So you’ve already got a truck, and an uncanny ability to fix just about anything.
I’m guessing that you’re here reading this because you’re wondering how realistic it is to start your own handyman business…
Am I right?
Well, before you get ahead of yourself, load up your tool box, and throw an ad up on Craigslist for your new handyman services…
I’ve got a seven step quick-start checklist that is going to cover everything you should really think about when starting a handyman business in 2021.
My name is Ippei, and online business is my thing.
I’m a master at all things lead generation and entrepreneurship, and in this article, I’m going to break down everything from the startup costs involved in this business model…
To the realistic profit potential.
Plus, the one thing you should really know before starting your handyman business.
Let’s get to work:
How to Start a Handyman Business in 2021
Ready to Start Your Handyman Business in 2021? Here's What it Takes to Get Started:
If you’ve got the skills and the drive (literally because you’ll need a truck!), then starting a handyman business can be very profitable. To get started, you will need to establish a legal business entity, understand your local licensing requirements and regulations, and develop a strong marketing strategy.
Start Up Costs
While this list is not a comprehensive compilation of everything you need to start a handyman business, it provides a snapshot of what you need to add into your business plan.
Annual Revenue of Established Handyman Business
According to Business Insurance USA, the average annual revenue of this kind of business is: $43,000
Profit Margins of Established Handyman Business
According to this website, the average Profit margin of this kind of business is: 10-15%
7 Step Quick Start Checklist:
1. Write a Business Plan
Alright, I’m going to take an educated guess here and say that if you are contemplating starting your own handyman business…
You’re probably the type of person who likes to get down to business and get their hands dirty.
Which is great!
And if you’re planning to run a successful handyman business, that mentality will definitely play a huge role.
But running a thriving and financially successful handyman business is about more than just your ability to tackle physical labor and solve problems.
You need a structure and direction for your business’s growth before you can jump headfirst into things.
Which is where writing a business plan is going to come into play.
When you’re talking about starting a small contracting and handyman business, chances are, you won’t be seeking large investors or extensive small business loans.
In fact, you might already have the work truck and most of the basic tools necessary to get started.
However, just because you have the practical application side of things handled, that doesn’t mean that you don’t need a business plan.
Business plans aren’t just for people looking for fancy suit and tie types to invest in their business model to get it off the ground.
They can be an incredibly practical tool for business growth.
And when everyone and their mother has a (well intentioned) opinion on the direction you should take your business, or how you should be running things…
Your business plan will remind you of your goals, and why you are doing things the way that you are.
So what do you need for a basic business plan?
Here is a simple outline that will help get you started:
Basic Things to Include in a Business Plan:
The main key is to keep things simple, clear, and actionable.
Focus on getting down the systems that will help your business run smoothly behind the scenes, like:
As well as setting both short term and long term financial projections for your handyman business.
Such as:
Remember that your business plan exists to serve you, and no one else.
Write it in a way that will be genuinely helpful for how you want to run your business…
And don’t worry too much about making it a “formal” business plan!
2. Get Your Business Legal
After you’ve gotten your business plan square away, there is still quite a bit of due diligence work left to tackle before you can hop in your truck and start working.
One of the most important things to remember when you decide to become a small business owner…
Is that you are now responsible for becoming legally compliant per your state’s tax regulations and licensing requirements.
We’ll get to licensing and industry specific regulations in just a moment.
But first, let’s start with the basics.
If you are going to run a business that brings in more than a couple thousand dollars a year, (and I certainly hope that you are!)...
Then you are going to need to set up a legal business entity structure for your company.
By default, your business will be classified as a Sole Proprietorship.
But unfortunately, this classification offers very little for you as the business owner in regards to personal legal protection.
And since you are going to be working with many different types of clients and servicing their homes…
You need to take the route of hoping for the best, but planning for the worst.
Which means that you need to set up a Limited Liability Corporation for your handyman business, so that if anyone decides to sue you…
They can only sue your business.
You and your personal assets will be safe.
Once you have applied for your LLC, you can register for your EIN number.
An EIN number will be important, because it operates like a social security number for your business…
And enables you to do everything from filing your taxes at the end of the year, to opening a business bank account, and eventually even hiring employees.
The process is extremely simple, and can be completed online via the IRS’s website.
Plus, it’s free!
