A small handyman business that is operated by just one person is likely to make between $50,000 to $120,000 yearly, and a well-structured handyman business with over a handful of employees and with the capacity to execute massive handyman contracts will likely make between $360,000 to over $1 million.
It is important to note that the amount a handyman business can make yearly, and their profit margin cannot be the same across the board, as some handyman companies will surely make more, while some will make less due to certain factors such as the size of the business, location, market conditions, competition, and the quality of services provided.
Profit Margin of a Handyman Business
A handyman business should expect to target a profit margin of 25 to 45 percent or even more depending on the business strategy of the handyman company.
When it comes to the profit margin that is expected of a handyman business, the factors listed above will come into play, as well as the capacity of the business to manage its capital flow and operations.
A handyman company that has effective operations and business management in place will most likely have a high-profit margin when compared to a handyman company that is not good at cutting costs and streamlining its operations.
Sources of Income for a Handyman Business
- General Repairs and Maintenance such as fixing leaky faucets, repairing broken windows, or patching holes in walls.
- Installation Services for homes and businesses
- Renovation and Remodeling Projects such as bathroom remodels, kitchen makeovers, or the conversion of spaces.
- Painting Services including touch-ups, full-room repaints, or exterior home painting
- Assembly Services such as furniture, outdoor equipment for both residential and commercial clients
- Safety Modifications for elderly or disabled clients, such as grab bars, wheelchair ramps, and stairlifts.
- Home Improvement Consultations
- Seasonal Services such as gutter cleaning, snow removal, or preparing homes for winter or summer.
- Emergency Services for issues like burst pipes, storm damage, or lock replacement
- Contract or Subscription Services
- Specialized Services such as electrical work, plumbing, HVAC maintenance, or landscaping. These require specific skills or certifications but can significantly increase income potential.
- Technology Integration including thermostats, security cameras, and home automation systems. As homes become more tech-centric, these services are increasingly in demand.
Revenue Breakdown for a Small-Scale Handyman Business
For a small scale handyman business to achieve $120,000 in annual revenue, the number of clients needed depends on the average charge per client. Let’s calculate for two different average charges:
- Average Charge per Client = $150
- Average Charge per Client = $300
Annual Clients= Annual Revenue ÷ Average Charge per Client
To achieve an annual revenue of $120,000, here’s how the numbers break down for handyman businesses that charge $150 per client and $300 per client accordingly::
If Average Charge per Client = $150
- Annual Clients Needed: 800
- Monthly Clients Needed: Approximately 67
- Weekly Clients Needed: Approximately 15
- Daily Clients Needed: Approximately 3
If Average Charge per Client = $300
- Annual Clients Needed: 400
- Monthly Clients Needed: Approximately 33
- Weekly Clients Needed: Approximately 8
- Daily Clients Needed: Approximately 2
These calculations assume the business operates 5 days a week. This gives us approximately 260 days of operation a year (52 weeks x 5 days).
If a business operates under different conditions (e.g., taking holidays into account or working weekends), these figures would need to be adjusted accordingly.
Factors That Determine the Income of a Handyman Business
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The Demand for Handyman Services in the Location
The truth is that a handyman business that is located in a city where the real estate and construction market is booming will always have higher demand for its services.
Consequently, a handyman business that is operating in a city with slow construction and a real estate market will naturally have low demand for its services.
The booming construction and real estate market means that people and businesses will change apartments and office space, and they will most likely require a handyman to help them with tasks such as plumbing, electrical work, carpentry, painting, and general property maintenance.
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The Level of Competition
If there are many handyman businesses in the area where you have your handyman business, then you should expect price competition and lower profit margins.
One of the things a handyman business can do to earn more when their business is in a location with a higher level of competition is to differentiate their services or specialize in specific niches. Or better still, you can move your handyman business away from the city or location with a high level of competition.
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Your Pricing Strategy
If you want to earn more as a handyman business, then you must make it a point of duty to set competitive prices that reflect the quality of work, materials used, and market standards.
Interestingly, no one mold fits all when it comes to the type of pricing strategy a handyman business can adopt to increase its revenue.
Some handyman businesses may choose to offer premium services at higher prices, while others may focus on affordability and volume. The bottom line is to adjust your pricing strategy to fit the community you are serving.
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Reputation and Customer Satisfaction
As expected, a handyman business with a strong reputation for delivering high-quality work and excellent customer service is likely to attract more customers and repeat business which will translate to more money for the handyman business.
o also, positive reviews and referrals can contribute to increased earnings, and you achieve this by building trust and credibility in the market.
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Operational Efficiency
A handyman business that is big on operational efficiency will always earn more than its competitors. The bottom line is that efficient management of resources, including labor, materials, and equipment, can impact the earnings of any business especially businesses that are into service delivery.
In essence, streamlining processes, minimizing waste, and optimizing productivity can help reduce costs and improve the profitability of your handyman business.
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Your Marketing and Branding Strategy
Effective marketing efforts can help a handyman business reach a wider audience and attract more clients which will automatically translate to earning more revenues annually for the business.
If you are looking to earn more annually as a handyman business, then you should consider investing in online and offline marketing strategies, establishing a strong brand identity, and showcasing past projects to your target market. You can do all this through various channels – mass media, social media, and word of mouth.
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Business Size and Scale
As expected, larger and well-structured handyman companies will have the capacity to take on more significant projects or multiple projects simultaneously, potentially leading to higher revenues.
In essence, a smaller handyman business will not have the capacity to handle large projects that are high paying hence they will make lower income annually.
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The Economic Conditions in Your Business Location
The economic condition in a country goes a long way to determine the purchasing power of people in the country. If the economy of a country is in bad shape, people will rather opt for do-it-yourself DIY, or will hardly be involved in real estate or construction, and that in itself will hurt how much a handyman business will likely make yearly.
So also, if a handyman business is operating in a city or country with a thriving economy, the likelihood of the handyman company earning more income yearly is high.