Start free trial
Start free trial

How to Start a Handyman Business

How to Start a Handyman Business

function authorName(){var last=lastName||last_name;var first=firstName||first_name||'Housecall Pro Contributer';var authorTitle=title&&", "+title;var authorName=last?first+" "+last:""+first;return authorTitle?""+authorName+authorTitle:authorName;}

Posted by Brad Smith

February 24, 2020

A handyman business can be lucrative on its own or be a pathway to bigger enterprises. It can be the perfect fit for a skilled professional that is tired of working for other people and ready to strike out on their own.

To help you out on your journey, we’ve created this guide which is filled with curated advice from successful business owners and industry experts about the ins and outs of the market. We’ve also pulled the steps together you’ll need to take to get started into a printable check-off list.

I. Handyman Business Start Up Costs and Accounting Practices

The tools you’ll need on the job are not the only start up costs you should consider. Don’t forget to calculate in your overhead expenses, like the cost of a website and other software, your gas, accounting fees, etc. You’ll also want to keep in mind what kind of salary you’ll need to cover your personal expenses. 

Steps

  1. Assess tool and equipment inventory

  2. Add up your business expenses

  3. Assess your personal expenses not covered by other income or savings

  4. Estimate your initial monthly revenue

  5. Calculate your

    break-even point

  6. Figure out your

    business credit score

  7. Compare financial options for your startup costs

  8. Write a business plan

Bootstrapping Versus External Funding

Jeremy Winnie started

JW Handyman Services and Home Renovations

with little savings and only a set of hand tools. He didn’t take out any loans or look for other external funding. Instead, Jeremy built up his company as he went, buying new equipment with the revenue he made from past jobs.

This is the bootstrapping method — using one’s existing resources instead of asking for outside funding.

When Jeremy got started, his wife Katie was working as a vet technician full-time. After eight months, Katie quit her job and began working full-time for the handyman business, handling administrative tasks such as answering the phone and and scheduling jobs, and managing the books.

Two years later, the business has a team of six, is booked three months out and has increased their annual revenue 1395%.

While they’re now finding success, according to Katie, if they had to do it all over again, they would have taken out a small business loan to hit the ground running. “What we did is really hard to accomplish,” she explained.

If you’re considering bootstrapping versus taking out funding, consider the pros and cons of each strategy.

Bootstrapping MethodExternal Funding
Pro: No debt, less riskPro: Faster possible growth
Con: Slower growthCon: Debt, higher risk

The Pros of the Bootstrapping Method

The benefit of the bootstrapping method is pretty straightforward: you don’t have to worry about debt and interest rates. Without the debt, you can take your time learning the trade and how to do the best possible job, what equipment you’ll need, and wait to find the best prices. 

The Cons of the Bootstrapping Method

The downside is that you only add new customers and services when you have the equipment to sustain them. This means turning down work and probably needing other sources of income to sustain you as you save up.

The path to take really depends on your goals and needs. Is this business a side hustle or a primary means of income? Can you afford to grow slowly? What experience do you have running a business and assessing risk?

Calculating Overhead and Profit Markups Correctly

Something else to consider from day one is how to properly set up and manage your books. For instance, making sure you correctly label and separate your overhead and job-specific expenses. 

Calculating a consistent overhead expense can help you figure out what you need to charge per job

in addition

to the individual job costs in order to make a profit.

But it’s also important to match up how you’re calculating your overhead expenses for bids and estimates and accounting. In an episode of his podcast for

contractingcoach.com

, Tony Booth explains that when he works with clients, he dives into both to see what their current processes are.

He explains that two business’s profit margins might look very differently because they calculate expenses differently. While some businesses might consider mileage an overhead expense, others might say it’s part of the cost of a specific job. 

But, a problem he runs into is businesses placing something like mileage as both a job cost

and

an overhead expense, which means over-inflating your costs. 

Booth recommends sitting down with your accountant and making sure you know how they calculate your overhead costs. “You can sit down and print out your profit and loss statement and find out your bookkeeper is putting a lot of stuff in cost of goods that’s maybe overhead or at least not being the same as what your estimator is doing.”

Additional Resources from Our Blog

II. Legal Requirements

To run your own business, you’ll need to

register your business

on the federal, state and local levels, including registering for a tax ID. You’ll need this ID to open a business banking account and get insured. If you’re not sure how to register, you can work with a

registered agent

.

