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Handyman business plan for starting your own business
Apartment renters and homeowners often need professionals for small maintenance tasks like installing curtains and shelves, pre-fabricated furniture installation, hanging artwork, changing lighting fixtures, AC repair, plumbing, and so on. It is not easy to find qualified experts who can provide such handyman services. If you are interested in starting a handyman business and offering the above services, you should come up with a well-analyzed and written business plan for handyman to seek financing from investors and banks.
Executive Summary
The Business
Handyman Next Door is a professional and licensed handyman repair company established with a well-positioned and maintained office space in LA, California. We are the professional handyman service providers who are aimed to compete in this highly competitive market in our home market Los Angeles and across the US.
Management of Handyman Service
If you are wondering how to start a handyman business, consider adding professional team to your business. Our professional team will include a talented pool of highly experienced and certified tradesmen and technicians with skills in different trades in and across Los Angeles and other parts of the US.
All our team members will be selected with proper trainings and they will be hired to meet the needs of our company and will lead us to stand out as the leading handyman service providers and we will be engaged in maintenance, installation and repair throughout the country.
Customers of Handyman Service
The sample handyman business plan includes the general repair and maintenance services for commercial and residential clients, such as electrical repairs, plumbing, AC repair and installation, carpentry, painting, etc.
Business Target
At Handyman Next Door, we are aimed to come out as one of the top handyman service providers in the US and we will ensure doing everything possible to compete with industry leaders.
Company Summary
Maintenance tasks like AC repair and installation, furniture repair, electrical works, plumbing, etc. have high demands among residential customers all the year round. In this part of handyman business plan examples, explain that you have professionally trained handymen and professionals who are bonded and trained by your company. Also describe how you are networked with third-party vendors like plumbers, electricians, computer techs and others.
Company Owner
When writing a business plan for handyman service, you need to describe who the owner of the company is.
Handyman Next Door has been owned and formed by Cal Wardin. He will be the sole owner of the company with a vast team of professionals. The company is going to incur some start-up costs and basic tools detailed below.
Why the handyman business is being started?
Handyman Next Door is a startup aimed to offer complete handyman service to the residents of Los Angeles and California. Cal Wardin was also engaged in offering such types of services with other organization. With vast and proven knowledge and experience, Cal is aimed to launch his family business as a reasonably priced, trusted, and qualified service provider. If you are wondering how to start a successful handyman business, having a strong base of repeat customers and generating market penetration are the keys.
How the handyman business will be started?
Handyman Next Door is going to build a solid web presence as part of our handyman marketing ideas. The following table includes detailed start-up summary along with needed capital to start operations. Cal is going to start with his own tools for jobs, but he will also need to acquire the following tools and equipments –
| Start-up Expenses | ||
| Legal | $ 500 | |
| Accountant | $ 500 | |
| Brochures | $ 250 | |
| Insurance | $ 250 | |
| TOTAL START-UP EXPENSES | $ 1 500 | |
| Start-up Assets | ||
| Cash Required | $ 20 500 | |
| Other Current Assets | $ 0 | |
| Long-term Assets | $ 8 000 | |
| TOTAL ASSETS | $ 28 500 | |
| Total Requirements | $ 30 000 | |
| Need real financials? | $322 500 | |
| START-UP FUNDING | $52 625 | |
| Start-up Expenses to Fund | $ 1 500 | |
| Start-up Assets to Fund | $ 28 500 | |
| TOTAL FUNDING REQUIRED | $ 30 000 | |
| Assets | ||
| Non-cash Assets from Start-up | $ 8 000 | |
| Cash Requirements from Start-up | $ 20 500 | |
| Additional Cash Raised | $ 0 | |
| Cash Balance on Starting Date | $ 20 500 | |
| TOTAL ASSETS | $ 28 500 | |
| Liabilities and Capital | $203 125 | |
| Liabilities | $118 750 | |
| Current Borrowing | $ 0 | |
| Long-term Liabilities | $ 30 000 | |
| Accounts Payable (Outstanding Bills) | $ 0 | |
| Other Current Liabilities (interest-free) | $ 0 | |
| TOTAL LIABILITIES | $ 30 000 | |
| Capital | ||
| Planned Investment | ||
| Investor 1 | $ 0 | |
| Other | $ 0 | |
| Additional Investment Requirement | $ 0 | |
| TOTAL PLANNED INVESTMENT | $ 0 | |
| Loss at Start-up (Start-up Expenses) | $ -1 500 | |
| TOTAL CAPITAL | $ -1 500 | |
| TOTAL CAPITAL AND LIABILITIES | $ 28 500 | |
| Total Funding | $ 30 000 | |
- Plumbing tools like snakes, slip wrenches, Teflon tape, nuts, caps, and bolts.
