Handyman businesses undoubtedly have the potential to be very lucrative, especially since firms and homeowners regularly require help with repairs, maintenance, and improvements around their properties.
However, being a hobbyist and becoming a business owner are worlds apart. You need to plan carefully before turning your hobbyist skills into a thriving business.
Furthermore, surviving the first year as a business is crucial. And there are some things you must put in place to achieve that. For example, you must acquire licenses, establish a robust accounting system, run effective marketing campaigns, and set profitable prices.
Prepare to learn how to start a handyman business, even if you don’t have any entrepreneurial experience. And we’ll also show you how ServiceTitan can help you with the process.
1. Get Licensed
Most states allow handyman businesses to operate without a license. However, there's a limit to the size of the projects unlicensed handyman business owners can handle. That’s because only general contractors have sufficient expertise to handle large projects.
For example, a Louisiana-based handyman needs a state license to be eligible to handle projects costing above $75,000, while North Dakota restricts unlicensed handymen to projects that cost less than $4,000.
Additionally, some jurisdictions also require specialty licenses for jobs like HVAC, plumbing, and electrical. This is due to the complexity of such jobs, plus contractors in those fields must learn special safety protocols to prevent mishaps that can happen during or after the project.
In some cases, you will have to take some special tests and submit insurance and financial report documents.
Check your state’s licensing authority to confirm your area’s requirements. Also, consult local authorities if they have any rules besides those of the state.
Check out each state’s handyman license requirements.
Pro tip: Some states do not require a handyman license. However, it’s still advisable to get one to appear more credible and earn customers’ trust.
2. Decide What Services You Will Offer
Being a handyman allows you to offer a wide range of services. However, there’s one caveat: any service you offer must intersect with your current skill set.
For example, someone doing electrical work as a hobby or possessing a degree in it can offer electrical services. The same applies to people who were once apprentice plumbers or usually help neighbors, family members, or friends with plumbing tasks.
Furthermore, offering multiple services is a recipe for disaster.
You’ll get more work orders than your current capacity can handle, making it almost impossible to provide quality services to customers. Customers will leave, spread negative reports about you, and never contact you again.
It's better to start narrow and add more service offerings as you grow.
So, list all the odd jobs you’ve done before. Then, build a service around those that reflect your prospective customers’ needs. For example, someone fixing squeaky doors and leaky faucets around the house can offer general home repair services.
Some examples include the following:
Carpentry
Tile and flooring
Landscaping
Drywall installation, finishing, and repair
Painting
Bathroom and kitchen plumbing repairs
General home repairs
3. Create a Handyman Business Plan
A business plan is a detailed blueprint that guides handyman businesses from start-ups to growth stage to established companies. It contains strategies for outmaneuvering competitors, attracting customers, and adapting to market trends.
Business plans are typically working documents. They undergo frequent iterations based on the company's challenges, current market trends, and changes in customer behavior.
Writing a business plan is also a major requirement for capital infusion from lenders, such as banks, investors, private equity firms, etc.
The key to writing a comprehensive business plan is to include the details that readers—investors, business mentors, or employees—need to make decisions. The plan should be arranged to flow logically and make sense to anyone reading it.
Here’s a breakdown of what a logically structured business plan looks like:
Cover page: States the document's name and the business it was created for.
Executive summary: Gives a one-page overview of the rest of the document.
Business overview: This brief description of the business and its owners also states the company's mission, vision, and values.
Services: Describes the services you’ll offer and why you picked them.
Market analysis: Contains data about the state of the market. How many homes are in your coverage area? What are your competitors' weaknesses, and what are your strengths? Who are your target customers?
Financials: Outlines your plan for getting funding.
Tools and inventory: Lists the tools and materials required to start.
Marketing plan: Contains a plan for making customers aware of your services.
Management summary: Briefly lists the names of the management team and what makes them fit for their positions.
Some entrepreneurs believe business plans are optional, but that’s far from the truth. The fact that some business plan sections cover steps for starting a handyman business signifies the document’s importance to running a successful business.
4. Get Financing
Businesses can be capital-intensive. Money is needed to buy tools, get licenses, promote your services, and pay for insurance.
Before soliciting funds, make a list of all the items you’ll spend on. Assign dollar amounts to each item, with a buffer to account for price fluctuations and miscellaneous expenses.
Since handyman businesses are usually low-capital ventures, your savings and credit card will likely be sufficient to cover your start-up costs. But if that’s not the case, consider using any of these financing options:
SBA loans: The Small Business Administration offers low-interest loans to small businesses with long repayment periods. Such loans are ideal for businesses without the financial means to pay huge interest rates.
