How to start a handyman business from the ground up

Starting a handyman business is a rewarding venture that combines practical skills like carpentry and plumbing with smart business savvy. The industry represents a multi-billion dollar market, with consistent demand for repairs and maintenance from homeowners, property managers, and small businesses.

This guide will take you through the practical steps of validating your business concept, obtaining the right permits, acquiring equipment, and securing funding to help you launch a successful handyman business in the U.S.

Step 1: Create a business plan and validate your concept

First, gauge local demand. Spend a week monitoring neighborhood forums like Nextdoor and local Facebook groups. Note the types of repair and maintenance requests that appear most often. This direct research shows you what services are in high demand right in your target area.

Once you know what people need, identify your competition. Use Google Maps and Yelp to find at least five other handyman services nearby. Review their list of services, read customer feedback, and note their service areas. A frequent misstep is trying to compete on price alone, so focus on offering unique value instead.

Estimate your startup costs

Your initial investment will vary, but you can create a solid budget. A large tool collection can be a significant startup expense. You might consider starting with a versatile core set and renting specialized equipment for specific jobs. Here is a typical breakdown:

• Tools and Equipment: $2,000 to $5,000 for a comprehensive starter set.
• Business Registration and Licensing: $100 to $500, depending on your state.
• General Liability Insurance: $500 to $1,500 for an annual policy.
• Initial Marketing: $300 to $1,000 for business cards, flyers, and a basic website.

Here are 3 immediate steps to take:

• Track service requests on local online platforms for one week.
• Analyze 3-5 local competitors found on Google Maps and Yelp.
• Draft a startup budget based on the cost estimates for tools, licensing, and insurance.

Step 2: Set up your legal structure and get licensed

Choose your business structure

You might want to form a Limited Liability Company (LLC). This structure separates your personal assets from business debts. For taxes, an LLC offers pass-through taxation, meaning profits pass to your personal tax return without separate business taxes. You can file for an LLC through your state's Secretary of State website.

If you plan to hire employees now or in the future, you will need an Employer Identification Number (EIN). You can apply for an EIN for free directly on the IRS website. The process takes just a few minutes online.

Navigate licensing and permits

Many states have a "handyman exemption." This allows you to perform work under a specific dollar amount, often $500 to $3,000, without a full contractor's license. For example, California's limit is $500. Check your state's contractor licensing board for its specific rules.

A mistake many new handymen make is taking a job that exceeds this limit. This can result in large fines and legal trouble. Always confirm the project total, including materials, stays under your state's threshold if you are not fully licensed.

You will also likely need a general business license from your city or county. Contact your local city hall or county clerk’s office. These typically cost between $50 and $150 annually and are a basic requirement to operate legally in your area.

Here are 4 immediate steps to take:

• Decide on a business structure like a sole proprietorship or an LLC.
• Apply for a free Employer Identification Number (EIN) on the IRS website.
• Find your state's handyman exemption limit on its contractor board website.
• Contact your city clerk's office to ask about a local business license.

Step 3: Secure your insurance and manage risk

Your first priority is general liability insurance. This covers property damage or injuries to others. A small mistake, like a water leak that ruins a client’s floor, can be financially devastating. Aim for a policy with at least $1 million in coverage, which typically costs $500 to $1,500 annually.

Additional coverage to consider

Depending on your setup, you might also need other policies. It is a mistake to assume your personal policies will cover business activities, as they often have specific exclusions. You should look into:

• Commercial Auto Insurance: If you use a vehicle for work, your personal auto policy likely will not cover you.
• Workers’ Compensation: This is legally required in most states as soon as you hire your first employee.
• Tools and Equipment Insurance: This protects your gear from theft or damage, whether it is in transit or at a job site.

When you shop for policies, consider providers that focus on trades and small businesses. Companies like Next Insurance, Hiscox, and Thimble understand the specific risks you face and can offer tailored coverage. A general agent might not be as familiar with the industry.