- Electrical tools like wire cutters, gauge meters, several wires, soldering iron, and wire caps.
- Painting materials like paint rollers, paint brushes, air compressor, pneumatic paint sprayer, spackle tools, sand papers, and masking tape.
- Some general tools.
- Pressure washer.
- Power tools like sander, drill, saw, etc.
- Laptop with portable printer for printing invoice
Services for Customers
Handyman Next Door has been established to improve profits by providing the best handyman services and maintenance, installation, and repair.
Note
In order to run a successful handyman business, we are aimed to compete well with top handyman service providers and maintenance, installation and repair companies in the country.
We have put an excellent quality assurance team in place to ensure every installation, repair, and service is provided well to meet and exceed customers’ needs. We will strive hard to ensure Handyman Next Door will not just be renowned in Los Angeles, but also across the US. Here are the following services we have included in our handyman business plan template –
- Drywall installation/repair
- Plumbing repair
- Electrical installations
- Carpentry
- Rooting repairs
- Appliance installation and repair
- Flooring installation and repair
- Kitchen remodeling
- Plumbing
- Attic insulation
- Bathroom and shower remodeling
- Deck repair
- Fence repair
- Door installations
- Gardening and building service
- Power tool and yard repair and maintenance
- Exterior and interior painting
- Other installation, repair and maintenance services
Marketing Analysis of Handyman Business
If you want to know how to start a renovation company, be sure to analyze the market segment and trends related to it. For example, Handyman Next Door will focus on both online and offline advertising. We will use direct mail campaigns and email marketing to notify all the tenants and homeowners living in our target areas. We will distribute our pamphlets in local newspapers across the major geographic regions of the city. We will also use other marketing techniques, such as posting flyers, online ads, and ads on radio or cable TV in future.
Franchise Business Planning
Market Trends
Before opening a handyman business, you need to start doing proper economic analysis to reduce the threats and risks associated with investing in handyman business ideas or starting a business.
When it comes to how to market a handyman business, it is not all about acquiring a well-furnished office space and getting the place equipped. You also need to figure out how to attract customers and how to retain them so they can keep coming back for your services.
Basically, running and starting a handyman service is cost effective, especially when you have well-qualified, well trained and experienced team members. With the quality of work conducted for your customers, you can easily retain your customers and your company should do all the good work which will be spread by words of mouth. Customers will definitely want to recommend your services to their friends and families once you can get the job done well on their properties.
Your ability to provide quality services at competitive prices to the customers will be a major factor considered in the industry. This way, it will be easier for you to retain customers and attract new ones to get more business. The handyman market seems to be viable considering the existing competition in the industry.
Marketing Segmentation
There are basically two different customer groups to segment the market –
| Market Analysis | |||||||
| Potential Customers | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR |
| Home owners | 5% | 24 090 | 25 295 | 26 560 | 27 888 | 29 282 | 5,00% |
| Property managers | 4% | 1 234 | 1 283 | 1 334 | 1 387 | 1 442 | 3,97% |
| Total | 4,95% | 25 324 | 26 578 | 27 894 | 29 275 | 30 724 | 4,95% |
Home Owners
- Value of their homes generally range from $150,000 to $650,000
- Around 47% home owners prefer DIY small repairs. They often start the repair themselves and then realize that it’s not their cup of tea. Rests of 53% don’t even start to repair it on their own. They simply call a professional for every small repair.
- Around 62% of homeowners have been the owners for over 2 years.
- Rests of 73% of customers wait until a lot of small problems come ahead before calling a handyman. The reason is simple. They don’t want to bear a huge upfront cost just for small fixes.
Property Managers
- These types of customers usually manage 3 to 20 household units.
- They usually don’t have their in-house team for repair and maintenance to cut down on overhead costs.
- Their monthly rental ranges from $350 to $650.
