How to Start a Handyman Service from Scratch: The Ultimate Guide
Updated: May 31, 2021
If you're considering starting a handyman service, but don't know where to begin, then this guide is for you!
Whether you’re an expert in construction or completely new to the trade, I’ve outlined everything that is required from start-to-finish so that you can launch your business as soon as possible.
From choosing the right tools and equipment to setting your prices and attracting customers- it's all here! Keep reading to learn all the aspects of starting your own handyman service from scratch.
What Is a Handyman Service?
A "handyman" is a person who does minor, mostly unspecialized construction work around the home or office.
Depending on your skillset, you could offer a wide range of services. The most common tasks that handymen are called for are things too small to require an actual repair professional, but still requires knowledge and competency with tools.
A list of handyman services can include:
General home maintenance
Flooring installation or repair
Basic electrical work/upgrades for lights, outlets, fans, etc.
Home organization or moving
This list could go on and on. Basically, anything homeowners need done but might not have time (or don't know how) to do themselves.
The home improvement industry is always growing in popularity because of the demand for these types of services. Research shows this isn't going to change anytime soon either!
This means there's plenty of opportunity waiting for those who want to take advantage of it.
The Benefits of Starting a Handyman Service
There are many benefits to starting a handyman service. Some of the most common
reasons people want to start their own business is because they enjoy working with their hands and it offers more flexibility in hours than other careers that require them to have office space or set work schedules (e.g., doctor, lawyer).
There's also an increased sense of autonomy over where you can take your career. You're not limited by what one company deems suitable for you--you determine how much money you make!
Which Handyman Services Are You Offering?
Handyman services can be broken down into three broad categories:
Repairs and maintenance work
Home improvement projects
It's important to understand the difference between each of these service types before you get started so that you know how much time and money they'll take.
If your customer wants something outside of what your company offers it may be tempting to simply say "no," but if there’s another local handyman in a different trade who could help them out (or even do all three things) then you're missing out on potential business!
Another thing you'll need to think about is what materials you will use and how much work you can do without assistance from the customer or a subcontractor (since this will affect your costs).
Doing a little research on similar businesses in your area should give you some good ideas of what kinds of tasks could be included in your business' service offerings.
You might also find it helpful to read reviews online before deciding which types of tasks and services will best fit your customers’ needs and align with your skills and goals.
I recommend finding a unique niche; something you can specialize in that fills a gap in your local market. This will put you in higher demand, allowing you to charge higher prices for your service.
Investing In Tools and Equipment
A wide variety of tools will be needed for a handyman service. Stay organized with labeled toolboxes and make sure they have locks to protect your investment.
Basic hand and power tools that are used in nearly all jobs include:
Drills, both cordless and electric
Saws (joint or crosscut)
Pry bars to remove nails from boards or tiles without damaging them beyond repair
Hammers of different weights , lengths, and head types
Chisels to split wood or break up concrete
The Milwaukee M18 Combo Kit comes with 15 durable tools, batteries and a charger all for around $2K. This great set will cover most of your bases and will last for years.
Specialized items may be more expensive investments, but can help you provide more services or better solutions for your customers.
If you're working in a specific niche, like painting, you'll also need to consider supplies for that specific trade (like a pressure washer, scaffolding, or a paint sprayer).
Choosing a Location for Your Business
Will you be working out of your home or will you have a physical business location?
Some handyman services are just a one-man operation, and in that situation all you need is yourself, a truck, and your tools.
But if you already have some experience under your belt and are hoping to grow and add employees, you might consider renting or buying a physical location to give your business an official look and make it more visible.
Some handyman services provide their own office space, while others will pay rent for the offices of another company that does complementary work (i.e., roofing).
Whichever you decide, just know when you get to licensing your business, you will likely need to use a physical address (not a P.O. Box) to obtain a license.
Necessary Licenses and Permits
In order to function as a legitimate business, you must register with your state.
Every state has a website that provides all the information you will need to start and run your business legally, such as license numbers, deadlines for renewals, and contact info for each branch of government (state legislature, department of labor/commerce) in charge of overseeing different aspects of running a business.
It's important that you not only get registered with the state, but also understand what permits and licensing you will need for certain types of work you perform.
For example, you may need a general contractor license if the work requires certain contracting skills or knowledge that goes beyond basic carpentry.
You’ll also want to get insurance. As a business owner you’re responsible for the safety of your customers and their property. Insurance gives you and them peace of mind that if something goes wrong while working on their house, then whatever happens will be covered.
