Pricing, Insurance & Business
The handyman trade has the highest small-business failure rate of any trade — because most guys never learn the business side. This lesson covers rates, insurance, contracts, and the pricing system that actually keeps you profitable.
The lesson
Hourly vs flat-rate
Hourly ($50–$100 typical, varies by region) — fair, simple, but you have to track time honestly. Flat-rate ('it's $250 for a faucet swap, regardless of how long it takes') — better margins on fast jobs, worse on bad surprises. Many pros use HOURLY for hourly customers + FLAT for known repeat jobs.
The minimum trip charge
Two-hour minimum (or $150-$200 minimum) for any visit, even a 20-min repair. Otherwise driving + parking + small-job overhead destroys your margins. Communicate this upfront — every customer who balks isn't your customer.
Insurance you must have
General Liability ($1M minimum, ~$400–$800/yr). Covers if you damage customer property or someone gets hurt. Many higher-end customers + property managers REQUIRE you to be insured before they'll hire you. Without it, one $5k drywall accident bankrupts you.
Licensing rules — varies by state/city
Some states require handyman licenses for jobs over $500 or for specific work (electrical, plumbing, gas). Unlicensed work on regulated trades = fines + the customer can sue you AND not have to pay. Check your state's contractor licensing board.
Written estimates + simple contracts
Always quote in writing (email/text is fine). Include: scope ('replace kitchen faucet only'), price, payment terms, who supplies materials. A 3-sentence quote text protects both sides. Verbal estimates are how customers say 'you said $100' when you said $200.
Tool list
- Square or Stripe for card payments (no awkward 'cash only' conversations)
- QuickBooks Self-Employed or Wave (free) for bookkeeping
- Liability insurance policy (Hiscox, Next Insurance, Thimble — online quick quote)
- Quote template (email or text canned-response)
- Magnetic vehicle signs ($150 — best marketing $ you spend)
- Tax separated bank account (don't co-mingle business + personal)
Safety — Read or get hurt
- !!Doing electrical or plumbing work that requires a license without one = federal/state violation + voided insurance.
- !!Doing work on rental properties without a written scope = guaranteed disputes; landlords always want more for less.
- !!Cash-only encourages tax problems; track everything, deduct everything.
Take the mini quiz
6 questions · pass at 80%