(And when you’re going into business for yourself, there’s nothing more exciting than “free” when it comes to initial startup costs, am I right?)
You will also need to open a business bank account for your handyman business.
While you can get by for a little while with your personal checking account…
I don’t recommend this.
Things get really messy really quickly when you start mixing personal finances with business finances.
And I can assure you that you will save yourself hours of your time and a massive migraine if you just open that business account now…
Rather than having to unravel the tangled web of transactions during tax season.
Lastly, don’t forget to purchase insurance!
There is no end to the potential situations you may encounter as a handyman…
And you need to be prepared and protected for whatever might come.
Whether it’s equipment stolen out of your truck, a client that decides to sue, or an injury on the job…
Insurance is a must have for any handyman business!
3. Understand Licensing and Regulations
It’s time to talk about licensing and regulations.
If you take away one thing from this article about starting your own handyman business…
I hope that it’s this:
Before you bid a single job, you have to be aware and knowledgeable about the specific licensing requirements and regulations in your state.
This is crucial because if you fail to do your research, you could be bidding jobs that you aren’t even legally allowed to take on.
For one thing, jobs of a certain size can only be completed if you have a General Contractor’s license.
But even beyond that, even if you don’t need an overarching GC license to complete the work…
You may be required to have a license specific to that trade before you can legally quote or complete certain types of work.
For Example:
If you are wanting to offer electrical or plumbing services to your customers, you are legally required to have an electrical and plumbing license to touch the electrical or plumbing in someone’s home.
While there are grey areas when it comes to certain jobs and types of work…
The general rule of thumb is that in most states, tackling a job that is $1,000 or less won’t require a General Contractor’s license.
Fortunately, while $1,000 might not sound like a lot of money to be working with…
It actually leaves the door wide open to the majority of work that most people will need done around their house.
And surprisingly enough, you can easily make a sizable salary off of these basic jobs without ever touching a General Contractor’s scale of work.
Another thing to keep in mind is that if you are doing handyman work without a General Contractor’s license…
Keep the word “contractor” far away from any and all of your marketing, advertising, and general business and client communication.
Only use the language and terminology that you are a handyman, even if you happen to specialize in certain fields.
Using the word “contractor” can easily raise red flags to your local industry authorities, even if you are working within the bounds of your legal requirements for your trade!
What is important is that you do your own due diligence work to research and understand the laws that apply to your region and your line of work.
A great place to start looking for this information can be as simple as typing some key phrases into Google, such as:
And if you want to go straight to the source, contact your state’s Contractor Board for more detailed information.
Usually you can find the necessary information directly on their website, but if you can’t find what you’re looking for…
Call up your local contractor’s board and speak directly with an investigator.
These are the people who will be on your back writing up fines if you step out of bounds…
So by starting your business in communication with them, rather than just trying to avoid them, you will be on the right track to avoid complications down the road.
4. Define Your List of Services and Ideal Customer
It’s easy to get overwhelmed by buying into the mentality that you need to offer every kind of service as a handyman from day one.
But this isn’t true!
The important thing is to start with where you are at.
Your list of services should be based on the skills you already possess, and the legal regulations for your state.
You can always add to your list of services later, but it’s better to start small and specialize in what already you know that you excel at!
Another important thing to consider when building your list of services is who your ideal client will be.
Catering to everyone isn’t necessarily the way to go.
Just because you are a general handyman, doesn’t mean that you have to work for anyone and everyone, filling every imaginable need a customer might have.
In fact, it’s actually better to specialize and pursue a specific kind of client, rather than trying to please everyone.
All this does is put strain on you as the business owner to offer services beyond your capacity and skill…
And it can potentially hurt your business’s reputation if you take on jobs that you weren’t equipped to handle and your client leaves a bad review as a result.
Plus, if you don’t set clear goals regarding your list of services and ideal client base…
You will end up being pressured to lower your prices or your hourly rate by customers that don’t value the work that you do.
Yes, you have a responsibility to serve your customers with excellence, and solve their problems.
But not everyone is your customer, and that is ok.
Over time you will learn to spot the red flags, and learn which jobs will be a good fit and which ones aren’t.
5. Pricing and Estimating Jobs
Pricing your services should be based on what is mutually beneficial for both the client and you!
It’s easy to get so concerned with what the client wants or expects out of a price, that you neglect to adequately consider what you need out of a certain job.
