Are you passionate and talented in certain building trades and you are possibly thinking about making more of your skills? It could be time to start your own handyman business and turn what you love into a living.
In this article, we’ll take you through our step-by-step guide on how to start a handyman business. We will cover topics like writing a business plan, registering your new business, and promoting it. Let’s get started.
Step 1: Write a business plan
To establish how your handyman business is going to succeed, you’ll need to write a detailed business plan. This is an essential document that maps out your company’s first 12-24 months.
The primary purpose of a business plan is to assess how viable your business is, and how much funding it’ll require to get through its early phase. It also helps visualise your projected profits and marketing costs and plan your market research strategy.
Starting a business (especially your first one) can be overwhelming. However, constructing a comprehensive business plan will help you visualise your strengths and weaknesses, goals, and what you need to do to achieve them.
It is also a crucial tool for securing the funding your new company needs to evolve. When you’re ready to seek additional investment, third parties (like investors and banks) will want to see a well-written business plan, to help them assess the level of risk involved in investing in you, as well as the reward potential.
To help you get started, see our blog on how to write a business plan as a start-up.
Step 2: Register your business
Now that you know what the road ahead looks like, it’s time to register your handyman business as a limited company. You can do this quickly and easily with our expert team here at 1st Formations, where company formation packages start at just £12.99. To get started, you’ll need a unique business name. Simply enter the company name you’d like, and our company name checker will let you know if it’s available.
You’ll then be asked to choose your desired formation package, depending on the additional extras you’d like (such as a registered office address or VAT registration). If you’re unsure which package is best for you, you can compare our packages or contact our team for guidance.
Finally, you’ll need to tell us more about your company. We will ask you for details such as its jurisdiction, director’s details (you need at least one), and up to four Standard Industrial Classification (SIC) codes.
Our expert team will work with you to make sure there are no errors in your application and answer any questions you might have. They will then send your application to Companies House. Once accepted (typically within 3-6 hours), you’ll receive digital copies of your incorporation documents from us.
Benefits of incorporation
You might be thinking of setting up as a sole trader (self-employed), which is also an option. However, incorporation offers significant benefits that the sole trader model is missing. Here are some of its key advantages:
- A limited company is its own legal entity – In the eyes of the law, your company is treated independently from you.
- ‘Limited’ liability – If your company accrues debt, you will only be liable up to the amount paid for your shares (plus the unpaid amount, if any). In contrast, as a sole trader, there is no distinction between your personal finances and the business’, and you’d be personally responsible for its losses.
- Credibility – Customers and suppliers tend to find registered companies more trustworthy than sole traders, giving your business a credible and prestigious image.
- Your business name is protected – Registered company names cannot be the same or remotely similar to any other existing name. This means your unique business name is legally protected and cannot be used by anyone else.
Other benefits include taxation, business exit options, and options when raising new capital.
Step 3: Get the right equipment
The next step is getting the right equipment. As a handyman, you’ll be a jack of all trades, but they don’t all offer the same services. So, you need to define your skills, narrow down the services your new business will offer, and make sure you have the right tools for the job.
For instance, if you’re going to offer gardening and landscaping services, you’ll need a hedge trimmer and lawnmower. Or if you’re going to provide roofing services, you’ll need roof and gutter sealant and roofing sheets.
You don’t need every tool yet, but on top of the basics (like a toolbox and a ladder), it’s important to know what kind of handyman jobs you’re able to undertake, so you can be prepared with the correct equipment.
Additionally, a suitable vehicle is an essential part of running a handyman business. You’ll need a van to transport all your equipment and travel to your customers.
But choosing the right type of vehicle is an important and expensive decision. For a new handyman business, a small van like a Citroen Berlingo or a Peugeot Partner might suffice. It’s important to do your research based on your budget and the type of equipment you’ll need to store in your van regularly.
Finally, you’ll need safetywear. Items like hard hats, steel-toe boots, goggles, dust masks, and gloves are the minimum requirements to keep you protected from injuries and accidents.
For specific jobs like painting, you’ll also need respirators and coveralls. A fully stocked first aid kit is also essential to have with you at all times.
