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I’ve put together a ton of information on this website to try to help the average guy (or gal) get his (or her) own contracting or service business going and thriving, but occasionally I’m asked basic questions that demonstrate to me that I need to go over more of the basics. One question I get over and over again: “What exact steps do I have to take to actually become a contractor?” These questions come from folks who usually already have a skill but have never owned a business before and are afraid that starting one would be too complicated or too risky. It doesn’t have to be either. Learning how to become a contractor is actually a rather straight-forward process. Here’s a basic list for turning that dream into a reality (note that this list could be slightly different for your state):
- Have the guts to go for it. Either you can make excuses all day long not to start your own business or you can grow some courage and take the leap. As for me, I worked at a dead-end job for years that offered no opportunities for advancement or growth. I reached a point however, around my 30th birthday, when I realized that life was passing me by and I wanted something more. I wanted to take a risk. I wanted to be in a leadership role. I wanted to experience the ups and downs of the American entrepreneurial experience by becoming a professional contractor. Above all, I wanted to build something that was tangible and that I could be proud of. So I went for it, and I’ve never once regretted the decision. There have been highs and lows, good days and bad, but overall it’s been a terrific experience, and my only real regret is that I didn’t start sooner. (Please make this transition in a smart and calculating way, my friends. Unless you have mass cash reserves set aside, it’s a good idea to keep the day job and work your biz on the side until things really start rolling. For more on this subject, please see my post about knowing when to quit your day job.)
- Decide what kind of service to offer. I think the most important part of this decision is making sure it’s something that you have at least some level of interest in. Don’t become a contractor in a trade that you hate just because you “heard” that there’s good money in it, because you’ll burn out before the big money even starts to roll in. You don’t have to love it, either, but it should be something you can tolerate long enough to get to that point when you can hire on laborers. Ideally, your business should also involve something that you’re already skilled in. Learning the ins and outs of a new trade is extremely time consuming, and time is money (you’ll have your hands full with administrative tasks, anyway). If you still don’t know what to do, ask your family and friends for advice. Often times those closest to us know our talents better than we do. If you’re more of an organizer and a leader then you might want to focus your efforts on learning how to become a general contractor.
Learning how to become a contractor is not difficult, but few people take all the necessary steps to ensure legitimacy and, ultimately, success.
- Name your business. Keep it short and memorable, but not hokey. People shouldn’t laugh when you tell them the name of your business, nor should it be so convoluted that you have to repeat it five times before they get it. Remember, your business is a brand, and you’ll be identified with it for the foreseeable future. Make it a name to be proud of, and include the type of service you offer in the name if possible. Check the website of your state’s Secretary of State to make sure the name is still available, then register it as a sole proprietorship, LLC, or corporation (among others). My business is set up as an LLC but check with a lawyer to decide what’s best for your situation. I’ve added a post that discusses setting up as an LLC versus an S Corp.
- Apply for an EIN (Employer Identification Number). If you are set up as a corporation or LLC then you need to do this even if you have no employees, and you can apply online here for free. You’ll need this for things like opening a bank account, applying for a license, and filing a tax return. If you are a sole proprietor then you are usually not required to have an EIN, but it may benefit you to have one anyway as it helps to protect your personal information and shape your image as a real pro with a legitimate business.
- Apply for a service vendor’s license from your state. This one came as a surprise to me back in the day when I was in the process of learning how to become a contractor, but it’s one of those red-tape steps that shouldn’t be overlooked. Depending on your business and state this may or may not be necessary but it was for me. Again, a simple google search should point you in the right direction on this one. Most states now have a business gateway website that will walk you through a lot of this kind of stuff.
- Open a business bank account. This is easy. I walked into my local bank, met with someone for about 15 minutes and it was done. I walked out with a booklet of checks and received a debit card in the mail a week or two later.
- Get insured. Nothing says “amateur” like an uninsured contractor. This will be a significant expense for you but well worth the cost when you consider how many potential customers will turn you away if you don’t have it. Talk with a local agent to go over your particular situation and to make sure you’re fully covered for your services, vehicles, and equipment. If you plan on hiring employees right off the bat, you’ll also need workers compensation coverage and probably an unemployment compensation tax account with your state’s department of job & family services(check with your state for more information).
- Register with your state’s department of taxation if you’ll be collecting sales tax. This is usually a pretty straight-forward process, and I pay collected sales taxes to my state on the internet once a month.
- Make sure you take the necessary steps to become a licensed contractor, if the law requires it. My business did not require any sort of trade license, but obviously for people like electricians and plumbers this is a must-have. In some states you’ll need a license even if you’re trying to learn how to become a general contractor. Starting a legitimate contracting business means playing by the rules, and avoiding them will burn you eventually so take this one seriously. It’s hard for me to be more specific about getting a license because every state handles it differently, but just Google it and you should have your answer.
- Find a location. Obviously it would be wise to start your business from home and then if growth justifies it look for an industrial space to rent or buy. Many states also offer a department of development website with an online database of available commercial space.
- Set up a business phone number. Setting up a dedicated line for your business not only comes across as more professional but also usually gets you a complimentary listing in the phone book. Try also to get a number which translates into an easy-to-remember “vanity” number. For example, if you’re starting a roofing business see if they’ll find a number for you that ends in 7663 (which coordinates with the letters R-O-O-F). It’s easier for a potential customer to remember 999-ROOF than 999-1928. When I set ours up the rep at the phone company was very helpful with this and it was done in a matter of minutes.
- Prepare for the accounting. You can either hire this out or use software like Quickbooks. I use Quickbooks and it’s a huge timesaver once you get the hang of it. I know, I know, you want to become a contractor, not an accountant, but sometimes in the early stages you have to wear several hats. It comes with the territory. If you would rather just hand this stuff off to a pro then I recommend Randal DeHart at Fast Easy Accounting.
- Learn about how to price your work. This is a biggie. The most common mistake I see with new contractors is that they don’t know what to charge their customers. Usually this means that they don’t understand their cost structure, they don’t understand buyer psychology, and they don’t place a high enough value on their own time. Result? Epic failure. Well, the good news is that there’s an easy button for that. Check out my buddy Dan Perry’s guide to becoming a $100k Handyman (it’s applicable to any home services or remodeling business). He’ll show you EXACTLY how to price your work for maximum profits. Follow along as he shows you how he went from making $25 an hour to over $90 an hour with his business.
- Get the word out. Time to tell every person you know and meet about your cool new contracting business. Have professionally designed construction business cards on you at all times. Order postcards and have them direct mailed to wealthy suburbs in your city. Most importantly, start a blog using my complete, step-by-step guide. Our web efforts have been, by far, the single biggest factor in providing us with free construction leads and growing our business. Web marketing is far more cost-effective than TV, radio, or print ads. It’s still shocking to me just how few contractors bother to utilize the internet, but that’s a good thing for you because if you go that route you’ll have very little competition. Also, start networking with other professionals in your city who are even remotely connected to the home improvement industry. Check out Jonah’s great tutorial on how to get no-cost leads through realtors.
Now sit back and watch the money roll in. Yeah, right! Now the real work begins, but if you’ve made it this far you’re already ahead of the 99% of people out there who talk a good game but will never do what it really takes to get a business off the ground and running. Please keep in mind that this is a generic list and that there could be additional steps and procedures in becoming a contractor that you’ll need to take depending on what state you live in, what your legal structure is, and how many other owners are involved. Though I set up my business without the help of a lawyer, you’d be wise to consult one just to make sure all your bases are covered.
So now you know how to become a truly self-employed contractor. It’s not hard. You just need to do it. Do you have it in you? If you’ve read this far then I’m willing to bet that you do.
My name is Jeff and I created this blog in 2007 to help and inspire contractors and home service providers. It’s come a long way since then.
As a handyman I often get asked by my customers if I could “coordinate” getting a roofer, electrician, plumber, etc for them and making sure the job is done right. The customer pays me the full amount and I pay the licensed roofer, electrician, plumber, etc. Do I need a special contractor’s license to act as a “coordinator”.
Thanks,
Ed
Ed-
It sounds like you’re basically acting as a general contractor in that situation, and in some states this will require a special license. Check with your state’s license board. Thanks for the comment.
Hey Man,
Thanks for the helpfull hints of wisdom. I am only 22 and I hope to have a biz up and running real soon. With your detailed description on what to do I feel as if I have a leg up on the comp. I and im sure everyone who reads this and myself really thank you for posting it. Its sounds like a long road to get there but I’m sure it will be well worth the effort. Thanks again and keep doing what your doing.
Hey Pat Man,
I am reading this thread now and was wondering if you ever started your business and/or if you succeeded? Please let me know.
No problem, Pat Man. It can seem like a long road sometimes but the fact that you’re starting so young is a big plus. You’ve got plenty of time to work out the kinks and shape a business that gives you pride and puts plenty of cash in your pocket. If only I had started my business at 22…
Best of luck and let me know if you need any more tips on your journey to becoming a contractor.
So I’m 44 with 4yr BS degree. In sales most of my life, married,family, own house etc. I have mostly been told that you need to have $$ to start this business. How much money would I realistically need? My construction experience is hiring a GC to do te exterior of my 2 car garage and greatroom. I GC’d the interior. Have done 20/6 pool deck,labored 2-3 small jobs, masonry jobs pads, 3 bathrooms, 1 hardwood floor, painting. Basically jack of many, master of none. I even have my state GC supervisor licence. With your information I think I am ready to start this on the side. How do I price a potential job or do I bring in the “professional that I would pay to do the job for the quote and then mark it up?”Thanks Again for your direction!
Hi Tony-
Yes you’ll need some money to get going, but not necessarily a ton. If you’re planning on acting as a general contractor and subcontracting out the work to specialists then you will save a lot of money on tools, materials, and employee expenses. Your costs will come down mostly to administrative expenses. It’s hard for me to throw a number out there because every situation is different but I’d say try to have at least a few grand set aside up front for everything from marketing to software to permits. The nice thing about starting it on the side is that you’ll still have the cash flow from your day job to keep the family bills paid until the contracting business really takes off and starts spitting off cash. As for pricing your jobs, well that’s a huge topic unto itself. Basically you’ll need to understand how you subcontractors price their work first. Tell them what you’re doing, ask what their rates are, and then you can build your price quotes from there. Once you’ve worked with them a few times you’ll have a good feel for what they’ll need to get paid and you can come up with quicker and more accurate prices for your clients. Of course you’ll need to leave some padding in there for your GC services or else you won’t make money! Hope that helps. Good luck.
