Handyman Maintenance Business Plan
HandyMan Stan is a start-up organization offering residents of Duluth, Minnesota a complete handyman service. By developing the reputation as a qualified, reasonably priced and trusted service provider, HandyMan Stan will quickly generate market penetration and develop a solid foundation of repeat customers.
HandyMan Stan’s target market has been segmented into: home owners and property managers. There are 24,090 potential customers in the home owner segment. This group has a 5% annual growth rate. There are 1,243 potential customers in the property manager segment. This group is growing at a 4% annual growth rate.
As a handyman, Stan will offer a wide range of home repair services. The services are generally fairly minor tasks, if the problem becomes major a contractor is best suited to solve the difficulty. HandyMan Stan will offer the value-added feature to pre-screen a contractor when Stan is unable to perform the repair. This will develop a trust bond with the customer so that when a more minor issue comes up the customer is more likely to call Stan due to his honesty displayed earlier. Stan offers fix-it services for: plumbing, electrical, fences, windows, decks/patios, painting, weather proofing, floors.
HandyMan Stan will differentiate from the competition by offering: low price and low minimum charge. Stan is charging a reasonable $30 per hour in an effort to encourage people to hire him for tasks that they would otherwise try themselves of just ignore until it became more of a problem. The second element of the competitive edge is Stan’s low one hour minimum. This compares favorably with the other industry competitors who often have two to three hour minimums. This edge also creates an incentive for the customer to call for Stan’s assistance earlier than they would with comparable service providers.
HandyMan Stan’s mission is to provide knowledgeable, convenient, and reasonably-priced handyman service to the Duluth, Minnesota community. HandyMan Stan will provide every customer with an honest day’s work and will fix anything that is not done right.
1.2 Keys to Success
- Treat every customer as if they were the most important customer the business has.
- Honestly evaluate the needed skills for a job, passing it onto a contractor if it is too difficult as opposed to taking on a job that cannot be completed perfectly.
- Work hard, guarantee all work and promote 100% customer satisfaction, if this is done profitability will fall into place.
- Develop the business into full-time employment within 12 months.
- Generate steady revenue per year by the end of year two.
- Create over 20% of business from repeat customers.
HandyMan Stan has been formed as a Minnesota Limited Liability Company (LLC) by Stan Roberts. Stan will be the sole employee and owner of the company. The company will incur certain start-up costs, primarily tools, detailed in the Start-up Summary section.
2.1 Start-up Summary
HandyMan Stan will incur start-up costs associated with the beginning of the business. The following table details the start-up costs as well as indicated the needed capital for initial operations. Stan will be using his personal tools for jobs but will need to purchase the following additional equipment/tools:
- Assorted plumbing tools including: slip wrenches, snakes, teflon tape, and assorted caps, nuts, and bolts.
- Electrical tools including: electrical gauge meters, wire cutters, various wires and wire caps, and soldering iron.
- Painting material including: paint brushes, paint roller, pneumatic paint sprayer, air compressor, sand papers, spackle tools and masking tape.
- Pressure washer.
- Various general tools.
- Assorted power tools (drill, saw, sander, Dremel).
- Assorted nails, bolts, screws, and fixtures.
- Laptop with portable printer for mobile invoice printing and submission.
- Mobile phone.
2.2 Company Ownership
Stan Roberts is the founder and owner of HandyMan Stan. The company will remain a one-man operation for the foreseeable future.
HandyMan Stan offers the community of Duluth the finest home repair and maintenance for home owners and property managers. All services start at just $30 per hour plus parts. HandyMan Stan will give every customer at least one hour of work at their property.
All work is “handyman” work, for larger jobs that require a contractor, HandyMan Stan will pre-screen a service provider free for the customer.
By providing only handyman services, HandyMan Stan will always attempt to repair the problem first, replacement is only an option if the item cannot be repaired. This differs from a contractor philosophy which is generally to replace everything first.
Repairing items is far less expensive for the consumer. HandyMan Stan offers a one year guarantee for all of their work, if something goes wrong, HandyMan Stan will make it right. The goal is to not have any unsatisfied customers.
