How To Start A Contractor Business – One amazing aspect of the contractor business is that you can start it anytime. People need shelter and other essential things, meaning contractor business will forever be on the rise. Establishing a personal contractor business is one of the great ways to earn money, especially if you have management skills.
As a contractor, you are required to provide services to businesses or clients for a stipulated amount of time. With a contractor business, you get to work on several assignments or projects. It is a lucrative job that can be pretty rewarding. Are you interested in starting a contractor business? We got you covered. Below is a comprehensive guide on how to start a successful contractor business. Let’s dive in.
Step-by-Step Guide On How To Start A Contractor Business
Below are the steps involved in beginning a contractor business:
1. Learn about the license requirements
The first step of starting every business is learning and understanding the business requirements. Therefore, to create a contractor business, you must first obtain permission from your local or state government.
The requirements to start a contractor business depend on the state. Still, the general rule is, you must at least obtain industry experience proof and a passing result from either law, business, or trade department. Aside from these, your state may also ask you to write a test to assess your knowledge. This is because they will want to ensure that you are well-versed in the field. Sometimes, they ask you to submit your financial records, assets, or insurance liability proof.
2. Create a business plan
Although this step should come before obtaining a license, you can still take it as a second step. Before starting any business, it’s essential to draft a strong business plan. This also applies to a contractor business. Creating a solid business plan will help you get an insight into the industry and help you understand your short-term and long-term goals for the business.
Some people don’t give this step some importance, but the truth is, a business plan is essential. Moreover, it takes a few times to finish, and it’s pretty easy. It’s a document with a clear outline of your business journey. Remember, if you are planning to apply for a loan, then be sure to be concise and precise while drafting the business plan. Some of the things you should put in the plan include the structure you want to build the contractor business on, the description, strategy, and concept of the business, the kind of service you want to offer, the market details, the number of people you want to hire, and your profit goals.
3. Select a business name
Once you draft your business plan and get a license and insurance, the next step is choosing a business name. You should choose a name that your clients can readily recall. The name should also describe the specific type of contractor business you are doing. Once you select a name you want to give your contractor business, conduct a Google search and see if other people are already using the name. However, this method is still not foolproof, so the best thing you should do is to use sites like My corporation, which will do name research for you. The site will check whether a business name is already taken by someone and also ensure that the name is tailored around the services your business offers.
So what if someone already uses the business name? This is the reason initially; you should at least write down different business names in a jotter, so when one is unavailable, you can easily use another from your list.
4. Select a business entity
You want a legal entity for your business since you are almost done with the essential parts. In terms of selecting a business entity, there are a variety of options to choose from. You can evaluate Corporate and Limited Liability Companies (LLC), which permits you to create your business as a separate legal entity.
The benefit of this entity is that, in unfortunate events like debt or lawsuits, it will prevent your home and other assets from being used as tools for repaying debt. This is among the reasons this step is vital.
5. Create a bank account for your business
Opening a bank account is also critical in establishing a contractor’s business. Never accept your first payment and deposit it in your account; in fact, never put your business money into your personal account.
Opening a business account allows you to be able to send and receive payments with your business name, which signifies professionalism to many customers. You can easily track your losses and profits, and it will also help you build a credit history for the business.
6. Recruit subcontractors
Likely, you may not be the only one that will execute every work; you will need assistance from other contractors. The workload here is recruiting the best people with the necessary skills that will get the job perfectly done.
This step is important because since the subcontractors are mostly the people doing your job, hiring the right people will help you maintain your reputation in the industry. However, before hiring additional workers, try and familiarize yourself with the industry rules and regulations governing hiring subworkers which include insurance, tax, legal formalities, salary, etc.
7. Brand your business
Once you are done with the above steps, it’s now time to brand your business and make it stand out among other competitors. Branding your business includes designing a unique logo, promoting and marketing the business, etc.
8. Make your presence known online
A website will help you collect your client’s information, attract potential clients, and advertise your business. Even though it might look expensive, it’s still one of the best ways to get customers. Once you build the website properly, it will appear on the top search whenever someone is looking for a contractor around your area.
Benefits Of Contractor Business
The contractor business offers flexibility; you can be a freelancer, temporary employee or employer, consultant, and many more. Let’s look at some of the benefits of this business.
1. You can be your boss
One of the important benefits of contractor business is you can be your boss. You can work when you want and rest whenever you feel like it. You will have great income security since you can be working with different clients at a time.
2. You can work from anywhere
Another benefit of the contractor business is you can work from anywhere in the world. All you need is access to a computer and a strong internet connection.
3. Create your schedule
Employees are bounded by their work schedules, while employers can set their schedules. You will have total control over your work hours and create a schedule that fits into the lifestyle you want.
4. You will get a better work-life balance
Sometimes, it’s challenging to balance work and other life activities. However, if you work as a contractor, you will be able to balance your work and life. You will have time for other activities, you can have fun, and you can prioritize other activities in your life. You will have more time to spend with your family and friends, whenever you decide you can also increase your productivity.
Tips For Growing Your Contractor Business
You will need to grow your contractor business after establishing it, so here are a few tips for growing your business.
1. Build a professional team
The people you work with or those that work for you are your team members and would contribute immensely to the success of your business. Therefore, it’s best to hire dependable, knowledgeable, and skilled employees. Be nice to your employees, promote them, reward them, and recognize their efforts.
2. Invest in the business
To earn more, you must invest your time, effort, and money. You will need to buy new equipment that will aid your business regularly, train your employees and constantly market your business.
3. Build meaningful relationships
One of the best ways to grow your contractor business and maximize profit is to build meaningful relationships. Build and maintain healthy relationships with your clients, team members, and even your competitors.
4. Advertise your business
Tell people about your business and regularly put your business out there. Encourage your customers or clients to tell other people about your business. Advertise your business using different channels and ensure to include ways that potential clients can contact you.
Conclusion
The contractor business is one of the best ways to earn money. People are constantly needing shelter and other basic life necessities, which means once you start this business, you will have many customers knocking on your door for your services. Therefore follow the laid-down steps above on how to start a contractor business to begin your journey toward establishing a successful contractor business.
Frequently Asked Questions
How much does it take to start a contractor business?
The exact amount of starting a contractor business varies, however, you should have at least $15,000 to $20,000.
Does a contractor business offer independence?
Yes, it does. One of the top benefits of starting a contractor business is that you get to control your working hours.
References
- Uschamber.com – how to start a contracting business
- Constructconnect.com – tips to grow a construction business
- thebalancemoney.com – how to succeed as a self employed contractor
- Www.mycooporation.com – the contractor business
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