So you’re a champ at motivating people, and you want to be your own boss. Have you thought about becoming a general contractor?
Whether it’s smaller home renovations or giant office buildings, construction jobs always need someone running the show. As a general contractor, you’re the person responsible for supervising the entire project and keeping everyone on schedule and on budget.
If this sounds like you, you might have a great career ahead as a general contractor. Not sure where to start? Read on for a step-by-step look at how to become a general contractor.
d out how contractor licenses are granted where you live – at the city, county, or state level. You should be able to track down this info with a quick Google search. Once you know which government office handles licensing, visit its website for information about the contractor’s exam, including when and where the exams happen.
We also have a handy state-based contractor licensing hub – just click on the state where you’re located to find a -step-by-step guide on how to get a contractors license in your state!
In general, you’ll be tested on the following:
- Business structure and organization
- Financial management
- Contracts
- Estimates and bids
- Labor law, tax law, and construction-related law
- Safety and risk control
Remember, you’ll know a lot about these subjects thanks to your general contractors work experience – but you can also buy test prep materials or take an online course to get ready. Pass the exam, and you’ve shown you have the know-how to be a general contractor.
In its simplest form, your business plan should outline the kinds of general contractor projects you intend to work on, and the financial support you have to do it. It should also include your best estimate of what your GC business will look like in the future – say, three months, six months, and a year down the road.
Be optimistic – but realistic! A solid business plan is like a map of your path from startup to long-term success. It shows that you can take your ideas and make them profitable – plus, if you need financing, banks will almost always ask to see a business plan before making decisions.
Step 4: Bond. License Bond.
Not even a 007 agent can get a contractor’s license without a license bond.
Contractor license bonds are required by law in most states, and you’ll likely have to show proof of yours when you submit your application for a license. There are different kinds of bonds, of course, but your license bond acts as a guarantee that you will follow all rules related to your work as a general contractor.
Keep in mind that contractor license bonds are different from performance bonds, which guarantee that you’ll fulfill the terms of a contract for a specific construction project.
As with just about everything GC-related, the cost and requirements to get a license bond depend on your location. It’s safe to say you’ll be asked for your credit record, and that your bond application will be reviewed by an underwriter – similar to buying insurance.
Speaking of which, make sure you also have business insurance. It’s a crucial layer of protection between you and expenses that might arise from accidents or mistakes on the job. With employees, contractors, and subcontractors in the mix, the right insurance coverage helps protect your business, your clients, and your professional reputation.
Get Insured in Under 10 Minutes
Get an affordable and customized policy in just minutes. So you can get back to what matters: Your business.
Step 5: Prepare the paperwork.
Ok, we admit it: Figuring out exactly what you need to apply for a contractor’s license can be challenging.
Licensing might be managed by your city, county, or state. Some ask for professional references. Others require a background check. And everyone wants you to have construction experience – but the number of years will vary.
As with exam requirements, a list of documents to include with your license application should be available online, or on the application form itself. These will include most or all of the following:
- A signed application
- A copy of your driver’s license or state-issued ID
- Exam results
- Background check (and possibly fingerprinting)
- Financial statements, including working capital or net worth
- Proof of insurance and bonding
Step 6: Build your general contractor reputation
Ok, you’ve honed your skills, passed your exam, written your business plan, gotten bonded and insured, and obtained your contractor license – you’re almost there!
The last step to becoming a general contractor is to build a strong professional reputation. What does this mean?
Form a community: Keep in touch with contractors and other construction pros – and network to meet new ones. Networking helps establish you as an expert in your industry. Plus, the stronger your professional community, the more possibilities for word-of-mouth business!
Prove yourself: Develop a rock-solid work ethic, and show clients how dependable and hard-working you are. Pay close attention to detail on any project – including careful review of all completed work.
Be a leader: Learn how to motivate workers and bring out their best efforts. When problems come up (and they will!) offer solutions quickly and decisively. Communicate effectively, and learn to manage other people’s expectations.
Never stop learning: Stay on top of changing codes or regulations. Keep abreast of emerging technology in your industry. And add new contractor skills whenever you have the opportunity.
One more insider tip: Don’t be afraid to get help from experts when you need it. We all have our areas of expertise, right? For instance, the experts at Simply Business can help you decide on the right insurance coverage for your GC business – so you can focus on what you do best as a general contractor!