Here are 4 immediate steps to take:

• Get quotes for a general liability policy with at least $1 million in coverage.
• Review your personal auto insurance policy for business use exclusions.
• Research your state’s workers' compensation laws if you plan to hire help.
• Contact a specialized provider like Next Insurance or Hiscox for a quote.

Step 4: Set up your workspace and get your gear

You do not need a formal office. Most handymen operate from home. A dedicated space in your garage or a 10x10 foot storage unit provides about 100 square feet, which is plenty of room for equipment and materials. Check your local zoning ordinances for home-based business rules.

Acquire your core equipment

Your initial equipment purchase can be a large part of your budget. A mistake some make is buying low-quality items to save money. This often backfires when gear fails mid-job. Instead, invest in reliable brands and rent specialized equipment for unique tasks.

Here is a starter list with typical costs:

• Professional Cordless Drill/Driver Set: $200 to $400
• 10-inch Miter Saw: $300 to $600
• Basic Plumbing and Electrical Kits: $150 to $300
• Step and Extension Ladders: $200 to $500

To manage costs, consider opening a pro account at suppliers like Home Depot or Lowe’s. These often provide discounts and purchase tracking, which simplifies your bookkeeping.

Here are 4 immediate steps to take:

• Check your city’s zoning rules for a home-based business.
• Price a 10x10 storage unit with 24-hour access near you.
• Draft a purchase list for your core equipment, focusing on reliable brands.
• Apply for a pro account at a major hardware supplier.

Step 5: Set up your payment processing

For larger jobs, you might want to ask for a 30-50% deposit to cover materials, with the balance due upon completion. For smaller tasks under a few hundred dollars, collecting full payment after the work is done is standard practice. A mistake is to rely only on cash or checks.

Choose your payment solution

Waiting for checks to clear can slow down your cash flow. For a handyman business that needs to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone—just tap and done.

At just 1.99% per transaction with no hidden costs or extra hardware, it is a strong option. Other providers often charge 2.5% to 3% plus fees. This is particularly useful for collecting final payment immediately after a job is finished, right on the client's doorstep.

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available on your JIM card as soon as the sale is done—no waiting for bank transfers.

Here are 3 immediate steps to take:

• Decide on your payment terms, such as requiring deposits for jobs over a certain amount.
• Compare JIM's 1.99% transaction rate to other mobile payment options.
• Download the JIM app to explore its interface on your phone.

Step 6: Secure funding and manage your finances

Find your funding

You might want to look into an SBA Microloan. These government-backed loans range from $500 to $50,000 and are ideal for new businesses. Lenders typically look for a solid business plan and a decent credit score, with interest rates often between 8% and 13%.

Another option is a business credit card. Many offer a 0% introductory APR for 12 to 18 months. This can help you finance initial equipment and materials without immediate interest. Just have a plan to pay the balance before the promotional period ends.

Manage your working capital

A frequent misstep is mixing personal and business funds. Open a separate business checking account right away. This simplifies bookkeeping and protects your personal assets, especially if you formed an LLC. It also makes you look more professional to lenders and clients.

You should plan for at least six months of operating expenses. A good estimate for working capital is between $5,000 and $10,000. This buffer covers fuel, insurance payments, marketing, and material costs while you build a steady stream of clients.

Here are 4 immediate steps to take:

• Open a dedicated business checking account.
• Research local SBA Microloan lenders on the SBA website.
• Compare business credit cards with 0% introductory APR offers.
• Calculate your 6-month operating budget to determine your working capital needs.

Step 7: Hire your team and streamline operations

Build your crew

When you are ready to expand, your first hire will likely be a Handyman Technician. Expect to pay a competitive wage, typically $20 to $35 per hour, depending on skill level. This person should handle smaller jobs independently, freeing you up for larger projects.

Look for candidates with an OSHA 10 safety card. If you plan to work on homes built before 1978, you and your employees will also need EPA Lead-Safe Certification. These credentials show professionalism and are often legally required, so do not skip them.

Once you have a team member, managing schedules with a paper calendar gets messy. You might want to use a field service software. Programs like Jobber or Housecall Pro let you manage schedules, send quotes, and handle invoicing from one place, which keeps your operations smooth.