I am a salesman becoming a General Contractor, starting a subcontract with a roofing company owned by a friend of mine who lacks sales skills. I’ve got all the numbers figured out as far as materials costs, Labor costs and even been profitable. The problem is what are the requierements to start: Licenses, Permits..etc and how to get those…any ideas?
Roofy
Roofy-
That sounds like a good partnership you’ve got worked out with your friend. Becoming a GC is often a great fit for someone with sales skills. As for the specific requirements, it really all depends on your state and local laws and regulations. Many states will require you to obtain a General Contractor’s License before beginning work. Likewise, most cities and towns will require you to get a permit for major work like roofing. You can try to go without it but I don’t recommend it and why risk it when the possible penalty fees can be sizable? It’s best to do things the right way. You really just need to contact your state and local agencies to learn what is required. Every place is different. A simple google search should take you in the right direction as far as getting a GC license in your state. Good luck.
Hello there, I’m a 34 year old female going in GC business. My problem is estimating everything, how much it is to do this and that when You are new to this field. And how does GC usualy works they take like 30% down or??????
What can You recomend to a lady in this field?
How would I go about applying for any necessary paperwork and becoming a contractor to deliver pizzas. I was thinking I could contract out to Pizza Hut, Papa Johns or Godfathers and they would not have the salary requirement or the insurance liability. I would charge like $5 per hour, $2 per delivery and then I keep any tips.
Julie – Read the comments I made to Tony above for information about pricing your work. Usually how it works is the homeowner pays you for everything and then you compensate the subcontractors with that money. The amount that you build into the quote for yourself is up to you. It really comes down to figuring out how much you want to make per hour, how many hours of work you think you’ll have to put into a job, and then coming up with a multiple. Then add that number to whatever the subs need and you have your final quote. 30% down sounds a little high to me but it’s up to you. If it’s a long project you might also ask the customer for partial payments as stages are completed.
Robert – That’s an interesting idea but I honestly wouldn’t know how to begin something like that. You might make a few calls to your state’s small business office and ask them.
Hi:
When I’m thinking to do my own business, contractor comes across in my mind. I have BE and ME degrees in electrical engineering field and some experiences in design of electronics and programming in university’s research program. If I want to design and provide customized power efficient/saving lighting or security alarm devices to residents and government agencies, what steps I have to follow!
I live in NYC and I appreciate for your valuable advice.
Sincerely,
Maung
Maung-
The answer to your question falls outside the perameters of my knowledge and experience. Designing systems for home lighting and security is a whole different ballgame, but if you’re just looking to install them then following the steps in this article will help. There is plenty of work to be had for contractors who handle security and lighting projects, both for residential and commercial customers. Best of luck.
Scott
First and foremost I would like to say, good blog. Secondly for all of you out there looking to do estimating it is something you have to take very seriously. It is the bid process that will win you the job. It is a talent that you get better at with practice. I suppose like anything else. In my estimating class we use RSMeans to price things out. It is kind of expensive for the book and or software but it is surprisingly accurate. If you can do QTO’s of plans, then you can use RSMeans, make sure it is the construction one. It takes some time to figure out how to use the city guide and such. But until you have historical data I would suggest you go this route.
Hello,
I have been looking for advice on how to become a sucessful contractor for a while now, and finally found something with great info, thanks!
Quick Background: I just graduated with a bachelors in Building Construction Management, 24 years old, in Florida, and I will be taking the GC Exam on February 16th, and have my General Contractors license in 3-4months. My education gave me basis on Estimating, Project Management, Scheduling, Green Building (LEED Accredited), and I speak English/Portuguese/Spanish.
I have interned for companies before, but I’m about to decide for what kind of GC should I work for now that I’m done with school and about to start working full time. Should I try to work for a small private contractor, or a big firm (International) with a career start program?
What could a young inexperienced contractor do to be able to grow and get business in such a recession? Any niches that still have growth potential?
My plan is to gain experience thru work and eventually become full time with my construction company.
Also, my father has a good size plywood distributor/factory. How could I use that to maybe pair up with my license? Maybe a certain kind of subcontrator (CSI “Division Wood, Plastic, and Composites”? Shoring? Wood Scaffolding?)
Thank You so much, it’s great to see professionals helping young minds to achieve career success!
I currently have my State GC License and have been asked by a local company to use it to permit a job because they don’t have their license yet? I would act as a qualified agent. I trust the company will complete the job professionally. Do you happen to know the fee that is appropriate for this?
Rich Contractor,
As i read all you posts its seems like you are my alter ego. Ive been Heming and Hawing about starting my GC company for the last 9 months now. I cant stand my job, and hate my boss even more. The one good thing i can truly say is that he gave me FULL control in his company. (or should i say he got the most bang for the buck) With this i mean, he got a superintendent when he needed one, a project manager to write all his contracts, an estimator, a LEED AP and a General Contractor wrapped up in a package known as myself. I truly find your website comforting. I read the blogs anytime i start freaking out, knowing im going to walk away after this job. (as long as i dont say ONE MORE JOB). We have very similar ideas when it comes to social media and posting videos as well. I just started taking some video on my flip to post some “how to” videos on youtube. Anything to get the word out and the buzz started before I take the plunge. I do have one question, when you first started, how did you find that FIRST job? or the second. I have 0 clients (that i know of). Im hoping to use some Pay for leads sites and hit it hard so if you could go into more detail about the ones you like and opinions about them, privately if you have to, please let me know. Thanks
William G.: Thanks for the compliment. I totally agree with you that the estimating and sales aspect of a service business is crucial to success. You have to price fairly to the customer but also to yourself. There’s nothing worse than underpricing and ultimately losing money on a massive project. The software you mentioned can be very helpful.
Rodrigues: Thank you and you’re welcome. Glad I could help. In answer to your first question, I would choose neither, instead opting to start my own business right off the bat, but that’s just me, and I understand that for some people that just isn’t feasible. If I had to choose between a small private contractor and a large corporation I think I would choose the latter, all the while stashing away as much capital as you can so that you can comfortably launch your own service when you’re ready, but again that’s just me and I can’t tell you what to do with your life.As for your second question, if you check out the “marketing” section or “leads” category in this site I think you will find lots of good info for drumming up lots of business in good times or bad. There aren’t many niches that are growing right now but give it a few years and things will be rocking again. Get things lined up in the meantime.
Dawn – That’s a tough question and I really think it just depends on how much value you place on your time and experience. I think I would estimate how much time you’ll have to put into it, multiply that by how much you expect to earn per hour, and you’ll have your answer.
Ronnie – Thanks for saying all that. As for getting those first few jobs, you’ll need to approach family and friends. They’ll trust you to do a good job (I hope) and then you can use them as your first referrals and for those first before and after photos for your portfolio. As long as you do good work word will spread from there. Like you said, the internet can offer you huge leverage so use it to the maximum….it can be especially helpful in the early stages of your business. Check out my post about “free leads” to get some ideas. Other than that I would recommend that you try service magic but track it closely. It works well for some people but not so well for others so you’ll just have to give it a go. Good luck, man.
Awesome blog thanks for sharing. I am a senior in high school and know the career I want to pursue it general contracting.. my father has owned a grading and paving company for 30 years so I have been around construction my whole life. Working on site for the past 4 years has given me the knowledge I need. The dilemma that I have is that I don’t know if I should try to get a degree in construction management? It seems like the criteria consists of job estimating,planning, and business aspects. I already have most of this knowledge and I think with my father as a mentor I can begin to run a successful business. What’s your thoughts? thanks
Tommy-
That’s a tough one. College is expensive but it usually pays off in the long run, and that piece of paper can open doors for you in the future. It’s also an experience that I think, in general, is worth having. Is there a way to do both? Perhaps start your business and take some night classes? That would be a lot of work, but perhaps it would ultimately guide you and help you to decide which avenue to take. You might do one semester and decide that it’s not for you, or it might convince you to keep going because you’re learning a lot. Either way, I can’t tell you what to do with your life, but I wish you success in whatever you decide to do. Thanks for the comment.
Hi, I’m looking forward to becoming a general contractor, and starting my own bussiness, I liv in Texas and wondering if I should get a degree and any other steps that would help me get out. Thanks for a awsome and usefull website, it has become one if my favorites.
Hi,
I am 19 teen years old and have been working for my father doing remolding work since I was eight years old. I have a done all differnt ypes of work such as all types of flooring, tiling, framing, sheetrock, siding, basic eletrical and plumbing, and roofing. I have basic general knowledge on how to basically do everything. Recently there has been many people who saw me working and asked if I self contrated. I said yes and got a a few deck job, flooring job, and redoing a basement. I am tired of working for my father company and want to start my own company. I have all the tools, resources, work trucks in inorder to self contract. I was wonder if you had any adivice for me. Am I to young, would clients not want to hire me due to my age, should I continue to work for my fahter company and still do work on the side?
Hi, I just recenlty posted a comment but would like to expand on my post. Not only do I have many years of on the job work experience but I also have many relatives who are older and retired and a few of them were builder. I am very close to them and with there fourty year experince I believe that I could get threw any job. Even when I am working for my father or doing another job and I have a question about what to do I always call my unlce. For example I was doing a tile job which was tile over tile and I needed to know which adhisive I needed and he told me which was the right one. I have many resources but I am very weary about my age. However, not only do I work full time but I also go to college full time were I am finishing my second year and I major in business managemnet. I am a A student a school but I really enjoy doing work in the building field and believe that it fit my personality. Is there any adivce that you could give a kid like me I would really appreciate it.
Hi,
I have am a GC based in Nairoi,Kenya. A keen enthusiast of your blog, i must admit it has been such a valuable resource to me. I trained as an accountant, worked in a bank for four years and went into Construction business 8years ago.
Right now,am considering expansion to various fast growing countries in Africa, what must i take into account prior to actioning this?
Kev- A degree is not a prerequisite for becoming a general contractor, but in many states you will at least need to be licensed. As for other steps to follow, it’s pretty much all laid out in this post.
Mike- Age usually isn’t a big factor, but 19…that’s pretty young. If you’re already juggling work and college without any problem then I guess I would say just finish up, bro. Get the piece of paper, and in the process you might just pick up some useful knowledge about how to manage people. Then, when you graduate, go for it. A few more years will also help you to develop sales and people skills before you take the leap into entrepreneurship. Half the battle of running your own business is learning how to deal with people, and sometimes these skills can only be learned with time. In the meantime, set aside some cash every week so that you’ll have startup capital after graduation to buy equipment, hire help, rent space, buy advertising, etc. But, it’s your life, and I can’t tell you what to do. I can only tell you what I would do if I could do it all over again.
