These are all valid thoughts and questions.
My friend knows how to do the work he does (construction, repairs, etc.) but doesn't have the skills needed to set up and run a regular business -- entity formation, accounting/bookkeeping, insurance, sales and income taxes, invoicing, marketing, etc. etc. So, in a way, I would be helping him out by setting up, owning, and operating the business and just having him do the actual work. On the other hand, if I didn't know him and have him as an available and reliable resource as the person who would do the work, I doubt that I would want to go forward and set this up.
And, yes, the amount of return on my investment of time and money would be limited. Still, I think that once I set it up it could succeed as a small ongoing venture.