How to Become a Contractor in 6 Building Steps


Are you interested in becoming a contractor and starting your own contracting business? In this guide, I will take you through the 6 essential building steps to kickstart your career in contracting today.

  • Build your contractor skills by gaining experience in areas such as bidding on projects, budgeting, obtaining permits, managing subcontractors, complying with codes, and working with clients.
  • Check the licensing requirements in your state and pass the necessary contractor exams related to business and law, as well as construction.
  • Create a comprehensive business plan outlining your projects, financial support, and future growth and success of your contracting business.
  • Obtain a license bond to demonstrate your commitment to following the rules as a general contractor.
  • Gather the required paperwork, including a signed application, identification, exam results, background check, financial statements, and proof of insurance and bonding.

Now that you have a clear roadmap to becoming a contractor, it’s time to take the first step towards turning your dreams into reality.

Building Your Contractor Skills

Building your contractor skills is a crucial first step towards a successful career in contracting. By gaining experience in areas such as bidding on projects, budgeting, navigating permits, scheduling subcontractors, complying with codes, and working with clients, you’ll be well-prepared to tackle the challenges that come with being a contractor.

One important skill for contractors is the ability to bid on projects effectively. This involves accurately estimating the cost of labor, materials, and other expenses involved in a construction project. By developing strong budgeting skills, you can ensure that your bids are competitive while still allowing for a profitable margin.

Another essential aspect of being a contractor is obtaining the necessary permits for your projects. Navigating the permit process can be complex, as different projects may require different types of permits and approvals. Familiarizing yourself with local building codes and regulations is essential to ensure compliance and avoid costly delays and penalties.

Table 1: Contractor Skills Overview

Contractor Skills Description
Bidding on Projects Accurately estimating project costs to submit competitive bids.
Budgeting Planning and managing project finances to ensure profitability.
Permits Navigating the complex process of obtaining the necessary permits and approvals.
Subcontractors Scheduling and coordinating subcontractors for different aspects of a project.
Codes Understanding and complying with local building codes and regulations.
Clients Developing strong communication and relationship-building skills with clients.

Working with clients is another critical skill for contractors. Building strong relationships with clients involves effective communication, problem-solving, and delivering projects that meet or exceed expectations. Satisfied clients not only provide repeat business but also serve as valuable references and sources of referrals for future projects.

Remember, becoming a skilled contractor takes time and experience. Continuously improving your skills and staying updated with industry trends and advancements will help you remain competitive in the ever-changing construction industry.

contractor skills

Depending on your state, passing the contractor exam may be a requirement to obtain a license. To ensure you meet the necessary licensing requirements, it’s crucial to understand the exams related to business and law as well as construction that you may be required to take.

There are different types of contractor exams that you may encounter, and they vary based on state regulations. Business and law exams typically cover topics such as contract law, labor laws, business management, insurance requirements, and licensing regulations. These exams are designed to test your knowledge of the legal and administrative aspects of running a contracting business.

On the other hand, construction exams focus on assessing your understanding of construction techniques, building codes, safety regulations, and project management principles. These exams are tailored to evaluate your expertise in the technical aspects of contracting, ensuring that you have the necessary skills to handle construction projects safely and efficiently.

It’s important to thoroughly prepare for the contractor exams to maximize your chances of success. Consider enrolling in exam preparatory courses or studying relevant textbooks and resources. Practice exams can also be helpful in familiarizing yourself with the format and content of the actual exams. Remember to check your state’s licensing board for specific exam details and requirements.

contractor exam

State Business and Law Exam Construction Exam
California Yes Yes
Texas Yes Yes
Florida Yes No
New York Yes Yes
Arizona Yes No

Table: Contractor exam requirements vary by state. Some states require both business and law exams as well as construction exams, while others may only require one of the two. It’s essential to check your state’s specific requirements before scheduling your exams.

Passing the contractor exam is a crucial step towards obtaining your license and establishing yourself as a professional contractor. By understanding the different exam types, preparing diligently, and staying up-to-date with your state’s requirements, you can increase your chances of success and embark on a rewarding career in the construction industry.