Peter- Thanks for reading. To be honest, I don’t have the slightest clue about the contracting landscape in Africa. That’s a tough question. Obviously you’ll need to educate yourself about the laws and regulations in each country, you’ll need to have local teams that you can trust to do the right thing when you are not local, and you’ll need to have a solid business plan in place.
Hey man my name is bill and I am 18 years old. I have completed a trade program for pre aprientership in the united brotherhood of carpenters and I am now thinking about going to college for a buisness management degree thinking it would help alot when I go on the mission to becoming a contractor I have always loved manual labor and was raised up around sheet rock roofing and framing do you think this degree would further my contracting skills? Also I never really understood when you hire on workers do you pay them out of your pocket so would you have to take out a buisness loan or is there a trick to paying your workers? Thanks a million for your post it just helped me realize that this is definitly what I want to do helped out alot
Hi there Scott, thanks for such a useful and inspiring website.I am wondering if I should get a degree in structural engineering at UTEP in el paso Texas. Would this be helpful when owning your own business if I was interested in being a general contractor and overseeing renovations? Also if you could go through your tipical Work day and if possible, salary. This would be extremely helpful, hope to here from you soon.
1st- thanks for this site- it has provided us with the information we need to hopefully succeed! Here is our situation and questions:
My husband has been a house framer for about 10 years working for others and more than once has been taken advantage of- a few times being told he will be paid ‘tomorrow’ only to discover the boss has quietly packed up, without paying him… 🙁
We have finally saved up enough for him and his best friend/ co-worker to start their own Framing business. While my degree, experience and interests are in a different direction, the one thing we have in common is the desire to make an honest living, providing our services to those in need-
We have followed your direction and completed all the steps up to- ‘go get em tiger’. We are technically, up and running, and have the licenses, insurances, tools, cards and those working for/with my husband. We have done a few jobs, so we are making money- We now need to know how we go about introducing our company to the large home builder companies- such as ABC Home Builders (fictional name) in the hopes that they will come to us when they have a home needing to be built.
His current employer does not want my husband on his own. A) because he does not want to compete with him, and B) he does not know how to frame and uses my husband to run the site and translate to workers. Because of this, he will not tell us the one thing we are unsure of- how to go about introducing our new company to the ‘big dogs’ such as ABC Home Builders in the hopes that they will call us to give a bid (is bid the correct term) when they have a property that needs to be built.
Also, what is this called? When we go to one of these larger companies and introduce ourselves, what do we say we are here to do??? That is the big question for us…
Finally, am I correct in the following- ABC decides to use us to build a home based on our bid, our bid is just for us to do the work and ABC is responsible for getting the materials, we then go to the job site with our workers and do the job, and we pay our workers out of what we receive from ABC.
thanks for any insight on the above questions…
TN Framers
Scott.
Just wanted to say thanks so much for your time in constructing your website. I am a Home Improvement contractor doing remodeling and hoping to start building homes. Would love to become a builder. Your site is really informative and enjoyable to read. I have just started my own construction business and hit the ground running. First few months were great and now it has really slowed down. I am networking a lot and trying to use this slow time wisely. I know business will pick up, yet it can be tough sometimes. I appreciate your willingness to help others trying to achieve their dream. Keep at it and I will be following and reading your comments.
Bill- A business management degree is going to be helpful when it comes time to run your own operation, so that’s a good idea. As far as paying your workers, you need to have a steady stream of cash flowing into the business so that they are compensated on time and in full. A startup loan can be helpful to get things going, but don’t hire on lots of laborers until you have the business revenue to justify if. Glad you liked the post.
Kevin- I would think that such a degree would be very useful in your chosen line of work. Typical work day….well, there really is no such thing. Every day is different. Some days you sell, some days you put in the labor, other days you balance the books. Everybody has to find a system that works for them. Just be prepared for long days and a lot of work. Running a business is no walk in the park, especially these days. As for my personal salary, well, I think I’ll keep that to myself. It depends on your industry and your marketing savvy, but six-figure contractors are pretty common in major cities.
TN Framers- It’s just a matter of picking up the phone and calling the builders. Let them know what you’re doing and ask to be given the opportunity to put in bids on new homes they are building. Follow that up with a professional letter and a bunch of business cards. Some of them may shrug you off but if you keep at it you will eventually be given a chance, and if you do good work then it’s off to the races. Just let them know that you have a framing company, that you’re fully insured, and that you have references who can vouch for you. Different companies handle the building process differently, so you’ll just have to ask lots of questions as far as who is providing materials and so forth. Better to have it all crystal clear and in writing before any contract or work is entered into. Then you will pay your laborers from your own business account. If cash flow is an issue ask ABC Builders if they can make payments in stages.
Chris- Thanks for the comments. Winters are usually a little slow for most contractors, but it’s smart to be using this slow time to build business relationships, formulate a Spring marketing strategy, and making preparations for when things pick up again. Good luck out there.
Very interesting post and I have a few questions.
Well, i have zero background in engineering, architecture and similar fields. The only plus is that I can train under my parents as they are contractors.
Would it be beneficial if i take some form of basic construction management classes or similar to give me a crash course on construction before I decide to train under my parents?
Is this field very technical? and would it be impossible for me to succeed in this proffession granted i am neither an engineer nor architect nor know nothing about construction except i have the eagerness to learn?
Hey Scott.
Great blog. Thanks for kinda cutting through the crap and for your “dive right in” approach and encouragement… it’s refreshing to say the least. Too many people are scared to take a chance and therefore become paralized by the idea.
Your story about being 30 and at a job you were less than thrilled about… it was like you were describing my current situation perfectly… I am that guy right now.
Here is my situation, I have done quite a bit of “household projects” from kitchen remodel to rebuilding a back porch (with an enclosed room above) that was falling off the back of my house. Even though I have done these projects I still feel unsure of my talents and know how. Like they say, I’m a jack of all trades but a master of none… that concerns me.
My questions for you are, should I start this process small, picking one trade that I feel comfortable about and comfortable doing(say, tile work)? Or should I jump in feet first and learn as I go? Also, if I pick one trade, how do I continue to educate myself in other trades so that I can expand my tools? My main fear is getting in over my head and screwing up someone’s home. Lol. Thanks.
Hello,
This is a very informative site and I have a few questions that I am hoping you will be able to answer.
Well, my parents have been in the contracting business since I was a kid. I had no intention of continuing what they were doing and because of this i studies in liberal arts, far from the engineering and architecure courses that would deem useful in running a succesful contractoring business.
However, recently I realize that there is indeed an opportunity in continuing and improving what my parents have started. I have some fresh ideas that will hopefully revitalize their business.
My biggest fear is that I am not qualified to even begin working for them. I’m no engineer or architect and i fear that i am at a very huge disadvantage! Are my fears true? Is there still hope for me to work and run in this type of business?
Martin- You don’t have to be an engineer or architect to become a successful contractor, just the desire to learn and a good work ethic. Taking management classes is never a bad idea, but also learn as much from your parents as you can. They can show you the ropes along the way. You can do it.
Adam- Great question. I think it’s best to start with what you feel comfortable doing just to get your feet wet, and you will naturally begin to build other skills as time goes on. Don’t be afraid to try new things as the business progresses, however. You might be surprised to know that many general contractors started where you are and just went for it, learning along the way. If there’s a project or three that is obviously above your head then pass it on to someone else, but as with most careers you can pick up a lot along the way. And remember that mistakes are opportunities for learning.
Scott
I just recently began looking into becoming a general contractor, as I am learning early on the depressing realities of my proposed profession. I am a junior in a BAS in architecture program in Boston, and within 2 years I will have a masters degree. I am also currently interning at a medical design firm and I plan on getting my architectural license asap. Soon enough my credentials will be good. My dilemma is that I am a designer at heart, and a good one at that, but generally speaking, there is little money and too much frustration in my field. I am trying to gather as much input as possible as to how I could succesfully combine my desire and skill to design with the general contracting profession. feedback is much appreciated, thanks man
Design and general contracting can dovetail very nicely. Could you find a business partner who would manage subs and do the things you don’t want to do so that you can focus on planning, blueprints, and letting your creativity run wild? If design is your real passion then don’t give up on it. There are ways to make lots of money with your skill set, and you don’t have to abandon your real interests.
my name is rick i want to start a home repair business do u know if i need to have a contractors license if im doing jobs under $400 i live in california
In my state you would not need a license as long as you are not doing plumbing or electrical work, but I don’t know what the laws are in California. Check with your state officials on this one….they probably have a website where you can learn more.
Hi im.23 and I want to become.a general.contractor, I have 8 workers that vary from electricians, roofers etc. they worked for a really unorganized and,rather drunk fellow whom never payed them fully. They quit and,are looking for someone to orchestrate them. They are all mostly spanish fellows that arent very fluent or even so dont really speak english. They want me to be their leader but I,have no experience in construction. They said they would do estimates and everything and that all I would do is the signings. Is this a goos risk to take? The workers are hard workers and love to work but I dont know anything about this…
If you have no experience in construction then I would say this sounds a little risky until you’ve had more time to educate yourself and think it through. You might also consult an attorney. There need to be clear perameters about who gets paid what, what your role will be, and things of that nature. But if you trust these people and they work hard then you can find a way. Just make sure you have all your bases covered and you know exactly what you’re getting into.
Hey Scott great site
I’m applying for my GC license in Maryland. I have to send in a credit report which is fine, but also 3 months of bank statements. As a tile layer with a family I, like alot of other people, don’t have alot of money in this account. I know it will vary by state, but do you know what they are looking for when they review this. Thanks in advance and great site learned alot reading the comments.
Patrick
Not really sure. They’re probably just making sure there isn’t any strange activity in the account that would warrant further review, but I’m just guessing here. Sorry I can’t be of more help. Perhaps a phone call would prove helpful.
I am currently working towards my AS degree in business management but I really want to be a contractor and have my own construction business. I have no expereince whatsoever in construction but I have always been fascinated about building and designing homes. My main thing I want to do is build nice apartment homes, community homes and such. I don’t want to do the actual building but I want to be incharge of everything and I basically want to lay out how I want a house built as far as how big the master bedroom will be, open floor plan concepts and such. By the way, I am a female and I cannot draw whatsoever so I kind of ruled out architecture. Any ideas on what direction I should go?
Well, you don’t seem to have any industry-specific skills, but you do have some management classwork under your belt. That just means that you will need to network, network, network in order to build a competent team around you that can do the things that you can’t do. Can’t draw? Team with an architect. Don’t know a thing about measuring out kitchen cabinets? Team with somebody who can do it in their sleep. I’m not going to lie – with absolutely no experience this is going to be a challenge, but it is not impossible. Start building relationships with local professionals, formulate a plan, and move forward from there.