When pricing your handyman services, think carefully about how much work is going to go into the project.
Including things like:
Always build in more time than you think a job will take.
It’s better to under promise and over deliver, rather than setting unrealistic expectations for yourself and the client in hopes of impressing them or closing a sale.
This will only result in frustration for both parties!
Plus, if you underestimate the time involved to complete a job…
You’re probably under bidding it as well.
Which means that you’re going to be losing money…
And potentially even affecting the profitability of other jobs that you have scheduled.
Because if your current project is dragging on past the estimated finishing timeline…
Then the jobs that were scheduled next are going to have to shift.
Which may result in you even losing the job completely, and at the very least it will cause frustration with the customer and a loss of profit for you.
One thing to consider is that pricing your services based on an hourly rate isn’t always the best way to go!
In fact, there is typically more money to be made by quoting a flat rate for specific services than by charging by the hour.
For Example:
Installing a new light fixture might only take you an hour or two, but the value of that task is probably worth much more than an hourly rate will provide. In this case, charging a set rate for installing new lighting will increase your profit potential, and also provide the customer with a guaranteed and solidified price tag before they agree to hire you. Which is a win-win for everyone!
Another way to value your own time and skills is to charge a set rate for job quotes.
While offering free quotes and job estimates might seem like a great way to get customers…
It can also cause problems.
I say this because offering a free quote often attracts a customer that is already concerned with the price of solving their problem.
Which means that they’re looking for a cheap solution.
So if they don’t like your price after you’ve given them the free quote and they choose not to hire you for the job…
You’ve wasted your valuable time by driving out to their home and inspecting whatever the issue is!
For this reason, I recommend charging a set fee for quoting a job.
This will cover the time you spent driving to the potential customer’s home, as well as the time you spent on site putting together the quote and evaluating the work that needs to be done.
If you are really set on offering a “free” quote, consider deducting your job estimate fee from the total cost of the job if they decide to hire you.
Then they are already invested in the idea of hiring you for the job, because they know that they will get the cost of the estimate back in the end.
6. Marketing Your Services
So you’ve tackled all the legalities, regulations, and basic structures of your handyman business…
But now you need to actually get customers!
This is an age old problem for business owners everywhere…
So take comfort in knowing that you are not alone.
Eventually, word of mouth referrals can become one of the best ways to get new leads for your handyman business…
But until you reach that point down the road, you need a reliable system for generating new leads for your business.
Fortunately, you are actually already in the perfect place for that!
Because we specialize in helping small businesses generate a steady stream of new leads on auto-pilot.
That’s right, you don’t even have to lift a finger once everything is set up!
So if you’re interested in learning more about how we can help your business with sustainable lead generation, click here for more information: https://ippei.com/best
There are a variety of ways to get started in marketing your new handyman services to the world, however:
Craigslist is an “oldie but a goodie” when it comes to handyman work.
Unfortunately, a lot of the listings on there are from untrustworthy sources…
So it tends to have a sketchy reputation.
However, on the flip side of this, by offering quality work as a legitimate business…
You can stand out from the crowd on platforms like Craigslist and even Facebook Marketplace.
One of the best ways to legitimize your business on these platforms is by creating a website.
If you list your website in your Craigslist ads, and people can click over to it and see that you are a professional business with great reviews…
They will be much more likely to trust you and therefore hire you!
Building a website doesn’t have to be complicated either.
So many handyman businesses never take this step…
But you will set yourself apart and establish yourself as a cut above the rest of your competition by simply building out a professional and user friendly website for your business.
If you don’t want to hire a graphic designer to do this for you, don’t worry!
There are plenty of user-friendly template based website builders out there that make building a website simple and easy for almost anyone to do.
Some of my favorites are:
Another practical and easy way to help get your business out there is to create a Google My Business page.
When someone searches in Google for handyman services in your area, if your business has a GMB page, it will be listed in the localized Google Maps search results.
The more info you have linked to your GMB page, the better.
So be sure to include things like your address, phone number, website, and reviews!
If you're still struggling to attract new leads to your business on a consistent basis...
Check out our course on local lead generation for small businesses here!
All of these things will help your business to rank higher in Google, therefore helping more and more potential customers to find your services!
And finally, don’t neglect the marketing potential and power of social media!
