Prospects for a Handyman Business
There's a huge pent-up demand out there for all-purpose Mr. Fixit men. October 3, 2006
Question
After reading this forum for the year, I realize that it's tough to make a living as a cabinet maker. After losing a corporate job that I hated a couple of years ago, I've been working at the big orange home center and I've met some guys that who are running their own handyman businesses.
They all stay busy, have a backlog of clients and appear to make some serious money (expensive trucks, toys, nice vacations, etc). They do the small jobs that licensed tradesmen don't want to do, such as installing light fixtures, repairing bathroom tile and faucets, hanging shelves, small carpentry work, repairs, etc. They are charging $65 to $90 an hour.
All of them claim to have more business than they can handle. One guy even took the signs off of his truck because he couldn't keep up with all of the calls he was getting. In England, there is a start-up franchise, www.0800handyman.com that offers similar services and is among the fastest growing franchises in the UK. I believe that the concept has potential. This looks like a serious opportunity to be self-employed and make a pretty good living. Does anybody out there have any experience running a handyman business?
Forum Responses
(Business and Management Forum)
From contributor A:
I don't think that it's hard to make a living as a cabinetmaker so long as cabinets aren't your limit. I offer woodworking which includes everything from mantles to kitchens. I started off doing everything under the sun - even some entry doors and gates. But after a while I've become a little more familiar for our custom cabinets and that's pretty much all I do now. So instead of being a handyman, start a shop and offer mouldings, mantles, entertainment centers, etc and after a while, providing that your quality and service are good, you can get to where you want to be. Paying the bills is all I need to do as long as I love my work.
From contributor B:
I think there is very good money in that market, but doing a handful of small jobs every day could lead to billing nightmares. Collect full payment before leaving. Also, charge a trip fee to cover any time spent driving and getting tools and parts together. If you spend half your day driving around and not getting paid for the time, you’re not going to make much.
From contributor C:
Behind every fancy truck and garage full of toys and fancy vacation is a wife with a good paying job. Whatever your hourly rate, with that type of work it is hard to work a clean 8 hours in a day. Many jobs are only a few hours at best so if you finish one at 2:00 you might not want, or be able to, start and finish the next one. That type of work is largely emergency stuff or short lead time so you can't schedule out more than a few weeks in advance. Also, finding parts for repairs can be a nightmare. The most successful ones I've seen work for property management companies, so they are constantly busy. But even then it's a decent job at best. Of course, individual circumstances may vary.
From contributor D:
As far as the franchises go, we already have a couple up here in the northeast. And as far as going it alone, I think there is a lot of money to be made depending on where you are. If you are near a large city you have access to many people who get paid very well and don't have any interest in picking up a hammer.
I once did a two week house-sitting stint in N.Y. City, to get a little pocket money I did a couple small handyman jobs that were set up ahead of time. You would be amazed at what people are willing to pay for a couple small things. Paint an entry door fix a couple loose hinges, and easily pocket $300 a day. You just have to have access to the right people and market yourself.
From contributor E:
I know of a couple retired men who say they stay a lot busier than when they were working and these are guys who are now doing the handyman thing. One said he got started at church, when a lady asked him if he could fix a screen door. Then the word spread, and he said the church has even asked him do to small jobs. But I agree with an earlier poster - billing and collecting could be a nightmare. I guess you could demand payment in cash and then buy a little condo on the Mexican Riviera.
From contributor F:
There are several franchises in the states dealing with this exact issue. There seems to be a huge demand for it. Personally I would look into a franchise since they will have an entire business operation package already set up for you. I believe they also have a price book, kind of like a car mechanic, so you don’t even need to bid projects on your own -you can just reference the book.
From the original questioner:
Thanks to everyone for the response. I've been researching the handyman business for a couple of months. One thing that seems consistent with my buddies and the franchises is that they all claim that once you show up at the location, the "honey-do" list starts to get longer, averaging about six hours per customer. Even at a low rate of $60 an hour, that's $360.00 a day gross, plus the cost of materials. Everyone charges a call out fee of about $30, so add that and you're grossing nearly $400 per call. Most charge time-and-a-half for any work after 5:00 or weekends. Most of these guys have a merchant account so they can take credit cards for payment. The typical scenario is to show up, give the customer an estimate, the customer will sign off, and the handyman collects when the job is done.
These guys usually have about a two week lead time. If someone needs it after normal business hours, they pay the 50% premium. The sharp operators charge by the job. For example, one guy gets $120 to hang a light fixture, $90.00 to install a light dimmer, or charges 25% of the retail price to assemble IKEA furniture. The real trick is to keep a truck full of light switches, outlets, toilet flush mechanisms and be sure to show up on time.
From contributor G:
Do try to keep it ethical guys. I know an 89 yr old woman who was charged $600 to trim a vine on her side steps.