So I am trying to find out if I Have to have or become a licensed contractor on a personal project. Here is the deal. I found a small motel in a tiny little town that doesn’t even have building permits. So I am the owner and we are doing all of the work on our own it is mostly clean up, paint, tearing out paneling and putting up sheet rock and things like that. So now someone walks up to me and asks me who is the general contractor on the job. I said well we are the owners and we are doing the work. Am I supposed to have a contractors license in and instance like this?
I would think probably not, but it also depends on local and state laws and regulations. It’s hard for me to say without knowing where you are. Since you’re only doing minor work and no permits are required then I would think you’re okay without a license, but again you should check with local agencies just to be sure. I’m just speculating here.
your information was strait forward and i have better vision of my future as a general contractor. I have not nearly enough experience but i have the organizational and leadership skills that are required to make my goals checked off. so my question is simple but not easy, what can i do to become a contractor’s assistant? what do you think about applying as an intern? or even volunteering? What type of business do you think is less reluctant to hire an assistant?
love to hear your input,
K.Dobbs
That sounds like a good idea. If you can get your feet wet somewhere as an assistant then you are more likely to succeed later when you strike out on your own. I don’t know about volunteering….you will need to get paid for the hard work that you will inevitably be doing. Start with people in your circle of friends and family – ask them if they know of any businesses that could use some help, and if not then just start making calls and knocking on doors. Yes, the economy is not in great shape but tenacity can still get you where you want to go, and many employers are still always looking for people who are hungry to succeed. Good luck.
Hi Scott,
I’m into the environment, and thus looking for environmental jobs, but I’ve always had an itch for construction, or rather fixing up rooms, remodeling, etc; overall handy-man work with a mind for design. My background is that I’ve got a Bachelor’s in Environmental Studies with a minor in Biology, and I’ve been considering eventually starting up a green-remodeling(?)/contracting(?) business. Basically, rebuilding people’s places with more environmentally-sound material, appliances, etc., making homes more environmentally conscious AND energy/cost efficient.
I want to start low, doing the labor work myself so I know how it all works (but also because its fun). But I’m not sure how I can go about learning ALL of these trades together, i.e., carpentry, electrical, tile-work, plumbing, etc. I’ve tried to do some research of trade schools, but the results were vague; it seems that a trade school will only involve you in one specific trade like ‘carpentry’ or ‘plumbing’.
My question is, is there somewhere I can go to learn all of these things, or will I have to go through several trade schools? Not to mention, when I do this remodeling work, will I need to have a ‘design degree’ or will my savvy be enough? Can I just DESIGN someone’s living space (based on what they’re interested in, of course)?
Sorry for the long-winded-ness. Thanks!
Stacey
“Green Remodeling” is really taking off in many regions of the world for all the reasons you mentioned, and I applaud you for wanting to get in on the action. Several organizations now offer green certifications, including NARI and NAHB, and having one can go a long way in boosting your local profile, but I believe that they tend to require that you already have several years of remodeling experience under your belt. So you’d have to just get things going without it at first. As for the trade schools, I wouldn’t do every single one. Just pick your favorite and go from there. You can learn most everything else along the way as you go if you have a hunger for learning and information, and if you’re not afraid to fall on your face a few times (not literally, of course). Doing it all, in addition, to design, can be quite a load, however. You’re talking about doing everything from design, to electrical to plumbing…that’s a lot for one person. I would say find the one aspect of the whole deal that really lights your fire, focus on that at first, collaborate with other skilled people, and see where it takes you. And, no, you don’t need a design degree. You just need talent and drive. Best of luck.
This website was pretty inspirational for me. I am about to turn 27 and only work part time right now as a substitute teacher. I realized late in the game that working with children from 7:30-3:00 isn’t for me, and that I need to be my own boss. Like what you said, when working in a full time job that you don’t really like, you realize that you are wasting your life away. While I get much less pay working part time, I have enjoyed life much more. I have started exercising frequently, spend time going to museums, go to the beach, take community classes, and have time to spend with family and friends. How did the contracting thing come into play? My family had a ton of work done on the house for months. We went through a contractor who was obnoxious, but we liked the workers she got for us. Once the work we paid for was done, we then paid the staff under the table to do other work for us and saved probably 40% if not more. The guys said to my parents that if one of them takes the contractor exam, that they would go into business with them, do all the work, and that we don’t have to try to find a new staff because we know they are reliable, get work done quickly, and are a hard working staff. Only reason the main guy didn’t want to take the exam was because he has a hard time reading English and the exam isn’t offered in Spanish. I’m in CA and have to take the exam in order to start up a business. I don’t even know how to start studying for this!
Online resources for the California exam are rather easy to find on the internet. A few google searches should steer you in the right direction. It will require serious study and devotion on your part, however, particularly since you seem to have little experience in the industry. Many people have gotten into construction and remodeling because they hated their day job and wanted to work for themselves, so you’d be following a well worn trail. Just know that this kind of work is no walk in the park and though your laborers might be skilled there will be a whole new skill set that you will need to acquire in order to be successful (people, organizational, and business skills). It can be done, however, if you are motivated enough. Best of luck to you if you elect to move forward with it.
Hello Sir,
I would like to say that from reading all the comments, questions, your valuable imput and answers to all the question. You are quite brilliant. Thank you for your blog. I am currently licensed in NYS as a GC. I did exactly what you entailed in the beginning. This lets me know that I am on the right track. I only wanted to become a contractor because at the time I bought a house and did a lot of projects. I hired contractors for labor and I did materials. Learned alot from reading online and books and youtube DIYs. I was intrigued with concrete. Learning about concrete from Home Depot Books and videos. I worked with stone designing my on planter in from of my house. I designed my patio and subcontracted the work it was a big job for a big backyard. I was involve with all phases. I knew what materials was needed as well as excavating. I love plastering the gypsum & cement boards. My father was a handyman so I became a handy woman. Yes I am a female. Thank you for your straight forwardness, regarding the education and the experience that is necessary or not. I understand everything you said. Thanks again.
Thank you, CJ. I appreciate the comment, and wish you continued success!
Hi CJ,
i’m also a female who is interested in becoming a general contractor in nys. I’m currently unempolyeed and don’t have a lot money to be insured and stuff. Can you please advise me on what are the necessary steps in becoming a gs in nys. what kind of license would i need to obtain and how do i bid on jobs w/o having insurance? is there any other way? can i show someone else’s insurance? please help
Very good blog., it is nice to see somebody given a helping hand to somebody starting out. I Thank You for that. Here is my question= I am going to get my contractor license to do remodeling, I also have 28 years in HVAC, will I need to get a separate license for HVAC as will or can I use the contractors license for HVAC jobs?
THANK YOU again for the great help you are proving to us.
BOB
This is going to sound like a cop out but it depends on your state, Bob. Some states require an HVAC license, and some don’t. You’ll need to touch base with your state agency and ask them. Thanks and good luck!
Hi Scott, just stumbled upon your blog and found alot of it really helpful. My situation is this. I got my undergraduate degree in business management last year, and recently started my graduate degree in accounting, only to figure out it’s not what I want to do with my life at all. I have always been fascinated with residential construction / remodeling from a design and planning perspective, and was a real estate agent for a while. I’m young, but I have back problems, so I know any type of heavy manual labor isn’t in the cards for me, but I recently started thinking about general contracting. I like the fact that I could combine my skills in business, planning, and problem solving with my passions for home design and real estate. I figured as a general contractor, I could handle the planning and coordinating, and let subcontractors do all of the work I’m incapable of. Does this sound crazy? Also, how would you recommend someone like me, with no experience, get started? Locally, there is a technical school with a nine month program that teaches you basic construction and contracting skills. There is also a community college that offers classes in construction management and architectural design and planning. I’ve thought about doing both. Any thoughts would be appreciated, Thanks!
Doesn’t sound crazy at all. Your unique background of being a real estate agent and also having a business education would suite you quite well as a general contractor. Sure, taking classes or going back to school for a bit never hurts, but since you’re aiming to be more of a manager I would focus more on the design and planning and less on the actual trade skills. As I always say, though, most of what you will learn will happen on the job, not in the classroom. At some point you just have to roll up your sleeves and get going. You will make mistakes and learn from those mistakes along the way. Assemble a team of tradesmen, raise capital, network with old realtor buddies, and jump in. It won’t be easy, but nothing worth achieving ever is. Good luck out there, my friend.
Hey Scott
Just wanted to note that you have a lot of great info in your blog-I am a carpenter myself by trade, and started my own business a little over a year ago, doing mainly reno’s for home owners. Things are going well, however it is quite a learning experience in a variety of ways.
I had a bad week and was thinking about packing it all in, however came across your blog and am now thinking of ways to take my business to the next level. Your post about those who stick with it seperates those who make excuses reminded me why I started out on my own.
Again, great articles you have here, thanks.
Hey Chris-
Thanks for the comments. I know exactly what you mean about having a bad week and thinking about quitting. I’ve been there a few times, but thankfully during each instance I’ve been able to resist the temptation and kept pushing forward. I’m glad to hear that you’re pushing forward as well. In the long run you’ll be glad that you kept going. And taking your business “to the next level” is never a bad idea. In some ways it could even make your life easier, because as your revenue grows you will be able to delegate the things that you don’t particularly want to do. Thanks again, Chris, and continued good luck with your business.
Hey Scott,
Appreciate very much that you have created this site and still answering questions up to the present moment.
I have a daughter who’ve worked in a main contractor firm for 4 years as a quantity surveyor and purchaser. Recently a friend of mine who I have consulted about starting up my own business, told me that I am sitting on a gold mine that I have yet to tap on. He was referring to my daughter of course and he is even willing to put up half of the capital as an investor if I can come up with a business plan that will employ my daughter’s expertise.
My daughter is actually quite good in her field landing some high profile contracts for her company. Her work rate is very high (clocking more than 14hrs per day). The way I see it, she could easily survive doing it for her own, like setting up her own business with me. However, eventhough I do not know anything about building construction but I am good with account softwares and internet marketing.
Need your advice on the type of business we should engage ourselves in.
Thank you for your kind attention.
It’s difficult for me to tell you exactly what to do with the limited information you’ve provided. Is your daughter prepared to leave her job and start a new business? There is always risk involved with such a change that should be carefully weighed, particularly in an economy where finding a new job is very difficult for many people. Perhaps she could keep the job and the two of you could start this venture on the side and see where it goes.
