How to Start a Handyman Business

Homeowners and businesses are using handyman services more and more these days. If you are skilled at making repairs, and doing other work like painting, drywall, carpentry, and more, starting a handyman business could be a great opportunity for you to build a profitable company.

Starting any kind of business, however, takes a lot of work. The key is to have the knowledge that you need before you start so that you avoid common mistakes. This step-by-step guide provides all the information and insight you need to start and build a profitable business.

Step 1: Decide if the Business Is Right for You

Starting a handyman business requires time and effort. Before you jump in, you need to fully understand what is involved before you decide if a handyman business is right for you. 

Pros and cons

Handyman industry trends

The overall home services industry size was valued at $105 billion in 2018 and is projected to reach $1.2 trillion by 2026.((https://www.verifiedmarketresearch.com/product/us-home-service-market/))

Market growth has been driven by more spending on home improvements and is expected to continue as the pandemic recedes. Overall, the industry is sensitive to economic fluctuations because when consumers have less disposable income, they delay non-critical home repairs.

Industry size and growth

• Industry size and past growth – The US handyman industry grew 1% annually over the last five years to reach $4.5 billion in 2021.((https://www.ibisworld.com/industry-statistics/market-size/handyman-service-franchises-united-states/))  
• Growth forecast – The industry is expected to expand at least 2% in 2022.
• Number of businesses – There are more than 1,500 handyman service franchises in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/handyman-service-franchises-united-states/))
• Number of people employed – The industry employs more than 20,000 people.((https://www.ibisworld.com/industry-statistics/employment/handyman-service-franchises-united-states/))

Trends and challenges

Trends in the handyman industry include:

• Rapid growth in online on-demand home services  
• Rising adoption of digital communication channels with clients
• Booming home improvement and renovation industry

Challenges in the handyman industry include:

• Poor service providers
• Rise of aggregators who offer clients a wide array of services

What kind of people work as handyman?

• Gender – 96% of all handymen employed in the US are male, while 4% are female.((https://www.zippia.com/handyman-jobs/demographics/#gender-statistics))
• Average level of education – 41% of handymen are high school graduates.((https://www.zippia.com/handyman-jobs/education/))
• Average age – The average age of a handyman is 47 years old.((https://www.zippia.com/handyman-jobs/demographics/#age-statistics))

How much does it cost to start a handyman business?

Start-up costs for a handyman business range from $2,300 to $5,900. Tools and a website are the largest investments. Buying second-hand tools can help cut costs, as can building your own website.

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $300	$200
Business licenses and permits	$200 - $300	$250
Insurance	$100 - $500	$300
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Initial marketing budget	$200 - $500	$350
Tools	$500 - $1,000	$750
Total	$2,300 - $5,900	$4,100

How much can you earn from a handyman business?

Your profits will vary depending on:

• How many customers you can acquire 
• Ongoing expenses, particularly if you hire staff

The cost to provide services is minimal if you pass on the cost of any materials to the customer. You should average about $50 per hour, and with minimal costs have a profit margin of around 90%. 

In your first year or two, you might work 15 hours per week, which would give you $39,000 in annual revenue and a profit of about $35,000. 

As your brand gains recognition and you begin to get referrals and repeat customers, you could get to 40 hours per week and start charging $65 per hour. You would make $135,000 in annual revenue and about $122,000 in profit. 

If you eventually grow your business enough that you can hire other handymen to work for you, you could increase your income considerably.

What barriers to entry are there?

There are very few barriers to entry for a handyman business. Your biggest challenges will be:

• Standing out from the competition. You will need to market your expertise.
• You need to have excellent handyman skills.

Step 2: Hone Your Idea

Now that you know what is involved in starting a handyman business, you need to hone your idea in order to be able to enter a new market with tough competition.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research handyman businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a handyman who can also do electrical work or plumbing. 

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Determine your products or services

Make a list of all the skills that you have and turn that into a comprehensive list of all the services you can provide. If you are a licensed electrician or plumber, you can use that in your marketing and charge higher prices for those services. Be sure to list all of your services on your website. If there are any gaps in your skills, start to fill those gaps by learning new skills. The more you can do, the more business you can get.

How much should you charge for handyman services?

