An honest look at the pros and cons of running a handyman business, the licensing limits that decide what work you can take, insurance, pricing, finding customers and what changes when you hire your first helper.
Launch checklist complete.
This step decides what kind of handyman business you can run. Many states and some cities require a contractor license for jobs above a set dollar amount, and some require registration for any home improvement work. Almost everywhere, electrical, plumbing, gas and some HVAC work must be done by licensed tradespeople, regardless of job size. Permits may be required for certain jobs even when no license is. Check your state contractor licensing board and your city or county before quoting any job, and keep a written list of work you will and will not do. You will also need a local business license.
Handyman businesses usually price in one of three ways: by the hour (often with a minimum charge for a visit), flat rate per job, or a mix. Whatever you choose, your price must cover:
A simple check: total your monthly business costs and the income you need, divide by the number of hours you can realistically bill in a month, and compare with your hourly rate. Many new handymen discover they are charging too little once they count unbilled hours. Our job labor cost calculator and profit margin calculator can help.
A handyman wants $5,000 a month before taxes and has $1,500 a month in business costs, so needs $6,500. Of roughly 170 working hours a month, about 110 can be billed; the rest go to travel, estimates, shopping and paperwork. $6,500 ÷ 110 = about $59 an hour, before materials markup and any allowance for self-employment tax and slow weeks. Charging $45 an hour because a competitor does would leave the business short every month.
Customers remember reliability above almost anything else: showing up when you said, finishing when you said and leaving the place clean. Use a calendar for every appointment, confirm the day before, take before-and-after photos, put quotes and change requests in writing and invoice promptly. Our work order template and invoice template help with paperwork.
Handymen often skip insurance until a customer asks for it. The SBA notes that laws requiring business insurance vary by state and advises checking your state’s website for the requirements that apply to your business (SBA: Get business insurance).
Even where none is required, general liability coverage is worth pricing early. One water leak from a loose fitting can cost more than years of premiums. When you hire your first helper, most states will also require workers’ compensation coverage, so add that to the budget before you post the job.
Growing beyond yourself means hiring. Once you have employees you need an EIN, payroll, workers’ compensation in most states, Form I-9 and W-4 for each hire and accurate time records. Helpers are usually employees, not contractors, if you direct their work and schedule. See independent contractor vs. employee and the cost of hiring an employee. Travel between job sites during the workday is generally paid work time; see travel time pay rules.
EZTime helps small service teams with GPS-stamped clock-ins at each job, hours tagged to customers, job scheduling and tasks with photo proof. See EZTime for handyman services.
It depends on your state and city. Many require a contractor license for jobs above a certain value, some require registration for home improvement work and almost all require licensed tradespeople for electrical, plumbing and gas work. You will usually also need a local business license.
Enough to cover your billable and unbillable time, vehicle, tools, insurance, materials, taxes and profit. Calculate your required hourly rate from your monthly costs and realistic billable hours rather than copying competitors.
General liability is the essential starting point. Tools and equipment coverage and commercial auto are common additions, and workers’ compensation is required in most states once you have employees.
It can be, especially with good pricing, repeat customers and contracts with property managers. Profitability depends heavily on charging for all your costs and keeping unbilled time under control.
Usually helpers who work under your direction and schedule are employees. Misclassifying them as contractors risks back pay, taxes and penalties.
It depends on your state. Many states allow minor repairs below a dollar threshold per job without a contractor license, but restrict electrical, plumbing, gas and structural work regardless of size. Check your state’s contractor licensing board before advertising a service.
Start local: a Google Business Profile, neighborhood groups, flyers in nearby shops and asking friends and family for referrals. Ask every satisfied customer for a review. Property managers and real estate agents can become steady sources once you prove you are reliable.
As soon as you have hourly staff, two jobs take more time than most owners expect: recording hours accurately and building a schedule everyone can see. Under the federal Fair Labor Standards Act (FLSA), employers must keep accurate records of hours worked and pay non-exempt employees overtime for hours over 40 in a workweek, and some states add daily overtime or meal-break rules. This is general information, not legal advice.
EZTime covers all three with a time clock app, employee scheduling and payroll-ready exports, from $2 per employee per month. See pricing and start a 14-day trial.
EZTime lets helpers clock in at the job by GPS and tags hours to the client, so you know what each job really cost.