Handyman businesses have long been popular with people continuing to enter the industry. What makes this industry unique is how it's handled compared to other trades. For example, the bar for entry is lower, and you might not even need a license in some of California’s cities. Plus, you can always start your handyman service as a handyman and work your way up to electrical work, carpentry, and other types of work.
You have to approach starting a handyman business correctly. You can start one from home but you must apply for the appropriate licenses based on your projected revenue. Additionally, you need to form a legal entity for your business and devise a plan to take action.
While this can sound overwhelming, don't worry, we’re here to help. Read on to learn more about how to start a handyman business in California.
How to Start a Handyman Business in California
Step 1: Create a Business Plan
Step 2: Register Your Business
Step 3: Choose a Registered Agent in California
Step 4: Apply for the Necessary Contractor License
Step 5: Insure Your Handyman Business
Step 6: Start Marketing and Getting Clients
Contents
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Begin by selecting a unique business name, appointing a registered agent, and filing your Articles of Organization with the California State Corporation Commission, which includes a $100 processing fee.
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What Is a Handyman Business?
Handyman businesses have been around for a long time and they’re flexible businesses, so there are multiple types that you have to consider. In short, a handyman business usually involves someone working in residential homes and performing maintenance work on those homes. A handyman might fix tools, repair buildings, or focus on outdoor things like minor repairs to roofing, siding, or sprinkler systems.
For this reason, what someone needs to start a handyman business in California can vary based on the person and what they want to do. In California, handyman businesses may also need a license if the work they do exceeds a certain amount. That said, you can keep your projects under a certain annual income to avoid the licensing requirements. Still, we recommend getting one, just in case.
What Services Can a Handyman Provide?
Handyman businesses are limited in the services that they can provide; they can’t do anything that’s over $500. Some examples of services that a handyman can offer include:
- Replacing light bulbs
- Installing or repairing sprinklers
- Fixing or building a trampoline
- Building a small shed
- Repairing a roof
- Repairing siding
- Interior repairs
- Fixing small leaks
- Cleaning gutters and drains
- Fixing washing machines and other small electrical equipment
Overall, any repair job that costs less than $500 is suitable for a handyman to complete.
What’s the Difference Between a Handyman and a Contractor in California?
The key difference between a handyman and a general contractor in California is that a handyman has to work under a certain dollar amount. If a handyman wants to do larger projects, they have to apply for a Class B contractor’s license.
While both jobs do similar work, the difference is that contractors are licensed and a handyman is not. That said, many contractors will market themselves as a handyman company sometimes because it’s easier to advertise.
Do You Need a License to Start a Handyman Business in California?
No, you don’t need a license to start a handyman business in California. However, it’s important to note that California did update the laws for how handyman licenses are handled. In the past, you could avoid getting licensed until you made $20,000. Today, you need to get a license if you work on any project that’s over $500 in value. This includes the value of the labor, materials, and any other costs you add to the job.
Because of this change in the law, it’s a requirement to be licensed if you want to make a career out of handyman work. If you only plan on doing odd jobs here and there, it’s not as important. If you plan on doing business as a handyman in California, we recommend applying for a contractor’s license.
What Are the Types of Handyman Licenses in California?
Several types of contractor’s licenses are available in California. Each type of license allows you to work on a different kind of project, so make sure you understand what each license allows you to do.
According to the Contractor’s State License Board, these are the available licenses:
- Class A: General engineering contractor
- Class B: General building contractor
- Class B-2: Residential remodeling contractor
- Class C: Specialty contractor
Under a Class C license, you will find several specializations. For example, a C-2 license is for a contractor who works with insulation, while a C-4 license is for a steamfitter, boiler, and hot water work. Other variations of specialist licenses are available, so if you have a unique specialization, make sure you apply for that specific license.