From the original questioner:
I agree. You must keep any business ethical. That's why the customer gets a written estimate before any work is done. I used to sell real estate but got out of the business because of the wide spread dishonesty that dominates the industry. The buyers and sellers were fine; it was dealing with so many unethical agents and brokers that made me hate the business. I've never seen anyone become successful in the long term (other than lawyers and real estate agents) by being dishonest.
Also, you shouldn't give away your work. The handyman business has potential because of pure supply and demand; there is a short supply of skilled tradesmen, and a much bigger supply of customers that don't know how to use a hammer or screwdriver and they are willing to pay someone else to do it. I live in Atlanta and I see my potential market as well educated, high-income professionals who will pay a decent price to perform a service that they cannot or will not do themselves. A fairly good attorney in this city will charge at least $250.00 an hour and works about 60 hours a week. Paying a handyman $80.00 an hour to perform a dreaded task is a bargain. This is a huge opportunity. For the last 50 years, our education system preached that becoming a knowledge worker would be the path to success. The US education system ignored training for skilled trades. Now, the problem (or opportunity) is that we have too many knowledge workers who never took woodshop in high school and can't fix a broken hinge or repair a faucet.
For most of us who visit this web site, we take it for granted that we can work with our hands. Guess what? Most people in this country don't know how, and they have to pay someone else to do it. I'm telling you - there is a huge demand!
From contributor J:
I’ve been doing that type of work for 3 years now. I do no advertising of any kind and can never get a break. Once you go fix something for somebody, and you do the job to exceed their expectations, you’re there every time the toilet won’t flush. It always leads to more work.
From the original questioner:
Thanks for your input. I hear exactly the same story from the guys doing the handyman thing here in Atlanta. All of their new business is from word-of-mouth. Do you charge by the job or by the hour? Are you located near Washington DC or a large city?
From contributor H:
I've read your post and been reading all the responses. I think you’re right about this handyman business. Let me illustrate - I have a neighbor who is a single parent and can't or won't do odd things in her house, so she gets whoever can come over and do them. This guy she uses has generated several other jobs in this community - once word gets out it spreads if you are good and reliable and honest. Another important source to consider is the older folks homes and neighborhoods. Usually these men and women don't have the strength to move heavy ladders around or climb. Put a sign on your truck or van -"Handyman on Call". Put out business cards at hardware stores or places like that. You don't need to be involved in a franchise. Do good honest work and word will spread.
From contributor I:
I really like this idea as well. I think the profit margin would be much higher and very low overhead. What about insurance and licensing? I thought you needed to have a plumbers or electrician or contractors license from the state to do most of that work as a professional? Do people work under the radar? Do you guys have a shop or just work out of a trailer? Where do you draw the line on what you will and won’t do?
From contributor H:
As far GA is concerned all you need is a business card and telephone number. Not even general contractors need licenses other than permits. As for me, I am licensed, insured and legal even as far as workers comp. But, it is permitted to work out of home or garage or van or truck. I would recommend that someone like the original questioner should get liability insurance. Electricians do fall under the state laws for practice.
From contributor J:
I charge both ways. A knick-knack honey do list gets charged the by the hour. For somebody whowants a flagstone sidewalk, I’ll give them a set price. I live on the south side of VA, not really near any large cities. You will get a ton of jobs where contractors didn’t finish something and the homeowner is having trouble getting them back to put that shoe moulding around the tub, and hang the towel bar, and toilet paper bar, etc. Nobody wants to do the small jobs and the homeowner sure can’t cut miters. That’s where you come to the rescue and the homeowner loves a job that’s complete and will be happy to pay a couple of hundred to get it done when they already have 15k in the bathroom remodel.
From the original questioner:
To contributor J: Thanks for the response. What's interesting is that you aren't in a big city and you have more business than you can handle. There's no telling how much business you would find in a major metropolitan area. What may be the best thing about the handyman business is that you're not dealing with a stingy contractor whowill beat you down on price and then take forever to pay you, if you ever get paid at all. Instead, you're dealing with a homeowner who is glad to see you show up and happy to pay you as soon as the job is done.
I talked to a guy today who installs kitchen cabinets for a contractor. He's only making $12 to $15 a box, including the trim out. He told me that it takes him (working by himself) a day to install a good-sized kitchen. I figure that he's making about $250 to $300 a day. He has some high overhead - payments on a big Isuzu box truck and rent on his shop. I've got a feeling that he also has a big investment in his tools. To me, it looks like there is more money doing the handyman thing. Your overhead is much lower. Really, all you need is a small truck or van, a small set of tools, some parts and hardware, and your knowledge. The demand is huge, customers will pay your price, and then you get paid immediately. This is a formula to make some serious money.
The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).
Comment from contributor P:
The handyman business is like any other business. Work hard, be honest and fair to your customers, and you will succeed. But like any business it has its pluses and minuses. People will call you for "free" estimates, pick your brain on how you are going to do the job, and then do it themselves. In many cases they will try to get over on you if they can. But all in all you can make money if you can find and develop good customers who will call you periodically. You need a base of customers who call you back and trust that you are fair and honest and do quality work for an affordable price.