Market Analysis Summary
HandyMan Stan has identified two distinct market segments, home owners and property managers. These are the most attractive customer segments as they are the customers who often have small repairs that are too small for a contractor but too complicated for the owner to perform themselves.
The handyman industry competes with the contractor industry for home repair jobs. Handymen are typically used for small items, contractors are typically called in for more extensive projects.
Customers will often call whatever service provider they are familiar with, regardless of the appropriateness. For this reason, word of mouth referrals will be very important. Potential customers will ask neighbors/friends and other property managers for recommendations on handyman service providers. HandyMan Stan will capitalize on word of mouth marketing by going the extra mile to keep customers satisfied. Exemplary service will result in new and repeat business.
4.1 Market Segmentation
The market has been segmented into two distinct customer groups:
The value of the homes ranges generally between $150,000 – $650,00.
47% of home owners attempt to make small repairs themselves, often starting the repair and realizing that they do not have the skills to complete it. The remaining 53% do not attempt to repair it, they call a professional from the start.
62% have owned their home for more than two years.
73% wait until several small problems accumulate before they call a handyman. This behavior can be explained by not wanting to incur a large upfront charge just to have someone fix one thing.
Manage between three – 20 units.
Typically do not have their own in-house repair man in an effort to reduce overhead expenses.
The range of monthly rental costs of their units is $350-$675.
4.2 Target Market Segment Strategy
The two customer segments, home owners and property managers have been targeted because they are the most likely consumer of handyman services.
Unless the home owner is particularly crafty, he/she does not have the skills, time or desire to tackle most jobs. Their preference is to hire someone and have them take care of it.
The property manager are also likely consumers because they are managing a group rental property which needs periodic maintenance. Property managers with less than 20 units rarely have on-site maintenance personnel, it is less expensive to hire someone as needed.
It is rare that the property manager would have any maintenance skills themselves and those that do usually do not have the time in the day to perform the repair.
It should be noted that the majority of business will be coming from residents and rental property from within the Duluth city limits. As you venture farther out of town into the country people tend to have more free time and more fix it skills and are therefore more likely to try to repair things themselves.
4.3 Service Business Analysis
Handymen operate within the general home repair industry. This industry encompass both handymen as well as general contractors. The distinction between the two is as follows: handymen can fix most minor problems, items that are not to extensively damaged nor do they require expensive special tools.
Contractors are most useful for jobs that are very technical in nature, extensive in the repair, or require very specialized tools. A handyman is typically far more of a generalist, he can handle a wider range of repairs whereas a contractor has a smaller realm of expertise.
4.3.1 Competition and Buying Patterns
HandyMan Stan will receive competition from several sources. The most well-known competitors are detailed below:
Jack Of All Trades: This is a handyman company that employs six different workers as handymen. This is a large company (for handymen) with a far less intimate customer experience. If a customer used this service on four different occassions, they are likely to receive four different people on the service calls.
Fix-It-Up: This is a one man outfit that specializes in plumbing and electrical problems. Painting and patios are not serviced. In speaking with several customers regarding their experience with this service, their impressions have been mixed.
Duluth Contractors: This is a full-service general contractor. The organization is large with 17 employees. This company does a mixture of commercial and residential work. This company has a eight hour minimum.
Red Rock Contractors: This is a small sized contractor of six employees. They concentrate on residential jobs and have a smaller minimum of four hour projects.
The buying patterns of consumers are largely based on who they know. Either they know a handyman or contractor whom they call or they will inquire with friends or neighbors as to who they recommend. They will often stay with that person unless they are unhappy with the service.
Stan plans to capitalize on word of mouth referrals, achieved by ensuring every customer has their expectations exceeded.
It is reasonable to expect that some of the larger contracting companies would be able to offer a better hourly rate due to economies of scale. This does not turn out to be the case since most of the large contractors perform a wider range of specialized services, necessitating many more tools and skilled workers, increasing overhead and therefore there billable rate.