When you are just starting out, you may have to charge a lower-than-average price until you have a track record. You should probably start out charging $50 an hour and increase that as you build a reputation. Research other handyman services in your area to determine prices in your local market.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be mainly homeowners, but you can market to businesses as well. One way to reach homeowners is to market to real estate agents so that they can refer you to their home buyers and sellers. You can also search sites like Facebook, Instagram and LinkedIn. 

After you get started, word-of-mouth referrals will be your biggest source of business.

Where? Choose your business premises

In the early stages of your business development, you can operate your business from home to help you keep your overhead expenses in check.

However, as your business grows and operations intensify, you may hire workers for various job roles and rent out an office. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “handyman”, boosts SEO
• Name should allow for expansion, for ex: “Ace Handyman Services” over “Plumbing Handyman Services”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A brief summary outlining the essential elements of your handyman business, including its mission, goals, and key achievements.
• Business Overview: A concise description of your handyman business, including its mission, vision, and the problems it aims to solve in the market.
• Product and Services: Clearly define the specific handyman services you offer, detailing the range of tasks you can handle for your clients.
• Market Analysis: An examination of the target market for your handyman services, identifying potential customers, market trends, and demand factors.
• Competitive Analysis: A study of other handyman businesses in your area, highlighting their strengths and weaknesses to identify your competitive edge.
• Sales and Marketing: Outline your strategies for promoting and selling your handyman services, including advertising, online presence, and customer acquisition.
• Management Team: Introduce key members of your handyman business, detailing their roles, responsibilities, and relevant experience.
• Operations Plan: Describe how your handyman business will operate on a day-to-day basis, covering tasks, scheduling, equipment, and any partnerships or subcontracting.
• Financial Plan: Provide a detailed projection of your handyman business’s financial outlook, including startup costs, revenue forecasts, and profit margins.
• Appendix: Include any additional information, such as detailed financial spreadsheets, contracts, or supporting documents that enhance your handyman business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to handyman work. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

There are different ways to structure a business, and each has some pros and cons. The legal structure you choose for your handyman business will impact your business registration requirements, how much you pay in taxes, and your personal liability.

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing your funds is your next step and there are plenty of ways you can raise the capital.

• Bank loans: This is the most common means entrepreneurs fund their businesses. However, getting approved will require you to have a very compelling business plan and credit history.
• SBA-guaranteed loans: If you get rejected by the bank, you can try to have the SBA as a guarantor. An SBA-guaranteed loan can help get that elusive bank approval.
• Government grants: There are plenty of government financial assistance programs that you can explore and apply for. Just head on to Grants.gov to see which one you’re eligible for.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a handyman business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

To start a new business, you will have to obtain a number of licenses and permits from the local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting a handyman business include doing business as (DBA), trademarks, copyrights, patents, and other intellectual properties (IPs), as well as industry-specific licenses and permits if required.

You may need licenses to do various types of work such as electrical and plumbing. Check with your state and local government for requirements. Getting a contractor’s license, even if it is not required, would give you credibility with customers.

Additional permits may be required by your state to allow your handyman business to function legally, such as a general business permit and basic business license. The license requirements and how to obtain them may vary from state to state. You should check your state’s official site or contact the appropriate person to inquire about licenses and permits that you need to run a handyman business.

Your city, town, or county may also have legal and compliance requirements for a handyman business, such as sign permit, fire department permit, building and home occupation permit, and planning and zoning permit. You should speak to the designated representative of your local government and inquire about the licensing requirement for your business.

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your handyman business’s finances separate from your own personal account makes it easy to track how your company is doing and keeps things simple when it comes to filing taxes and a profit and loss statement when the time comes, so it’s worth doing even if you’re running your business as a sole proprietorship.

Opening a business bank account is not very difficult and is similar to opening a personal one. Most major banks will offer business account options, so you can inquire at the local banks to understand the different rates and features.

It’s important to look at a few options since they can vary quite a bit in what they offer, and you will want to get the best rate. Once you decide on the right bank, you just need to bring your EIN (or Social Security Number if you decide on a sole proprietorship), and your articles of incorporation or other legal documentation showing that your business is registered.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked but is vital to your success as an entrepreneur. Insurance protects you from those unexpected events that can have a devastating effect on your life and business.