If you have an investor who is willing to put up half the capital that is good in the sense that it spreads the risk around a bit, but I would make sure everything is in writing, and run it by a lawyer before any papers are signed. Many a friendship has been soured by business arrangements that went bad, so just make sure everything is understood up front so there are no disagreements later about who is entitled to what.
If you have no construction experience then you will need to focus your service on your daughter’s skill set and expertise. If she already knows how to land big contracts then just let her continue to do it, and manage the accounting and marketing so she can focus on what she excels at. Using her advice, build a team around her that will complement her and enable you to flesh out a full blown business.
So that’s my take on the limited information at hand. At the end of the day, I can’t tell you what to do. You know the situation better than I do, and you’ll need to make a calculated decision that takes into account the inherent risks of starting a business. Some will make it, and some won’t. I truly hope that it works for you if you decide to give it a shot. Thanks for the comment and best of luck.
Hey Scott,
Appreciate very much your advice on the steps to take if we are going into this business.
I will pay particular attention to the legal issues of the matter like putting up the paper and running by a lawyer about the agreement with my investor.
I have given it a thought about joining my daughter full-time when I can keep my job and help her on the sideline. I totally agree about building a team around her so that we can hit the first most crucial job and being paid at the shortest time possible.
I’d rather spend on that compared to paying my salary if I were to join her full-time. I can still draw my salary from my current job and whatever paid-up capital to be spent on building the team to ensure this business gets off the ground.
The strategy that we have discussed is, my daughter should zero in the kind of projects (government tenders mostly) that she is very familiar with and have a good relationship with the sub-contractors that can carry it out completely. In other words, a project that she can totally owned and then keep a record of the price that made the hit. The price that gives the tender to the contractor so that she would have a gauge of the pricing when it comes to working out the tender quotation.
It is like being familiar with the project profile that we are going to undertake when we set up our business. Of course one of it is the shortest amount of time the project can be completed and get payment from it.
For taking the time to read this and giving your kind attention, I am forever grateful… May you find satisfaction in whatever you do…
Regards
Zul
Hey Scott,
I am interested into getting into the remodeling/contractor field. I don’t think that calling a contracting company and asking for a job would be a god idea without some advice. So what would you recommend as the best way to get started? And what requirements would a job in the field expect? I do not have any official previous experience and am not sure how to break into this market. Thank you for your advice and I look forward to hearing back from you.
It sounds like you’re interested in finding a job, not in starting your own business, which is fine, but the steps to get there are different. If you have no experience then you will have to start at the bottom and work your way up. This means that a remodeling company would probably start you out by doing basic labor: demo work, transportation of materials, and simple tasks that nobody else wants to do. You would gain on the job training in the more advanced concepts of remodeling, and eventually you could work your way up to more responsibilities and higher pay. Since you have no trade skills to speak of you’ll just have to convince them that you have a proven track record of hard work and a willingness and learn, and eventually you should be able to find someone who will give you a shot. Good luck!
Scott,
Your site has helped in many ways besides how to grow a pair! My bro and I are very handy with many skills, i’m a pipe fitter/ plumber, industrial mechanical background, operator, and a jack of all when dealing with residential. That’s where my bro comes in, he’s more of the journey man carpenter he knows the ins and outs of homes, from foundation up to roofing, we’ve done many side jobs and still have kept our annoying 8 and skate job with horrible bosses, and my bro and I are tired of making someone else the money… so basically we’re ready to start something! So how do you grow a pair and get over the risk factor of dropping the secure day to day job and go full on with your own company?
Derek,
There’s always an element of risk when you start a new business, and especially if you drop the job cold-turkey. Is there a way to slowly scale back your hours at your job as you slowly build your business on the side? If you do drop the job cold, be sure you have a lot in savings because real cash flow may not appear for some time. Upfront business costs can be extensive. So be bold, but also be smart with how you make this transition. Good luck to you.
hey man im only 22 years old. i already know the following roofing, ceramics, siding, framing, flooring, plumbing. finishing, mason, even landscaping. im ready to start a business soon. i would like to be the best general contractor in new jersey one day. and hope to one day buy homes to renovate…thank you for this dude, i can see it wont be easy but im ready to jump in head first.
Good luck to you, Max. You’re right that it won’t be easy but with hard work and smart business decisions there really is no limit to what you can do.
Ok to be upfront with you I don’t have any construction experience. In fact, I went to college got a bachelors degree and a normal job. My dad has his own remodeling buisness working on section 8 housing. Although he has his own business he doesn’t have his contractor licence. My plan is too figure out a way to get the certified experience and pass the board exam to expand the business. My question is how much does experience count? Not for taking the exam, but for practicality purposes. It also seems like much it takes more brains then practical knowledge to be able to pass the exam. Although, I don’t have any experience, my dad does, we just need someone with a license.
It sounds like you and your dad could form a good team. By combining his experience with your book smarts there is a way to make it work. Since your dad has the background why not have him take the exam and get the license so that you can focus on administrative, accounting, and marketing tasks? Is he just not interested in getting licensed? You could probably do the exam, too, but with no background in the field there is probably a good deal of preparation and study involved. Hope that helps. Good luck to you both.
Scott,
I already have my own LLC for marketing and lead generation but I don’t want to sell all of my leads anymore. I want to hire a team to do the jobs I so choose. I have a couple of questions I think you can help me with. 1) Can I hire a team of roofers with just a contractors license or do I need to go for my gen contractor license? 2) Would it be more beneficial to hire a licensed contractor to bring his own team to do these jobs or for me to get my contracting license and hire a team? I know I’ll need to check with my state to find additional answers, but I’m on the site so I figured I would ask your opinion. Thanks again and I enjoyed the site.
Roth,
As for your first question, you’re right that it depends on your state/location. Some states are more “loose” about it than others. As for question number two, I think the better situation for a marketer like yourself would probably be to find a contractor who has his own team in place so that you can focus on what you do best (marketing and lead generation). The margins will be smaller but I bet the overall volume would be better to more than make up for it. Thanks and good luck.
Scott,
First, let me apologize for my lack of knowledge in this area. I’m doing my best to learn by research, but still have many questions. My husband and I are looking to start a construction business. He is a very experienced heavy equipment operator and we plan to buy a mini excavator. He wants to rent himself along with his excavator out on an hourly basis for small jobs to homeowners, etc. He has been told by a friend who does the same thing that he does not need a contractors license if he rents himself on an hourly basis… no bid jobs. I have checked the California license classifications and am not certain if this is true or what category he would come under should he need a license. Can you help?
Jan,
Those are some pretty specific questions, and I’m not familiar with all the rules in California. Every state is different as far as license requirements. I would suggest directly contacting someone at the state level who can clarify these issues for you. I’m sorry I can’t be of more help.
Thanks Scott
Hey scott my names alex. I read the top of your posting but i pretty much scrolled down to the reply section. I was just curios on how to actually go about going to school to become a general contractor. I have about five years experience in pretty much all kinds construction. Im from southern california so there is no shortage of contractors out here. I just need to know if there is like a course that covers all the aspects of construction i can take. Or if thats even possible? Thanks man
Alex,
Sure, there are plenty of schools out there that will take your money (a Google search will show you the way), but it sounds like you already have some substantial experience on your own. If you feel up to it, why not just get your license and get the ball rolling? Some people are able to learn on the fly, while others seem to require classroom study. Try to figure out which category you fall into and go from that starting point. Good luck.
Scott, thanks for this article. I am 25 and have job that sounds similar to the one you were in before you started this. I hate sitting down in front of a computer all day, and I have a 45 minuted commute to work everyday. I constantly think about being a contractor, just a good ‘ol fashioned carpenter to start off. I don’t have a whole lot of experience in carpentry or any construction at all, but I know deep down it’s in me, and it’s in my blood too. It’s hard to get a job where they are hiring someone with little to know experience. Is there some sort of school or program I can go to, to get a head start? What does it take to get a liscence? I figure I am only 25 and could get 2-3 good years of experience before i really jump into starting my own business. What do you think? Any suggestions?
Danny,
Since you have little experience, it probably would be best to take some courses or learn the ropes as an apprentice first. The best option would be to work for somebody else who is willing to teach you carpentry. That way you’re getting paid to learn. School is the other option but it can be pricey sometimes. Then, once you have some skills under your belt you can go for the license. You’re probably right that in your situation it would be best to get some experience before starting your own business. Good luck to you.
Scott,
first i would like to thank you for creating this site, and helping inspire your readers.
I also have a desire to start a business in construction, and i would like to ask your opinion on direction. I have a masters degree in electrical engineering, a masters in tech management, and a professional engineers license in two states. I understand that being a good engineer does not necessarily make me knowledgable in construction. My last job introduced me to electrical design for commercial projects, and also involved dealing with project managers, contractors, and customers. The job lasted 4 years. I have no physical construction experience except fixing minor things around the house. A few childhood friends of mine have careers in construction which I can refer questions to.
I am really not interested in doing any physical construction work myself. I would be interested in the design, or the management of jobs. With no construction experience, and limited exposure to physical construction details, I am not sure what route I should take to get started as an entrepreneur. Should I focus on electrical jobs, and hire electricians? Would starting as a GC make sense if I do not yet understand the ins and outs of the other disciplines? Should my limited experience in construction steer me away from construction for now. I have felt driven towards construction for some time and I would like to start a career that will excite me a bit. Working for someone else is starting to drive me nuts.
Any input is much appreciated. Thanks!
JJ,
That’s quite a resume. Given your background and knowledge I’m inclined to say that you should start with electrical jobs and then, if you feel compelled, you can branch out to become a full-blown GC down the road. You could launch the business, hire electricians to perform the labor, and focus your efforts on management, estimates, and customers. You’d probably feel right at home, given your experience. If it feel right you can always branch out later. Best of luck to you.
Hi Scott
First I have to say thank you for the work you put in and I am really excited right now. I am 18 years old and ready to enter a community college in California. So I was thinking if my goal is to get a GC license in the future, what should I major in? Engineering technology? Archetecture? Or something else?
please tell me what is the better option and give me some advices.
Thank you so much!
Hey Kevin,
You’re welcome. As far as picking a major, I would go for whatever interests you most. Both of the majors you mentioned would dovetail nicely with a GC career. I would go with whatever it is that you find most interesting so that you don’t burn out and so you can eventually walk with that piece of paper which is the ultimate goal. Best of luck!
Hello,
I am currently in the military and about to get out. After 12 years of serving i finally decided to do what I always wanted and become a contractor. My problem is that I don’t even know where to start since I do not have much experience. I need to know where do I start? I would like any information I can get to include schools, course etc. Anything that will get me in the right direction. Please help. Thanks!
