How to Start a Handyman Business: Steps and Insurance Requirements

Handyman businesses generated over $4 billion in 2022. The industry is growing and has low costs for you to get started. This article will examine how to start a handyman business, what you need to know, and what work your business will provide. We will also show the handyman insurance policies you might need.

How Much Does It Cost to Start a Handyman Business?

When planning how to get started as a handyman, you will want to figure out the cost of your business. Your handyman business can be started for as little as a few hundred dollars. However, you should invest more to create a profitable business to succeed in the long run. 

Starting a profitable handyman business can cost between $2,000 and $6,000. This cost will depend on the number of tools you already own and if you own a work vehicle. Below is a list of a few expenses when figuring out how much does it cost to start a handyman business.


Contractor’s License 

Some states require a contractor’s license to tackle larger projects. You might spend up to $1,000 getting a contractor’s license.


Business License 

The cost of your business license will change depending on the state and city you operate in. City licenses cost $100 or more. To incorporate as an LLC, you will spend between a few hundred dollars and $1,000. This cost will increase if you pay someone else to help you incorporate your business.


Insurance 

You will need several kinds of insurance as a handyman. A contractor’s license requires a general liability policy and will cost you $30 monthly or more. You might want to get a business owner’s policy combining general liability and business property insurance. A tools and equipment insurance policy will protect your handyman tools when damaged or stolen.


Tools and Equipment

You will require a few hand tools and power tools for most handyman jobs. One good thing is you don’t need to purchase expensive specialized equipment up-front. Some tools that are essential to handymen include:

  • Power drill

  • Circular saw

  • Angle grinder

  • Router

  • Nail gun

  • Hammer

  • Wrench

  • Wire stripper

  • Scissors

  • Screwdriver set

  • Measuring tape

  • Box knife

How to Start a Handyman Business With No Experience

When considering how to start your own handyman business, you might be worried that you lack experience. To build up experience, you can work with a general contractor. General contractors work in many different areas. This means you can quickly get experience with various activities, including:

  • Installing windows

  • Working on decks

  • Installing siding

  • Framing

  • Cement work

  • Roofing

Working with a professional, you will learn the names and uses of the standard tools you will use as a handyman. Working with a general contractor allows you to make mistakes while learning since they will be supervising you. 

If a general contractor isn’t around, a method you can employ in how to start a handyman business with no experience is to work with a carpenter. 

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How to Register a Handyman Business

An essential step in how to set up a handyman business is registration. The steps you must follow are listed below.


Acquire a State Business License

Your first step is creating a business entity. You will want to research which type of business entity is best. It is recommended that small handyman businesses choose an LLC or sole proprietorship.

Sole proprietorships are a great choice if you have no employees and want to simplify your business. It is free to set up and requires less paperwork. The downside of a sole proprietorship is you, as the owner, are responsible for all debts and financial obligations. You also miss out on tax-saving strategies compared to other business entities.

LLCs are more expensive, by contrast. However, they offer several advantages, which include:

  • Not subject to corporate tax or double taxation

  • LLC member’s personal assets are protected from business debts

  • More credible to potential customers

Register for an Employer Identification Number

An employer identification number (EIN) is used to help your business pay taxes and easily identify your business with the IRS. You can apply for an EIN free on the IRS website.

Some businesses are required to have an EIN before operating. These businesses include:

  • Businesses with employees

  • Companies acting as corporations or partnerships

  • Businesses that file employment, alcohol, tobacco, excise, or firearm tax returns

Get Your City Business License

You must go to the chamber of commerce in the city your business is operating in. Once there, you can ask someone how to get the proper forms to obtain your city business license.

Some cities allow you to do this process online. You will need multiple licenses if you plan to offer handyman services in more than one city.


A handyman assembling a shelf.


How to Grow Your Handyman Business

To answer the question of how to run a handyman business, you must figure out the key ingredients to growing your business. Below are a few actions you can take to grow your handyman business.

  • Make connections–An excellent way to make connections while starting as a handyman is to work with one. You can also make connections while working under the supervision of a general contractor. Another way to make connections is to attend meetings with other business owners.

  • Invest in advertising–Advertising in an important step in how to grow your handyman business. You will want to make your business easily discoverable by potential clients. You can pay for services that let you get leads for customers. Consider paying for website ads and creating your own website so people can find you on search engines.

  • Market research–If you invest in market research, you can make intelligent decisions about what your local customers need in your target market. You will also want to research the strengths and weaknesses of your competitors. This will allow you to understand what is working for them and how you can carve out a niche for your business.

How Much Does a Handyman Make a Year?

The salary of a handyman in the US is $43,180 per year, according to the Bureau of Labor Statistics. This figure will change depending on the area your business operates in.  How much you make depends on what services you focus on as well. Below are a few handyman-related careers and how much they make.

Carpenters $48,260
Plumbers $59,880
Electricians $60,040


How Much Does a Handyman Make Per Hour?

A handyman will make approximately $20 per hour as a median. These rates typically range between $15 and $29 per hour in the US. Below are a few hourly rates for handyman-related careers.