Steps

  1. Incorporate and register your business 

  2. Apply for a tax ID

  3. Open business bank account

  4. Apply for insurance and bonding

How to Stand Out

By its nature, the handyman market is not well regulated. As a catch-all market, it attracts individuals who want to make easy money or who are not qualified to do what they’re advertising or who don’t take the time to research what it takes to run a legal business (steps like incorporation and insurance). As Lui Gillermo, owner of

Mr. Handy New York

, explained, “There's a lot of sketchy and sneaky dudes out there that want your money.”

However, these issues also create an opportunity to stand out by being more professional than the next handyman. Here are some tips:

1. Be Properly Insured.

Talk to an insurance broker who has experience working with handyman or construction companies about what it will take to be properly insured. While you’re not advertising your insurance status, a problem with one client that you can’t afford to fix can be majorly detrimental toward building a positive brand.

2. Be Properly Licensed.

Licenses vary by state. Check out our

guide to handyman licenses

by state.

3. Know The Work You Can and Cannot Perform Legally.

The handyman industry has a tainted reputation for performing jobs they do not have the proper license for. This is a problem that can negatively impact both your own business and the market, in general. Know what jobs it will take a specialist to complete. Don’t want to give up certain jobs? Subcontract a journeyman to help you complete the work.

4. Don’t Attempt Jobs That You’re Unsure Of.

Similarly, even if you can legally complete a job, are you sure you can do it well? This is Lui’s advice to other home repair specialists. If in doubt, turn down the job and refer someone else.

5. Run Your Services Like a Business, Not a Hustle.

Katie believes that JW Handyman stands out because she’s available to answer the phone and answer potential customer’s questions. Think about what your customer’s expectations will be around their entire experience with your business: from scheduling through paying for your service. What staff and software can you afford that can help you stand out as a premium service provider?

Why does all of this matter? Because if you’re thinking long-term, you’re thinking about building your brand. And we’ll get into how a handyman business can turn into bigger and better things.

Additional Resources From Our Blog

III.  The Technical Stuff

One of the big dilemmas business owners face is freeing up time to work

on

their business instead of always working

in

their business. And reducing the time it takes to do administrative tasks using better tech solutions is a big part of the solution. 

Steps

  1. Set up a website and social media profiles

  2. Shop for and invest in tech platforms (see chart)

  3. Create calls-to-action (CTAs) on your website and social media profiles

It can be helpful to chart out all of the administrative tasks you’ll need to do on a regular basis, and then see what kinds of tools and features can make these tasks easier. To get you started, take a look at the following table, which goes through what happens before, during, and after a job and matches up tools that can assist you throughout the process.

Customer LifecycleTech NeedsWork Order LifecycleOperations
Consumer searches for a service providerSocial media management
Online booking & schedulingNew job is created
Job management and dispatchJob assigned to technician and added to schedule
Customer is notified and reminded of upcoming appointmentEstimate ManagementTech prepares quote
Customer accepts estimateInvoicing & Payment ProcessingJob is completed and payment is taken or invoice is sent, then receipt is sent
Customer paysReview ManagerRequest for review is sent
Customer books another service or signs up for recurring servicesEmail marketingCustomer is sent a follow-up message
Bookkeeping Payroll

Tips On Effectively Using Online Booking

Booking new jobs is a huge time suck. When you’re working in the field, you don’t have time to answer the phone constantly or quickly respond to emails. And even if you hire an administrator, there are better uses for their time that can help grow your business.

Giving customers the option to book an appointment online is one step you can take toward freeing up time to work

on

your business. And the customers appreciate it, as well. 

Did you know that 56%

of people are frustrated

with the inconveniences of scheduling over the phone, and that

40% of online bookings

tend to happen after regular business hours? 

Here are tips on successfully implementing online booking using examples from our pros.

1. Start With Paid Estimates

Unsure what services you’d like to offer online booking for? Allow customers to book a time to for a paid estimate. Like

Blessed Hands Handyman

, explain the details and fees associated with your services.

2. Only List Certain Types Of Jobs

Business owners are cautious about customers signing up for jobs that aren’t a good fit for them. List the types of jobs you feel most comfortable booking online. For instance, Blessed Hands Handyman has a detailed breakdown of many of their most common services for customers to choose from.

Consider setting a minimum price per job as

Unstoppable Handyman

does. In the different service details, they explain that the minimum cost covers a certain time amount and what additional time will cost.

3. Set Times That Work Best For You

Whatever booking software you use, it needs to be flexible enough to allow you to set dates and times that work for you. Set time slots big enough that allow for travel to and from the job site, as well as perform the work itself. 

