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How to Become a General Contractor in 6 Steps

5-minute read

Daisy Kincaid

Daisy Kincaid

26 September 2019

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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.

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Follow These 6 Steps to Become a General Contractor

Step 1: Build your contractor skills.

There’s just no way around it – learning how to become a general contractor takes time. You need the skills and experience to manage construction projects from start to finish, and they don’t happen overnight.

There are two main paths for this experience: higher education and hands-on work.

Most GCs have a combination of these two. Successful general contractors often have a degree in construction management or civil engineering, along with several years in the construction industry. Regardless of your approach, start planning three to five years in advance to become a general contractor.

At a minimum, you need to:

  • Be at least 18 years old
  • Be able to work legally in the U.S.
  • Earn your high school diploma or GED
  • Have a clean work record

Once you’ve checked the boxes on those qualifications, take a look at your experience in the following contractor areas:

  • Bidding on projects
  • Planning a budget and tracking expenses
  • Navigating the permit process
  • Scheduling and managing subcontractors
  • Complying with building and safety codes
  • Working with clients, especially managing expectations
  • Good, overall knowledge of construction

If you’re not an expert at these things now, don’t worry! But do keep learning and improving as you prepare to be a general contractor.

The best way to do this, of course, is to soak up as much experience as you can working for a reputable construction company, especially on midsized or large jobs where you can see every aspect of a project. Plus, most states require time in construction before you can apply for a general contractor’s license.

Which brings us to our next step…

Step 2: Pass the contractor exam (if required).

It’s a legal requirement in most states that GCs be licensed – but before you apply for your license, you have to pass an exam that shows you’re ready to be a general contractor. Test requirements will vary from state to state. For instance, Georgia general contractors must pass two separate exams: one on business and law, and one on construction. Other states combine everything into one exam.

The first step, however, is to find 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.

Step 3: Set up a business plan.

“The construction industry” is a term that covers a lot of ground – everything from banging nails on a backyard deck, to electrical contracting, to building skyscrapers. A business plan might sound like busywork, but it’s the single best way to see how you can be most successful in this huge industry.

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.

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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!

Download

Free Contractor Invoice Template

Are you starting a contracting business? Download our FREE contractor invoice template & start getting paid!

Your email address will be used by Simply Business to keep you posted with the latest news, offers and tips. You can unsubscribe from these emails at any time. Simply Business Privacy policy.

Daisy Kincaid

Written by

Daisy Kincaid

I'm a freelance writer and editor with a passion for entrepreneurship, adventure, and my two rescue dogs. For more than two decades, I've created content for businesses of all sizes, from a small, daily newspaper to a Fortune 100 global giant. I landed my first writing gig at 21, and can't imagine doing anything else.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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