Here are some of the different types of insurance to think about and consider whether it is right for you and your business:

• General liability: This is the most important type of insurance that acts as a catch-all for many things that should be covered. If you’re only going to get one kind of insurance, this is it! It protects you against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies as part of your shaved ice business.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing your equipment that has broken down due to mechanical issues.
• Worker’s compensation: Provides compensation to employees who are injured on the worksite.
• Property: Covers your physical space, whether it is a cart, food truck, or storefront.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects you against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As you approach your opening day, there are a few ways to get prepared for the launch! These are some of the last steps to take to ensure you are ready to get started.

Essential software and tools

Being an entrepreneur can mean taking on a lot of different roles and functions, from marketing to accounting. It can get overwhelming and difficult to manage so many diverse activities! Luckily there are a lot of excellent software programs and tools to help you with specific business tasks. 

You may want to use tools like Jobber, Housecall Pro, and WorkWave to manage your schedule and customers, receive payments and issue invoices, and more.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

For your handyman business, the marketing strategy should focus on showcasing your versatility, reliability, and the quality of your work. Emphasize the range of services you offer, your quick response times, and your commitment to customer satisfaction. Highlight any specialties you have, like carpentry, electrical, or plumbing work. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

• Professional Branding: Your branding should convey trustworthiness and skill. This includes your logo, business cards, uniforms, and vehicle signage.
• Direct Outreach: Network with local homeowners’ associations, real estate agents, and property management companies. Offering your services for small fixes can lead to larger projects and word-of-mouth referrals.

Digital Presence and Online Marketing

• Professional Website and SEO: Develop a website that outlines your services, showcases testimonials, and displays before-and-after photos of your projects. Optimize your website for local SEO to rank for searches related to handyman services, home repairs, and emergency maintenance.
• Social Media Engagement: Utilize platforms like Facebook and Instagram to post about completed projects, share DIY tips, and engage with the local community.

Content Marketing and Engagement

• Home Improvement Blog: Share informative articles about common home repairs, DIY advice, and home maintenance tips.
• Email Newsletters: Send out newsletters with seasonal maintenance tips, special offers, and updates on your services.
• Video Tutorials: Create how-to videos or demonstrations of small repair jobs, showcasing your expertise.

Experiential and In-Person Engagements

• Local Workshops: Conduct DIY workshops or seminars at local community centers or hardware stores to engage with potential clients and demonstrate your knowledge.
• Community Events Participation: Attend community events, fairs, and local markets to increase your visibility and connect with potential customers.

Collaborations and Community

• Collaborations with Local Businesses: Partner with local suppliers, home improvement stores, or real estate agents to offer exclusive services or promotions.
• Community Service Projects: Volunteer for local community service projects, which can provide exposure and build goodwill.

Customer Relationship and Loyalty Programs

• Referral Programs: Implement a referral program that rewards customers for referring new clients to your business.
• Loyalty Discounts: Offer discounts or special rates to repeat customers to encourage ongoing business relationships.

Promotions and Advertising

• Targeted Local Advertising: Use local advertising in community newspapers, radio, and online platforms to reach homeowners in your area.
• Direct Mail Campaigns: Send postcards or flyers to neighborhoods in your service area, especially offering seasonal maintenance and repair services.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your handyman services meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your handyman business could be: 

• Electrical, plumbing, and more! Your do-it-all handyman
• On-call 24/7 to fix whatever needs fixing 
• Discounted rates for large residential units 

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a handyman business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working as a handyman for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in handyman work. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business. 

Step 12: Build Your Team

You may not need to hire any employees if you are starting out small from a home-based office. However, as your business grows, you may need to recruit full-time employees for various job roles, such as:

• General Manager 
• Handymen 
• Customer Service Rep 
• Marketing Lead

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Handyman Business – Start Making Money!

You’ve now got all the knowledge you need to start your handyman business. It’s time to get out there and start fixing your way to a bright entrepreneurial future. You’ll not only have the freedom to work at your own pace, but you’ll also be able to earn a tidy income.

As homeowners become more confident in spending for house repairs and maintenance, you can expect bigger demand for handyman services. So brush up on your networking skills and find your first customer. If you do this right, you’ll soon be able to scale your business and enjoy a profitable career!