Want to start your own company? Nice! If you’re skilled at repairs, maintenance, and odd jobs, offering handyman services may be a great fit for you. Regardless of where you’re working, or what you’re doing, there are a few steps necessary to take before you launch your business.
1. Define your scope of work
2. Choose a business structure
3. Open a bank account
4. Get insurance
5. Find clients
Defining your scope of work
Home and business owners rely on handymen to perform miscellaneous work to keep their properties in good repair. Either they can’t do the work themselves, or they don’t have the time to – which is good for you, because it creates more job opportunities for yourself!
Not everyone can be experts at everything, there are a few basic things a handyman should know how to do, like:
- Anchoring objects
- Fixing leaky faucets
- Cleaning gutters
- Changing shower heads
- Changing electrical outlets
Most handymen are jack-of-all-trades, but you may want to dig into a specialty to set yourself apart from the rest.
Choosing a business structure
While many handy-persons operate as sole proprietors, some states require some sort of license in order to do business. If you’re required to carry a license, you’ll want to register your business with the state. By registering your company, you will receive an FEIN, or Federal Employer Identification Number.
Business entities that require registration:
- Corporation (Any kind)
- Limited partnership
- Limited liability partnership
Sole proprietors are not required to have an FEIN.
Registering a business isn’t designed to break the bank. To get started, it typically costs less than $300.
Opening a business bank account
Speaking of banks, it’s a good idea to set up a bank account specifically designed for your handyman operations – outside of your personal bank account. In order to set one up, you’ll need a business license.
There are many types of business bank accounts you can open, including:
- Checking account
- Savings account
- Credit card account
- Merchant services account
If you’re not familiar with a merchant services account, it’s an account that allows your business to accept both credit and debit cards from your clients, both in person and online.
One of the main perks of business banking is that funds are separate from your personal accounts. You may think it’s a hassle having an additional account to keep up with, but it’s important to have because mixing the two can affect your legal liability. Meaning, if you face a lawsuit and they accounts aren’t split, a court can go after your personal funds – even if it was a business claim.
Another nice thing about business bank accounts? Tax advantages. Rather than going through your personal account and noting which transactions were personal versus business-related, transactions flowing in and out of a business bank account is clear and hassle-free.
Business banking offers owners a line of credit. This can be helpful if you need access to short-term capital – whether it’s to help you grow, or help you stay afloat during slow seasons.
Not sure how to pick the best business bank for your company? Consider the following:
- Account features, like wiring services and mobile banking
- Start up requirements
- ATM access
- Minimum balance requirements
Business insurance for handymen
You’re really getting there! Your entity is set up, you’ve got a bank account, next stop: insurance. May not seem like an exciting next step, but it sure comes in “handy”’ in the event of an error or accident.
You may work at a client’s home, business, or rental property. Surely you run errands for your customers, like driving to a home improvement store for materials. That’s why commercial insurance is definitely a must-have for your line of work.
Pros of commercial insurance:
- Financial coverage in the event of an accident
- Protection for your company if you’re facing a claim
- Less stress knowing you won’t have to pay for incidents out-of-pocket
Cons of commercial insurance:
- Can be tricky to understand which policies are best for your business
- Additional business expenses
- Not choosing the correct limits and potentially having to pay for claims out-of-pocket
Having handyman insurance is great because your work is physical – and with that, comes risk. Because the work you perform is so varied, there are a few different recommended policies to consider.
Handyman workers’ comp insurance
We’ve all heard it before… workers’ compensation insurance. The question is, what’s it all about? Who needs it? Why is it so important? What does it cover, anyway? If you have workers’ comp questions, you’re in the right place.
If you have a team working for you, odds are you will be required to have workers’ compensation insurance by your state. If you’re a sole proprietor, you may not legally be required to have this coverage, although your hiring party may mandate you carry this policy. Many homeowners and business owners hiring handyman prefer that they are insured because if something happens, the liability is taken off of themselves.
If you’re a one-person operation and you’re looking for an affordable workers’ comp option, you may want to consider a ghost policy. This policy offers you your Certificate of Insurance at an inexpensive rate.
Additional ways to save on workers’ compensation insurance:
- Implement a back-to-work program for injured workers
- Establish a drug-free program
- Outline a safety program
General liability insurance for a handyman
This coverage is a catchall policy, in a sense. General liability insurance protects against property damage, third-party bodily injury, and personal/advertising injury (like libel and slander). This is a very important policy to have as a business owner, and especially critical if you’re working with the public.
Wondering how all of these coverages could apply to a handyman? Here are a few examples:
- Property damage: You’re hanging a heavy mirror over an expensive glass credenza. The mirror slips out of your control, shattering the credenza. Rather than paying for replacement or repair costs, your general liability policy would pay for the damages.
- Third-party bodily injury: You’re working at a client’s home and you’ve got tools sprawled out over the floor. Your client trips over one of the tools, falls, and shatters their elbow. Rather than having to pay for the medical costs yourself, general liability takes care of medical expenses in the event of an injury.
- Libel and slander: Not loving one of your customers and find yourself venting online? Or maybe you’re telling others about a horror story experience you had working with them? If your not-so-favorite client files a claim against you for libel or slander, this policy would cover court costs and miscellaneous fees associated with a lawsuit.
Want to get more out of your general liability policy? Consider a BOP, or business owner’s policy. This bundle packages general liability with commercial property insurance, at a more affordable price than purchasing each policy on their own. More coverage at a better price – nice!
Handyman inland marine insurance
Business property insurance is great to have, but the downside of that policy is that the coverage ends once you are 500 feet away from your business premises. And since handymen typically work at different locations, additional coverages are required to ensure business property is covered.
Inland marine insurance offers business property protection while in transit and in other locations, like job sites or temporary storage sheds. If you want to protect your materials, equipment, and tools while on the go, you will want to consider this policy.
Essentially, inland marine protects your business against losses while moving commercial property, and anywhere that’s outside of your business location. This policy covers replacement and repair costs in the event something happens to your gear.
There are several add-ons (known as “endorsements”) when it comes to inland marine insurance. These include:
- Installation floater
- Builder’s risk
- Contractor tools and equipment
Commercial insurance for a handyman
There are many benefits of additional business insurance policies, as well.
Other coverages handymen may want to consider are:
- Commercial property insurance
- Commercial auto insurance
- Hired & non-owned auto insurance
- Umbrella insurance
Check out this guide on handyman insurance costs.
Getting new customers as a handyman
Word of mouth is a great way to gain new clients. If you’re trying to build a customer base, asking friends, family members, and past clients for referrals is a perfect place to start. Think about it, if you’re looking for a recommendation, you’re going to ask your inner circle first, right? Right! So make sure you’re on everyone’s nice list to ensure you’re at their top of mind when it comes to handyman recommendations.
An additional way to find new prospects is to attend networking or industry events. Maybe you’ll meet another tradesperson who has been looking for help with handyman work. Or, you may run into a few property managers and find they are in need of assistance with repair and maintenance.
Play up the “local” aspect! Handymen are all about that neighborhood vibe. Print out some fliers and place them in people’s mailboxes. Or, go to apartment complexes and ask to speak with a manager, they may need some assistance with upkeep.
Looks like you’re ready to go!
Now that you’re up to speed on tips and tricks on how to start your own handyman business, go spread your wings! But before you do, make sure you’re all squared away on your business insurance. With Pogo Insurance, we compare quotes from over 30 carriers to offer you the best coverage at the right price. Get a free estimate.