I am going to officially starting up a handyman business in January of 2004′. I need as much insight, help and advice as possible. What is a fair amount comparative to the competition in this field for a days labor (8hours) to charge a customer? How do I go about obtaining a small business license for a small business-sole proprietorship? Do I have to apply to he state of New Jersey, the county, locally….? How do I obtain a resale certificate? Do I need to obtain a “handyman” Trade certificate/licence? Any suggestions on how to draw up estimates for homeowners with endless amounts of projects all at once? Is $2,000 liability insurance premium payment quote annually a good deal, for general liability $360,000.00 maximum coverage? How do craftsman go about getting on contractor lists for real estate agencies?
Thank You!!!!!!!!!!!!!!! Chipper [email protected] 10/12
Replies
Chipper: Post this over at Fine Home Building magazie & IM sure your going to get a ton of advise from those guys..
ToolDoc
Proud Member of the Delta & Klein Tradesman Club & Milwaukee HD Club & Knots Bad Boys & Girls Club..
A Non ~ Member of the Knots Bandsaw Guru Club..
Been in business in Jersey over 20 yrs.
you don't need a license to be a contractor in this state.But you also are resticted as to what you can do re licensed trades elec and plumbing
are the two most common you"ll run into.
You have to go to the county ,I think ,and register the name of the business so the state can check hat no one else is using it and then the tax id will be issued in the name of the business.
Insurance is a real b**ch.
You need to buy work comp and a commercial auto policy in assition to liability .
You might want to talk t a lawyer this is a case of what ou don't know can really hurt .
Also a good accountant is worth the cost. Always good to have a thid party check the math and ithink there are 47 tax payments a year,though some of them are just for c corps.
Good luck
I just wanted to say- Thank You very much for your input and advice!!!! I greatly appreciate it!!
Chipper Jim Parker Oaklyn, NJ
your weklcome
Chipper -- I started as a handyman -- sole prop. -- about ayear and a half ago. So far, I'm doing well. I can't answer any of the questions related to government regulations in NJ, but I'll take a stab at a few others.
What is a fair amount comparative to the competition in this field for a days labor (8hours) to charge a customer?
You should probably start out a bit lower than the competition, just to get yourself known a bit. I have no idea what the "going rate" is in Jersey. I started out at $35 per hour, and will soon be charging $50. But note that as a handyman, you'll be getting a LOT of jobs where your service call minimum is more important than your hourly rate.
Any suggestions on how to draw up estimates for homeowners with endless amounts of projects all at once?
Sure -- give them a line-item estimate. And either be very clear that it is an estimate, or be prepared for the customer to assume that it is a quote. Also note that those kind of customers might try to "nickel and dime" you -- call you to do one little item on the estimated list, while trying to avoid your minimum service call charge.
Is $2,000 liability insurance premium payment quote annually a good deal, for general liability $360,000.00 maximum coverage?
You'll have to shop the insurance brokers in your area for the best rate -- it varies greatly by location. But note that a third of a million coverage is very little. Your actual liability could be WAY higher. What if a homeowner is watching you on your ladder, and you drop your tool bucket on him, and break his neck. Will $360,000 cover you? How about if you are in the attic of a McMansion, and a truss cracks. When you fall through the ceiling onto the antique dresser, and the Picasso on the wall is damaged, are you covered? What about if something you do causes a fire three years after you're finished? I have a million in general liability, and I worry often that it is way too low.
How do craftsman go about getting on contractor lists for real estate agencies?
The only way that I know of is the hard way. Send them faxes, send them business cards, call them on the phone, and call them again. (And note that when I started, this was my highest-producing marketing tool for about 6 months. Since then, word-of-mouth has been the biggest.)
Thank you greatly for your insight and advice, I truly appreciate it!!!!!!!!!!!!!!
Where do you live, by the way? It sounds like you really know your stuff. I wish you the best of luck! Chipper Jim Parker Oaklyn, NJ
Where do you live, by the way?
I'm just outside of Raleigh, NC. But I just moved here from Ohio in 2002. I had an opportunity to quit my desk job, and try what I had wanted to try for decades. And I did.
One point that others have not made yet, concerning starting a business. If you have a family, they need to be supportive. I've talked and listened to countless successful entrepreneurs, and every one of them credits their spouse for the support. If the support is lacking, then when things get slow, you'll be much more tempted to give it up.
For what it's worth, my wife is the most supportive person I've ever known.
Vast projects should not be founded on half vast ideas.
YesMa'am, This subject intrigues me as I have often thought about doing this also. Can you answer a few questions for me?
1.What king of jobs do you typically do in a day?
