How to start a handyman business: Laws, permits, insurance, contracts and more

How to start a handyman business: Laws, permits, insurance, contracts and more

Jessica Crosby
By Jessica Crosby
Jul 26, 2023
9 min read

You’ve the first person in your circle of family and friends that’s called when something needs a repair. And you’re wondering if it’s time to make your handyperson side gig legitimate. If you’re curious about what it takes to start a handyman business, our guide breaks down everything you need to know about.

Read more about starting a handyman business:

What is a handyman?

A handyperson is a repair worker who can assist a home or property owner with various tasks. Seen as a jack-of-all-trades, a handyperson can hang a tv, install a ceiling fan or fix a leaky faucet.

Though a handyman and a general contractor both deal with construction, renovation and repair, a homeowner hires these tradespeople for different reasons. Typically a client hires general contractors to manage large projects. A handyperson is suitable for smaller home repairs.

Read moreHandyman vs. general contractor: What’s the difference?

What type of work can a handyman do legally?

A handyperson can perform home maintenance, home repairs and simple renovation projects. This might include repairing drywall, flooring, decks, landscaping, fixing minor leaks, etc.

Handypeople are not legally allowed to do specialized tasks of higher value that require permits or licenses. This includes structural work, plumbing and electrical work. 

Every state and locality has varying legal requirements, so check with local governments before starting your business. 

Learn moreHow professional handyman courses can improve your business

Register your handyman business

Many handypeople start small by doing work on the side. But if you’re ready to start a handyman business, you should register your business with local and state agencies. 

When you register your business:

  1. Name your company
  2. Define your business classification: You can stay an independent contractor, a sole proprietor or register as a limited liability company ( LLC). LLCs protect your assets, and you can set up your finances to pass income through to your personal accounts.
  3. Obtain an EIN: An EIN is a number that identifies your newly formed business on business forms like taxes.

Learn moreWhich business structure is right for your small business?

Understand handyman laws in your state

Handymen have different laws in different states. Some states heavily regulate handypeople, while others are more lenient. Here’s how the laws break down for handyman licenses and insurance requirements in several states:

Read moreHandyman license requirements by state: A comprehensive guide

Protect yourself and your business with insurance

The handyman industry requires a variety of jobs on other people’s properties. Handyperson insurance should reflect your risks to bodily injury, property damage and protect your tools and equipment — all at a reasonable cost

Learn how to avoid the most common handyman mishaps, and how to file a claim when you need it. Make sure you get just the right protection for you and your growing business.

Read moreGet a free quote on handyman insurance

Refine your service list and define your customer

Being a handyman can feel like you can do it all – but it’s not always the best move. Narrow your focus to define your customer. This way, you can market to potential clients more directly. You will be more successful at winning bids if you position yourself as an expert at a particular task or set of tasks. 

Refine your service list because you may not be licensed or insured to perform every service. You can also save money on overhead costs because tools and materials can add up.

Develop a business plan

A business plan helps you organize your financial goals and business structure for your handyman company. You will need a business plan if you apply for funding or loans to show your company’s financial viability. 

These are some components of a business plan:

  • Service list
  • Ideal customer persona
  • Financial goals
  • Budget
  • Projected costs and income
  • Marketing plan
  • Operations and procedures

Read more: Small business plan essentials: What to include and why

Get a loan to fund your handyman business

Cashflow issues can be a problem in the construction industry. Starting a handyman business comes with overhead costs, including:

  • Reliable transportation
  • Permits and registration
  • Tools and equipment
  • Insurance
  • Marketing and advertising

The problem is that you first have to acquire clients, and then they don’t usually pay until after the job is complete. 

Depending on your finances, you may need access to funding, such as credit and loans, to get your business started. But there are more options.

Read moreFunding your small business: Your guide to loans, funding, grants and credit

Set prices to maximize profit

A pricing strategy helps take the guesswork out of estimates and bids. The self-employed handyman hourly rate varies from city to city. Research both your typical costs and what your competition is charging. 

You also want to decide whether to charge hourly or by the project. Experiment with both to see which works best for your ideal clients and the work that you do. Carefully consider and adjust your pricing structure to maximize your take-home pay. 

Have a marketing strategy that includes referrals

The marketing strategy for your handyman business should be about growing your reputation and skills to build trust with potential customers. Here are a few ways to do that:

  • Create a Google Business Profile so that customers near you can find you and contact you. This is also a great place to collect reviews. 
  • Develop a simple website that lists your handyperson services. Include photos and testimonials. This helps to legitimize your business.
  • Register for online directories and review sites like AngiHomeAdvisorYelp and Nextdoor.

Give clients a business card and ask them to refer you. Maintaining good relationships with past clients is also an effective marketing strategy. 

Read moreHandyman marketing guide – 6 business ideas to help you prosper

Create a customer contract

A customer contract spells out the scope of work and pricing for a potential client, positions your business as more legitimate and saves you from future headaches. Develop a generic customer agreement template before you launch your business so that you’re not scrambling to make one when you need to give a quote. 

Read moreComprehensive handyman contract in 7 easy steps

Find and bid on projects

Your first few projects as a handyman will take a lot of work to get. That’s because you don’t yet have reviews, testimonials and referrals. 

To help get your client flow off the ground, network through your friend circles, your neighbors, the local hardware store or online via Facebook or Nextdoor. Think about where people go to look for local service providers like handyman services. Start here – then offer to come over and provide an estimate. 

Once you have a few jobs under your belt and some positive reviews, you can lean more on marketing through your website and other review sites. 

Also, take the time to record your leads and past projects. You can always follow up with these people and ask if they have any projects for you during a slow period. 

Read moreHow to find handyman jobs: 5 proven strategies

How NEXT can help protect your handyman business

NEXT provides customized, accessible and always-on handyman insurance via web and app to help you start a handyman business.

Answer a few questions about your business, get a free instant quote and review your options. You can purchase just the right coverage in about 10 minutes and get a certificate of insurance immediately.

Start an instant quote with NEXT.

How to start a handyman business: Laws, permits, insurance, contracts and more


Jessica Crosby
About the author

Jessica spent over a decade working in education before moving into content marketing. She has worked on content marketing campaigns in the edtech, real estate, and personal finance sectors. She has a passion for working with companies that take the time to educate their customers. When she’s not working, she’s probably outside with her two kids.

How to find handyman jobs: 5 proven strategies

How to find handyman jobs: 5 proven strategies

Handyman license requirements by state: A comprehensive guide

Handyman license requirements by state: A comprehensive guide

Handyman vs. general contractor: What’s the difference?

Handyman vs. general contractor: What’s the difference?

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