Many of our pros who use our online booking feature use it to set time windows and then contact the customer with a more exact time that works best for them.

Additional Resources From Our Blog

V. Positioning Yourself in the Market

When you’re selling to everyone, you’re selling to no one. When it comes to positioning yourself in the market, you need to know who your ideal customer is, and consider specializing.

Steps

  1. Outline your target market and ideal customer

  2. Decide if you want to specialize

  3. Update your brand messaging and service offerings accordingly

Who Do You Want to Work With?

When businesses “cast a big net” advertising to the general population, they waste money and time. On an

episode of the Thrive Time Business Coach Radio Show

, hosts Clay Clark and Dr. Robert Zoellner advise handyman business owners to ask questions about who your ideal and likely buyers are, starting with things like their gender and income bracket, as well as where they live, and what key words they might be using to find businesses like yours. 

They explain that you should define your buyers before you start heavily promoting your business. “The reason why you want to answer these questions first is because this is going to affect everything that you do from here. It’s going to affect the way that you brand; it’s going to affect your purple cow; it’s going to affect the way that you market.”

Your purple cow is the thing that differentiates you from other businesses, such as a unique tagline and logo or vehicle or value proposition. Your “purple cow” needs to be attractive to you ideal buyer.

Why Do They Want to Work With You?

It’s also important to understand why customers are looking for handyman services as opposed to working with a specialist, such as an electrician or plumber.

Lui has observed that when people search for his company, they more often search for “handyman” as opposed to a specific service. 

“Most of the time, there's a punch list of things they want done all at one time,” he explained. 

His customers choose his handyman business specifically

because

he’s a generalist and can complete their entire checklist as opposed to things within a particular specialty.

This is helpful for Lui when he is choosing what keywords to advertise for. Things like “handyman Brooklyn” is going to be more successful than “light fixture installation,” which is one of the services they offer.

VI. Setting Your Pricing and Services

It may take a while to find the best set of services and prices that works for you. What follows are some tips to get started.

Steps

  1. Create a list of services you’re able or interested in offering

  2. Create a price list for all of your services

  3. Create a contract template

  4. Write up a terms and conditions document

You Don’t Need to Do Everything

Like we explained earlier, customers tend to search for handymen when they’re

not

looking for a specialist. However, as

Dan Perry explained

, “You can generate a very healthy income by offering a limited range of services and, in many cases, it’s actually much more profitable to just offer one or two services.”

How does this work? 

Even handymen start to become known for certain types of jobs and can begin to specialize in them. For instance, although they offer other kinds of services, as well, JW Handyman has become known for bathroom remodels.

It happened rather by chance. One customer started out with smaller projects and was satisfied with the work and trusted Jeremy’s business. So when it was time to remodel her bathroom, she asked Jeremy to lead the project.

Similarly, Jeremy’s business applied to be a

Home Depot authorized service provider

. They started out with smaller jobs, such as hanging new lighting fixtures. “That got our foot in the door on the bigger stuff.” Once again, because they had proven reliable and efficient with smaller work, when a customer wanted their bathroom remodeled, their liaison at Home Depot felt confident asking Jeremy.

Other customers kept asking. Soon, it made sense to focus on bathroom (and now full house) remodels, because they have pictures and customer testimonials, as well as experience knowing how to best price and efficiently handle these kinds of jobs. Now their marketing and promotions focus on remodeling projects.

Flat Rate or Hourly? Consider a Hybrid Model

Studies have shown that most customers prefer flat rate pricing because they know the total cost up front. But for handymen and custom service work, the types of jobs you do can vary so widely, it can be hard to solely set flat rates. We’ve seen more of our pros use a hybrid model: charging a flat rate for common jobs and hourly for everything else.

Why You Shouldn’t Give Free Estimates

“Free estimates are just costing you money,” said

Donald, host of BlueCollar DIY

and longtime handyman.

He charges based on how long it will take him to drive to the home to give an estimate. If they book his services, he’ll knock the estimate off of the total price of the job.

Not getting many of the jobs? According to Donald, that’s a good thing. “If you’re getting fifty percent or more of the jobs you estimate, you’re too damn cheap or you’re not giving many estimates.”

Additional Resources From Our Blog

VII. Marketing and Sales

You know who you want to target and what you’re selling, but how do you reach them? To continue reaching new customers, you’ll need to continue trying new things. But marketing doesn’t need to be a huge money sink. There are affordable ways to attract new customers.