2. Do you charge by the job or by the hour?
3. Do you find it difficult to charge for small jobs?
4. Do customers readily agree to pay out $35.00 per hour?
5. How did you get started and actually make that plunge from employee to self employed?
6. How do you deal with folks that are obviously low income and cannot afford your rates?
7. What made you decide to do this in this stage of your life?
Thanks so much, Dalewood
Edited 10/14/2003 8:18:31 AM ET by Dalewood
I hope that this reply does not get too long......
What king of jobs do you typically do in a day?
I do whatever I can, whatever the customer needs, whatever I've discussed with the customer. I try to limit the jobs to those that I won't hate -- but note that there will be 'dry' times when you'll be in a crawlspace, or a ditch, for a day at a time. Hopefully these will be offset by the times when you're re-trimming the windows in a millionaire's dining room, while joking with the cute four-year-old kid.
Do you charge by the job or by the hour?
Yes, both. There are some jobs for which I will not work by the job, because of the nature of the work. For example, if a customer needs a soft section of their bathroom floor replaced, I won't quote a final price. I'll work on a time+materials basis. This is because it is virtually impossible to know all of the problems without ripping into the floor. Other jobs -- clean somebody's gutters -- I'll do based on a quote.
Do you find it difficult to charge for small jobs?
Do customers readily agree to pay out $35.00 per hour?
Yes, I'm a bit of a softie when it comes to charging for the small jobs. But not when the customer is obviously able to pay. On the other hand, if the customer is a retiree from a mill that has long since closed, eliminating benefits for retirees, you bet I'm soft. But the great thing about that, is that I can (hopefully) find enough well-paying business that I can help some of the folks who need it.
And yes, those who have the money will readily agree to my rate (whether it's 35 or not). Word-of-mouth advertising helps tremendously with this, so you'll need to be absolutely meticulous about quality, and warranty.
How did you get started and actually make that plunge from employee to self employed?
Well, that was kinda easy for me. I was a single custodial parent, with a desk job in the automotive industry -- a really good job. But three things happened all at the same time, and each was a gentle push in the right direction. 1-My nest went empty, as my daughter got married, and my son went to culinary school. 2-The economy tanked, and the employer offered incentives to those who would quit. 3- And I fell in love with a woman just about the time that she "had to move back home". Her home was 600 miles from Ohio, so I quit, moved, married, and started my business. (Yup, I gave it all up for love!)
That was the incentive. Actually starting involved research into what the local and state laws are, what the market was like, and what the marketing opportunities were. Of importance -- this section of Carolina is VERY friendly to businesses, and particularly to startups. Regulations are easy to deal with, and the local press is awesome when reporting on new businesses (a press release got my picture on the front page of section 2, along with a story that was quite beneficial). The local community college has free (yes, free) classes in what it takes, and there is other free help and advice available too.
How do you deal with folks that are obviously low income and cannot afford your rates?
See above -- I try to help them out, so long as they don't start to take advantage of me. But when you do your business plan, you'll understand how much of that you can do. You'll know how many 'billable' hours you need in a week, and therefore how many you can give away.
What made you decide to do this in this stage of your life?
For the "why now" portion of the question, see above. As to " why this" instead of a transfer, or another job in automotive or computer industry..........
1- I hate rush hour more than anyone I know. 2-Although I was quite good at it, I did not enjoy what I did. 3-I realized that if I stayed at a desk until retirement, that there would be no "footprint" left behind me. Although I would have contributed to the competitiveness and profitability of a fortune 50, there would be no other mark. As a hanyman, I can know that when I die, some of my work will remain, and some folks will appreciate it. (I'm not naive enough to be thinking in centuries here, but decades.) Also note that my philosophy concerning those who can't pay is a part of the "footprint" too. So are all of the friendly conversations with all of the folks I've met in the business, mostly retirees.
Good luck.....Vast projects should not be founded on half vast ideas.
YesMa'am, Thanks so much for the quick reply. That helps me a lot. Good luck to you also and maybe I will have enough nerve one day to quit a good paying job, with insurance & retirement and 401k.....sounds crazy doesn't it!!!! Actually my plant is on rocky ground and I am just trying to be prepared. Thanks again. Dalewood
Edited 10/14/2003 10:43:29 AM ET by Dalewood
Edited 10/14/2003 10:44:03 AM ET by Dalewood
I'm also going into this in the near future and so have been researching info along these lines. The other suggestions are all very good, but I would like to mention (I think someone might have already) that the Breaktime forum will answer alot of those questions plus many others that you haven't yet thought to ask. Also, at our local CC they offered a business startup course thru SCORE. I signed up (got the last of 48 slots) figuring it cost me $49 so if it didn't pan out I wasn't losing much. But it really is turning out to be quite informative, tho the hours stink, 8:00 - 10:10 on a weeknight for 7 weeks but I'll live. SCORE offers free advice to startups . They lead you thru all the stuff that if your like me your not knowledgeable/comfortable with such as how to right a mission statement, business plan, how to get financing, etc. They'er in the phone book if your interested or I can send you info offline if you like. I've already learned a lot that I didn't know that I can now use and can say that it's worth the $49 for the course
Dan
I would be interested to hear from you on the success of your handyman business, since your original post last October. Thanks.