Understanding How to Pay Your Taxes
If you're going to be operating in the United States, then it's important that you understand how handyman taxes work.
This is complex and can vary from state-to-state, but even a one-man show will be required to pay taxes throughout the year (estimated quarterly taxes) and will need to file their final taxes in the first quarter just like everyone else.
If your business will have employees or goods sold at a fixed price (such as carpentry), then there are certain tax requirements for these types of businesses.
In general though, most handyman services do not need any sort of payroll system so filing should be relatively straightforward with just one person on board.
Just like when dealing with registering your company with the government, understanding this process ahead of time is key to avoiding issues down the road!
If you're a sole proprietor, then the IRS is going to ask for your personal tax info if they audit you. To avoid that hassle, and to save on taxes in general, set up an LLC or S-Corporation.
Please keep in mind I am not an attorney or a tax preparer. I come from the perspective of someone who owns a small business and has gone through the process myself...So don't take any of this blog as hard legal advice.
You'll of course need to consult with a professional about all of this and how this will affect your business operations and finances, but it can be worth it for all the benefits offered by these entities.
You should also consider the costs associated with creating one before making any final decisions though because there may be cheaper options available depending on what state you live in.
If you're concerned about following the right tax laws and paying the right amount at the right time, consider hiring a professional tax preparer for advice and to help you stay on track.
Keeping Track of Deductions
There are a few deductions you can take advantage of to get more money in your pocket each year and reduce the amount that needs to be taken out for taxes.
For a handyman service, this typically includes items like tools and equipment used exclusively for the business; vehicle expenses such as trucks, vans, etc., incurred while providing service; advertising costs associated only with your company; certification courses and training; and other business overhead.
Don't leave money on the table! Do you research, save your receipts, and talk to a professional in your area who can guide you on the best write-offs for your small business.
Setting Your Prices
Since a handyman's work is often based on the project and will vary in length of time, it can be difficult to set a price for your services.
Prior to starting any new jobs with clients, you should have an understanding of how your pricing model works so that there are no surprises when invoices need to be sent out!
There are two popular pricing models you should consider:
Hourly Pricing (i.e. time + materials)
Hourly rates are common for trades that have a direct link to the time it takes them to complete their work. If you charge by the hour, people will know that they're not paying too much upfront and there's an understanding of what kind of value they'll get in return.
This pricing model is best suited when the job can take between two and four hours, or less than one day (if you include travel time).
For example, if someone needs a faucet repair or a light fixture replaced, this would work well with hourly rate models since these projects only require a few hours at most including travel time.
Flat Rate Pricing:
If you charge by the job rather than hourly rate, then customer service becomes more important because people may not feel comfortable paying what they think might be too much money upfront.
This could lead them into feeling like they're being taken advantage of without getting adequate value back in return.
But if you get good at explaining the benefits of charging by the project, your customers might prefer this pricing option.
With flat-rate pricing, you can offer discounts if multiple projects are being done at once versus just doing one project. This can actually save the customer money in the long run.
And if you're an efficient worker, flat rate pricing can result in more money in your pocket.
There is no hard and fast rule about what kind of pricing structure works best, you'll have to decide what's right for your business. It might even take some trial and error to find that sweet spot where you're making a healthy profit.
Tracking Your Expenses
Don't forget to factor in the overhead of running your business when you set your pricing. Be sure to take a look at your monthly expenses, and be realistic with how much you need to charge for profit.
A project can quickly lose you money if you don't keep a good track of materials and expendables.
You should also consider the cost of maintaining or replacing any tools or equipment you use and factor that into your pricing too.
And then of course there's the normal costs of operating your business. Things like fuel, office supplies, taxes, marketing, etc., can eat away at your profits if you don't have a healthy markup on your services.
If you're not tracking your expenses, it's usually because you don't have a system in place to manage the data. I recommend using QuickBooks Self-Employed for that, but any simple spreadsheet or even an Excel file will work as long as you're organized.
Creating a Brand
Creating a strong, unique brand for your handyman business will help you stand out from the competition and be easily recognizable in your area.
But a brand doesn't just mean having a clever name for your company. That's important, but a truly great brand has many other components like:
A mission statement that's short and concise, but also covers who you are and what your company stands for.
A tagline that tells people what you offer and why they should buy from you.
An easily recognizable logo design with a strong color scheme to reflect the personality of your brand.
Marketing materials that are consistent with the tone and voice of your brand.
