How to start a contractor business

You need to figure out the costs, determine your licensing requirements, and register your contracting business in order to start a contractor business. For details on each of these steps and others you can take, use this guide:

• Figure out the costs. Most general contracting businesses need between $15,000 to $20,000 of startup capital, but these figures can rise in certain cases.

If you have the necessary startup capital secured, you are in good shape. However, if you are lacking in funding, you might want to seek out an investor to help you get your contracting business off the ground.

You might also consider taking out a small business loan to help fund your contracting businesses' startup costs.

• Determine your licensing requirements. State and local governments require general contractors to be licensed.

This is necessary because when you start a contractor business, you need to make sure whatever projects you work on or build are done so safely and are up to code.

Local and state licensing requirements vary widely, depending on the state you are trying to start your business. However, most states do require you to provide proof of industry experience before they grant you a license.

In addition, many license applications also require you to take an exam that displays you are knowledgeable on your specific trade's best practices, codes, and industry-specific regulations.

• Register your contracting business. To start a contracting business, you need to register it in your state.

You will have to provide your business name and articles of incorporation. The articles of incorporation delineate the purpose of your company and include a list of officers. You must also indicate the method or technique by which business-based decisions will be decided.

The creation of a bank account is also necessary for this step. This account needs to be unique and solely tied to your contracting company.

The choices you have in terms of structuring your business include:

• Sole proprietor

• Limited Liability Company (LLC)

• Corporation

Do some research to find out which is the best fit for your contracting business; this depends on the size of your business, and many other crucial facets.

• Conduct market research on contracting businesses in your area. It is critical to do a lot of research on your local contracting market.

It's best to do this research before you start to do anything else in preparation for your contracting business. You might also find that this makes you pivot from your initial contracting business idea if there are already a lot of competitors in that niche of services.

Understanding your competition, who they serve, and the price quotes they have will help you determine how you can make a successful contracting business that will stand out.