You have a passion and the skill for home improvement projects, so you start dreaming about how to start a handyman business and finally be your own boss. The possibilities feel limitless, but the question is where to start. If you don’t feel like you have the business know-how to get started, don’t sweat! Here’s three simple steps to help you start framing the foundation of your handyman business.
Step #1: Define Your Services
Before diving in on the practical steps of how to start a handyman business, take a moment to assess your strengths and passions. What home improvement tasks do you excel at? Which services are in high demand in your community? By focusing on what you do best and what people need most, you’ll set yourself up for success from the start.
Things to ask yourself when deciding on your handyman services:
- What services do the surrounding communities need?
For your handyman business to succeed, you’ll need to provide the services that are in the highest demand or on the rise in demand in your community. The best plan is to offer services that are in high demand but have few competing businesses providing them. - Which of these services do I excel at?
Choosing the services that you are especially great at doing helps you build on your strengths and skillsets. It’s much easier to manage your business when you know what type of projects you’ll be working on and could also make it easier to market your business when your focus is narrower. - Do I have the right tools and equipment to provide these services?
Having the right tools and equipment right off the bat helps keep your start-up costs low. If there is new equipment you will require, you’ll need to make sure to include that when you create your start-up budget.
Step #2: Choose Your Name and Entity
Got a memorable or catchy name in mind? Great! Now, make sure it aligns with your services and resonates with potential customers. As for your business entity, weigh the pros and cons of sole proprietorship versus LLC or corporation to protect your personal assets while minimizing paperwork.
The easiest entity type is sole proprietor. There isn’t a lot of extra paperwork and most of the time, there isn’t an annual license fee or filing fee. The downside of sole proprietorship is that you are personally liable for any business expenses. For example, if something goes terribly wrong on a project and a customer were to sue you, you could lose all that you own. That is a worst-case scenario, but something to keep in mind as it’s a riskier route to take.
If you choose to form a limited liability corporation, limited liability partnership, or corporation, then liability would land solely on the business – the business assets and financial standing would be responsible for any damages. This keeps your personal finances separate from the business, so even in a worst-case scenario, you wouldn’t lose your house on top of your business assets. To get one of these types of business entities started, you need to file with your state and get a federal employer tax identification number. Depending on the state, you may need to file financial records each year as well as pay licensing fees. Although these entity types may seem a little more complicated, putting in a little extra money and effort up front will help keep your personal finances and taxes separate from your business finances.
Step #3: Budget Wisely
Money matters, especially when considering how to start a handyman business. Create a detailed budget covering essentials like licensing, insurance, expenses, and pricing for your services. Remember, investing wisely now sets the stage for future growth. Your budget should include the following:
- Business license expenses – the exact cost depends on the business entity, state, and sometimes even city or county in which you live. You may also need to hire legal counsel to help set up your entity; however, you can always use a service like Legal Zoom if you would prefer not to have to pay high attorney fees.
- Small business insurance – get a few quotes. Some states will require business insurance to get a business license. Letting customers know you have business insurance helps put their minds at ease in case something should go wrong, so it could be the difference between gaining trust and getting a job or losing it entirely.
- Office expenses – operating a business out of your home is pretty easy to do, but you will need a designated area, access to internet, a computer, an additional phone line (if you’re not using your mobile phone), handyman business software (such as estimating, invoicing, and payment software like Project 2 Payment), a printer/scanner, etc. Think of all the administrative tasks you will need to complete on a daily or weekly basis and what you need to complete each task.
- Vehicle expenses – you’ll need transportation to get to all of your future handyman projects. Make sure to budget for gas, insurance, and maintenance for the vehicle you plan on using. Although it’s tough to budget for the unknown, look at how many projects you could take per week and then estimate how much mileage you would be putting on your vehicle to help you create the budget portion for vehicle expenses.
- Tools and equipment – look at the current condition of your tools and equipment. Does anything need to be serviced or replaced? Are there other tools or equipment you need to launch your handyman business? Make sure to account for what you already have and what you will need.
- Marketing and advertising – most handyman businesses rely on word-of-mouth and personal referrals; however, potential customers are still going to need a way to find you. To start with, have a business website and a Google business listing to make it easy for people to find you online. There are many online directories out there, but with a Google Business Profile, your business will be one of the first things to pop up when people search “handyman in my area,” and it’s free!
- Pricing for your services – your budget will need a pipeline to fill it up to keep things moving, and this is where your pricing comes. You will want to look at what your competitors are charging for similar services and what your overhead costs are (licensing, insurance, and all the expenses listed above). Make sure to also factor your expertise into the price. There is a reason you chose services that you are great at: it lets you charge a better price. Don’t sell yourself short because your business is new. You are worth more than you think when you do the job well and on time.
Ready to Roll?
Once you have these three things decided, it’s time to start completing forms and getting the foundation of your handyman business built. It’s a lot to do to start with, but there are plenty of resources and business coaches to help you along the way, such as the Handyman Startup with Dan Perry. Dan provides a lot of helpful tips on how to start a handyman business, and also how to get your business growing and thriving.
When it comes to choosing your business software, don’t forget about Project 2 Payment! Project 2 Payment makes it easy to keep track of and manage your customers, your projects, your invoices, and your payments. Plus, we were created for small businesses like yours with a low monthly fee of only $20.
Armed with a clear plan, it’s time to put your dreams into action. Utilize tips from veterans in the industry and don’t underestimate the power of tools like Project 2 Payment that streamline your operations and save you time and money in the long run. Remember, success comes to those who are prepared, passionate, and persistent. Here’s to your thriving handyman business!
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