Your business probably is not the only one servicing customers in an area, so it should stand out and look as professional and cohesive as possible.
Take some time to craft these unique aspects of your business identity or hire someone to help you carve out a unique angle for your brand. It'll pay off big time!
Marketing Your Service to Potential Customers
It's not enough just to have a good product or service — you have to advertise so potential customers know about you!
Marketing your handyman business doesn't have to break the bank. In the beginning, the most important component of your marketing strategy will be word-of-mouth advertising.
You can't afford to do any other form of marketing if this one isn't in place yet; it has such a direct impact on sales that it should take priority over everything else.
You can start making money by asking friends and family members whether there's something they've been wanting done but haven't had time or energy for it lately.
Social media is a great next step, and it's free!
Make sure your social media profiles are up-to-date with professional images and information about what services you offer.
Post content regularly that's relevant to people who might need your services. Before and after pictures are very effective for service businesses on social media. And customers love seeing behind the scenes videos of your work. Images and video of you doing your job well helps establish credibility with new customers.
Social media can be time-consuming and overwhelming for a new business owner, but its so valuable!
This article has helped other contractors get customers on social media efficiently and affordably 👉 How To Manage Social Media With Limited Time And Budget
Promoting your business for free on social media will help you grow, but if you want to build a sustainable growth model and reach higher income levels, you'll need to invest in marketing.
A healthy marketing budget will ensure you're able to reach a wider net of potential clients.
To do this in the first year, at least 7% of your revenue should be spent on marketing and promotion. Even if it feels like an indulgence at the time it's worth spending some money upfront. Investing in effective marketing leads to big returns later.
One of your first investments should be in a professional looking website. A good website will:
Be easily searchable by people who need your service
Have an eye-catching design
Include high-quality pictures of you and your work to build trust
Use well-written content that answers your customers' questions
Further legitimize your business and make you appear credible
Be responsive for mobile users
Finally, you'll want to consider paid marketing like:
It's important to stay current with the latest digital marketing trends and changes, because this industry moves quickly.
Want to get your new business up-and-running on social media? Grab 35 FREE social media captions to catch homeowners' attention. Click here!
Focusing on Customer Experience
It's easy to get distracted by the day-to-day operations of your new business...but taking care of customers is what separates good contractors from great ones. Don't be so busy with the work that you forget about delivering an exceptional customer experience!
Your competitors are out there too, trying their best to stand out and grow their businesses long term.
High praise from satisfied customers on sites like Yelp, Angie’s List or Google Reviews goes a long way in strengthening your local reputation.
But you'll only get those rave reviews if your customer experience is top-notch.
What are some ways to provide the best customer experience?
Offer convenient scheduling options, including evening appointments and weekend work. Remember — emergencies happen at all hours!
Keep your customers updated on their projects with regular progress reports via email or phone.
Communicate early and often about any issues that arise during the project so they’re dealt with head on before things get too difficult for you both.
Do your best to stay on schedule. No one wants to be strung along on an endless project (including you!)
Set high standards for your work and always strive to exceed them.
If these tips seem like common sense advice, then you're probably not alone in this assumption...but most contractors still don't do them right!
To stand out from competitors who might be providing a similar level of service, consider doing even more than is expected. Go above and beyond!
Set yourself apart by providing excellent customer service while maintaining top quality standards throughout every job.
Getting Paid for Jobs
Last but most important, you need to get paid for the hard work you do!
To make sure you get paid on time everytime, you need to make paying for your services as easy as possible for all types of customers.
You can accept cash or check, but these days customers expect to be able to pay by credit card, so you'll need a way for them to do that.
The most common method of payment is through PayPal or Stripe and it's as easy as clicking the button and inputting your banking information on their website. They've even designed everything with security in mind!
Both companies have all the necessary tools needed for invoicing, tracking payments due, managing tax reporting requirements, etc., which means less work for you.
Making your payment experience straightforward and simple means happier clients who are more likely to come back again because of their experience.
It also means you get paid faster!
I hope this handyman business guide has been helpful and informative.
If you have any more questions about how to get started, feel free to ask them in the comments section below.
And if you are looking for ways to advertise your new service, check out this article: 👉 How To Get More Leads For Your Home Improvement Business With Marketing
Whichever marketing strategy you choose, remember that it is important to maintain a positive online presence through social media posts and interaction with potential customers.
Good luck as you start up your own handyman company — let me know how everything goes by leaving a comment below!