January 27, 2023 | Last Updated on: January 27, 2023
Today’s homeowners and business owners are turning to handyman services in ever-increasing numbers.
If you are skilled at making repairs as well as doing other work such as painting, drywall, carpentry, and more, starting a handyman industry could be a wonderful opportunity for you to establish a profitable company. However, launching a company of any kind requires a substantial investment of time and effort.
The important thing is to make sure that you have all of the necessary knowledge before you begin doing anything. This will help you avoid making mistakes that are very common. This detailed manual walks you through each step of starting a profitable business from scratch and building it into a successful small business. We’ll cover the following in this article:
A foolproof handyman business plan can assist you in establishing a strong foundation for the success of your business and is the first step in the process of starting a handyman service business.
You need to get started with the planning process by making a prioritized list of the handyman services your residential customers will require from you. A successful handyman business can offer a variety of services, such as interior and exterior handyman services, to attract and retain customers.
The services provided by an interior handyman include the assembly of furniture, painting and staining surfaces, maintaining and repairing drywall, performing minor plumbing and electrical work, performing minor carpentry, installing window coverings, winterizing the interior, and tiling.
Exterior handyman services include cleaning the gutters, using pressure washing equipment, washing the windows, installing and repairing screens, applying exterior paint and stain, performing general yard maintenance, and repairing fences and gates.
You should also be prepared to take on loose-end jobs that crop up at worksites from time to time that customers need to have done. Being versatile and ready to solve any problem can set you apart from other handymen who may have more narrow skill sets.
Also, consider what sort of operation you are planning to run. Will you be leading a team of individuals who are working with you? Or will you be the only employee at your company operating as an individual handyman? What are your goals for the business? Do you want to specialize in some sort of appliance repair overtime (this is often a lucrative next step for general handymen to take)? These are all things to consider.
After you have decided on the handyman services, the next step is to choose a name for your business, determine your target market, and identify your competitors.
Getting your own handyman business off the ground takes more than just setting up the business fundamentals and offering handyman job services. You need to conduct research and settle on the pricing for your handyman service.
Your pricing strategy for your handyman service will play a significant role in determining how successful your handyman service business can be and will help you stand out from the competition. You need to determine the pricing for your handyman services based on the specific market that you serve.
In order to finalize the pricing for the overall handy service, it is important to check the prices offered by competitors, the average standards of the industry, expenses, and other marketing offers.
Hourly rate and fixed price are the two primary pricing models that are utilized in the various service-oriented business sectors. You need to conduct a market and profit margin analysis for your company, taking into account different pricing scenarios and selecting the pricing model that is most appropriate for your business.
Some jobs may make more sense to do at an hourly rate, whereas others may make more sense to do at a fixed rate. You can have variability in your pricing model and offer flat rates for some jobs (typically smaller jobs) and an hourly rate for other jobs (typically larger jobs).
When you use an hourly pricing model for larger, multi-day jobs, you should also have a plan for giving quotes and estimates. While estimates can change as a project progresses, you will want to make sure you don’t end up charging too far beyond your original estimate. So, you will want to become proficient and estimating the time commitment of tasks.
After you have completed the preliminary planning, it is time to move on to the execution phase and begin the process of registering your business. Find a good business name and register it. You are required to acquire business general liability insurance and register your handyman business.
When you are submitting your application for business registration, you will need to choose the category under which you want your new business to be registered.
Because it is the most straightforward method of managing business operations, many businesses that provide handyman services opt to begin as partnerships or sole proprietorships when they first get started.
There is also the option of beginning as an independent handyman contractor, which does not require you to have partners or employees. After becoming registered, all that is left to do to begin providing services to paying customers is to obtain the necessary licenses for your business.
In order to obtain the necessary business license and certificates to operate a handyman business, you will need to comply with a variety of laws, which will vary depending on the location of your operations.
Before you apply for the handyman’s license and certificates, you need to make sure you have the necessary paperwork in order. You will not be able to legally offer your services unless you first fulfill the requirements set forth by the governing authorities in your area.
Many states have dollar amount limits on the value of jobs that handymen can perform without having a license. At a certain dollar amount, your state may classify you as a contractor as opposed to a handyman. At this point, some states will require you to obtain a license and register with the state.