Setting Up a Business Plan

A well-crafted business plan sets the foundation for a successful contracting business. By carefully outlining the projects you plan to work on, determining the financial support required, and projecting the future of your business, you’ll be better equipped to navigate the challenges and seize opportunities in the industry.

Creating a business plan allows you to assess market demand, identify your target audience, and establish a unique selling proposition. It provides a roadmap for your business, guiding you in making informed decisions, setting realistic goals, and ensuring financial stability.

When developing your business plan, start by defining the projects you intend to undertake. Research the market and identify potential clients or industries where your expertise can be valuable. Consider factors such as project size, scope, and location to accurately estimate timelines, costs, and resources.


Next, determine the financial support required to fund your projects. This includes estimating expenses for personnel, equipment, materials, permits, and overhead costs. Developing a comprehensive budget will help you secure the necessary funding, whether through loans, investors, or your own capital.

Finally, project the future of your business. Set realistic growth goals and identify strategies to achieve them. Consider market trends, competition, and potential challenges that may arise. By staying proactive and adapting to industry changes, you can position your contracting business for long-term success.

Key Elements of a Business Plan Description
Executive Summary A brief overview of your business, including its mission, vision, and objectives.
Market Analysis An assessment of the industry, target market, and competitive landscape.
Services and Products A description of the services or products your contracting business will offer.
Financial Projections Projected financial statements, including revenue, expenses, and cash flow.
Marketing and Sales Strategy Your approach to attracting clients and promoting your contracting services.
Operations and Management The organizational structure and management team of your business.
Risk Analysis An assessment of potential risks and mitigation strategies.
Implementation Plan Specific action steps and timelines for launching and growing your business.

Remember, a well-crafted business plan is not only a tool for attracting investors or securing loans, but it also serves as a reference point for monitoring your progress and making informed decisions. Regularly revisit and update your plan as your contracting business evolves to ensure you stay on track and achieve your goals.

Obtaining a License Bond and Building Your Reputation

Once you’ve met the licensing requirements, it’s crucial to obtain a license bond as a general contractor. A license bond serves as a guarantee to your clients and the government that you will comply with the rules and regulations related to your work. It provides financial protection for your clients in case you fail to fulfill your obligations.

Building a strong reputation in the industry is equally important. Networking with other professionals can open doors to new opportunities and collaborations. Attend industry events, join professional organizations, and connect with fellow contractors, architects, and suppliers. These connections can lead to referrals and partnerships that will help grow your business.

Demonstrating a strong work ethic and dependability is key to gaining trust and establishing yourself as a reputable contractor. Completing projects on time, delivering high-quality work, and being responsive to client needs will showcase your professionalism and reliability. Word-of-mouth recommendations from satisfied clients can go a long way in building your reputation.

Staying informed about industry changes is crucial for any contractor. The construction industry is constantly evolving, with new materials, techniques, and regulations emerging. By staying up-to-date with industry trends, you can offer your clients the latest solutions and ensure compliance with the latest codes and standards. Continuously learning and improving your skills will set you apart from competitors.


Q: What skills do I need to become a contractor?

A: To become a contractor, you need to develop skills in areas such as bidding on projects, budgeting, navigating permits, scheduling subcontractors, complying with codes, and working with clients.

Q: Do I need to pass an exam to become a contractor?

A: It depends on the licensing requirements in your state. Some states require contractors to pass exams related to business and law, as well as construction.

Q: How do I set up a business plan for my contracting business?

A: Setting up a business plan involves outlining the projects you intend to work on, planning the financial support needed, and projecting the future growth and success of your business.

Q: What is a license bond, and why do I need it?

A: A license bond is a requirement in most states that guarantees you will follow the rules related to your work as a general contractor. It provides assurance to clients and protects them in case of any issues.

Q: What documents do I need to gather to become a contractor?

A: You will need to gather documents such as a signed application, identification, exam results, background check, financial statements, and proof of insurance and bonding.

Q: How can I build a strong reputation as a general contractor?

A: Building a strong reputation involves networking with other professionals in the industry, showcasing your work ethic and dependability, being a leader in managing projects and expectations, and staying updated with industry changes.