Requirements for a Handyman License in California
A handyman’s license is known as a contractor’s license in California. To obtain one of these licenses, you need to meet several important requirements. Some of these requirements are easy to achieve, but others might take time, and some can even cost you money. That said, the requirements you need to meet are listed below:
- You need to be a journeyman, which is four years of experience in the trade of your choice
- You have to apply for a contractor’s license
- You need to pass a CLSB exam; it covers safety, construction laws, and other aspects of construction
- You have to pay the required business license fees
- A contractor’s bond and workers’ compensation insurance are required
- You have to pass a background check; you can still pass the check even if you’re a felon
You may also need additional certifications if you plan on working with specific materials. For example, you’ll need the EPA lead safety certification if you plan on working with lead.
How Much Does a Contractor’s License Cost in California?
The cost of a contractor’s license in California varies based on the type of license you apply for. On average, the initial fee in California is about $450. This will get you a license for a specific class that you request. If you want to add additional options to this license, like HVAC or electrical work, you’ll have to pay an additional fee. The additional classification fee is usually $230.
Aside from the initial application, you also have to renew your license. Expect to pay $450 for sole owners or the company or $700 for any non-sole owners. Ultimately, how your handyman business is structured can impact the cost of your license.
There are also other fees that you have to pay in order to get your license. For example, you may have to spend about $100 to take the contractor’s license exam and another $100 for a background check. Some other small fees can also be charged to you if you change your name or request copies of public documents. These fees can range from $.10 to $100 but are not usually higher than that unless there is a penalty.
How to Start a Handyman Business in California
In the past, starting a business was a complicated process that involved mailing information and waiting days or weeks for a response. Fortunately, you don’t have to worry about going through a hassle-filled process like that anymore. There are plenty of online resources to help you start a handyman business in California.
Learn more about the steps to get your handyman business off the ground below.
Step 1: Create a Business Plan
When you want to start a handyman business in California, you need a plan. Every company needs a business plan because it will help you stay in tune with your goals and keep you organized. A good business plan can also help you get funding from banks and investors, so it’s important to put some thought into what that plan will look like.
The good news is that there are tons of business plan templates. You can find them online or purchase one from a reputable source. Several AI tools can also help you draft a business plan with the right inputs.
Regardless of how you create your business plan, make sure you include:
- Company research
- Products and what you’re offering
- A financial plan
- An appendix that helps you and others jump around the business plan
- The budget for your handyman business
- An analysis of the market you plan on entering
- Operational plans
- Management and team structure
- Intellectual property you may have
Ultimately, you want to clearly define what your company does, how it does it, and who you will work with.
Step 2: Register Your Business
Registering your business is essential when it’s time to start a contracting business in California. To register your business, you need to register the name and form a legal entity. The most common legal entities to form for a handyman business are sole proprietorships, but that doesn’t mean it’s the best option. In fact, you should always form a business with built-in protections to remove any risk from your personal assets.
When starting a handyman business in California, we always recommend forming a limited liability company (LLC). This is because an LLC will shield you from the liabilities that come with working in someone’s home. While many handyman companies opt to be freelancers or sole proprietorships, all it takes is one broken railing, staircase, or damage to an electrical system to lead to a lawsuit. For this reason, we always recommend going the LLC route. Plus, you can take your LLC with you if you decide to become a contractor.
Step 3: Choose a Registered Agent in California
If you’ve decided to establish your business as an LLC or corporation in California, your next step is to appoint a registered agent. This is a critical requirement when preparing your Articles of Organization, the document necessary to officially register your LLC or corporation with the California Secretary of State.
But what does a registered agent do? A registered agent is either an individual or a business entity that is responsible for receiving important documents on behalf of your business, such as tax forms, legal notices, lawsuits, and official correspondence from the government. In other words, your registered agent acts as your business’s primary liaison with the state.
Who can serve as a registered agent? The registered agent must be a California resident or a corporation authorized to operate in the state, such as a registered agent service. If you prefer to serve as your own registered agent, you’ll need to appoint an individual within your company, as California law does not allow business entities to act as their own registered agents.
For more detailed information on the requirements for registered agents in California, you can consult the California Corporations Code.
