How Do You Start a Contracting Business?

If you’ve been thinking about starting your own business, you might be focused on the kinds of services you’ll offer or where you plan to set up shop. But before you can do this, you need to start the business. And while opening a business might not be the most complicated thing you’ve ever done, there are a lot of little things you need to follow. Keep these tips in mind to help you cover all the bases.

Get Your Contractor License
While some jobs in construction do not require you to be a licensed contractor, you will almost certainly need one in order to run your own contracting business. This is because you’re not operating under somebody else who holds a current license. The good news is that getting your contractor license makes it a lot easier to do business in construction. And once you’ve cleared this hurdle, the rest of it should fall into line.

Make a Business Plan
Before you start your business, one of the first things that you should do is create a business plan. Although this isn’t always a requirement, you’d be surprised how much making a business plan helps you to refine your goals and expectations going forward. A typical business plan includes:

• Services you intend to offer
• How much you plan to charge for those services
• Your target demographic
• Where you plan to operate
• What you plan to do for yourself and whether you need employees
• How you will manage money

These details may take you weeks or even months to work out. This is why you should start early, so that you can look for gaps in your research and fill them in while you can.

Think About Income and Cash Flow
Managing money for your business is one of the most important things you need to master right from the very beginning. If you can’t stay ahead of your bills and pay yourself at the same time, you’re not going to be able to keep doing the work. Since you may need to make some investments in the business before you have a reliable clientele, it’s worth considering how you can help support yourself in the first year or two as you get established. This might include adding to your savings or working another job on the side to provide a stable source of income and benefits.

Select the Type of Business
When you open your business, you will need to select the type of business you intend to run. At first, a lot of licensed contractors may operate as a sole proprietorship or as a limited liability company (LLC). As a general rule, LLCs allow you to run a business and keep the function of your business separate from your personal life. It’s important to understand the differences in the types of businesses that you can start, particularly the way that each type of business is required to run by the state.. This may be a good opportunity to consult with a lawyer or someone else with experience in business law.

Register Your Business
Once you know which kind of business is most appropriate for your plan, you need to register it with the state. This may require purchasing insurance or providing evidence that you have the right licensing or permits. As a general rule, you’ll need to pay a fee to register your business and confirm that the address for your business is appropriate for the type of work you intend to do there. For example, if you intend to run a business from your home, you should confirm that your property is zoned to allow it.

Starting a business begins with the right training for the contractor licensing exam, which you can get at CSLS. To learn more about our programs, contact us today!