More than ever, people turn to social media to find solutions to their problems.
Whether someone wants to know which brand of vacuum their friends and family recommend…
Or who their friends hired to fix their plumbing problems…
Social media can be one of the easiest and best ways to get your name out there.
And you don’t have to be on every social platform out there!
Pick 2-3 that you can commit to being active on, and utilize those.
7. Staying Organized
Just because you are great at your specific trade or skill set…
Doesn’t mean you are going to excel as a business owner.
Being an entrepreneur and the owner of a small business is about so much more than just being good at the services you offer to your customers.
You need to be prepared for all the other aspects of running a successful business as well.
If you aren’t naturally an organized or detail oriented person…
Don’t expect that to magically change when you start your business.
Know your strengths and your weaknesses, and run your business accordingly.
If you know yourself and your own limitations, then you will be better prepared to set yourself up for success.
Staying organized in your handyman business is going to be so important.
There are going to contracts and invoices piling up on your desk (or in your inbox), and a never ending list of transactions to keep track of.
At the very least, invest in bookkeeping software from day one!
And if you know that the whole bookkeeping and accounting thing isn’t for you…
Just take the plunge and hire someone to do this work for you.
It’ll be much easier to spend the money now than it will be to untangle the mess later.
And your end of the year tax accountant will be eternally grateful!
Pros and Cons
of starting a handyman business
Pros
For many aspiring entrepreneurs, one of the greatest draws to launching a business is the freedom to set your own schedule. There’s no boss to dictate your day, or look over your shoulder… You are in control of your time. This can be both freeing, and stressful. But for most small business owners, it is one of the most gratifying aspects of being self employed.
As a handyman, you will have the ability to monetize the existing skills that you have. Most likely, this is a large reason you may be considering this business model. If you’re already known as the guy who can fix just about anything… Why not make some money off of it?
Because there is the potential to start this business at home, you have the luxury of growing at your own pace. When you're ready to expand to online sales or a physical storefront, you can! You can even franchise your brand and expand across the world. The sky's the limit, but you can start as small as you'd like.
Most likely, you’ll start out as a one man operation. Probably just you and your truck. But if you have bigger aspirations… You don’t have to stop here. There is a large potential to grow and scale your handyman operation as large as you want it to be!
Cons
Without customers, you don’t have a business. And as a handyman, you will need to work hard to acquire those customers. Having strong marketing for your handyman business is a must. Simply driving a truck with your business name and phone number on it won’t be enough.
One of the biggest things that can hurt your success in the beginning is improperly estimating jobs. Whether you are concerned about being turned away based on your rates, or you simply miscalculate the amount of hours necessary to complete a job… Improper job costing can make or break your handyman business.
Just because you have a certain skill, doesn’t mean you can start advertising it to the world. Certain trades, such as electrical and plumbing, require specific licensing and are heavily regulated. Be careful to comply with all rules and regulations of your state and local authorities before performing such services for customers.
If you have any visions of earning steady passive income from your landscaping business… I encourage you to lay those aside. Your income as a landscaping company will be directly linked to your hours. While owning your own landscaping business can eventually lead to consistent passive income, that is a long way down the road.
Starting a Handyman Business Can Be Profitable, If You Know This First:
Here’s the deal:
Is it possible to make bank as a handyman?
Yes.
But it all comes down to one thing…
Your ability to generate a steady stream of new customers.
And word of mouth simply isn’t enough.
Especially not for your first couple of years.
You can pour your money into Facebook ads if you want to.
And your Google My Business page is probably a good start…
But ultimately, these things are not enough to turn your handyman side hustle into a thriving business that can feed your family.
What you really need is a strong lead generation strategy, and fortunately…
You’re in the right place.
When I quit my traditional 9-5 job in search of something more, I dabbled in all different kinds of online business models.
I’ve done everything from affiliate marketing to drop shipping, but the thing that changed everything for me was local lead generation.
You see, online lead generation relies on the incredible localization capabilities of Google, alongside targeted SEO strategies to produce a sustainable stream of new leads for small businesses.
Once the initial due diligence has been done, your lead generation system does all the heavy lifting for you…
So you can go back to serving your customers with excellence, rather than fussing over your marketing constantly.
And the best part?
Anyone can learn how to do this.
If you want to learn more about how we can help you get started with local lead generation for your business, click here for more info.
