Starting a handyman business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful handyman business.
Importantly, a critical step in starting a handyman business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Handyman Business:
- Choose the Name for Your Handyman Business
- Develop Your Handyman Business Plan
- Choose the Legal Structure for Your Handyman Business
- Secure Startup Funding for Your Handyman Business (If Needed)
- Secure a Location for Your Business
- Register Your Handyman Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Handyman Business
- Buy or Lease the Right Handyman Business Equipment
- Develop Your Handyman Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Handyman Business
- Open for Business
1. Choose the Name for Your Handyman Business
The first step to starting a handyman business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own handyman business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your handyman business.
2. Develop Your Handyman Business Plan
One of the most important steps in starting a handyman business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your handyman business.
- Company Overview – this section tells the reader about the history of your new business and what type of handyman business you operate. For example, are you a home repair, electrical work, carpentry work, or a general handyman service?
- Industry Analysis – here you will document key information about the handyman industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your new business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing strategy.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your handyman business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Handyman Business
Next you need to choose a legal structure for your own handyman business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the handyman business owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the small business owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a handyman business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a handyman business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a handyman business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your handyman business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Handyman Business (If Needed)
In developing your handyman business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a handyman business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a handyman business that they believe has high potential for business growth.
5. Secure a Location for Your Business
When starting a handyman business, you’ll need to find a location for your business. You’ll want to find a space that is big enough to accommodate your tools and equipment, and that is also in a good location for attracting customers. You’ll also want to make sure the rent or price is affordable.
6. Register Your Handyman Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a business bank account in your handyman business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your handyman business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The most important licenses and permits for a handyman business are a business license and a contractor’s license. You may also need a trade license depending on the handyman services you offer. Contact your state’s licensing board or department of consumer affairs for more information on the licenses and permits required for your business.
10. Get Business Insurance for Your Handyman Business
The type of business insurance you need to operate a handyman business will depend on the services you offer.
Some business insurance policies you should consider for your handyman business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your own business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Handyman Business Equipment
You will need a few basic pieces of equipment to get started in your handyman business. A tool box, ladder, screwdriver set, drill, and hammer are all essential tools that you’ll need to have on hand. You may also want to invest in a power saw, caulking gun, and tape measure to help you with your projects.
12. Develop Your Handyman Business Marketing Materials
Marketing materials will be required to attract and retain customers to your handyman business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your handyman business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional handyman business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your handyman business.
13. Purchase and Setup the Software Needed to Run Your Handyman Business
To open a handyman business, you will need to purchase business software such as a customer relationship management (CRM) software, invoicing software, and a scheduling program. You will also need to create a website and online presence for your business.
14. Open for Business
You are now ready to open your handyman business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Handyman Business FAQs
No, it is easy to open a profitable handyman business. You don't need any special business training, and you can start with just a few tools. However, it's important to do your research and create a detailed business plan before you get started.
The best way to start a handyman company is to research and plan. You'll need to create a business plan and determine what handyman services you will offer, how you will market your business, and what your costs will be. You may also want to consider hiring employees or subcontractors, depending on the size of your business. It's also important to understand the local market and what potential customers are looking for in a handyman service.
There is no one-size-fits-all answer to this question, as the most profitable type of handyman business will vary depending on your location and the services you offer. However, general home repair and maintenance services are often the most in demand, so this may be a good place to start.
To start a small handyman business, you may need to invest between $5,000-10,000. This amount covers the costs of tools, marketing materials, and hiring a few employees. Keep in mind that these are just approximate numbers, and your specific costs may be higher or lower depending on your individual situation.
There are a few ongoing expenses associated with running a successful handyman business. One of the most important expenses is the cost of marketing and advertising to attract new customers. Another important expense is the cost of materials and supplies. Tools, hardware, and other materials necessary for completing handyman work will need to be purchased on a regular basis. Finally, it's important to have a sufficient amount of working capital available so you can cover any unexpected costs that may come up.
Handyman business owners make money by charging clients for services. This can include home repair services, maintenance, installations, and other services. In addition, most handyman businesses also charge their clients for the materials they use to complete a project.
Yes, a handyman business can be profitable because people are always in need of repairs and maintenance. Homes and businesses need to be regularly maintained, and many people lack the time or skills to do these tasks themselves. A handyman business can fill this need and offer a valuable service.
One of the main reasons many handyman businesses fail is a lack of proper planning. A business plan is essential for any business, especially a startup. Without a business plan outlining the goals and objectives of the company, it can be difficult for new business owners to make sound decisions about the future of the business, which can lead to its failure. Another reason handyman businesses may fail is that their customer service does not meet client expectations, leading customers to choose another company.