Steps

  1. Create a marketing plan

  2. Design business cards,

    van wrap

    , and other marketing materials

  3. Sign up for Google My Business

  4. Claim your business on other lead generation platforms

  5. Optimize your website for search engines (SEO)

  6. Join digital and in-person networking groups

Mr. Handy New York Case Study

Promotional Strategies include: Yelp, Google Reviews, Search Engine Optimization, Facebook Ads

When they were getting started, Mr. Handy New York was one of the top handyman companies on Yelp for their area. They relied almost solely on Yelp for clients for two years and then began diversifying their presence through Facebook and Instagram ads.

And then, Yelp changed their format and their ROI decreased significantly. Before, they appeared at the top because they had a number of positive reviews. After the format change, they even if a client chooses to message them, there’s an option to send the message to every handyman business. It has now become more of a bidding game where the cheapest provider wins.

Mr. Handy New York is still active on Yelp, but they’ve decreased the amount that they spend per month in advertising and spend more time and energy on other tactics. “Now I'm just paying Yelp to just stay away and stop calling. Here's 160 bucks a month. Don't call me anymore,” Lui said.

Other customers find them through Facebook and organic search on Google thanks to optimizing their website using search engine optimization (SEO) strategies and their wealth of positive Google reviews.

Additional Resources From Our Blog

VIII. Hiring: Your Path to Growth

It can be very difficult to find folks who are able to take on a wide array of tasks. This, combined with other requirements, such as timeliness, friendliness, and dependability make hiring for a handyman business very difficult. But it’s possible to find solid employees you can trust with your customers.

Steps

  1. Assess the numbers (what can you afford?)

  2. Research the legal requirements (federal, state, and local) of hiring someone

  3. Outline the hiring and onboarding processes

  4. Set up functions to handle salary and benefits

  5. Create job listing ad

Change Your Mindset

In his podcast,

The Seven Deadly Sins of Building a Contractor Business

, Karan Dhillon, founder of

The Contractor’s Coach

, explains:

Too many contractors believe that hiring is a crapshoot. The way they hire is they land a couple of jobs, and then they go around looking for people and hire the first guy who doesn’t smell of alcohol. Or even worse, they hire friends and family. They’re frustrated when they go through mediocre employee after mediocre employee and struggle to find people who can get the job done right. Because hiring isn’t a game of chance or a fly-by-the-seat-of-your-pants operation. It is one of the most critical aspects of running a successful business.

The difference is having a strategy that includes knowing what kind of employee you want to attract, where to find them, and how to train them. 

It’s generally easier to find and train individuals who don’t have every skillset you need, but are reliable workers than it is to find highly skilled employees that will fit your business well and at the pay rate you can afford.

Instead, the goal should be to attract individuals that want to learn and grow with your business. Here’s Karan again:

People want to be good at what they do and want to be acknowledged for it. If you can help people feel appreciated and, more importantly, provide a system of training, advancement and recognition within the company, and then help them see that their business is growing and thriving, you can keep top quality employees around for a long long time.

Learn more about Karan’s hiring advice

in the rest of the episode.

Additional Resources From Our Blog

IX. Where to Go From Here

Finding Support

It can take a few years to establish your company and gain a consistent customer base. Just keep at it, and you can create a successful business that returns six figures.

But you don’t need to do this alone. 

Check out our

local meetups

and full day

Mastermind events

to network and learn from other service businesses.

And check out these Facebook Groups:

For general business resources, we recommend:

Finally, don’t forget to download the ‘How to Start a Handyman Business Checklist’ — a summary of all of the steps we went over in this guide.

Download Now

By clicking 'Download Now' you agree to our Terms of Service (including the provisions of such terms that require you to arbitrate certain disputes) and you acknowledge you have read our Privacy Policy. You also consent to receive calls or SMS messages, including by automated dialer, to the number you provide, for informational and/or marketing purposes relating to our business. Consent to receive such calls or messages is not a condition to using our services.

Let's Grow Your Business.

Get tips, tricks and trade secrets to help you build a profitable and thriving service business.

Submit

By clicking 'Submit' you agree to our Terms of Service (including the provisions of such terms that require you to arbitrate certain disputes) and you acknowledge you have read our Privacy Policy. You also consent to receive calls or SMS messages, including by automated dialer, to the number you provide, for informational and/or marketing purposes relating to our business. Consent to receive such calls or messages is not a condition to using our services.