Step-by-Step Guide to Becoming a Contractor

Within the United States alone, there are more than 650,000 construction employers operating throughout the country, creating more than 6 million jobs. As one of the largest industries, construction presents several opportunities for those wanting to hang their own shingle and start a business. Most construction professionals start their entrepreneurial journey by becoming a licensed construction contractor, but there are several steps to follow in that process. Those who want to join the ranks of contractors in the industry must know what it takes to be successful from the start, and how to remain in the best position to thrive as a contractor business.


Focus on Education Requirements

As a contractor, many believe there are few if any education requirements necessary to start a successful business. However, that could not be further from the truth. In contracting, individuals need to focus in on how they can prepare themselves for all the tasks they will take on as a business owner in the industry. Education for contractors can follow a traditional route, including two- or four-year college degrees in construction, management, or business. Alternatively, contractors who want to become skilled in their trade may follow a less conventional path of trade specialty courses, such as carpentry, electrical or plumbing work, drywall installation, or masonry. Regardless of the type of contractor an individual wants to be, it is important to have the right mix of education as a foundation for future success.


Gain Industry Experience

In addition to learning the skills necessary to do contractor work, individuals who want to become a business owner in their field must have applicable industry experience. This means having the practical, real-world knowledge of how contractor work takes place from start to finish. Many contractors who ultimately begin their own company gain industry experience through internships, full or part-time employment with a construction or contracting company, or long-term apprenticeships with experienced contractors in a specific field of work. Gaining this type of hands-on experience allows contractors to build their resume over time, laying the groundwork for getting more jobs once they branch out on their own.


Develop Business Owner Skills

Not everyone is a natural when it comes to starting and running a successful business. In some cases, taking the time to develop business acumen is necessary before establishing a company, large or small, as a contractor. These skills may include leadership, communication, negotiation, and accounting. Business competencies can be quickly learned and mastered through online or in-person courses, or by shadowing other successful business owners in any related field. Individuals who want to become a contractor need to have a solid understanding of what it takes to own and operate a successful, legitimate business before diving in.


Get Licensed and Bonded

Once an individual feels confident that becoming a contractor is the right choice for them, it is crucial to understand the legal requirements of operating a contractor business in the state where work will be performed. Nearly all states require contractors to acquire and maintain a contractor license, although these requirements vary from state to state. There may be different requirements for those wanting to work on residential or commercial projects or those who have a specialty in electrical, HVAC, or plumbing work. Similarly, most states require contractors to secure a bond before taking on any residential or commercial work. Bond requirements vary just as licensing requirements do. Therefore, before launching a contractor business, it is necessary to research the state licensing requirements and follow through with the process before taking on work.


Establish Your Business

Finally, once individuals have obtained the appropriate level of education, industry experience, business skills, and contractor license, it may be necessary to create a legal structure for the business. There are several ways contractors can operate as business owners, including an LLC, a sole proprietorship, an S or C corp, or another legal entity. It may be beneficial to discuss business structure options with a tax or legal consultant to help determine which business type works best for the immediate and long-term. Similar to contractor licensing requirements, contractors will need to follow their state’s rules for establishing and operating a business to ensure they are operating legitimately from the start.


Becoming a contractor can be a lucrative choice for individuals who have a passion for the construction industry, but it is crucial to recognize what the process entails. Prospective contractors must take the time to learn about the industry, including licensing and business structure requirements, before taking the leap into owning their own business. Following these steps will pave the way for a successful contractor business that is profitable over the long haul.


Author's bio:

Eric Weisbrot

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

Mercy - CBNation

This is a post from a CBNation writer. CBNation is a Business to Business (B2B) Brand focusing on increasing the visibility of and providing resources for CEOs, entrepreneurs and business owners. CBNation consists of blogs(, podcasts ( and videos ( CBNation is proudly powered by Blue 16 Media.

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