Becoming a contractor can be an excellent path for anyone who has experience in construction work and wants to grow their own business–but it is not an easy move, and there is a lot to learn.
To become a contractor, you need to have the necessary skills and experience. You will also need to obtain licenses and permits. Once your business is up-and-running, you will have to market yourself to potential clients.
Here is a step-by-step guide to becoming a contractor:
1. Getting the Necessary Skills and Experience
Before becoming a professional contractor, you should have some experience working as one. You can gain this experience by working under an experienced contractor or by working in the construction industry.
If you need more experience, you can take classes or workshops related to electrical work, plumbing, etc. Also, you have to complete six hours of continuing education for each licensing period.
2. Get Licensed & Certified
Before you can run your own contracting business, you will need some professional credentials. These are typically acquired through work experience or by passing specific tests or exams that demonstrate your knowledge of contracting techniques and regulations in your state/region or local area. You may also need to show proof of liability insurance as well as worker’s compensation insurance.
Here are some examples:
HVAC — Heating, ventilation, air conditioning, and refrigeration technicians usually need a state license. Many specialties within this group have national certification programs as well.
General — General contracting licenses vary by state. To find out how to become a general contractor in your area, consult the individual licensing board for that state.
3. Get Insurance
Before you can start work on any project, the owner of the property will probably ask you to show proof that you have Insurance. Liability insurance protects your clients in case you injure yourself or damage their property while working.
Property damage insurance covers costs if something happens to the property or materials that belong to your client (for example, tools).
Worker’s compensation provides benefits and medical treatment for employees who get injured on a job site (usually required by law). Make sure all your licenses and certifications are up-to-date and that you carry enough liability and workers’ comp insurance to cover your business.
4. Set Up Your Business Structure
Businesses need to be registered with the state/local government to operate legally. There are different types of legal structures for contracting firms, including sole proprietorship, limited liability companies (LLC), general partnerships, and corporations.
You will need an attorney or accountant’s help in deciding which structure is best for you; each type has pros and cons.
For example, a corporation offers protection from potential lawsuits against your business (for yourself and the employees) but requires additional paperwork like annual meetings and shareholder agreements.
An LLC limits how much personal liability you take on when signing contracts or making decisions about work performed by the business but doesn’t require shareholder agreements. Check with your state/local licensing board to find out what business structure you need and how to set one up.
5. Market Your Service
Now that you have completed the necessary training, obtained certifications and licenses, and set up a legal business structure, it is time to put yourself in front of potential clients.
Tactics include cold-calling, working with referrals (getting subcontractors or other businesses to recommend you for jobs they can’t do), bidding on projects (through online job boards; asking local building supply stores for help), networking, etc.
Be sure your advertising materials (business cards, flyers) clearly describe what type of contracting work you specialize in and list your credentials any endorsements from industry associations or contractors.
It is a good idea to have a website so clients can find you online. Reference the client testimonials from your marketing materials and use online review sites to show how your business did with your clients.
If you are a general contractor, remember that a lot of business decisions go into starting and running a contracting business–from choosing your legal structure to deciding how you are going to market yourself.
Once you have gotten through these steps, you can make a name for yourself as a contractor. Good luck!
The information contained in this article is provided as a courtesy. It is for informational purposes only, not to provide legal advice as individual situations will differ and should be discussed with an attorney. Please consult your local or state licensing board to determine what may be required for you to do business within your state/local area.
Meta title: How to Become a General Contractor in 5 Steps
meta desc: Becoming a contractor can be a great way to start your own business and build your own client base. This guide will walk you through the process step-by-step.