First, I would read every post on this site to get oriented. There’s lots to learn right here. You may not need formal schooling or courses….it depends on your trade or specialty. The most important thing is to start getting your hands dirty and learning on the job. Do some projects for yourself and friends/family. Start learning as you go. Get a job with an established GC first and learn on site if necessary. Figure out what you like and don’t like. Then you can shape your future from there. Every major city has places that offer courses in construction….a simple google search should point you in the right direction if that’s the route you want to go.
Scott, All I can say is THANK YOU!!!!! Your blog has finally answered SOOOO many questions that I’ve been asking all over and have never gotten anywhere but more confused. I look forward to keeping you up with my progress. I have added you to my thankful prayer list and my bookmark, :-).
Thanks, Nina! Let me know how things go.
Hi Scott,
It is amazing to see all of the people who have made positive advances in their lives due to your blog! I too am one of the people who are unhappy in their current job. I am 30 yrs old and have owned a home for the past 6 yrs. In that time I have discovered a love for home improvement and design. I have done 5 or 6 tile jobs, a hardwood and laminate floor, a patio w fire pit and pergola, a fairly large deck around an above ground pool, and various other smaller projects. I would love to start a business part time to make extra money and move to full time. My major dilemma is what services I can offer. Having no other construction experience I don’t know if I am experienced enough to confidently bid on jobs. The only way I see making the leap at this time is to quit my job, sell my house(moving in with friends temporarily), and take a job working for a contractor to gain experience. I could continue to do free jobs for friends and family, but I don’t feel as though I am gaining the experience I need fast enough. What do you think, jump in head first or try to find a way to keep my house and transition slowly. Thanks in advance for your time and help and thank-you for such a truly inspirational website!
Jonathan,
I don’t know all the details of your situation so it’s tough for me to tell you what to do, and ultimately the decision must be yours, but I think in general if you don’t have a bunch of cash set aside in savings it would be wise to keep your job and house and start your business on the side part time. In time you will gain additional skills, knowledge, and confidence. Then, if business starts to boom, you’re in a better position to quit your day job and go full time with the new venture. Thanks for your comments and good luck!
Hi, I’ve always wanted to have my own contracting business. I’m not necessarily good at any of the specialties, but have done them for a while. (A long while ago) I don’t have the physical ability to actually do most of the work, 4 back surgeries in the last 5 years and MS. Business/management skills, integrity and I will return calls, I have all of this in abundance. Is this viable opportunity for me? I love to work and work hard, yet I would be relying on a team. I’m also 45 with a family, I don’t want to have to live on disability and I want to make my own income. Suggestions?
Zev,
You sound like an ideal candidate to act as a GC. You can avoid the physical work completely by hiring your own guys or using subcontractors. Manage the business, handle sales and estimates, oversee ops, but let others do the labor. Start small and see how things go. Thanks for the comment and good luck out there!
Scott—I am so glad I found your website! As my husbands cheering section, driving force, mother of our 2 sons aged 20 & 13, and keeper of the home, and up until a few weeks ago having a full time job of my own in retail pharmacy; the information I have found thus far behind door #1 shows me that I really can help my husband make this a reality for himself & leave it as a legacy to our boys if they want it or GOD willing our grandchildren one day. My husband is knowledgeable as a plumber, electrician, & as a builder. He has talked about becoming a contractor constantly now for about the past 15 years before that it was off & on, but all ways it has been keep the steady job with health benifits & crappy pay & crappier bosses because we have kids, and dr visits & rx’s aren’t cheap. Now that the company he worked for since he was in his early 20’s has trans his plant here out of the country, it would seem like the time to make this our reality. I’ll be his admin person & the one basically in charge because all he wants is to do the work work, if you know what I mean. So thanks for all the info
I’m sure you guys will make a great team, Amy! And you’re right that one of the benefits of having your own business is that it can be a valuable asset to someday sell or pass on to your kids. The same can’t be said for your typical job working for somebody else. Thanks for the comments and best of luck to you guys.
First off, let me be one of many to thank you for the fantastic website, which answered many questions I had regarding startup. I’m considering starting a deck cleaning and staining company in PA, where I would clean, power wash and stain decks for private residences. Would this be considered home improvement? I checked out the PA site bit was confused as to whether or not this would require a contractors license. I’m not really remodeling or tearing anything down, you know? Also, can I get by doing this with out incorporating and getting insurance and just use my social to claim with the IRS?
Thanks Boss!
Hey Jonathan,
You’re welcome….thanks for the compliment. In my state such a business would not require a license, though I’m not sure for PA. You don’t have to incorporate or set up an LLC if you don’t want to. You could operate as a sole proprietor. In this case, yes, you would file as a sole proprietorship come tax time as part of your personal tax filing (1040). You COULD try to operate without insurance but I wouldn’t recommend it. You at least should have some basic liability insurance. Keep in mind that many homeowners won’t even consider hiring you if you don’t have it! Thanks and good luck!
Im 21 years old, I work in the Union as a Laborer and I want to go out on my own. I would LOVE to be a contractor. I just dont know where to start. I feel so swamped with info. My dad owns a painting/drywall company, and ive worked with him since i was like 13, so i know a thing or 2 about carpentry and painting/drywall, of course theres always more to learn. What steps should i take first? I have a few people who would help me work while im starting out. Anyways looking fwd to your response…Thanks, Eric
Eric,
The steps you need to take are outlined in detail in the post above…did you read it? Also, if your dad is already a contractor can you go to him for additional help and guidance? Sounds like he’s been in the game for awhile….best of luck.
Hello Scott, you have provided lots of helpful information for those of us trying to get into this business. Im a 25 year female from CT, I have little to no experience in this field. Ill be operating this business with the help of my father ( who has 35+ years of experience as a GC). He previously owned his own business but came into a mishap with the company so… he asked me to get contractors license and get the business in my name (I agreed). He will be doing all the work with the help of other employees that we plan to hire. My question(s) are what is my role/ job title in the company? I will be handling the bookkeeping, checks etc. I assume that I would have an important job title being that i am putting the company in my name and Ill be the owner but my dad thinks other wise since he’s using HIS money to start the business. He also doesnt think that I (the owner) should get paid that much because im not doing as much work as he is… I also assumed that since I am the owner that I should get paid a reasonable amount NOT LESS than my employees… so please let me know what you think is right?! thanks in advanced
Jasmine,
Wow, it’s probably not my place to get TOO involved in these disagreements. At the end of the day the two of you will need to work out who gets paid what. I guess I would just say to make sure you get everything in writing. Have a lawyer write everything up if possible. You guys are blood relatives but sometimes business disputes can sour even the closest of relationships, and it sounds like you guys are already having some issues. Get it in writing so there’s no question later about what was agreed to.
Scott- Thank you for the valuable information on your site. I am 34 yrs old and have been contimplating starting my own GC/remodeling business for some time now. I have been in the construction industry in my market for 15+ years. My experience is in sales, business management, project management, remodeling sales, estimating, and residential design. My market is, in my opinion, full of home builders and remodelers that got their start as carpenters that went into business for themselves. In other words, they started with the physical skills and learned the business and technical skills the hard way. My situation is exactly the opposite. I have the business and sales skills and a lot of construction knowledge; however, I was never the one “swinging the hammer” so to speak. My wife is also in the construction industry doing cabinet sales and kitchen design. My dream would be to someday combine our efforts, but for now I’d like to just build a successful business. I tend to take more of a calculated approach to this kind of thing rather than taking any big risks. I have met with other local contractors in my area to discuss their business and pick their brains about what it takes to get a start in the business. The people that I ask tell me I should just do it but, like a lot of people, I am afraid to fail. My two biggest obstacles that I’m battling with right now are #1: how do I get leads? I read your articles about this and feel confident with your advice in that area. So that leaves #2: Will my lack of physical skills (carpentry) hold be back even though I have all the necessary construction knowledge and business and sales skills? I am willing to start small and grow from there. Unfortunately I would not be able to keep my current job because it would be a conflict. Although I lack the physical skills, I’m not incompitent, just inexperienced. So I’d be willing to put in my own labor on jobs to avoid having to exclusively hire trade labor and also to increase my project margins, at least to get started. What advice would you have for someone looking to break into the remodeling industry with more business skills than carpentry skills?
Given your extensive experience with the business aspect of things and your ability to tap a large network of subs right off the bat I think you would have a very good shot at being successful despite the fact that your trade skills are not there. It sounds like you’ve thought things through and your reasoning is very sound. You could always take on jobs as the GC and then, if you wanted to save some money, just contribute on-site where you can and try to learn the carpentry aspect from the subs who are there as you go along. Learn while doing. Pick subs that you get along with and who are willing to “hold your hand” a little along the way. Or just stay out of the hands-on labor completely, and make up for the smaller margins by taking on more volume. The real issue is that you’d have to leave your day job first. This is risky. Make sure you have lots of savings set aside before you make the leap, and then be prepared to work your ass off.
Hello,
I enjoy working with my hands, and am interested in becoming a general contractor. I would like to design and build small homes, but have no idea how to get started.
1. What should be my first steps?
2. What challenges have women faced, breaking into this predominately male industry?
As for your first steps, well, i would suggest reading the post above. Since I’m not a woman it’s hard for me to speculate as far as the challenges you could face. Perhaps some other readers could chime in here, but I would think that as long as you are legitimate, licensed, show up on time, do quality work, and price fairly you should have a good chance of success regardless of your gender, race, background, or orientation.
I know I have hired several female contractors for various jobs without hesitation if they come with the above qualifications.
OK so I apologize if you have answered this and i missed it I think i have read everything you have posted here. I have no hands on experience and want it, but don’t really want to work for a company to get it, because it will be hard for me to work for someone just for the knowledge let say for a yr then turn around and start my own business, in the same area. I may be wrong but is that the only way to learn hands on? I have my contractor license in Ks and thinking about moving to TX where there more construction work, in Tx you do not need a license to be a contractor. What do u suggest? Could i also get by with not having hands on experience… just keep a contractor on hand and use him (or her) and their crew…?
You can start without experience – but the beginning stages will be tough. It’s like with anything in life…if you jump right into something that you know virtually nothing about then you will need to be a quick learner and have an ability to adapt and use mistakes as opportunities for growth. The other option to is work for somebody else for awhile and get a feel for the business before striking out on your own, but it sounds like you’ve already scratched that idea. Just be smart about jumping into this blindly. Know that there is an element of risk.
