Are you interested in becoming a general contractor? This field has a wide range of opportunities, but it requires strong commitment if you’re set on being one.
This post will explore why general contracting is a fantastic career choice. It will also touch on essential steps you’ll need to take if you wish to enter the field.
Why Go Into General Contracting?
General contracting has numerous benefits making it great for those who strive to provide others with incredible craftsmanship while making a decent salary.
Being a general contractor also means you often work independently. This means you get to decide on your schedule and rates.
This option is always bustling, so you’ll get to work on various projects ranging from new homes to structural renovations. Thanks to this, you’ll not only have a steady income but can increase your skills and experience.
5 Steps to Becoming a General Contractor
Brainstorm Your Plan
Before setting out on your new career, carefully plan things. Jumping right into it might be tempting, but general contracting requires many permits. Moreover, if you miss something critical and start working, it will reflect poorly on your new business, which could affect its future.
Also, start to get an idea of how you’ll manage your finances. This includes figuring out your hourly rate and if you should open a separate bank account for your company.
After you have a strong business plan, please write it down. This way, you can keep your thoughts in one place and organize things as you go.
Secure Insurance
Insurance is vital in general contracting and legally required. It protects you from lawsuits, but it also helps you sustain an income should you be injured on the job.
General contractor insurance rates vary, so you’ll want to carefully research different plans. Because you’ll be dealing with various factors, most general contracting insurance will cover numerous things. These include:
- Workers’ compensation
- General liability
- Commercial property and auto
- Tools and equipment
Besides insurance for yourself, you’ll also need to consider subcontractor insurance if you plan to use their services. This can protect you if they’re injured or cause project damage.
Overall, it’s best to talk with an insurance agent to ensure that your package covers everything you need. They can also design a customized one to fit your budget and preferences.
Get the Appropriate License
You’ll now want to look at obtaining the proper contracting license. This confirms that you can legally run your general contracting business.
Requirements will vary, though, depending on where you’re located. For instance, some areas might demand that you have at least a few years of experience in this field before you’re allowed to get a license. You’ll want to check that you have the necessary permits and paperwork before applying for one.
Take a General Contracting Education Course and Pass the Final Exam
In most states, you’ll need to take a contracting course. This will teach you the ins and outs of the field. It also proves that you’re educated in general contracting requirements.
After a few weeks, you’ll be able to take the final exam to test your knowledge. If you pass, you can move on to officially being a general contractor. However, if you don’t, you’ll need to retake it.
Keep in mind that you won’t be able to get this far if you don’t have at least a high school diploma or a similar equivalent. This is key to beginning your journey, as it shows you have basic knowledge in critical mathematical fields. If you don’t have this, you’ll need to obtain one before you can take the final educational courses.
The classes do come with fees, some of which can be hefty. You’ll usually need to pay for them out of pocket, but sometimes loans are available.
Apply for Your Business
Once you’ve passed the test, you can send in your legal business information to your state’s contractor license department for approval.
You’ll be asked to pick a legal entity to form your business under. Most times, this will be an LLC (limited liability company). This covers most business aspects from liabilities and lowers the necessary paperwork and taxes other options require. But, if you prefer a different route, other options include:
- Sole proprietorship – gives you complete control over your business but leaves you personally liable.
- S corporation – gives you slightly more advantages than an LLC (especially financially) but can be much more work to obtain.
- C corporation – requires you to pay consistent income tax but provides liability coverage and low tax rates.
After submitting the necessary paperwork, the state will contact you with either a confirmation or denial. If confirmed, you can begin your business. If your application is declined, you’ll need to review the reasons why and fix them.
Becoming a general contractor takes time and patience, but your dedication will be well worth it. With these steps, you can efficiently work on starting your own successful business.