A handyman or handywoman provides a service of physical labour that entails the repair, maintenance or construction of something. For the purposes of this article, we’ll stick with the term ‘handyman’ as it’s the most commonly used phrase.
A handyman business is an essential service that will always be in demand. A well-established handyman business has the potential to be a successful and stable venture, so if you’re thinking of starting one, then you’re on the right track!
However, like with any other business, it’s important to get all the legal and business things sorted so you can focus on the work itself without any worries.
When you’re starting a handyman business, you need to consider matters such as business structure, taxes, legal agreements and a few more things – we’ll discuss them in this article, so keep reading to find out more.
How Do I Start A Handyman Business?
A handyman business starts off the same as all businesses in Australia. In order to get your business off the ground and legally recognised, you will need to apply for an Australian Business Number (ABN).
Once you’ve decided on a business name, get your business name registered.
Next, open up a bank account for your business. Depending on the business structure you choose (more on this later) a separate bank account for your businesses may or may not be required.
Regardless, it’s advisable not to use your personal account for your business in order to make things easier.
What Do You Need To Start A Handyman Business?
In order to start a handyman business, you’ll need to sort out a number of things. First, make sure you’ve decided on the services you will be offering and have all the proper skills and training to conduct it well.
Next, invest in some good equipment – this also includes reliable transportation as you will be travelling from job to job.
Finally, you’ll need to sort out all the right paperwork such as your registration, taxes, licences and legal agreements. We’ll discuss this in more depth below.
Which Business Structure Do I Choose For A Handyman Business?
Many handyman businesses choose to operate as a sole trader. This means there is only one owner of the business and that owner is personally liable for the business. It’s relatively simple and cheap to set up a sole trader business, making it an appealing option.
However, there is also the option to operate your business as a trust or company.
A company structure will mean the business is a legal entity on its own and therefore, all losses, debts, gains and legal matters belong to the company as opposed to you individually. A company has its own bank account and can own property.
A trust is where another person essentially owns the company.
Setting up a company is a little more complicated as involves having a director, complying with the Australian Securities and Investments Commission (ASIC) and following the Corporations Act 2001. However, there is considerably less liability involved with choosing a company structure, so if your handyman business intends to go global or enter into high-risk transactions, it’s an attractive option.
Do I Need A Licence To Start A Handyman Business?
Licensing rules differ from state to state, so be sure to research the regulation of your area as there can be penalties for operating unlicensed.
In NSW, a contractor licence or a minor maintenance and cleaning licence is needed for work that is valued at over $5,000. In addition to this, specialised contractor licences are required for certain trades.
Depending on the services your business plans to offer, it’s important to look into these before you get started.
Registering For Taxes
As a business owner, you will need to pay taxes on the money earned from your business. This will depend highly on where you live, what kind of business you’re doing and how the business is doing financially.
Registering your businesses and obtaining a licence all have associated fees. The exact amount will depend on the type of business you choose to register and the kind of licence you are going for, along with how long the licence is being applied for.
Be prepared for these costs and set aside money in your budget for the various registration costs.
Do I Need Insurance For A Handyman Business?
There is no legal requirement to have insurance for your handyman business. However, we do recommend getting insurance and making sure you’re covered.
Unfortunately, things can go wrong and if that scenario arises, you want to be prepared so one bad incident doesn’t end up costing your entire business. The type of insurance to go with is very individual specific, but you’ll mainly want protection if you or someone else gets hurt or there’s damage to your business assets.
In Australia, it is legally required to have Workers’ Compensation insurance. So, if you intend to hire employees, you need to make sure they are covered.
Do I Need A Handyman Business Plan?
A business plan has all the research and information that is unique to your idea in one document. More specifically, it covers details around your business goals, resources, strategies and deadlines.
Essentially, having a business plan is important as it helps keep your priorities in check to keep your business goals on track.
A business plan usually includes information like:
- Market research
- Future goals
- Business operations
- Promotions or marketing
Can I Start A Franchise?
There are two ways to be part of a franchise:
- Buying a franchise (you become a franchisee)
- Starting your own franchise (you become a franchisor)
If starting a business from scratch isn’t for you, then you can think of buying a franchise of an already well-established handyman business. When you purchase a franchise, you get a copy of the assets such as the trademarks, business plan, structure, organisation (essentially everything that makes up this business) so you can operate the same business in a different location.
It’s also a lot easier for franchisees to conduct business because they manage the day-to-day activities of the business, while the franchisor is responsible for the larger, long-term matters.
If your handyman business is doing well, then you can also consider broadening your reach by becoming the franchisor and having one or more franchisees. This way, you can expand your business’ reach with the help of other business owners and distribute the efforts of running your business.
If you need help, chat to our franchise lawyers today.
What Legal Documents Do I Need For A Handyman Business?
Legal documents, such as contracts, are often used to protect your business from potential disputes and miscommunication. When running a business, you want things to go as smoothly as possible, and making sure you have agreements that work for you in place is key in achieving this.
Hiring other people is a great way to have help in running a business and expanding your operations. You can’t be in two places at once!
If you have chosen to hire staff, this will be a big help for your business. However, the terms of their employment with you need to be in writing so that both parties are clear on what need sto be done, and what happens if duties aren’t fulfilled.