Also, investigate the various licensing requirements that may be required for particular jobs, as there are a few specialized small jobs that may also call for licenses and permits. For example, doing plumbing, HVAC, refrigeration, and electrical work may all call for licenses depending on the state and the extent of the work.
Operating a business without having obtained the necessary licenses and certificates can get you into legal trouble, which can be detrimental to the image of your company and reduce the impact you have on your industry.
You should limit the scope of your services to what is permitted by your contractor’s license and permits in order to maintain a professional appearance for your company, as well as to comply with the legal requirements of the various states in which you do business.
After you have laid the groundwork for beginning the operations of your handyman business, it is time to raise awareness among your target demographic regarding the services that you offer. But how to decide your target audience?
It is necessary for you to develop a detailed buyer persona for your ideal audience so that you can better understand their needs, objectives, and requirements.
Once you have created an ideal buyer persona for your target audience, you need to thoroughly investigate their issues and strategically position the solutions that your handyman service provides.
The customer profile can serve as the foundation and guiding principle for your future marketing efforts. It can also assist you in determining the feelings and responses that you want to elicit from your ideal audience in the hopes that they will become your leads and potential customers.
For example, are you serving a wealthier community with clients that have large homes? The type of work that they require will likely be different from lower-income communities. Based on the local price levels and the income levels of your clients, you may be able to charge them more on an hourly basis. At the same time, though, the quality of the work you provide will likely have to be higher since you will be working in state-of-the-art, expensive homes. So, these are all things to consider and balance.
The most important aspect of your new business venture is definitely the marketing of your handyman business. In order to keep the cash flow consistent in your business, you need to conduct research on your ideal customers and get the marketing operations off the ground.
To begin, you will need to calculate the startup costs and then base the development of your marketing strategy on the available marketing funds.
Your marketing plan ought to center on the provision of value to your clientele as well as the demonstration of your credibility and authority in order to entice prospective clients to purchase from your company.
Your traditional method of marketing a handyman business can be strengthened by the creation of referral programs, business cards, flyers, and personalized postcards, among other marketing materials.
Many businesses that provide handyman services rely solely on conventional offline marketing, and as a result, they are unable to attract customers in this day and age due to the prevalence of the internet.
In order to realize the objectives you have set for your professional handyman business, you will need to demonstrate flexibility in the face of change and make the transition to digital marketing platforms, such as social media.
Remember, in service-oriented businesses, word of mouth is critical. Consider offering discounts to customers who give you a successful referral, and make sure to cultivate long-term relationships with clients. Handyman work is not a one-and-done thing – you can provide different services (or even the same services) for the same clients for years on end.
This next section will depend on how large of an operation you plan to run and how large of an operation you think your local community can actually support in terms of the amount of work available for you and your team.
If you are not operating a single-man handyman operation and instead plan to have a team, you should provide customer relations and support guidelines and training for each member of your team so that they are able to handle and respond to a variety of client inquiries while onsite. That way, the customer experience is always top-notch.
As previously noted, you will also need to develop a system for providing professional cost estimates and requesting a certain percentage payment in advance for larger jobs. Try to learn what competitors are doing in the local area and see what is working for them.
You will also need to have a contract for customers to sign. Consider having a lawyer develop a professional standard contract for your business that can be used across jobs over and over again. This will help protect you and limit your liabilities.
Having a working knowledge of the nuts and bolts of running a handyman service business can help you get a head start and protect you from making mistakes and experiencing problems in the future.
Before beginning a handyman business, it is important to establish a business bank account so that you can effectively manage the cash flow of the business and ensure its continued success. When you are the owner of a small business, it can be extremely stressful to manage cash transactions and the flow of capital through your company.
You should open a proper bank account so that you can more easily obtain approvals for various registrations and licenses, conduct business with your customers and suppliers in a professional manner, and maintain accurate records of your profits, expenses, and other aspects of your financial situation.
With the assistance of a bank account, you will have an easier time managing the salaries of your employees and keeping track of your overall financial balance.
You need to look into getting small business insurance that will assist you in the management of worker’s compensation claims, client damage covers, business risk covers, and other types of liabilities.
Even though you go to the homes of your customers to fix things like squeaky doors or AC vents, you still need to get insurance for your handyman business. You can apply for various types of coverage, including insurance for your vehicle, your business, or your employees, depending on the requirements of the service industry in your work.
