What's It Take to Become a Contractor?

Have you ever thought that you'd like to become a contractor? General contracting can be a very rewarding career - both professionally and financially. If you have an interest in construction and some knowledge and experience in the field, contracting may be the perfect career path for you.

Here's the deal though. If you want to become a contractor, there are some things you need to know. First, you'll need to have a firm grasp on the duties of a general contractor. You will want to make sure that you have the skills and the resources to handle all the duties that will be required of you before going into business. Second, you will also need to find out what your state requires to license a contractor. Different states have different rules and requirements and you'll need to understand and meet the requirements of your state in order to operate legally. We'll go over basic requirements in this article that should help you decide whether or not this is the right job for you!

Required Skills

If you are interested in contracting, there are some basic skills that you'll want to possess. You probably already know that you should have some experience in the construction industry before venturing out on your own, but there are other important skills that contractors should possess as well. For example, you absolutely must have very strong organizational skills in order to become a contractor. You will be responsible for hiring all the subcontractors on jobs you manage, as well as managing all the financial aspects of the job and the associated paperwork so the ability to be organized is very important. 

You should also be able to multi-task and manage other people efficiently. As a general contractor, you will be the main point of contact for the owner, architect, and all the subcontractors that work on your job sites. As you progress in business, you'll likely be managing multiple jobs at one time, which means that you'll have to manage multiple people and things at one time. 

In order to succeed as a contractor, you will also need to have strong accounting skills. The general contractor on a construction job is usually responsible for taking money from the client and then paying for all supplies and labor associated with the job. All of these funds need to be accounted and records need to be kept, both for clients and for tax reporting purposes.

State Requirements

The State requirements to become a contractor will depend on what state you wish to become licensed in. However, there are some requirements that are basically the same no matter where you live. Those are the ones that we'll go over in this article. If you are interested, you can find out more information about specific state contracting licensing requirements.

Experience: Most states have experience requirements. You will likely have to prove your experience with references that can be verified by the state.

Personal Financial Statement: Many states will require you to show that you have a minimum net worth or liquid assets in order to become a contractor. The reasoning behind this is because contractors take on a large amount of financial liability and the licensing department wants to ensure that a future contractor has the financial resources to operate in this business. Often times, states will require that this financial statement be completed be a certified public accountant.

Bonding: Almost all states will require that a future contractor obtain bonding. The amount of the bond required varies widely, but the reasoning behind the bonding is to protect both you and your future clients. A bond will ensure that a client is paid if a job is left incomplete or is not completed properly. It offers you protection from lawsuits from clients as your bonding company will assist you with dealing with claims against you.

Testing: States will also require you to pass at least one test in order to receive your license. The tests are generally administered by a 3rd party company and you'll be required to register with the company directly in order to take your test.  Proper preparation for your test is key because not passing the first time means that you'll have to pay to retake the test and it also delays your ability to get your license.

If you are still interested in learning more about how to become a contractor, we've got all kinds of great resources for you to get started on the right path the first time!