As an employer, it’s important to have a good relationship with your employees and starting off with a Employment Contract is highly recommended.
A good Employment Contract should generally cover:
- Expected work
- Scope of work
- Working conditions or arrangements
- Other entitlements
- Non-compete clauses
- Confidentiality clauses
Employment Agreements may need to be drafted according to the specific needs of your business and your employees’ work.
If you’re hiring staff for your handyman business, our contract lawyers can help you out with this one!
Getting materials supplied might be an important aspect of being able to conduct business for your clients.
If you’ve decided to engage with a supplier to provide these materials for your handyman business, then consider getting a Supply Agreement.
A Supply Agreement lists the most important aspects of your arrangement with your supplier, such as:
- The product being supplied
- Delivery date and times
- Payment amount and methods
- Dispute resolution
- Termination of the contract
Suppliers play an important role in your business function well and a strong Supply Agreement can make sure you’re protected and help supply chain issues. .
Terms And Conditions For A Handyman Business
Currently, most businesses have some kind of online presence. You may decide to have a business website where potential customers can get informed about your services or make a booking.
Website Terms and Conditions are something you will find on most websites. It’s an agreement between you and the user about how your website is used. So, the user needs to agree to these terms before they can further engage with your business.
For example, a term may be that they must create an account before they can browse any further.
Terms and conditions can aid in limiting your liability and establish what you control and own on the website.
NDAs And Confidentiality Clauses
As a handy person, you will likely be entering into private spaces whether they are residential or commercial. In order to put your clients minds at ease, you can provide Non-Disclosure Agreements or Confidentiality Clauses in your contracts with them.
If you’re hiring employees, consider adding a confidentiality clause into their contracts so you can be assured that anything that needs to stay within the business can remain private, such as trade secrets or client information.
Another aspect to consider with Employment Contracts are Non-Compete Clauses.
Essentially, a Non-Compete Clause prevents the employees from using information they have gained from their time of employment with your business to compete against it.
This way, you can involve your employee in your business activities to the necessary extent without worrying about your business’ inside information being used in a way that’s harmful to you.
Wet Or Dry Hire Agreement
Wet or Dry Hire Agreements are useful when hiring out equipment. There is a key difference between the two that needs to be established first.
In its most basic terms, a dry hire agreement is a rental for the equipment alone. A wet hire agreement, on the other hand, includes the equipment and a person to operate it.
Renting out equipment can be the more cost efficient practice, particularly if it is not something that will be used frequently.
A Wet or Dry Hire Agreement establishes the terms of the rental such as time, payment, the equipment itself, conditions, warranties and liabilities.
Again, it’s important to have all this and anything else in writing to make sure all parties are on the same page regarding the hire of equipment.
Professional Services Agreement
Businesses who provide services that require a higher level of skill or expertise will inevitably be held to a slightly higher standard than others.
So, when deciding to take on a client, a verbal agreement between you and the other party cannot suffice. There’s a multitude of reasons for this – miscommunication happens, people have different ideas and some may even try to take advantage of the situation.
In order to make sure your protected incase a dispute arises between you and your client, a Professional Services Agreement should be used to outline the following:
- A description of the service you will be providing
- The timeframe it will be completed in
- The payment expected for the service
A Professional Services Agreement is generally used for businesses in industries that require a higher or specific skill.
Do I Need An Exclusivity Clause For My Handyman Business?
This is dependent entirely on you and your situation. An exclusivity clause will restrict who or where you can provide your services to for a certain amount of time.
Stan has been hired to build a bird feeder for Jemma. However, Jemma doesn’t want anyone else in her area to copy her. In a contract with Stan, Jemma puts an exclusivity clause preventing Stan from building another bird feeder for anyone in her locality while he’s building one for her.
There is no requirement for you to sign an exclusivity clause and you should never feel compelled to do so. This is especially important if you feel the clause is unfair and does not consider the best interest of your business.
If you need help or advice regarding exclusivity clauses, contract us for expert legal advice.
What Should I Do About Liability As A Handyman Business?
Liability refers to your legal responsibility when operating your business. For example, if someone gets injured because you were negligent in your actions, then you can be held liable for their injury and may have to pay them damages.
Insurance can help keep you covered if you ever find yourself in such a situation. Another way to address liability is by placing limitation of liability clauses in your contracts – there’s more on this below.
Limitation Of Liability
A limitation of liability clause places a cap on the amount of damages that can be paid if you are found to be liable. This can prevent detrimental financial loss, however, keep in mind that having a limitation of liability clause does not protect you from acts that are considered illegal such as negligence or fraud.
Thinking Of Starting A Handyman Business?
Starting a handyman business can be a promising new venture! However, there are a number of things to get in order before you get going.
Getting the help of a legal professional can aid in making this process easier. To summarise what we’ve discussed:
- Before you start your businesses, make sure you have the correct qualifications and licences to practice
- Create a plan for your business to stay on track
- Decide on a structure for you business and get to registering it as well as the name for you business
- Register for any relevant tax obligations and look into getting insured
- Have all your key legal agreements in place, including online terms and conditions as well as employment contracts
- Prepare in advance for scenarios where you can be held liable
If you would like a consultation on starting a handyman business, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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