Step 4: Insure your business
Next, protect your business with an insurance policy. There are several cover options for handymen, such as:
- Tools – Covers the cost of your professional equipment if it is lost, stolen, or damaged
- Materials – Additional insurance that is not part of the tools cover
- Public liability – Covers you if you injure someone or damage their property
- Employer’s liability – This is a legal requirement if you have permanent employees
- Temporary employee cover – If you take on short-term employees between 60 and 150 days
- Legal expenses – This covers your business if it runs into any legal problems with a supplier or customer
- Personal accident – This covers you (or anyone else in the business), if you’re unable to work due to an injury (personal or business)
- Van insurance – Protects your business vehicle
When it comes to business insurance, be sure to shop around to find the best deals. Popular sites like Direct Line and AXA offer a range of tailored handyman and trade insurance policies, but you can also use comparison sites to find the right insurance for your handyman business.
Step 5: Promote your business
Now that you have all the building blocks covered, it’s time to promote your new business and market your services. Here are some tips to get you started:
Your new business should have a website that communicates your services and prices. This doesn’t have to be a state-of-the-art website – a simple page that highlights who you are and what you do will suffice in the start-up phase.
As mentioned, our formation packages come with a free domain name, to help you get your professional website up and running. You’ll also need a hosting platform like WordPress, which offers a free trial and a range of packages to suit your budget.
Word of mouth
This is one of the most popular forms of marketing in the trade industry. When it comes to manual services, people often rely on tried and tested companies that their friends and relatives have used. You can start by offering your services to people you know and asking them to share their experiences with others.
Reviews are also a powerful extension of word-of-mouth marketing. Especially when you’re a brand new company without much history yet, positive reviews from your customers are an excellent way to instil confidence in future clients and spread the word about your new handyman business.
Social media is an effective way to build brand awareness. For instance, you could start a YouTube channel and share videos of your jobs and projects with your audience. This can help bring your brand to life and demonstrate your skills and services.
Another great option is Instagram. There is a specific business account option, which enables you to:
- Create Ads
- Engage with your audience
- Share contact information
- Get real-time insights on your performance
- Sell your services directly through the Instagram app
Other great options are Facebook (which has similar functions to Instagram) and LinkedIn (perfect for making business connections).
Being featured on these sites can help get your handyman business noticed, showing potential clients that you are a trusted and approved company.
Step 6: Running your handyman business
Now that you’re all set up, you need to prepare to run your new business.
Bookkeeping and invoicing
As your customer base grows, you’ll need to organise your financial documents. To keep your bookkeeping in order, you need to keep all your business expense receipts, invoices, and bank statements.
You’ll also need to issue invoices to your customers after completing jobs. Creating invoices correctly is crucial to avoiding incorrect and delayed payments. The key components of an invoice include your company name and address, an invoice number, the details of the company or person being billed, and the description and cost of the services provided.
Staying on top of your company’s financial data is crucial. To help with this workload and ensure procedures are carried out correctly, you may wish to hire a bookkeeper or accountant as and when required.
Companies House filings
As a limited company owner, you’ll have certain ongoing obligations when it comes to filing documents at Companies House. These include your annual confirmation statement, which requires you to check and ‘confirm’ certain company details such as your company name, your registered office address, and information about people with significant control (PSCs).
You’ll also need to file annual accounts, which is a report of your company’s financial activity covering its financial year.
One of your requirements with HMRC is registering for VAT. Limited companies are not automatically registered for VAT – you will need to register once your company’s annual taxable turnover exceeds £85,000, or if you expect it to reach this threshold in the next 30 days.
You then need to file a VAT return monthly or quarterly. To register for VAT through 1st Formations, see our VAT Registration Service.
If you take on employees (including directors who take a salary from the company), you’ll need to register for PAYE. This allows you to run payroll for your company.
Limited company directors and shareholders may also need to register for Self Assessment and file annual tax returns. This process works out how much income tax you owe from any personal income, such as dividends or share profits.
To access HMRC online services and complete these obligations, you will need to register for a Government Gateway account.
Thanks for reading
So, there you have the 6 key steps to starting and running your own handyman business. Start by writing a business plan to visualise how your business will perform in its first couple of years. Then, incorporate your company, purchase business insurance, and promote your services.
Once you’re set up, it’s essential to familiarise yourself with the legal requirements and obligations that limited companies have with Companies House and HMRC.
We hope you found this guide helpful and information. If you have any questions, please don’t hesitate to post them below or send our team a message.