How to build a profitable handyman business
They know you have the skills and / or the manpower to start your own artisan business. Are you really ready to start your craft business?
What’s the first step you should take in building your artisan business? What skills and experience would I need? Do I need certifications and licenses? How much profit can I expect?
These are probably some of the questions you have while planning this crafting business. Fortunately, starting a craft business is relatively easy: all you need is a little bit of time, a basic understanding of local permits and regulations, the patience to fill those pesky papers, and of course, business and craft skills.
Below we will explain the step-by-step guide for starting a profitable artisan business. By following these steps, you can optimize the cost effectiveness of your craft business, maximize profitability, and ensure success.
Let us begin.
Step 1: choose your services
As we know, the artisan business can consist of many different services. It is best to evaluate your current skills (or those of your employees) and decide on just one or a few specialty services.
It is generally more profitable to specialize in a limited range of services than to be a generalist. Why? There are many reasons for this, but above all because your customers tend to trust a company that they perceive to be an expert on a particular service.
Are you thinking about whether you, as a potential customer, are more likely to hire someone to apply to be a “licensed hardwood flooring specialist” or someone who says they can do anything?
The second reason choosing just one or more specialties is important is licensing. Depending on your location, you may not be able to start a business without a required certification, and obtaining this license can be time consuming and expensive.
You can later expand your craft business to include additional services. However, it is best to start with just one service that you are really good at and grow from there.
Make a list of all the possible services you can currently offer and do competitive research for each service. This will give you a clearer picture of which services to specialize in.
Step 2: Learn about local regulations
It is very important to first find out the local contract laws in your state and / or location and see what services you will need in order to obtain a license before you can offer your service. Before you can deploy the service you specified in the previous step, check what types of licenses you need.
Certain states may also require a contractor’s license for jobs over a certain price (i.e. $ 1,000). If you live in the United States, you can simply go to the contractor’s website for your state and read the FAQs or the Legal (or similar) section.
You don’t want to start planning or even starting a business only to later realize that you cannot start the business without a license.
Step 3: define your target customer
It is very important to understand that you cannot target and please everyone.
It’s best to define which customers you want your service to address and focus on this ideal target group. In addition to lowering your prices to satisfy a specific customer, you should target your service and marketing approach to a specific type of customer.
The important question is: How can you help your target customer? The better you can add value to that ideal audience, the better you can attract them as loyal customers.
Find out what your target audience’s needs and preferences are: In fact, some customers just want the lowest possible price, and it’s perfectly fine for you to target those customers.
It is important not to try to please everyone. This can put a significant strain on your company, both financially and emotionally.
Step 4: Invest in the right infrastructure
Now that you’ve decided on your target customers, it’s time to find the right infrastructure and equipment, depending on the type of services you will be providing.
Today, infrastructure is not limited to physical tools and devices, but also software infrastructure that can be used to streamline and even automate some parts of the business. Craftsman management and planning software like Field can help you optimize and automate your workflow, create special staff dispatches so that you can easily manage your employees in real time, and much more.
In fact, having the right software solution can go a long way in reducing and even eliminating the risk of missed appointments and other HR problems.
Step 5: set your prices
This can be the hardest step as there is no single single answer to how much to charge.
However, there are two basic ways to bill for your craftsman services: by the hour or professionally, and many craftsmen generally prefer charging by the hour.
The best way to set your prices is to first carefully calculate the cost of everything it takes to get started and stay in business. This usually includes the cost of:
- Your tools and infrastructure
- Licenses / certification costs
- Vehicle costs
- Salary and fringe benefits for you and your employees
- Reasonable taxes in your area
Add it all up as your total cost and divide that amount by 12. This is your monthly overhead. Again divide by the number of days you worked that month and add your target profit (or wages). You get the daily gross income that you need to achieve as a result.
For example, if your total daily cost is $ 450, you would need to earn around $ 65 an hour and work seven hours a day (23 work days a month) to cover those costs. You can calculate a 30% to 35% profit or try to be more competitive and lower your profit instead.
Step 6: plan your marketing strategy
Just because your craft business is ready to go doesn’t mean your customers will automatically turn to your business.
You need to have a comprehensive plan on how to reach this audience and convince them to use your handyman service instead. Remember, you are also competing with other crafting services in your area for the same potential customers.
How you market your business should ultimately depend on the preferences of your target audience: if they are actively looking for services to hire, your focus should be on SEO (local SEO) and social media. If your audience is more “conventional”, the age practice of newspaper advertising and brochure may still work.
Of course, you can combine all of these, but do take into account your available marketing budget so you don’t break the bank. However, you should put some time and effort into your marketing as it will have a huge impact on your business’s performance.
After following the six steps we outlined above, you now have a solid foundation to start and maintain your crafting business. Obviously, you may not be able to do all of this at once. So take your time and do your research as you go through each step individually.
Define your target audience, do proper competitive analysis, and customize your crafting business and marketing approach to serve that particular audience.