Bank loans: Banks offer loans, too. However, they come with high interest rates and stringent qualification criteria, such as collateral, financial reports, etc. Use this option only as a last resort.
Family and friends: Reach out to friends and family members who believe in your business acumen. Frame the request as an investment and have a lawyer draw up a repayment plan to prevent disagreements down the road.
Private investors: You can seek capital from private investors through business networks. However, you must be prepared to surrender a portion of the profits and control of the company in exchange.
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5. Register Your Business
Registering your business ensures you’re legally recognized and eligible for tax deductions and government interventions. It also secures your business name from being used by someone else.
Before registering your business, pick a short and easy-to-pronounce name. Then, ensure it's not taken by searching Google, social media platforms, and trademark databases.
Once you've selected a name, secure it. Register the name with your state's corporation commission and find matching dot com domains and social media handles. This will prevent you from being forced to use a domain name or social media handle composed of something other than your company name.
When filling out the business registration form, you’ll be directed to pick a legal entity. Here are the options to pick from:
Sole proprietorship is built for one-person businesses. In this case, the owner’s assets are at risk from business liabilities.
Partnerships involve two or more people who share profits and losses using guidelines enshrined in the partnership agreement. The owners are recognized as self-employed individuals and report their taxes separately.
Limited Liability Companies (LLCs) are treated legally as an individual. This means liabilities from the company cannot affect you as long as your expenses don't mingle with the company’s. However, you’ll have to pay taxes on the company’s income and your dividend (or retained earnings).
After completing the business registration document, file the required paperwork and get an Employer Identification Number (EIN) from the IRS website. Depending on your jurisdiction, you may also need to get a tax number from the state tax authorities.
Pro tip: Get a separate business number to avoid being disturbed by work calls at odd hours. Plus, purchase an email hosting that matches your domain name to aid brand recall and legitimacy. It should appear as Yourfirstname@businessname.com
6. Handle Finances & Accounting
Poor financial management is the number one reason businesses fail. It’s hard to monitor cash flow, track liabilities, and identify when debts pile up when you’re stuck with clipboards and paper packets.
This makes it imperative to have a solid accounting system that organizes and consolidates all financial transaction data. Such a system makes it easier to file taxes, make the right decisions, and clearly understand your company’s financial health.
The first step is to create a business checking account to easily calculate expense deductions when filing taxes and separate business expenses from personal ones.
The bank you decide to do business with should have little or no minimum balance requirement. They should also have a broad ATM coverage in your area and offer high interest rates on savings.
Once you have a business bank account, invest in tools to handle various steps in the accounting process, such as payroll, estimate creation, customer payments, and transaction data analysis.
However, to save costs and avoid manually copying data from different tools, invest in ServiceTitan’s comprehensive Accounting platform.
The platform integrates with various accounting tools like QuickBooks, Viewpoint Vista, and Intacct. These integrations eliminate manual data entry and provide a single source of truth about your company’s financial state.
Furthermore, the platform empowers field techs to accept customer payments via cash, credit card, or check. Such payments are immediately reflected in the central accounting dashboard, which front office staff can access.
This allows you to always know the financial status of your company before the end of accounting periods.
Finally, the platform has Accounts Receivable and Payable reports that showcase all outstanding invoices and payments in one interface. It shows the names of the debtors and creditors, the amounts owed, and their contact details.
Handyman business owners use these reports to follow up on overdue payments and settle vendors’ accounts before late payment penalties kick in. This helps them maintain a healthy cash flow and gain vendors’ trust.
7. Invest In Handyman Equipment
Avoid the temptation to save costs when purchasing equipment by going for lower quality. While it can initially feel like savvy business, the amount you’ll spend on repairs may eventually surpass the cost savings.
Your ability to do the job efficiently and deliver quality results that attract more customers depends on the quality of the tools you buy.
If you must save costs, start with your current tools, buy only those necessary for your services, and hire others from tool rental companies. As you grow, you can get more specialized equipment.
Another way to save costs is to visit pawn shops and yard sales and open a pro account with store chains like Home Depot and Lowes to enjoy discounts.
In addition to tools and equipment, buy uniforms so customers perceive you as a professional rather than just another handyman with a truck and duct tape. This will also help you charge higher rates.
Once you’ve purchased the necessary tools and equipment, you must ensure they remain in optimal condition and are always available so technicians can do their jobs. That’s where ServiceTitan’s Inventory Management platform comes in.
With the software, handyman business owners can track materials and equipment, create purchase orders, manage replenishments, and handle material returns.
One notable feature of the platform is its Item Overview display interface, which provides a snapshot of all the available materials and tools. The report captures their names, quantities, unit amounts, descriptions, and total values.
Users can also examine each item more closely to determine the number of times it was used, where it currently is, and its deployment history.
