposing your personal assets to your business creditors if legal issues arise. Moreover, as your business flourishes, this separate account can enhance your credibility with banks, making financial opportunities, like loans or credit lines, more accessible.

Step 4: Build a trustworthy brand for homeowners

The right branding can enhance your business’s image and reputation. In an era dominated by digital narratives, your brand story is more significant than ever. A distinctive logo reflecting your business values can become an instant identifier for clients. While business cards might seem old-fashioned, they remain tangible reminders of your services and are a vital part of many marketing plans.

However, your digital footprint, primarily through a user-friendly website, could be your most potent marketing tool. Incorporate client testimonials, before-and-after photos of projects, and a blog offering handy home maintenance tips. Such initiatives not only showcase your expertise but also potentially boost search engine optimization (SEO) rankings.

Speaking of SEO, optimizing your website helps ensure that when locals search for handyman services, you’re prominently featured. Paired with engaging social media content, your online presence can see exponential growth.

Traditional marketing, through local newspaper advertisements, community bulletin board postings, or even attending community events, helps in grassroots brand building.

Step 5: Secure finances

Establish the financial framework of your handyman business. The financial backbone of a profitable handyman business can often determine its longevity and success. To help ensure a strong foundation and a prosperous future, carefully managing your finances from the outset is essential. Here’s a roadmap to help you navigate this critical phase.

Set your service prices

Pricing your handyman services can feel like walking a tightrope. Set them too high, and you risk alienating potential clients. Set them too low, and you might find yourself working long hours for little return. Start by evaluating your costs for your handyman business, including the cost of equipment, overhead (like vehicle maintenance, gas, office space, and tools), and any other regular expenses you’ll face.

Next, do some market research. Investigate the rates other local handymen are charging. This will provide a ballpark figure to position your prices competitively. However, always ensure you’re charging enough to cover your costs and still turn a profit. After all, the primary aim of your business is to be profitable.

Anticipate ongoing costs

Every small business owner has operational costs, and a handyman business is no exception. Budgeting accurately is your buffer against potential financial pitfalls. Regular expenses may include tool replacements, vehicle maintenance, license renewals, and advertising costs. On top of these, always set aside a contingency fund for unexpected costs like emergency vehicle repairs or a sudden hike in equipment prices. Budgeting isn’t just about tracking your expenses and deciding when to buy new equipment — it’s about being prepared for the ebb and flow of business expenses, helping ensure you’re never caught off guard.

Get funding

Adequate funding is the fuel that drives your handyman business — especially in the early days, when you might need to make significant upfront purchases or handle a lean period before clients start coming in. Common funding sources include bank loans, business credit cards, and even crowdfunding platforms. Personal savings or investments from family or close friends are also viable options. Each source comes with its own advantages and drawbacks, so research each thoroughly to determine what’s right for you. Remember, while taking on debt can give you a jumpstart, it’s essential to have a clear plan for repayment. Read more on bank loan definition.

Prepare for tax time

One of the certainties of running any small business is dealing with taxes. As a handyman, you’ll need to maintain diligent financial records. This not only simplifies the tax filing process but also helps ensure you’re capitalizing on all potential tax deductions available to you, like those for equipment purchases or vehicle usage. Consider investing in reliable accounting software tailored for small businesses. If numbers aren’t your forte, you might also think about hiring an accountant, at least for the first tax year, to guide you through the maze of business taxes (including sales tax, employment tax, and more) and help you establish sound financial habits right from the get-go.

Step 6: Stay ahead in the home repair game

Stay competitive in the handyman industry. The home repair and improvement industry is dynamic, with constant innovations. Subscribing to industry-specific magazines, joining trade associations, or even watching tutorial videos can keep you updated.

Moreover, with the tech world continuously churning out innovative tools designed to simplify tasks, being tech-savvy and updating your toolkit helps you remain at the industry forefront.

Step 7: Build relationships with homeowners

Foster a good reputation with your clients. Quality work drives referrals. Every satisfied homeowner could be a potential brand ambassador. Encourage your clients to leave reviews, share their positive experiences on social media, or even provide video testimonials. Share these on your website and social accounts (with permission, of course) to showcase your good work.

However, the journey won’t be devoid of hiccups. Some feedback might be less than stellar. Embrace and address it with grace, view it as constructive criticism, and use it as an opportunity for improvement. Building a business is as much about skill as it is about character.