Professionalism

Does a Handyman Need to Have a Contractors License?

There are very few areas where a handyman can get a handyman license, so the question becomes: How can I work legally as a handyman and still make a good living?

It seems that every state in the Union has licensing requirements for all aspects of construction.  You have to be a licensed contractor to do any major work…jobs like rewiring a house or remodeling a bathroom.  If you are an unlicensed handyman you must look to the exceptions to the licensing requirements.  What kind of work can be done without a license?

Most states have some kind of “Minor Work Exemption” rule. There are often maximum dollar amounts for a job or some specific types of work that don’t require a license.  These exemptions are where the handyman makes his or her money!  But guess what?  Every state has different rules!

I’ve found that one state sets the maximum dollar amount for labor and materials at $750, while another is $1,000.  Still another state says that you can do up to $3,000 but you have to show that you have liability insurance.

Some states won’t let you do any plumbing or electrical work and won’t allow you to do any work that requires a permit.  It’s maddening really.  InCalifornia, where I live, the limit is $500 but there is an exception which allows the sale or installation of finished products that don’t become a fixed part of the structure regardless of the dollar amount.  So I can assemble furniture and garage storage cabinets all day long!

Everywhere you go you’ll find different rules and it’s impossible to quote them here.  But they all seem to have one thing in common.  They won’t let the handyman break the job down into smaller components to make the totals “fit” the rules and the job can’t be a part of a bigger job that exceeds the limit.

Obviously the government is trying to protect vulnerable consumers from unscrupulous, unlicensed contractors and they have the minor work exemption rules in their sights as a means of protection.  Because of this, we will continue to see the licensing requirements getting tighter and enforcement becoming stricter.

So what is the handyman to do?  How does a handyman business succeed?  Well, we take a closer look at what we are being allowed to do.

We can do repairs all day long.  We can do maintenance, we can do minor jobs like installing trim, power washing and staining a deck, doing trash hauling, touching up paint, or minor dry rot repairs, furniture and cabinet assembly.  We can repair a fence, build a gate and install a screen door.  There are lots of jobs that we can do.  In fact, almost everything we can do a licensed contractor will not want to do.  The jobs are too small for him to send out a worker. There is a definite niche for a handyman and a great need for honest, reliable handymen and women!

Don’t let the licensing limitations stop you.  Use them to your advantage.  Find partners to work with that will refer you the kind of business you can do.

The years spent as a handyman may count toward your experience requirements if you apply for your contractor’s license.  Call a local contractors testing school to find out what you can do now to prepare for getting your license.  They will also be a great resource for information on what types of work you can do in your area without a license.

Nothing I’ve said here has stopped me from making a good living as a handyman.  Whatever you do, I hope you take away from this question one simple idea.  As an unlicensed handyman it’s not our job do bathroom or kitchen remodels or to frame out additions.  That is not the kind of work we should be looking for and we can’t legally build a business based on large jobs.

How Much Insurance Coverage Should I Have?

If my commercial experience is typical, $1,000,000 worth of general liability insurance is a good starting point.  On my latest renewal I discovered that raising my limit to $2,000,000 did not increase my premium.  Ask your agent for quotes on both coverage limits.

The more assets you have, the more important liability coverage is and the more coverage you need.  Please consult your insurance agent for all of the facts.  You will also want to get a full explanation of manifestation or sunset clauses when choosing your policy.

Do I Need to Have a Catchy Name for My Handyman Business?

If you’re interested in selling your business down the road you will want to have a catchy name.  It would be pretty tough to sell Jim Smith’s Handyman Service to Jenny Jones!

But there are some downsides.  Using a fictitious name (any name that isn’t your given name) will cost you some extra money.  Once you’ve chosen the name you’ll be required to register that name with the local authorities and to pay to publish the announcement of the name.  You’ll probably want to have a logo to go along with your new name too and that could mean additional expenses.

This is the route that I chose to take, but in retrospect I could have just used my given name and added “Handyman” as my title.  Besides saving on the cost of the filings and the extra time involved getting the paperwork together, I wouldn’t be on every credit card company’s mailing list under my business name!

Regardless of the name you choose, business cards are a must.  There are some great online print sources for professional looking cards listed on the Resources and Helpful Links section my website: SensibleHandyman.com.  You can lay out the cards online to save on graphics fees.

Order plenty of cards and give them out to everyone you know.  When someone asks for my card I always give them three so they have one to keep and two to pass on.

Do I Need an Email Address and My Own Domain Name?

Yes on both counts.  An email address and a domain name will help to build your credibility.  They prove that you are serious about your work and give your clients another way to communicate with you.

I encourage you to get your own personalized domain name and use it for your email address and your webpage.  There are many free email services and free web hosting services out there and you may be tempted to save money by choosing one of these.  Before doing that, consider these two email addresses:

[email protected]  vs. [email protected]

Who would you rather do business with?

Should I Ask To Be Paid in Cash?

No.  And don’t offer a cash discount.  Never tell a customer that you prefer to be paid in cash.  Asking for cash is bad business and a dead give away that you are cheating on your taxes. If they pay you in cash, accept it!

What About Preliminary Notices and Mechanics Liens?

Here is a definition for you:  A Preliminary Notice contains language which describes the details of the contract and who the interested parties are to the transaction.  It also makes a statement to the property owner that a mechanics lien could be placed on the subject property, what the consequences of such a lien placement are, and what their remedies would be.  The placement of a Mechanics Lien helps to ensure that you receive payment for your services.  The owner of the property will not have clear title until the lien is released.