ServiceTitan’s Inventory Management software also allows users to create templates for allocating inventory, reserving items for upcoming jobs, and creating purchase orders to replace tools.
This makes it easy to maintain optimum stock levels and reduce turnaround times.
Pro tip: Buy sufficient inventory that will last a while to avoid wasting time and gasoline on frequent supply store visits.
8. Decide on Your Pricing
To operate profitably, you must use the right pricing strategy. Your prices should also accommodate overheads and have a healthy markup to deliver a return on investment.
For starters, take stock of local competitors’ pricing strategies. Calculate the labor and material costs associated with each service. Then, fix a price that includes a healthy profit margin.
Next, pick a pricing strategy—flat rate, hourly, or hybrid. You can charge flat rates for large projects so customers won't hound you to finish quickly to save costs, and use hourly rates for small-scale projects.
Pro tip: Always sign an agreement containing the price and scope of a project before you begin. This could be a work order, change order, or purchase order. Respectfully refuse extra work beyond the agreed scope unless the customer offers to pay for it.
9. Get Handyman Business Insurance
While this may seem like an extra cost, we often advise handyman businesses to take out insurance policies to protect their business from liabilities.
This will protect the business and its owner from unexpected events covered by the policy, like work-related injuries, accidents, and lawsuits.
You’ll need these five basic types of handyman business insurance to fully protect yourself and your business from liabilities:
General liability insurance protects from workplace injuries, property damage, and personal injury.
Worker's compensation covers benefits and wages of employees injured on the job.
Commercial auto insurance provides liability coverage for business vehicles.
Property insurance protects owned and rented assets and business records from natural disasters and thefts.
Equipment insurance pays for lost or damaged handyman tools and equipment.
Get as many quotes as possible from small business insurance providers. To ensure full liability coverage, pick a one-million or two-million-dollar policy.
10. Market Your Handyman Business
Now that your business is established, you need people to know about the services offered. This way, they’ll book an appointment immediately or do so later, having remembered your company from a business card you shared with them at an event, for example.
That’s where marketing comes in.
Marketing is simply promoting your services in a way that highlights your unique value proposition. The goal is to attract potential customers, make them value your services enough to pay for them, and earn a place in their memories.
Before running any marketing campaign, build a digital footprint that customers can use to verify your credibility. Share helpful content on your handyman website and social media handles, then create a Google Business Profile and fill it up with reviews.
You can build a strong online presence via the following low-cost marketing channels, to generate more leads:
Share flyers and business cards.
Post on your local community’s Facebook pages and groups.
Register with Craigslist and other local directories frequented by prospects.
Invest in pay-per-click (PPC) advertising and Google Local Services Ads.
Set up email marketing campaigns.
Use direct marketing techniques such as door-knocking, cold-calling, and word-of-mouth.
To maximize results and reduce waste, monitor each marketing channel’s contribution to your generated revenue. Additionally, keep track of field service performance metrics such as average response rates, employee productivity, repeat visits, and average ticket prices.
ServiceTitan’s Home Services Marketing software lets handyman business owners access a marketing performance scorecard and match new customers to the campaigns they came from via dynamic call tracking (DNI).
This way, you can increase the budget for revenue-generating campaigns and pause those performing poorly.
Over to You
Now, you’re set to become a fully-fledged business owner and grow your company. To start, spread the above steps across two weeks or ten working days.
Then, invest in ServiceTitan’s comprehensive handyman business software to hit the ground running and streamline operations. The tool can consolidate customer data, boost booking efficiency, and maintain optimum stock levels.
ServiceTitan is an all-in-one, cloud-based handyman software solution that helps automate business operations. Home services providers have recorded a 25 percent increase in revenue within one year of using the software.
Frequently Asked Questions (FAQs)
Understandably, you may still have some questions after learning about the steps for starting a handyman business. But don’t worry—we’ve answered all of them below.
How much does it cost to start a handyman business?
Data from Zen Business says starting a handyman business costs between $2,000 and $10,000. The exact cost depends on salaries, registration fees, and your location’s cost of living.
Are handyman businesses profitable?
Yes, handyman businesses are highly profitable since they offer various services people frequently need. The Bureau of Labor Statistics says a handyman or a general maintenance and repair worker makes $46,700 per annum or $22.45 per hour.
What type of business is best for a handyman?
The best type of business for a handyman will depend on the business owner's skill set and the services their target market needs. They can offer the following services:
Furniture assembly and repair
House moving assistance
Carpet cleaning and installation services
Home security system installation
Plumbing system repair and maintenance
Landscaping
Window washing services
Air conditioning installation and repair services
ServiceTitan Software
ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.