Business Target
We conducted a feasibility study and market survey before starting our handyman services in Los Angeles. Hence, we understand that there is a huge range of individual and corporate clients who need handyman services on daily basis. With that in mind, we have come up with certain strategies which would help us to reach out to several households and corporate organizations we know that they would need our services. Here are some of the individuals and organizations who we can target –
- Blue chip companies
- Insurance companies, banks, and other financial institutions
- Corporate clients
- Real estate developers, owners, and contractors
- Government organizations
- High schools, universities, colleges and other educational institutions
- Sports facilities
- Hotels
- Households and individuals
- Religious organizations
Product Pricing
Customers usually prefer who they know. They either call a contractor or handyman they know or they ask their neighbors or friends for recommendation. They often stay with their service provider until they get dissatisfied with their service. Cal is planning to dominate the market with words of mouth referrals which is done usually by exceeding the expectations of every customer.
Considering the economies, larger contracting companies are expected to offer better rates on hourly basis. But most of the large companies offer different specialized services, which need a lot of skilled workers and tools, which also increase their overhead and billable rates.
Highly Efficient Service
I am incredibly happy with the outcome! Alex and his team are highly efficient professionals with a diverse bank of knowledge!
Marketing Strategy
Our website will serve our customers as a basic catalog of services. We would list different skills our team has, and a range of referrals and testimonials on our site. It will be effective to help unsure visitors who haven’t heard about Handyman Next Door.
In order to attract traffic, Search Engine Optimization would be the cost-effective way to organically grow our web business. We can help people who are looking for a nearby handyman. It will also include searches of people who know about our organization but want to know more.
Competitive Analysis
Our competitive edge is offering best services at reasonable prices. So, our target customers would be more inclined to call Handyman Next Door whenever any problem occurs.
Sales Strategy
Our sales business strategy would be planned well to convert customers looking for temporary services to the ones choosing Handyman Next Door for different repairs. We would do the same in different ways. We will put a level of professionalism in each repair job. We will also focus on problem areas in home and provide the best solutions.
Sales Monthly
This section of handyman maintenance business plan includes average monthly sales done by Handyman Next Door –
Sales Yearly
This section of our handyman services business plan includes average annual sales done by Handyman Next Door –
Sales Forecast
We have developed a sales forecast in a complete way to help us achieve our sales goals. The following table details the breakdown of sales on the basis of our activities –
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Plumbing | $ 250 000 | $ 287 500 | $ 330 625 |
| Electrical | $ 290 000 | $ 333 500 | $ 383 525 |
| Fences | $ 120 000 | $ 138 000 | $ 158 700 |
| Windows | $ 290 000 | $ 333 500 | $ 383 525 |
| Decks | $ 280 000 | $ 322 000 | $ 370 300 |
| Paint | $ 245 000 | $ 281 750 | $ 324 013 |
| Weather proofing | $ 265 000 | $ 304 750 | $ 350 463 |
| Parts | $ 245 000 | $ 281 750 | $ 324 013 |
| Floors | $ 190 000 | $ 218 500 | $ 251 275 |
| TOTAL SALES | $ 2 175 000 | $ 2 501 250 | $ 2 876 438 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