Hello Scott, I have been researching on becoming a contractor for some time now, but I have yet to pull the trigger. My father owned his own remodeling business for seven years, but when he got divorced in 2006 it was too much to deal with and he got a day job in a cabinet shop. I am 21 and like many of my peers went to college for a year for liberal arts and dropped out. It is a complete waste of time and money because it has nothing to do with what I want with my life. I wish I could have went to vo-tech, but that wasn’t an option for me. I have applied for apprenticeships with plumbers, pipefitters, electricians, and lineman unions. I am relatively smart and a great test taker so passing the tests isn’t hard at all, then it comes time for the interview and they don’t hire me because of lack of education or experience. I went through a 4 month application process with the oil refinery here in NJ and out of 2500 applicants I was one of 100 that was selected for an interview. Unfortunately that opportunity came and went as well. I feel like getting a job today is harder than winning the lottery, am I tired of getting my hopes up. I would rather start my own business. My question to you is that in this economy what strategy could I implement that would be most beneficial for my business? I have experience in complete bathroom restoration and could probably do a kitchen if I had to. Plus I have my father so if I ever get stuck I can ask him for help. I have created some very professional business cards, but have yet to really distribute them. Another question that I have is about having a website. Do you really think people search google for contractors? And even if they did what is the chance that they would see my website? I know little about SEO (search engine optimization) so I think it might be difficult or costly to be able to actually have this work. Or is it typically all word of mouth? I am just unsure as to what to dedicate my time to. I could keep applying to be a lineman (here in Jersey they make about 100-150k a year with full benefits and a pension) and go that route or start my own business. I am just very unsure what to do and am looking for some input for another party.
Yes, people Google for contractors all the time. Get a website and then begin marketing it. SEO is great but if you want quicker results then try Google’s adwords program. Also, check out the posts I have written under the ‘leads’ and ‘marketing’ categories in the right column of this site. Eventually, if you do good work then you will gain traction and ‘word of mouth’ referrals will become more common. Good luck with your decision.
Hey Scott,
Thanks for the helpful information. Can you please suggest what I should do? I have graduated with an undergraduate in Economics, then worked as an Accountant and pretty much have no construction experience, just saw a few houses being built and read many books on construction management. I would like to become a general contractor, maybe start with renovation and basement and then grow from there. Do you think it is possible to do something like that with no technical experience? Do you think if I hire subcontractors and maybe take a few courses while setting up the business it might be helpful? Personally I have always wanted to enter the construction industry but there was no program for this field in my university. Would really appreciate if you can help give me some ideas on what to do in my situation.
Thanks
Sean
Yes, it’s possible to get started with no experience. Just start slow and see how it goes. If your state requires you to have a GC license then get that taken care of and then begin to hunt down smaller jobs while networking to meet and get to know local subs. I’m not going to lie, though. With absolutely no experience there will be a steep learning curve, but if you are determined and willing to learn from mistakes then there’s no reason you can’t be very successful in the long run.
hello,i am persuing my engg 2nd yr from mechanical branch from gwalior.i would like to become a general contractors which is my real dream and aim in my life.but i dont have the money to invest to purchase jcb and buldozers.from family there is no financial help is there because i want to do wid my own.i want to achieve succcess in my life wid my own i dont want to take help from my family.2013 is golden year to achieve success in my life due to various challenges in my life.i will be very much thankful to u if u kindly give me suggestion for achieving my goal in before june 2013.
I understand your desire to not want to take financial help from family, but if you want to buy things like bulldozers right off the bat then unless you are loaded you will need to get loans from somebody. If not family then bank loans or silent partners or outside investors. The more practical route is to start with smaller goals and work your way up to that level. Start with smaller jobs that require little in the way of capital investment and then if growth justifies it you can always add to your arsenal of tools and equipment as time goes on.
Hi,
have wished to be self employed and decided to register a company which i successfully obtained all the paper work required, my major obstacle is marketing, what are the steps required to market my firm, should i approach contractors or consultants?
There are two paths to an effective marketing campaign. Either you can do it yourself or you can pay an expert or team of experts to do it all for you. If you want to do it yourself there is a ton of information on this site that you should read:
http://www.richcontractor.com/my_weblog/marketingadvertising/
http://www.richcontractor.com/my_weblog/leads/
I am 31 and am looking to start my own general contractor company in Virginia. I know a class a is required but what speializations do I need as a GC?
I’m not familiar with the specific requirements in the state of Virginia…not my home state. I am, however, working on a new section for this website that will give greater detail on what is required for each of the 50 states…look for it soon.
This comment is for Jonathan, I know this is a belated response, but you can use your social for your business, I assume putting it on schedule C on your form 1040, yes, the IRS allows that. The main concern of the IRS is whether you properly REPORT your income and expenses, again, properly report your income and expenses. We do not care about whether or not you are insured, bonded, operate without a license, hope that helps. Liability issues are between you and your clients, workers. Now if you have a lawsuit filed you may then have more EXPENSES, get it Jonathan?
Scott- Thank you for the valuable information on your site. M 21 ..completed my engineering degree from electrical and electronics this year…n wants to a general contractor… one of my relative is in this bussiness from last 10 years… and living a luxurious life…
Could u please help me to get into this…
I dont have any idea about it…how to start…
Raj,
Did you actually read the post above? It tells you exactly how to get started. As far as a “luxurious life”, that’s possible, but have no delusions about what it will take to get there. You will have to work your butt off.
This is entire site is great. My husband is in the process of starting his own drywall business. We have a few bids in to some GCs right now but one thing we are struggling with is when the GC is supposed to pay us. I have seen different schedules such as 20% the day the work begins etc. What do you think works best?
Thank you. Pay schedules for subs can vary wildly. It just depends on the GC and the size and scope of the project. For huge projects it’s quite common for there to be incremental payments along the way, including one up front and one at the tail end. But I would only agree to terms that you feel are fair for both parties involved. It also comes down to trust. If you’ve worked with a GC on jobs before and she has always been good about paying on schedule then you can feel more confident going forward. But when dealing with somebody that you know nothing about I would think it wise to get a payment or two towards the beginning phases of the job to protect yourself from getting burned.
Hi Jeff !
I am good in studies but i don’t want to study something which can get me office job.Where i have to sit on computer all day long and rest of my life. I always wanted to do some handy work like contractor. I have my deep intrest in building new houses and renovations houses. I love to do this kind of work at home and helping others. I don’t mind going to some school or college to get the course done or just get license . Can you please tell me that if i really need to go to college to get a diploma to build a house or i just can start with any renovation company as a labour job and get experience ? I want to have this skill to build my own business in future. I am 29 and live in toronto , ontario .There are some colleges who are offerening related courses but my dream is to build new homes and renovate them. Can you please help me to find my good future .
Going to college or attaining additional education is never a bad idea, but depending on your experience or lack thereof it might be best to get a job as a laborer with another company first so you can get your hands dirty and see if it’s really something you’d like to do on your own. In the process you will learn about what skills will be required, what licenses and/or courses will be required, and what direction you really want to go. Then you can always branch out on your own when you’re ready and have greater confidence about the process. And honestly I don’t know all the rules for Canada as far as building homes is concerned. Could be more or fewer hoops to jump through than what we have here in the states. Thanks for the comment and best of luck with your decision!
Hey Jeff: I am a 45 year old guy with two masters degrees, one in urban and regional planning and the other in public health, but I have become completely disillusioned with research.
I have always loved construction and have a knack or planning….well that is my degree after all.
The first question I have is, Am I too old to become a contractor?
While I have no training in the trades I have done a number of renovations to my own home and have done some part time construction (roofing) in the past.
Oh yes, and I have worked in an architects office at one time, so I am comfortable with blueprints.
The second question I have is whether you think I should finish a PhD, which I am presently doing in public health….about a year to completion.
Do you think it would give me any advantages or would actually be a liability…i.e., seen as overqualified.
I hope to ultimately become a GC, so perhaps the Dr. would help?
Your advice on these two questions is greatly appreciated.
Karl-
You are never too old and it is never too late to become a professional GC. It actually sounds like you have a great background to give it a shot considering your variety of experiences. As to your other question, if you’re only a year away from completing the PhD then I think I would go ahead and finish it up…you’ve come this far. I don’t think it would be a liability at all….and I think there could be some interesting marketing angles you could take with the title of “Docter”. Then you also have that in your back pocket just in case the GC thing isn’t all you hope it will be. Best of luck with your decision!
Hello Jeff.
I am a 23 year old mother and Accounting student from Texas and I have always dreamed of having my own home building business. My parent’s built their own home when I was a teenager acting as their own contractor and I fell in love with with the work while staying late nights helping my dad wire the house. My mother is a real estate agent and she has done several flips that I have helped with. My husband and I bought a foreclosure home a year ago which we lived in, fixed it up and made a $45,000 profit after we got word that we had to move due to his job. We are now living with my parents and I can’t help but think that this money is the perfect opportunity for me to build my first home to sell. I know the procedure to get a contracting license in my county I am just concerned about getting financing for building a new home for profit. What is available for someone that has never built a house on their own before? Should I maybe start off building a house for my family as a portfolio builder and asking for a loan after that? I just would hate for this money that we have saved to go to waste and am looking at all avenues to make sure it is use wisely.
Mary-
Congrats on such a profitable renovation and “flip”! That’s great. Building a new home from nothing is clearly a much bigger animal than taking an existing structure and renovating it. It’s a tough call, but I think if it were me I would rather take that money, buy another handyman special, live in it for two years while renovating, then sell for tax free profits. Rinse and repeat. Rinse and repeat. Meanwhile you can learn more about the process of home building, financing, working with subs, and the like as you go so that you are fully prepared to make that leap (and it is a leap). And by then you should have much more than 45k available to throw at it. Best of luck and please let me know how it goes…very cool stuff!
Hi Jeff,
Sometimes I think I’m crazy, but I wanted to be in the construction/home improvement business since I was in my 20’s. I’m now a 57 year old electrical engineer (contracted to the Army), in pretty good shape physically, and have a boatload of experience in the home construction/remodeling field. I come from a family of laborors – my dad built homes, my relatives were involved in masonary, landscaping, and trimwork. I also started a part time business building decks a few years ago, but had to abandon it because my partner passed away. As a result of my dad putting me to work each summer as a kid, I gained experience in all of these fields. I can pretty much do anythying, and if I need help, my brother can assist me (he took over the family homebuilding business). Anyway, I’m currently making 6 figures as an engineer, but I absolutely hate my job. I plan on starting a home improvement business soon, and I KNOW I can succeed. Its just so scary taking the initial “plunge”! You must think I’m crazy walking away from such a “cushy” job, but I just can’t see myself doing something I don’t even enjoy anymore (the engineering field has changed so drastically since I started). Am I not thinking straight??
