research the application processes and fees for your area

The construction industry offers a wealth of opportunities to entrepreneurs. Not to mention that the industry plays a key role in the economy, with 680,000 business owners employing around 7 million people. One of the most popular small business opportunities in recent years has been contracting.   

It’s not difficult to see why this is a popular choice. As a contractor, you play a key role in any successful construction or renovation project. You arrange for the materials, labor, and turn designs and blueprints into a reality. It is at once both a highly technical trade and a creative opportunity to get involved with lucrative remodeling and building projects. However, with this comes hefty responsibilities. You certainly can’t just wade into the industry, announce yourself as a contractor, and laugh all the way to the bank.

To ensure that your presence in the industry is as positive and lucrative as you would like, you need to take careful steps toward opening your contracting business. Let’s take a closer look at some of the main areas that you need to concentrate on to create a safe and successful enterprise.

Making Plans

You must approach your new contracting business with a degree of caution — and we don’t just mean to avoid interior design faux-pas! It is a highly specialized practice and requires attention to detail to ensure that operations are not just profitable, but safe. As such, your first port of call is to create a solid business plan for your endeavor.

Financial considerations are among the most important aspects of your plan. Approach it from the perspective of building an operational budget. In this way, a contracting business plan is not much different from any other skilled trade plan, such as interior design or landscaping and lawn care. Look into the equipment overheads — accurately pricing each element you’ll need to get started.

Don’t forget to include other costs such as the permits you’ll need to obtain, or liability insurance. If you’re working from an office, also plan for rental and utilities. Then you’ll need to assess your projected income, preferably for the next three years. Do your research into the industry, don’t just guess. You can then use both of these sets of figures to create an estimated cash flow that gives you and your potential investors a good idea of what capital you’ll need, and how profits will be affected.    

Your plan should also outline all the steps you intend to take in the first couple of years of your business. Be specific about this — it will help you to solidify your own goals as much as provide data for investors. People tend to trip up here by being too broad in their intentions — of course, you want to serve everyone you possibly can, but don’t be afraid to target a niche to begin with. This also helps you to plan steady, responsible growth and identify the resources you need in place to achieve this. 


Contractors hold a lot of responsibility — for the execution of projects, for the safety of workers, not to mention the lives of clients and the general public. As such, you need to confirm that you have all the required certification and licensing in order before you begin operations.

This should include:

Business License

The requirement for this varies on a state-by-state basis, but most will require you to have some form of general business license. Indeed, the construction industry is usually regulated locally, rather than on a federal level. Therefore, you’ll need to research the application processes and fees for your area. On top of a general business license, you are also likely to need a specific contractor’s license, depending on the scope of your services. This is particularly important if you are personally acting as a skilled tradesperson. If you are subcontracting skilled workers, it is also your responsibility to ensure they are adequately licensed.


Many states won’t allow you to obtain your business license until you’ve demonstrated that you have adequate insurance. However, as many things can go wrong in construction, you must make sure that you have more than the basic coverage in various areas. This will include both general liability insurance and professional liability insurance. If you operate a fleet of vehicles, each will need to be covered. If you have staff, you’ll also need to consider unemployment and worker compensation coverage. As the construction industry can be unpredictable, it can also be wise to look into business disruption insurance to protect you against financial losses.

Bonds Exhibit 

A bond helps to protect your clients should you be unable to complete the work as arranged. These are provided by independent, licensed agents who pay for any work that you leave unfinished. The extent of these bonds varies from state to state, so it’s important to research this. You should then produce a bonds exhibit — a list of all the bonds you have taken out — which can be attached to any paperwork you provide to the licensing authorities or clients.

Attracting Clients

You can make plans and gather your licenses, but that will all be relatively useless if you don’t have any clients. Therefore, it’s worth taking time to consider how you can best build a profile for your business that secures work.

Your web presence should be a primary early consideration for lead generation. This is likely to be how most non-referral work will come your way. It doesn’t have to be anything complex, but make it clear and easy to navigate. There are plenty of template-based web building platforms that you can use and pay attention to applying localized search engine optimization (SEO) techniques to help you to rank higher for people looking for contractors in your area.

Creating your own content is also an effective way to demonstrate expertise in your niche. Make blog posts giving hints and tips, make videos about design considerations for different types of property. Don’t just put these on your website, share them via social media.


Construction contracting can be a rewarding choice for entrepreneurs. You can best support your road to success with careful planning and adherence to legal guidelines that keep everyone involved safe and supported. Use your knowledge to assert your expertise in a way that builds your brand and generates those all-important leads. 

By Anurag Rathod

Anurag Rathod is an Editor of, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.