| Plumbing | $ 100 000 | $ 115 000 | $ 132 250 |
| Electrical | $ 116 000 | $ 133 400 | $ 153 410 |
| Fences | $ 48 000 | $ 55 200 | $ 63 480 |
| Windows | $ 116 000 | $ 133 400 | $ 153 410 |
| Decks | $ 112 000 | $ 128 800 | $ 148 120 |
| Paint | $ 98 000 | $ 112 700 | $ 129 605 |
| Weather proofing | $ 106 000 | $ 121 900 | $ 140 185 |
| Parts | $ 98 000 | $ 112 700 | $ 129 605 |
| Floors | $ 76 000 | $ 87 400 | $ 100 510 |
| Subtotal Direct Cost of Sales | $ 870 000 | $ 1 000 500 | $ 1 150 575 |
Personnel plan
Company Staff
When it comes to start a handyman business, you would need experienced team including senior management staff with experience of over 5 years and competent and qualified experts on the following positions –
- Head, Technical Services
- CEO
- Sales and Marketing Executive
- HR and Admin Manager
- Accountant
- Client Service Executive
- Handymen (with varied skill sets related to your business)
Average Salary of Employees
The following table describes the average annual salary of each employee and total payroll for the next 3 years –
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Head, Technical Services | $45 000 | $52 000 | $59 000 |
| CEO | $145 000 | $152 000 | $159 000 |
| Sales and Marketing Executive | $410 000 | $440 000 | $480 000 |
| HR and Admin Manager | $55 000 | $65 000 | $75 000 |
| Accountant | $60 000 | $63 300 | $70 000 |
| Client Service Executive | $20 000 | $23 300 | $30 000 |
| Handymen | $10 000 | $12 000 | $15 000 |
| Total Salaries | $745 000 | $807 600 | $888 000 |
Financial Plan
Include the following sections on your handyman business plan sample –
Important Assumptions
All the vital financial assumptions for the next three years are listed here in this table –
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10,00% | 11,00% | 12,00% |
| Long-term Interest Rate | 10,00% | 10,00% | 10,00% |
| Tax Rate | 30,00% | 30,00% | 30,00% |
| Other | 0 | 0 | 0 |
Brake-even Analysis
The following graph indicates what our company will need and project in monthly revenue to cross the breakeven point –
| Brake-Even Analysis | ||
| Monthly Units Break-even | 2860 | |
| Assumptions: | ||
| Average Percent Variable Cost | 10% | |
| Estimated Monthly Fixed Cost | $2 580 | |
Projected Profit and Loss
The tables and charts listed below indicate the project profit and loss of our company –
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $ 2 175 000 | $ 2 501 250 | $ 2 876 438 |
| Direct Cost of Sales | $ 870 000 | $ 1 000 500 | $ 1 150 575 |
| Other Costs of Sales | $ 0 | $ 0 | $0 |
| TOTAL COST OF SALES | $ 870 000 | $ 1 000 500 | $ 1 150 575 |
| Gross Margin | $ 1 305 000 | $ 1 500 750 | $ 1 725 863 |
| Gross Margin % | $ 1 | 90,46% | $1 |
| Expenses | |||
| Payroll | $ 745 000 | $ 807 600 | $ 888 000 |
| Sales and Marketing and Other Expenses | $ 110 000 | $ 140 000 | $162 000 |
| Depreciation | $ 1 596 | $ 1 596 | $1 596 |
| License fees (electrical & plumbing) | $ 25 000 | $ 31 000 | $42 000 |
| Insurance | $ 45 000 | $ 62 000 | $71 000 |
| Payroll Taxes | $ 171 350 | $ 185 748 | $ 204 240 |
| Gas/other incidentals | $ 1 800 | $ 1 800 | $1 800 |
| Total Operating Expenses | $ 1 099 746 | $ 1 229 744 | $ 1 370 636 |
| Profit Before Interest and Taxes | $ 205 254 | $ 271 006 | $ 355 227 |
| EBITDA | $ 206 850 | $ 272 602 | $ 356 823 |
| Interest Expense | $ 2 740 | $ 2 279 | $1 808 |
| Taxes Incurred | $ 0 | $ 3 168 | $5 943 |
| Net Profit | $ 209 590 | $ 278 049 | $ 364 574 |
| Net Profit/Sales | $ -1 | $ 0 | $0 |
Profit Monthly
It includes the projected profit per month from our services.
Profit Yearly
It describes the annual profit for the next three years.
Gross Margin Monthly
It describes the gross margin on monthly basis for the next one year.
Gross Margin Yearly
It includes the gross margin we are expecting for the next three years.
