Do you have the skills to execute odd jobs for a living? Are you looking to transition from having a career to owning your very own handyman business? If you've answered yes to these two questions, you're ready to take the first step and start your own company!
From writing a business plan to getting licenses, securing funding, and business registration, this comprehensive guide will go through everything you need to know to start offering handyman services in your locality! Blue Collar Websites can also share insight on how to start an hvac business.
How to Start a Handyman Business in 13 Simple Steps!
While starting a handyman business may seem easy, there are many steps that you must follow. These include the following:
1. Write a Business Plan
Without a proper business plan, your chances of running a profitable handyman business are slim. You need to have an idea of what you intend to do and how you will achieve your goals.
A detailed business plan helps identify a company's strengths, weaknesses, and competitors. It's also a great way to lure investors to secure funding to help you get started.
Make sure you include the following in your business plan:
Cover page
Table of contents
Executive summary
An overview of the business
An overview of the Handyman services you plan to offer
Pricing strategy and structure
Market analysis
Competitive analysis
Marketing plan
Employee planning
Financial projections and cash flow strategy
The US Small Business Administration (SBA) provides detailed information on how to write a compelling business plan. It's a great resource that you should consider checking out.
2. Apply for the Right Handyman License
Becoming a handyman in the United States is easy, but it's important to join the industry legally. This means adhering to the licensing requirements, which may vary from one state to another.
For example, in California, handymen who are looking to take on projects under $500 do not need a license. The applicable laws may differ if the contractor decides to work on large-scale jobs.
To ensure adherence to state and federal laws, it's important to check with your state licensing board to learn more about the licensing requirements. Depending on the municipality, you may have to follow additional local rules.
Offering handyman services without a proper license can lead to serious legal troubles. You could be looking at business closure, hefty fines, and even jail time.
3. Secure Funding for Your Handyman Business
You don't need a lot of money to start your own company offering handyman services. In fact, with a proper financial plan, you can determine what your business needs and how much it'll cost.
A handyman services company has low startup costs, making it easy for people to fund their entrepreneurial endeavors. However, if you don't have enough money, you can always tap into other sources of finance to help start your business. These include the following:
Business loan
Personal loan
Credit cards
Government funding
Grants
Microfinancing
Now that you know where to get the money, you might be wondering, 'How much does it cost to start a handyman business?'
On average, expect to pay between $1,390 and $2,930 to get started. However, you may incur additional costs, especially if you need a vehicle to help you get to job sites.
4. Open up a Business Bank Account
As a business owner, it is important to keep your company and personal assets and expenses separate, which means having different bank accounts.
Head over to a nearby reputable financial institution to discuss opening a business account. Make sure to ask them about any benefits or ongoing promotions that you can take advantage of.
5. Decide on the Handyman Services You Wish to Offer
Contractors may offer a wide range of handyman services. Some of the most common ones include the following:
Painting and staining walls and furnishings
Drywall repair and installation
Interior and exterior painting
Minor plumbing and electrical work
Leaky plumbing fixes
Fixture and hardware repair and replacement
Gutter and window cleaning
Senior home upgrades
Fence and gate repair
Some professionals may be good at drywall repair, while others excel at gutter and window cleaning. Your expertise and skills will determine the type of handyman services your business offers.
List the major and minor jobs that you can do around a house or commercial property. This will give you an idea of the type of services your handyman business could offer.
A key thing to remember is that the nature of work varies according to the type of location. Residential clients may request help with home repair or remodeling, while those owning commercial properties may need assistance with move-out repairs. Perhaps, consider handyman website design when promoting services.
6. Purchase Handyman Tools and Equipment
Whether you're planning to offer minor repair and replacement services or painting, plumbing, or electrical works, you must have the right tools for the job.
Here are a couple of things that you should invest in to help start your handyman business:
Allen wrenches or a complete wrench set
Broom, dustpan, mop, and bucket
Hammer, nail, and screw sets
Power drill, saw, and vacuum
Putty and caulk
Paint and roller brush with handle
Safety glasses, gloves, and earplugs
Measuring tape
You can add many other pieces of equipment to the abovementioned list. However, the more tools you plan to buy, the greater the startup cost of your handyman business. Invest in the things you need to complete your first few jobs. As your company expands, you can consider buying more items.
To save on costs, you can always purchase second-hand equipment or rent it out. Also, there is no need to buy premium-quality tools, as mid-range ones can help you do just as good a job, if not better.
7. Define Your Target Market
Who do you want your customers to be? Asking yourself this question will help define your target market. It's easy to say that your handyman service company will cater to "everyone," but in reality, not everyone is the right audience for your business.
Think about the following factors when deciding your target market:
Demographic
Geographic location
The type of handyman service people are looking for
Required qualities in a service provider
Some customers may prefer premium contractors, while others may be in search of affordable handyman companies. Make sure that your services align with what clients expect from you.
8. Determine Prices for Your Handyman Services
When property owners are looking for home repair or improvement help, they'll often reach out to a contractor for an estimate on the project. This is only possible if you have set prices for your handyman services.
