The Handy Man Business

For a seasoned construction worker who likes dealing with homeowners, starting a handy man business can be a very satisfying venture. The question of how to start a handy man business has probably been on the minds of many people in the construction industry for the last few years. During early and middle 2000's many construction related jobs were created as a result of the housing boom. Selling prices far exceeded construction costs and contractors and builders couldn't get houses, condos and townhouses up fast enough. And real estate investors, a great many of them people with zero business experience, couldn't snatch them up fast enough either in the resulting building frenzy. With property values rising year after year, seemingly without end, who could not be successful? Unfortunately, and to the great dismay of many, this ended abruptly in the spring of 2008.

For those employed in the construction industry prior to 2008, this probably felt like glory days, with more work available than anyone could handle. With the collapse of the housing market, most of the construction-related jobs created in this time period disappeared. This left a lot of unemployed tradesman. Unfortunately many, many others lost their livelihoods as well.

For many contractors the only solution was to turn to doing smaller home repair and renovation projects. They may have turned their noses up in disdain just a year prior at this kind of work, but now with bills to pay and mouths to feed, it began to seem like this was the only game in town.

For many builders, contractors and tradesman, dealing with homeowners and doing very small repair tasks aren’t to their liking. They would sooner be doing new construction or commercial work, and not having to answer questions about 'picky' details, carefully track and follow up calls & emails, or have to line up small project after small project, when they are used to being on one job for possibly months at a time.

For others this type of work is a dream-come-true. They have no boss or supervisor to answer to whom they may not like. They set their own schedule and work when they want, for instance if they wish to make plans to spend time with their family. And if they do consistently good work, and are able to make this well known to potential customers, then they deal with homeowners who are delighted to hire them, and who keep calling them back. So for the tradesman or craftsman with the right temperament a handyman business startup can be the perfect solution to the dilemma of how to find enough work in a down economy.

How to start a small business

The question of how to start a handyman business is, to begin with at least, the question of how to start a business...Any business. Starting a small business is not that difficult, but it can seem daunting to someone who has never considered the idea before. The main problem with doing so is finding specific information on what are those first steps. You're not likely to find the exact information you need to start your handyman business in a nice, neat package that you can follow step by step, because every state is different in their requirements for starting a home business (which is what a handyman business comes down to...You don't need to rent an office or warehouse with this kind of home based business. In fact the simpler your handyman business plan, the better.)

However you will find that there are many resources on the internet for every state on how to start a home business. Do a search on Google for 'how to start a small business' plus your state, and you will very likely get in the results web pages from both the state government on the requirements for a small business startup, and also other 'how to' web pages for doing the same. Take a look at both (and bookmark these pages, as you will be referring back to them many times), you are likely to find that the 'how to' pages are a little more concise and clearer on what you need to do, than the government pages, with maybe a little less information, but refer to both types...You will find most or all of the information helpful.

The main issues that all handyman businesses are faced with, in all states, is the does the handyman need to be licensed at the state level (you will be dealing with governmental agencies at the state, county & city level in one way or another...Don't let this scare you.) Many states, probably the majority, do not require a handyman to be licensed, such as they require of a general contractor, but the size of the jobs the handyman may take on are limited in dollar amount. This may range from $3,000 down to $500. This will be the first piece of information to find out. You may have to call the appropriate state agency to get a clear answer on this.

As a side note, don't get intimidated by calling up any government agency and asking a lot of questions. They are used to answering questions and most are very willing to help. Business is good for every state, and it is in their interest to help you get started. Just be polite and respectful and you will very likely get the same treatment.

The next question you will need to get answered is how to set up your actual business structure. You can either be a sole proprietor, which is the very simplest form of business, or form a 'Limited Liability Company' (an LLC) or a corporation. LLCs are set up on the state level, while a corporation is a federal business type. It is very unlikely you will need to set up a corporation. There are many types to choose from, they can be complicated, and require a lot of paperwork throughout the year.

What a corporation or LLC does is to 'limit' what you are personally liable for if in a worse-case scenario you damage someone's property. Basically you cannot be sued personally if you set up as an LLC.
(Here's my disclaimer- I'm not giving legal advice here. This is just general information to point you in the right direction. You will need to talk to a professional about the exact laws in your state. I'll give you some tips on how to locate someone like this inexpensively- think 'free' -in a minute.)

Fortunately LLCs have become very common, and a new one can be as simple and inexpensive to set up as a sole proprietorship. Keep in mind that you will need to do some paperwork, at least at the end of the year, to keep your LLC in good standing. Once again, you will find lots of good, easy to follow, information on how to do this in your state online.

As a sole proprietor you may need workman's compensation insurance, even if it is just you in your business. As an LLC you may be able to get a waiver of some sort for this requirement. If you do, it is probably a good idea to get a 'catastrophic' health insurance policy, which can be as cheap as $100 per month for an individual. But this is another good reason to look at an LLC versus a sole proprietorship. The state you are in is likely to have a website for their worker's comp requirements, and information on waivers if available.

Next is state, county and/or city tax collection. You may need to get a tax license from any one of these governments, track your job sales, and pay these taxes at the end of the year. Chances are this won't be excessive, but make sure you are in compliance, as the penalties and interest will add up quickly if you are not. Again, you will find this online.

Okay, here's a helpful tip. Do a search on 'small business advice' for your city or state. You will likely find organizations that give free advice to anyone wanting to start a small business. This may be through a local chapter of SCORE (Service Corp of Retired Executives), or through the state university. You may find 2 or 3 different groups, and you may have to call all of them to connect up with someone, but that person can be a gold mine of information of how to open your own business quickly and easily in your state. As you research what you need to know online, write down all your questions that aren't clear or don't seem to have answers, and fire away when you connect up with one of these guys.

This will get you started on the right track in setting up a handy man business. You can also find many handyman business ideas online, for different ways to advertise yourself, the best type of services to offer for your particular skill set, or the best ways in estimating jobs. It is a good idea to work on your overall business plan from the start.

There are many different areas to learn about in how to be a handyman. Getting your state legal requirements done right is a big first step that will save you many headaches down the road, or even cost you your livelihood. But keep in mind being in business for yourself is an ongoing learning experience. Some thrive, while others don't like the sense of personal responsibility needed to run a business when the boss breathing down your neck is you.

Wishing you a happy and healthy home,

Mike Wreggitt

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