Hi Joe-
Walking away from a six figure job to start a home improvement business would take some guts…no doubt. Most people will never make anywhere near that kind of money. But, if you really hate the work then eventually that will take a toll on you mentally and physically and there will be “costs” to your quality of life. You mentioned that you used to build decks part-time. Could you do the same model now with your new idea? In other words, work the new business on the side/at night/on the weekends/with help from others just to make sure it will meet your expectations before you walk away from the job? Then when it is obvious that the business has legs you can start making your move to get out of engineering. Best of luck with your decision!
Hi Jeff, im a 20 year old college student and my friend and I are in the process of starting our own contracting/construction company. My friends family is deep in the construction business and we have been working out in the field for the past two years part time learning the hard labor it takes to make things happen. We have started up by buying a ton of equipment such as expensive chainsaws, a concrete mixer, and many other tools to do general contracting. As far as I know I’m getting off on the right foot but i would like to know if there is anything else I can do to better prepare my future business for success. Thank you! -Anders
Hey Anders-
That’s some admirable ambition at such a young age and I hope it goes well for you guys. I would just suggest that you read as much as you can here on the blog, particularly the parts related to marketing. You need to have an internet presence as soon as possible. I guess I would also advise that you be careful with buying a “ton of expensive equipment” right off the bat. Since you are young and likely without much money to begin with I would look for opportunities to rent things as you need them or only to buy things that are used and deeply discounted (try garage sales, craigslist, etc). Then, as cash reserves fill up and you have some real momentum you can invest more in some of the higher end equipment. Just my two cents. Thanks and best of luck!
Hi Jeff, me and hubby, are in building business for 5 years, but he pleases people and charge them small amounts of money for his hardwork, he feels that charging people too much money, he will loose contracts, i really feel that he can make allot of money, can you please help us find a way, how to negotiate with people to get the big job and how to handle our money in the business? Thank u for your advice.
Hello Irene,
I would recommend that you read my post about low-balling:
http://www.richcontractor.com/my_weblog/2008/01/lowballing-will.html
It should answer your questions. In a nutshell, though, you’ll find that as long as you do quality work and provide amazing service then you can charge higher prices and there are plenty of people out there who will pay it. It’s about targeting the right customer. Thanks for the comment, and start raising those prices!
I’m a bit confused about making my drywall business a sole ownership, LLC, or corporation.
Daniel,
I’m working on a new post that will better address this topic, but in general an LLC or S Corp is the best way to go. If you go the sole prop route then you put yourself needlessly at too much risk, and the C Corp is more for already large companies. The LLC will protect your personal assets, though you might consider the S Corp if your end goal is to become a bigger service with several employees. With the S Corp you can set it up so that a large portion of your income is in the form of dividends, which are taxed at a lower rate than your regular salary. An S Corp also makes it easier to sell off shares of the company down the road to other investors, or even the whole thing. More on this to come…
Jeff,
I am 20-years-old, in college (getting my BS in Construction Management), in the Air National Guard, and on a full time fire department (24 hours on, 48 hours off). Since I was 15, I have done my own lawn care. I have grown the service from about 5 lawns to currently mowing 45+ lawns weekly. However, I am not “official”. With my hours at the fire department, the schedule works perfect in accordance with a lawn care company, but I want to officially start the business since I have a solid start thus far. What I mean by officially start the business is get the official name, applying for all the proper permits and licenses, business bank account, employees to start doing more lawns every week, get the commercial grade equipment to start doing bigger accounts (i.e business, commercial grounds) etc. (Basically everything you talked about in the article above). What do you suggest I do? Am I at a good starting point to start making serious money? Should I get a business loan to start get more equipment and maybe another work truck? Keep in mind I will be finished with my Construction Management BS degree in about 2 years, and I will be wanting to start with as a general contractor/project manager for the company I am doing my internship with. What are your thoughts? Thank you!
Jake,
Wow! When do you sleep? I’m seriously impressed by all that you are juggling right now. Due to your work ethic I don’t doubt that you will be amazingly successful, no matter which route you choose. You are definitely ready to become “official” with your company. You need to have the paperwork and insurance in place if for no other reason than to protect yourself. File as an LLC or S Corp, get insured, and open that bank account. Max out your one-man show as much as you can. But since you have your mind set on becoming a project manager for somebody else upon graduation, I think I’d be reluctant to jump right into getting loans, buying expensive equipment and trucks, and hiring people. But that’s just me. You can always take those bigger steps later if the GC job doesn’t pan out or you don’t like it. Owning a company with several employees is a whole different animal than just working solo. Despite your clear ambition, I think you could find it tough to juggle all that plus a GC job plus firefighter/National Guard/etc. Phew! At some point you’ll need to cut something out to make room for either your new job or a bigger lawn company. Make sense? Keep on crushing it, bud. Maybe you’ll just keep doing it all and prove me wrong…I hope you do.
Yes your blog was very helpful I have questions on what insurance do I have to have to start my contracting business and what company is the best to go with
Do I need money to start a general contractor company or can I ask for the general condition money up front?
Thanks
Yes, starting any kind of business will require an investment of capital. On large jobs you can ask for a deposit up front but this is unlikely to cover all of your startup business costs.
How can i win good contracts as a beginer
Begin to create a presence online. You should have a blog/website, a google places page, etc. This will help you to instantly compete with companies that have been in the game for years. But this will only get you in the door. You still have to be able to back it up with skill, organization, and focus. Snag a few testimonials and references in the beginning, too, as these will prove quite helpful.
Rich-
First of all I’d like to thank you for taking time to share such useful information. I’m a recent Construction Management graduate;I have learn to schedule, estimate and manage most aspects of the construction business, but have zero experience in the actual field. I’m interested in becoming a GC in TX where construction is booming. I have close friends that specialize in different trades and are hard reliable people who have been doing business for years. Even with all of that I’m a little hesitant about venturing on my own, I know that “book knowledge” doesn’t guarantee field success. Would you recommend for me to get an actual job with a contractor and gain some experience before going on my own, or do you think I stand a change starting on my own right off school?
Again thanks for all you time and shared knowledge.
Hey Rodrigo,
Thanks for the kind words. That’s a tough question. Every situation is different, and I think your personal cash flow situation should probably play a role, as well. Getting a job with somebody else right out of school will put consistent money in your pocket right away, which is great, while your own business will likely not provide such a steady stream of cash for some time as most profits in the beginning are eaten up with the purchase of equipment, perhaps marketing expenses, and just general startup costs. That said, the gambler in me would probably just go for it and start my own business from day one, especially if you already have that education in your arsenal. You can learn the “real world” ropes along the way. It just depends on your cash situation and how disciplined you are to be able to push yourself as an entrepreneur from day one. I hope that helps. Let me know what you decide!
Reading through the initial page sounds everything sounds pretty common sense, but how do you decide where to buy materials from? I have multiple bug box home improvement businesses in my area plus 2 local yards, and I am curious which to choose.
Search for “builders supply (your city)” in google and you should get some good ideas for where to get started. You’ll find better prices and service that is customized for business owners versus consumers.
I really want to thank you for this valuable information. I think it was what I am looking for to start my construction business.
I really appreciate this Jeff. Our company is one of the big construction company in Nigeria. But we have not be using social media for marketing, even our site is dead on google because we don’t believe about online presentation before.
But now, we want to start promoting our-self online. what do you think it will help our company in generating more profits because is not easy as a construction company to find client online as someone selling cloths or information online.
Please i will appreciate if you can tell me how. Thanks so much
Promoting your company online is one of the smartest things you can do. Start a blog, get clients to review you online, get a google business listing….these are all good things to do.
Hello! I am Rohan. I want to become contractor please help me how should I become a contractor and own boss without any investment
Starting a business will require some kind of investment, both financially and time-wise. It’s best to have some reserves set aside before taking on something like this.
Hi . I wanted to become a contractor in framing . I’m a carpenter . I’m 27 years old just got my 1 year carpentry certification. Planning on doing taking my 4 year appreciatship program. And I’m lost at the moment . Is it a good idea to get back into school for other degrees? Like business? Is it a must?
A business degree never hurts but is not a must. You can go far as a framing contractor….no bachelors degree required if that is the end game.
Thanks dear,
I like this article very much. I am also doing business of construction feild and full time job also.but now the time came to me i have to select one of them. Its very tough for me to decide. Please suggest me.
Can you slowly phase out of your job as your business improves? That would be the safest route, if possible, especially if you don’t have significant savings.
im looking into starting a gneral construction business in northest new jersey i was wondering if i should just focus on a few specific niche or overall everything? there is quite alot of competition in my area so im not sure if this field is too saturated to be profitable? and also i have no sales or estimating skills or experience? can you point me in the right direction
Since you’re just starting out I would take on whatever work you can get, then as time goes on and you start gaining some momentum you can start to focus in on the specific kinds of jobs that you’re interested in most. It’s not difficult to start to slay the competition if you leverage the internet. Looks for my post in this site about starting your own blog. Also start getting lots of online reviews: google, yelp, angies list, thumbtack, etc. You can hone your sales and estimating skills as you get into it. Good luck!
Thank you so much for the sharing it was useful and very informative.
Hello. I enjoyed your post read it all! Lol. So, I’m in the Low Volt business and currently work as a project manager for my boss but it hurts so bad when he sends me out to do a rough and and I’m only making cents while he makes the thousands per job etc anyway that’s why I wanna start my own gig. I got 10 yrs experience so I feel like I can do it on my own. But I’m intimidated by the state lisence test so I haven’t taken it yet. But my electrician buddy told me I can actually start without the license so how do I do everything you explained without a license? I live in GA. Thanks much appreciated.
Ray-
Can you explain the business a little more? Are you talking about low voltage lighting installations? If you have 10 years experience, the license test will probably be easier than you think. Why not get that done and have one less thing on your checklist?
I would like to ask how to start a branch for my company as I already have my company in another country
hi all!
I’m 21 and female. I’ve thought about being a contractor for some time now. I feel like i know some of the business if that makes sense. I know lots of designers since I’m a sales person at a design company and also my dad does a lot of carpentry work like cabinets/doors/ paint jobs and things of that nature. He tells me I can do it and start making my own money but I’m so scared. i wouldnt consider myself the best salesman out there and i get really anxious when talking to people about money/worry they’ll think i’m too expensive. I’ve read some comments and a lot of us worry about pricing it seems. anyone got any tips? i do not know where to start.