Projected Cash Flow
The following chart and table indicates the cash flow we have forecasted –
| Pro Forma Cash Flow | |||
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $17 410 | $53 500 | $70 834 |
| SUBTOTAL CASH FROM OPERATIONS | $17 410 | $53 500 | $70 834 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $17 410 | $53 500 | $70 834 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $20 000 | $24 000 | $30 000 |
| Bill Payments | $12 484 | $20 150 | $24 972 |
| SUBTOTAL SPENT ON OPERATIONS | $32 484 | $44 150 | $54 972 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $4 868 | $4 688 | $4 727 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $37 352 | $48 838 | $59 699 |
| Net Cash Flow | ($19 943) | $4 662 | $11 135 |
| Cash Balance | $557 | $5 220 | $16 354 |
| Cash Balance | $21 823 | $22 381 | $28 239 |
Projected Balance Sheet
The following table includes all the assets and liabilities in our projected balance sheet –
| Pro Forma Balance Sheet | |||
| Assets | |||
| Current Assets | |||
| Cash | $557 | $5 220 | $16 354 |
| Other Current Assets | $0 | $0 | $0 |
| TOTAL CURRENT ASSETS | $557 | $5 220 | $16 354 |
| Long-term Assets | |||
| Long-term Assets | $8 000 | $8 000 | $8 000 |
| Accumulated Depreciation | $1 596 | $3 192 | $4 788 |
| TOTAL LONG-TERM ASSETS | $6 404 | $4 808 | $3 212 |
| TOTAL ASSETS | $6 961 | $10 028 | $19 566 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $1 323 | $1 686 | $2 085 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $1 323 | $1 686 | $2 085 |
| Long-term Liabilities | $25 132 | $20 444 | $15 717 |
| TOTAL LIABILITIES | $26 455 | $22 130 | $17 802 |
| Paid-in Capital | $0 | $0 | $0 |
| Retained Earnings | ($1 500) | ($19 494) | ($12 102) |
| Earnings | ($17 994) | $7 391 | $13 866 |
| TOTAL CAPITAL | ($19 494) | ($12 102) | $1 764 |
| TOTAL LIABILITIES AND CAPITAL | $6 961 | $10 028 | $19 566 |
| Net Worth | ($19 494) | ($12 102) | $1 764 |
| TOTAL LIABILITIES AND CAPITAL | $198 839 | $232 978 | $267 117 |
| Net Worth | $182 060 | $226 240 | $270 420 |
Business Ratios
In this table, we are going to explain the business ratios of Handyman Next Door along with industry ratios for household and personal repairs and maintenance.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 0,00% | 207,30% | 32,40% | 9,27% |
| Percent of Total Assets | ||||
| Other Current Assets | 0,00% | 0,00% | 0,00% | 27,35% |
| Total Current Assets | 8,00% | 52,05% | 83,58% | 66,95% |
| Long-term Assets | 92,00% | 47,95% | 16,42% | 33,05% |
| TOTAL ASSETS | 100,00% | 100,00% | 100,00% | 100,00% |
| Current Liabilities | 19,00% | 16,81% | 10,66% | 22,05% |
| Long-term Liabilities | 361,03% | 203,88% | 80,33% | 8,56% |
| Total Liabilities | 380,03% | 220,69% | 90,98% | 30,61% |
| NET WORTH | -280,03% | -120,69% | 9,02% | 69,39% |
| Percent of Sales | ||||
| Sales | 100,00% | 100,00% | 100,00% | 100,00% |
| Gross Margin | 90,20% | 90,46% | 90,46% | 18,28% |
| Selling, General & Administrative Expenses | 193,55% | 76,64% | 70,88% | 5,96% |
| Advertising Expenses | 0,00% | 0,00% | 0,00% | 0,65% |
| Profit Before Interest and Taxes | -87,62% | 24,00% | 30,52% | 67,63% |
| Main Ratios | ||||
| Current | 0,42 | 3,1 | 7,84 | 2,41 |
| Quick | 0,42 | 3,1 | 7,84 | 1,2 |
| Total Debt to Total Assets | 380,03% | 220,69% | 90,98% | 34,25% |
| Pre-tax Return on Net Worth | 92,31% | -87,25% | 1122,93% | 244,58% |
| Pre-tax Return on Assets | -258,49% | 105,30% | 101,24% | 371,96% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -103,36% | 13,82% | 19,58% | n.a |
| Return on Equity | 0,00% | 0,00% | 786,05% | n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover | 10,44 | 12,17 | 12,17 | n.a |
| Payment Days | 27 | 27 | 27 | n.a |
| Total Asset Turnover | 2,5 | 5,34 | 3,62 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | 0 | 10,09 | n.a |
| Current Liab. to Liab. | 0,05 | 0,08 | 0,12 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $ -766 | $ 3 534 | $ 14 269 | n.a |
| Interest Coverage | -5,57 | 5,63 | 11,96 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0,4 | 0,19 | 0,28 | n.a |
| Current Debt/Total Assets | 19% | 17% | 11% | n.a |
| Acid Test | 0,42 | 3,1 | 7,84 | n.a |
| Sales/Net Worth | 0 | 0 | 40,15 | n.a |
| Dividend Payout | 0 | 0 | 0 | n.a |
| Assets to Sales | 0,45 | 0,48 | 0,51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23,66 | 27,01 | 30,36 | N.A. |
| Sales/Net Worth | 1,68 | 1,29 | 0,9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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