Robert
Robert,
I also attended a seminar for small business' in construction. It was only $50, and was extremely informative. It covered all of the aspects of running a small business, advertising, marketing, sales, business plans, estimating, bookeeping, insurance & bonding...............and much more.
This being my first year in business, was a success in that I accomplished many goals, improved many skills, and have a greater insight & appreciation for entrepeneurs. It has been quite a learning experience. The biggest piece of knowledge gained, that will help me in projecting business goals for next year is the difference and separation of "an Estimate" & "A Consultation" with customers. I found myself spending countless of hours sitting down with potential customers, drawing up plans, doing line item estimates, without a courtesy follow-up phone call from these customers as to what their decision was. Time is valuable! Thus, I plan to charge customers an hourly fee for educating them, doing drawings, & detailed estimates. This will be explained upfront with the customers on the initial phone call / inquiry. I will provide "Free Estimates" for any project that will take me less than 1 hour to go to the clients house listen / look / determine course of action / price / ......
I have learned how to screen customers to determine if they are a potential long-term customer. I have learned to say "NO". Whereas before I attemted to build / fix anything regardless of the profit level. I have learned that internet advertising & referral networks can be quite beneficial.
A few of the challenging projects which we completed this year were:
- fabrication of a wood mahoganey door (entrance) with brazillian cherry
- fabrication of 3 sets of wooden stairs
- 2 wood door restoration projects
- chess board ash & brazillian cherry
- maple display case 80" wide X 20" deep X 72" height
solid glass door (2pc.) sliding / colonial design piedmont roof sconces
interior lighting, 4 interior shelves. each shelf with 4 inlaid glass 12" X 14"
sides of case glass set into wood channels
- custom wood shelving
- plaster work
All in All, I have a positive feeling & approach for next year.
As far as the profit level of the business, I pretty much just reinvested "Everything" into the business overhead - tools, truck, advertising, office supplies, magazines....
Thank you for your question, it encouraged me to reflect on the past 9 months, which in turn helped me to determine where I need to improve & make changes....
THANK YOU VERY MUCH!
I would love to hear about your business & experiences.
Jim Parker Chipper
Thanks for your reply, it sounds like you are doing a fair amount of furniture and woodworking related work. I am starting off slow, have applied for a Home Occupation license through the county to see if I can work out of my home shop. I would like to do more furniture/cabinet work, but it may be more profitable to start with a handyman type of business. How many billable hours do you end up with in a week ? I figure I will have to work 55 - 60 hours a week, and end up with maybe 35 - 40 billable. One other question, what are your health insurance cost ?, Also, did you take the small business seminar through SCORE ? Thanks.
Robert
chipper,
I went through the same scenario with spending much time with people , and basically laying out the job for them , often never to even get a call back from them. Absolutely NO sketches or drawings leave my hands until a deposit is received. Otherwise they may take your plan and shop for the lowest bid. To combat the problem , I started to offer a set of plans along with a bid, for say about $200.00 for an average kitchen , this is just a guideline. Then they can take your plan and shop apples to apples , material, hardware, doors, drawers and all the particulars.I tell them it is like buying an insurance policy , no matter who does the job , it will be laid out correctly. I also offer to take the fee off of the total price when they decide to use me. So really it can help to eliminate some of the tire kickers. AS far as the amount of time spent not being productive and un- billable , I agree perhaps 25% of your time may fall into that category . I learned to charge that time to my overhead costs , add it in with hard costs and come up with an hourly cost to have your doors open so to speak.Of course this cost factor will not include profit , only expenses. The hard thing for me to learn was the difference between labor and profit , if your hourly wage or labor fee is say $40.00 and your hourly overhead costs are say $10.00 , then anything left after your wage may be construed as profit .You may have to alter the formula to suit your situation but in general you need to realize the difference from direct labor burden and profit . For me after many years of paying my dues , I have built a reputation and people who are referred to me from other customers , are already confident in my abilities to do quality work and the price becomes secondary in most cases.
good luck dusty
I have also got the handymen opportunity online. There are various websites where one can find the job or either can list their skills to get the best matched job for them.
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