Don’t forget that to run a business, you need to: register a business entity (LLC is the most suitable option, more details here), obtain an EIN (you can apply online here), open a business bank account (more details here), understand accounting and taxes (more details here), and register a domain and create a website (this is optional, you can do it here).
Alternatively, you can delegate all of this to a registered agent starting from $0 + State Fees and get everything done in 1 day. This can save you time and ensure everything is done correctly, leaving you to focus on growing your business.
Step 4: Apply for the Necessary Contractor License
You can skip this step if you don’t plan on working on projects valued at more than $500. However, we always recommend getting a license to avoid any problems if a project you’re working on happens to be valued at more than $500. When applying for licenses, you need to make sure you get the appropriate ones for your specific contractor company. For example, if you want to work on insulation, you’ll need a C-2 specialty contractor’s license.
You can also get a general license and add-on services when you start offering them. For example, you can start with a Class A Contractor’s License and then add specialty services that you offer. That said, this will cost you extra, so we only recommend doing so once you’re ready to offer that service.
Step 5: Insure Your Handyman Business
Unlike some other industries, you need to have insurance if you want to operate a handyman business in California. This is because you’ll be working at people’s homes or on rental properties, so the state of California regulates the industry more seriously. For this reason, you need a bond and worker’s compensation insurance at the minimum.
While these insurance options are enough to get started, we still recommend getting general liability insurance and other specific insurance policies for your tools and vehicles. This can prevent you from losing money if you run into any problems.
Step 6: Start Marketing and Getting Clients
The last step is to put yourself out there. We recommend building a website and creating a business profile with Google to maximize your exposure. You can also list any positive reviews on your website and use it to receive messages and emails from clients. This is a great way to get started on your journey, and it can help your business stand out from the crowd.
Aside from making a website, there are some other measures you can take. You can create business cards, hand out fliers, make pamphlets, and join Facebook groups or market yourself on other social media platforms. Ultimately, marketing is what you make of it, so feel free to get creative with your vision.
Handyman Business in California FAQ
If you have a question that we didn’t answer in the article, there’s a good chance that you can find your answer below.
Can a Handyman Do Electrical Work in California?
Yes, a handyman can do electrical work in California. That said, the work has to be under $500, or they will need a license. Some electrical work that a handyman can do includes replacing a lightbulb, changing smoke detectors, and installing security cameras. Other small electrical jobs are also a great way for a handyman to do electrical work as long as it’s less than $500.
What Handyman Jobs Pay the Most?
Handyman jobs that pay the most include jack-of-all-trades handyman businesses and shovel operation handyman businesses. Essentially, people who dig or perform all types of tasks make the most money in the handyman Industry. While this is the case, that shouldn’t deter you from other types of handyman work. Gardening handymen and swampers can also make a lot of money, so keep this in mind. Overall, the best handyman business for you is the one that fits the criteria for the type of work that you can do. Q
Is There a $500 Limit for Handyman Work in California?
Yes, there is a $500 limit for handyman businesses in California. That said, reaching the limit doesn’t mean you can no longer offer handyman services. You have to file for a contractor’s license to continue selling a specific service or working on projects greater than $500. However, if you don’t plan on going over $500, you don’t have to worry about the limit as much.
What’s the Easiest Contractor’s License to Get in California?
The easiest contractor’s license to get in California is a Class B license. It’s the simplest license and allows you to do general contracting work. While you won’t be able to work with insulation, HVAC, or steam fittings, you can do some carpentry, general repairs, and charge more for your handyman work. Ultimately, it’s the natural progression for most handyman businesses.
Start a Handyman Business Today!
There’s no time like the present to start a handyman business in California. It’s a simple business to start, and you might not even need a license if you just want to make a few extra bucks on the side. However, if you do plan to get serious, we always recommend forming an LLC, getting the appropriate license for your income and the type of projects you work on, and following the steps we covered in this article to avoid missing anything.
While handyman work is hard, it’s also rewarding. In fact, as artificial intelligence threatens more white-collar roles, the industry is expected to grow, so it’s a good idea to get started sooner rather than later. So, what are you waiting for? Start your handyman business today, get out there, and start making money.