I’ve never filed a Preliminary Notice or a Mechanics Lien for work that I’ve done as a handyman.  Would I be sorry that I hadn’t?  Yes, if I’d done work for a homeowner or a contractor and never got paid!

As a handyman, we continually work under the assumption that we will be paid for the work that we do.  If payment is never received, the homeowner has great leverage against us.  It is usually impossible to repossess the work that we did.

A Mechanics Lien is our way of insuring that we receive payment.  The Preliminary Notice is the first step in the process and it lets the homeowner know that a Mechanics Lien could be filed.  This in itself is often sufficient to prompt the homeowner to pay for the work making the actual filing of the mechanics lien unnecessary.

Check your local authorities for details.  Each state has its own filing requirements, time restrictions and laws.

Does the Truck I Drive Really Matter?

Ford Ranger with Magnetic Signs and Roof Rack

Yes!  A handyman’s truck should tell the world that they are dealing with a reasonably priced professional.  It should indicate to your customers that the owner is clean, organized, efficient, and serious about their work.

Buy a good used truck or a basic new truck like I did.  Don’t get anything too flashy because it will make you look too successful.  Better to be simply clean and reliable.  A little extra fuel economy doesn’t hurt either (I drive about 1,200 miles per month).

The picture shows my truck.  I carry nearly all of my tools with me.  This has proven to be a good practice because it enables me to do the unexpected job and reduces the “I don’t have the right tool” frustration factor.  In order to do this, I needed a truck with a shell or a tool van.  As you can see, I chose a small pickup with a standard shell and a small rack on the roof.

The disadvantages of my set up are probably clear to you.  First, the rack on top is too light to carry large lumber loads.  A standard rack would have been a better choice.  I continue to manage with this small rack but I am often pushing tools aside in the bed to make room for lumber.

Next, the camper shell should have been a workman’s shell with side access to the bed.  That would save a lot of crawling into the bed to retrieve items stored toward the front of the vehicle.  A workman’s shell would also be more secure with stronger locks and no windows.

Should I Accept Personal Checks?

Yes!  Most customers pay by check.  However, when in doubt do what the corner merchant does to cover himself.  Write the customer’s driver’s license number on the check to prove you checked their ID.  In order for the police to help you collect on a bad check, you will need to be able to prove who it was that signed the check.

What Should My Hourly Handyman Rate Be?

My web search yielded no local handyman rates so I continued my search the old fashioned way…I started asking around.  I know some real estate agents in the area and I asked them if they knew any handymen, and how much they charged.

From their referrals, I talked to a handyman who had a good reputation with these agents.  He told me that he quoted $25 per hour.  I thought it was too low for our area.  He also told me that he would send some of his business my way because he was too busy to handle it all.  Now I knew he was definitely undercharging!

The laws of supply and demand should have driven his rates up, yet he claimed that he had been charging the same rate for the last 15 years.  He hadn’t raised his rates because he didn’t want to upset his long time customers.

This example showed me how important it is to choose your rates carefully.  It will be more difficult to raise your rates later, particularly when you are getting a lot of referrals from current customers.

You don’t have to price yourself cheaply when there is plenty of business available.  Another handyman I talked to had all the business he could handle and charged $50 per hour.  He presents himself well and receives lots of referrals.

To take this project a step further I researched a handyman franchise in our area.  I found that they are charging $115 per hour and have a 2 hour minimum!  Are they too busy also?  I don’t think so.  In fact, they had a booth at the last Home Show I attended.  There they were, hawking their services and showing off their beautiful marketing materials.  Clearly, their challenge is finding enough customers who are willing to pay extra for a professional licensed handyman. Perception is everything and the handyman franchises are doing a great job of cashing in on their professional image.

With this sampling of rates I had a starting point.  Not having high overhead, I knew I didn’t need to charge as much as the handyman franchises.  Since I’ve never been a big fan of working long hours and earning less than I’m worth, I decided that I didn’t want to start too low either!  If I could maintain a professional image and do good work, why not try for a higher rate?  If I charge less then the major franchises I’ll still be seen as an inexpensive alternative.

I decided to start out charging $60 for the first hour and $45 per hour thereafter.  I correctly guessed that my customers would be willing to pay my rate. I also knew that I could offer a discount to my rate as a ‘special’ or even knock off some time when totaling up the invoice if I felt I should.

Do the same research in your area and don’t hesitate to push the envelope.  What ever your local rates are, there will always be a low rate set by the wannabes, a middle rate set by the professionals and a high rate set by the franchises.  Position yourself as a professional by setting your rates at or above the middle and below the top.  You don’t need to be the cheapest handyman in town to get all the business you need!

What About Weekend, Holiday or Overtime Rates?

If you want to charge extra for weekend or holidays I suggest you charge time and a half for weekends and double time for holidays.  Most customers will be comfortable with this structure since it closely matches the familiar work day environment.  Will they want to pay it?  Probably not, but at least they will understand the basis for the rate! Use these numbers as a starting point for negotiation.

I decided not to quote weekend or holiday rates on any printed materials or on my website.  Frankly, I didn’t want to advertise the fact that I might be willing to work outside of the regular Monday through Friday hours.  I wanted to keep my weekends for family, rest and fun.  If the customer asks, or the job demands it, I’ll tell the customer that there will be a surcharge for weekends or holiday work.

I’ve never been successful in charging overtime rates.  In every instance where I might have charged overtime I’ve never felt comfortable doing it.  However, if I had an employee and I was paying overtime to them I would definitely pass the cost on to the customer.

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