Most clients will ask you if you are insured and bonded before letting you work on their home. Many states have requirements surrounding the insurance that handymen, contractors, etc., must have.
Being insured and bonded helps protect both you and your clients from accidents that might happen on the worksite.
Small businesses, such as those in the handyman industry, have access to a variety of loan options through the Small Business Administration (SBA). The SBA acts as a guarantor for your loan and connects you to lenders who are working with it to provide financing options.
The SBA loan application process is lengthy and requires a lot of attention to detail, so it takes some time. The process entails the review of a substantial amount of documentation, in addition to your company’s and your personal credit histories.
To be eligible for a loan through this establishment, you will need to obtain approval from both the lender and the SBA.
SBA loans are often a great option for borrowers because they come with low interest rates, long repayment terms, and lenders view them as less risky because of the government backing.
You can also get financial assistance from lenders in the form of business lines of credit. Lines of credit are a set amount of funds that you can borrow at any time, typically at a variable interest rate. Once you repay the loan, you can then draw off the line of credit again. You are only responsible for paying interest on the amount of money you have actually borrowed.
Because they typically have variable interest rates and are not designed for long-term borrowing, they are typically best reserved for shoring up cash flow in a time of need or using them as interim financing while you find a term loan or other long-term solution.
It’s almost always a good idea to have a line of credit open as a business because it enables you to have access to cash quickly in a time of need without having to apply for a loan or go through an application process.
Equipment financing is another type of business loan that small business owners might want to take into consideration. With this type of loan, you provide a lender with a quote for a piece of equipment that you want to finance, and if you get approved, the lender will give you the money to buy it.
This can be of tremendous assistance to handyman businesses, which typically require a wide variety of tools in addition to other kinds of equipment in order to complete their work.
Individuals who do not have perfect credit may find it easier to gain access to equipment financing because the loan is “self-secured,” which means that the asset you are financing serves as security for the financing. This makes it possible for individuals who do not have perfect credit to obtain financing.
The initial investment required to launch a handyman business can range anywhere from $2,300 to $5,900. The biggest investments are going to go toward getting tools and a website, and potentially some limited marketing. Purchasing previously owned tools or developing one’s own website are viable options for cost reduction.
If you charge the consumer for the materials used in the service you are providing, the cost of providing the service will be reduced to a negligible amount. You should aim to earn an average of approximately $50 per hour, and if you keep your expenses low, you should have a profit margin of roughly 90%.
You may labor 15 hours per week over the first year or two of your business, which would result in an annual revenue of $39,000 and a profit of around $35,000 for you.
It is possible that you will reach 40 hours of work per week and be able to charge $65 per hour as your business becomes more well-known and you begin to get recommendations and returning clients.
You would bring in an annual income of $135,000 and create a profit of around $122,000 from it. Your revenue has the potential to improve significantly if you are finally successful in growing your company to the point where you can employ more handymen to assist you.
Again, pricing definitely depends on the market you are in, and you may be able to charge more than the wage listed here based on competition, etc.
If you are a handy person with a great deal of skill for fixing and repairing things and you are looking for a profession that will enable you to be your own boss, then establishing a handyman service provider might be the ideal choice for you. Like all businesses, you should make sure that you are passionate about and enjoy whatever it is you are trying to do. This will make it much easier for you to put in the hours necessary to make your business a success in the long run.
What’s unique about the handyman business is that the size and scale of your business can be almost whatever you want it to be. There are many handymen who appreciate working alone and want to maintain their business in their immediate area. In such a case, you can run a single-man operation. But there are many handymen who enjoy working with a partner and growing their business over time. If this is your goal, you can focus on expanding your offerings and getting into new lines of work, such as HVAC repair, electrical work, etc.
Indeed, in some cases, starting as a handyman can become a good path toward becoming a general contractor. Your handyman company has the potential to see tremendous expansion provided you have the appropriate expertise, staff, and abilities.
If you already have a significant amount of expertise in the sector, launching your own handyman franchise might be a lucrative option for you when it comes to launching a handyman company.
Biz2Credit is a leading supporter of small businesses and their owners across the nation. As part of our commitment to serving local small business communities, we run the Biz2Credit Blog, where readers can get all the latest news and information on trends, policies, and more that are impacting small businesses. So, please continue to check back here for all the latest content and articles we have to offer!
March 20, 2023