Here are a few things that you should consider when costing:
Labor costs: In the United States, the average rate for handyman labor is around $24.30 per hour, depending on location and experience. For every service you can provide, consider the number of hours it requires and multiply that by the labor cost. For example, if repairing a leaky tap takes about three hours, it should result in $72.90 in labor costs.
Overheads: When determining the prices of your handyman service offerings, you should factor in the day-to-day operation costs. Calculate the total bills and expenses you're expected to incur and divide that by the number of hours you plan on working. For example, if your monthly overheads are $1,000 and you work 160 hours a month, your total hourly overhead rate should be $6.25. That's $18.75 for a leaky tap repair.
Profit margin: This refers to the amount of income your business generates for every project delivered. Handyman business owners typically aim for 10% to 20% of the total costs incurred for the work. Suppose you decide to have a 15% profit margin. In that case, you can expect to make $13.75 extra for repairing a leaky tap.
Taxes: You must also factor in the income taxes you need to pay. Make sure to add all of the expenses (labor costs and overheads) to the profit margin before multiplying them by the current tax rate percentage. That's an additional $26.35, which means that you need to price a leaky tap repair at $131.75.
The price for handyman services depends on the geographic location, local regulations, expertise, and reputation, among many other factors. Studying your competitors and understanding their pricing can help you devise a strategy for your own company.
9. Register Your Handyman Business
To legally offer handyman services in the United States, you must register your business and look into licensing. The following are essential steps that you should follow:
Decide a name: You must choose a memorable name for your handyman business that describes who you are and what you offer. Make sure that it's unique to your geographic location. After that, focus on creating an attractive logo that truly captures what your company stands for.
Choose a business structure: Once you've settled on a name, it's time to determine the structure of your business. Will you register it as a sole proprietorship or choose a partnership or limited liability company?
File the necessary paperwork: The type of paperwork you need to file depends on where you're registering the handyman company. You may also need a business license to operate legally. Contact your local Chamber of Commerce for more information on how to apply.
Get an EIN: If you plan to hire employees or form a partnership business, you need an employer identification number (EIN). This will allow you to file your taxes with the Internal Revenue Service.
10. Purchase Insurance
As a professional offering handyman services, you could be working on a wide range of projects. From mounting televisions to repairing faulty plumbing, your work comes with a higher risk of liability, which is why it's crucial to have small business insurance.
If your potential customers find out that you're not insured, they'll most likely look elsewhere. A business owner's policy is an excellent place to start. It covers the following coverage types:
General liability insurance: When working on a project, anything can happen, and you must be ready to protect yourself financially from the damages incurred. General liability insurance provides coverage in the event of property damage and accidental injuries.
Commercial property insurance: Fire, theft, and natural disasters are all adverse events that can affect handyman businesses across the United States. Commercial property insurance covers your physical location and equipment damaged due to a problem mentioned in the policy.
Business income insurance: An incident or disaster can temporarily shut down your business, adversely impacting your financial situation. Business income insurance can provide coverage to keep the cash flowing.
Besides the abovementioned insurances, there are many different coverages that you can get, some of which include the following:
Commercial auto insurance for insuring your company's vehicle
Workers' compensation insurance for protection in case of employee injuries during job
Professional liability insurance for protection against lawsuits arising from professional mistakes
For a profitable business, you need to cut down on costs. One way of doing that is shopping around to find the best deals on insurance policies.
11. Create a Service Contract
When you get your first client, you must set up a legally binding agreement, which is commonly referred to as a service contract. It highlights the services offered, the agreed-upon rate, an estimated timeline, and other important details. This protects you and your business from disagreements, disputes, or lawsuits.
While you can make a legally binding document yourself, we highly recommend searching online for a handyman service contract template.
12. Market Your Handyman Business
To attract more customers and find additional projects to work on, you should consider marketing your handyman business. This may include exploring online and offline strategies to create a brand name and build a strong reputation while improving sales.
There are many ways you can market your handyman business. The following are some strategies that you can use to create an online presence:
Ask your customers to leave reviews or feedback if they're satisfied with your services.
Join local business associations and attend events to promote your handyman business.
Create social media profiles to interact with your target audience and create awareness about your brand.
Every successful handyman business has a website highlighting its expertise, showcasing its portfolio, and providing contact details. You can work with an experienced company like Blue Collar Websites to set one up.
Use online directories to list your business, allowing potential customers to find you, learn more about your services, and request estimates.
Focus on employing branding strategies, which may include decal vehicles, business cards, and professional uniforms.
13. Focus on Customer Service
To create brand loyalty and ensure customer satisfaction, you must offer exceptional customer service. If your clients are satisfied, they're more likely to refer you to their friends and family. Blue Collar Websites also has tips on how to start a painting business.
Every interaction with a customer is unique, so make sure to provide a personalized experience tailored to their needs. Also, after each project, reach out to your client for an online review and feedback on how you can improve your handyman services.
Get Started and Create an Online Presence with Blue Collar Websites!
Turn your passion for odd jobs into a full-fledged handyman business by building an online presence. At Blue Collar Websites, we help aspiring entrepreneurs realize their dreams and turn them into reality. Our experienced designers will create a website that represents the quality of your work.
Call us at (740) 729-1010 for a consultation with our experts and learn how our trade-specific designs can instill customer trust, develop a brand, and build an online reputation!
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