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:  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 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.

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.

What If I Run Over? When Should I Charge the Customer?

Be careful how and when you enter into this conversation.  Your reputation is at stake.

Good communication with the homeowners throughout the course of the work will completely eliminate surprises and conflicts when you go to collect your pay.  Make sure he or she understands the work being done and the challenges you are faced with.

If the over run couldn’t be avoided, talk to the customer and explain what the situation was.  Often, a job runs over due to unforeseen problems that crop up as you are working.  If it was totally out of your control the customer should pay.  If you uncover additional work to be done, show your customer as soon as possible and talk to him about the problem that faces you both.  Show proof of any unexpected material costs by showing him the invoices.

If you have a good honest reason for the over run the customer will agree, or at least be willing to split the difference with you.  Remember this old adage: “Volume solves all problems!”  Keep your eyes on getting a referral from every customer.

Lastly, don’t lose your temper!  If negotiations grind to a halt and you’re willing to walk away with your original estimate, just do it.  Tell them that you will stand by your word.  Your customer will be happy and your reputation will be intact.  Ask for a referral and chalk it up to experience.

How Large a Deposit Should I Request?

There are limits on what you can request as a deposit.  Check the laws in your state for the exact limits.  In California, contractors are prohibited from asking for a deposit of more than 10% of the contract price or $1,000, whichever is less.

You’ve heard the horror stories about “tradesmen” asking for a 50% deposit and then skipping town with the money.  Don’t be mistaken for one of these people.   If you have to request a deposit, even if you’re not a contractor, follow the contractor laws for your state.  Following this rule will increase your credibility and increase your chances of getting referrals.

I have chosen to never ask a customer to pay for materials in advance.   I charge all of my purchases on an air miles visa card.  This gives me thirty days to pay and a free round trip ticket when it comes time for a vacation.  If you can, do the same.

If you don’t have the available credit and the job has a large materials requirement there are solutions.  Have the homeowner buy the materials so that they are on hand when you arrive.  You can also go to the store together and let the homeowner choose and purchase the materials.  Handled this way, the homeowner will know that they are paying nothing but cost for the materials and you will have stayed within the law.  Don’t ask for a large deposit.

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