As you set your pricing, a good benchmark is for each technician to generate three to four times their salary in revenue. This ratio ensures you can cover their wages, business overhead, and still make a profit. It is a simple metric to track your business health.

Here are 4 immediate steps to take:

• Draft a job description for a Handyman Technician with a competitive hourly rate.
• Research your state's requirements for OSHA and EPA Lead-Safe certifications.
• Explore a free trial of a field service software like Jobber or Housecall Pro.
• Calculate a revenue target for your first hire based on their salary.

Step 8: Market your business and get customers

Start with your local community

Your first customers are often right in your neighborhood. Post an introduction on platforms like Nextdoor and in local Facebook groups. Make sure to include photos of your past work and a clear list of the services you provide.

You might also want to print around 500 business cards and some simple flyers. Ask local hardware stores, real estate offices, and community centers if you can leave a small stack. This direct approach still generates solid leads.

Establish your online footprint

Set up a free Google Business Profile immediately. This is how most new clients will find you through search. After each job, ask satisfied customers to leave a review. Positive reviews are powerful for building trust quickly.

A mistake many new handymen make is spending too much on paid ads at the start. Focus on these free methods first. When you do explore ads, aim for a customer acquisition cost (CAC) under $50 per job.

Here are 4 immediate steps to take:

• Set up your Google Business Profile with photos and service details.
• Print 500 business cards with your name, number, and top services.
• Post an introduction about your business on a local Facebook group.
• Ask your first three happy clients to leave you a Google review.

Step 9: Set your pricing strategy

Choose your pricing model

You have two main options: hourly or flat-rate. An hourly rate, typically $60 to $125, works well for unpredictable jobs. A mistake many make is not charging for travel or supply runs, so consider a one-hour minimum or a separate service fee.

For standard tasks like installing a faucet, flat-rate pricing is better. Calculate it by multiplying your estimated hours by your hourly rate, then add the cost of materials plus a markup. This gives clients a clear, upfront cost.

Set your markup and research rates

You should add a markup on materials to cover your time for sourcing and transport. A standard markup is between 20% and 50%. Forgetting this step is a frequent error that directly cuts into your profit on a job.

With this in mind, research your local market. Call three to five other handyman services and ask for a quote on a common job, like hanging a new interior door. This gives you a real-world baseline for your area and helps you stay competitive.

Here are 4 immediate steps to take:

• Decide on an hourly rate between $60 and $125.
• Create a flat-rate price list for five of your most common services.
• Set your materials markup percentage, aiming for at least 20%.
• Call 3 local competitors for a quote on a standard repair job.

Step 10: Maintain quality and scale your operations

Measure your service quality

Your reputation is your best asset. You should track your callback rate, which is the percentage of jobs that require a return visit to fix an issue. Aim to keep this rate below 5%. A simple spreadsheet is all you need to monitor this metric.

After each job, take photos of the finished work. This creates a portfolio and serves as documentation. You might also send a follow-up text asking for a quick satisfaction rating on a 1-5 scale. This gives you immediate feedback on your performance.

Know when to expand

A frequent error is to hire help too soon. A good signal to expand is when you are consistently booked four to six weeks in advance. At that point, you are likely turning down profitable work, and it is time to bring on another technician.

As you grow, field service software like Jobber or Housecall Pro becomes more valuable. These platforms help manage multiple schedules, dispatch jobs, and maintain a central record of all client communication. This helps keep your quality consistent across the team.

Here are 4 immediate steps to take:

• Create a spreadsheet to track your job callback rate.
• Start taking photos of all your completed work for documentation.
• Set a personal booking threshold, like being booked 4 weeks out, as your signal to hire.
• Review the features of a field service software for managing a team.

You have a solid plan to launch your handyman business. Remember that your reputation is built on trust, not just technical skill. Always communicate clearly and deliver quality work. The demand is there, so go meet it with confidence.

To keep things professional, make payments easy for your clients. JIM lets you take card payments right on your smartphone for a simple 1.99% rate, with no extra hardware needed. Download JIM and get paid instantly.