Carpenters $23 an hour
Plumbers $28 an hour
Electricians $28 an hour


An entry-level handyman will require a high school diploma or equivalent. Training on the job is a must to be successful as a handyman.



What Services Does a Handyman Provide?

Your handyman business can provide many types of services to your customers. Handyman is a general term for someone who can make various domestic repairs. As a handyman, you are a jack of all trades that can help customers with services that include:


Handyman Furniture Assembly Services

Your handyman business could offer furniture assembly services for customers. These services can help your clients assemble complicated items in their homes that may require specific tools. You don’t need much experience for this service, and you can save customers time and a huge hassle.


Handyman Plumbing Services

Handyman plumbing services include fixing leaky faucets, installing bathroom hardware, fixing shower heads, and applying caulk to avoid water getting in and out of cracks.


Handyman Carpentry Services

Some carpentry tasks your handyman business can provide will be building bookshelves or stairs, replacing doors, installing kitchen cabinets, and constructing small house additions.


Handyman Electric Services

A handyman can work like an electrician and help replace lightbulbs, install ceiling fans, install security systems, change smoke detectors, and upgrade light fixtures.


Handyman Babyproofing Services

Parents will employ a handyman to make their house safe for their new children. Handyman will go through the house covering electric outlets, installing safety locks, building safety gates, and anchoring dangerous objects like bookshelves, tables, and dressers.


Handyman Gutter Cleaning Services

Gutter cleaning can be an essential service a handyman provides. You need to clean gutters to avoid a flooded basement when it rains. With the water having nowhere to go because of dirty gutters, it can often seep into a home’s foundation and start causing cracks. These cracks will make your home less stable in the long run. 

Dirty gutters also produce rot, attracting pests like rodents and insects. The cost of dealing with a  pet infestation can be more than cleaning your gutters.


Handyman Painting Services

Your handyman business can offer painting services to freshen up the interior of a home. Exterior painting and staining are often critical to protecting doors, fences, and decks from facing the effects of weather.


Handyman Fencing Services

Fences and gates will need upkeep and repairs to be effective at their function of keeping out pests and maintaining owner privacy. You can offer your handyman services to repair broken fence sections, install gates, and keep a fence standing.

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Insurance Requirements for Boosting Income

To boost your business income and prevent catastrophic financial loss, you must purchase certain insurance policies. Some policies to consider are outlined below.


Business Owner’s Policy

A business owner’s policy combines coverage from general liability and commercial property insurance. It is the most comprehensive insurance option since it can incorporate many forms of coverage in one package.

Our recommendation for a business owner’s policy is NEXT. NEXT offers policy bundles that save you 10% or more on business insurance. They have a 4.7/5 customer review score and are accredited by the Better Business Bureau. NEXT has an A- score from AM Best.


General Liability

General liability insurance is a must for a handyman. You will use this insurance to protect your business from third-party lawsuits for personal injury, bodily injury, and property damage. If you get a contractor’s license for bigger projects, you must often have general liability insurance. This policy can protect you from damage your jobs do and injuries customers sustain.

Thimble is our recommended insurer for handyman general liability insurance. This company offers short-term policies that can cover the duration of your business projects easily. They have free online quotes, and the purchase process is speedy. They offer an app for tech-savvy customers to get the most out of their policies. Thimble has an A rating with the Better Business Bureau.


Professional Liability

A professional liability policy protects you from the professional mistakes you make in your business. These can include failing to meet a client’s contract conditions, negligence, and scheduling conflicts that result in client lawsuits.

Our recommended provider of professional liability insurance is Hiscox. Hiscox excels at specialty insurance that is tailored to your business. They have a 14-day refund policy and offer additional discounts for bundling multiple insurance policies. Hiscox has an A rating from AM Best.


Commercial Property Insurance

Your commercial property insurance will protect your business building and property on business premises. This policy will protect from many causes of physical damage like fire, lightning, theft, vandalism, and explosions.

CoverWallet is one of the best places to get a commercial property policy. They are a cloud-based insurance platform that offers over 10 top insurance providers to choose from. You can compare different policies and quotes to get the coverage you need. CoverWallet has an A+ rating from the Better Business Bureau.


Commercial Auto Insurance

You will need commercial auto insurance to protect your business vehicles. Personal auto insurance does not provide coverage for most work-related activities. Commercial auto protects you from the liability costs of vehicle accidents and can help you pay for vehicle damage.

Tivly is an excellent option for handyman commercial auto insurance. They are a platform of over 200 insurance agents, companies, and brokers to pick from. Tivly helps match you with the right policy through flexible targeting and your insurance needs. The company has an A rating from the Better Business Bureau.

Workers’ Comp Insurance

Workers’ compensation insurance protects your employees from injuries and illnesses. In most states, your business is required to purchase this policy if you have employees.

The Hartford is our recommended pick for workers’ compensation insurance. The company has a network of over $1 million medical providers. Your employees can access over 65,000 pharmacies to fill prescriptions without out-of-pocket expenses. The Hartford has an A- rating from AM Best.

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