How to Become a General Contractor in 6 Steps

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Follow These 6 Steps to Become a General Contractor

Step 1: Build your contractor skills.

There’s no way around it — learning how to become a building contractor takes time and effort. You need the skills and experience to manage construction projects from start to finish, and they don’t appear overnight.

So, what do you need to be a contractor? 

You’ll need to meet your state’s requirements. Each state has different requirements, but in general you’ll need to(1):

• Have your high school diploma or GED
• Be eligible to work in the United States
• Have related work experience according to your state’s mandates
• Have a clean work record
• Pass all mandatory exams

Not sure how to get this experience? Two common paths are through higher education and hands-on work, or a combination of both.

Many successful general contractors have a relevant college degree combined with practical experience in the construction industry.  

On the other hand, you can take steps to become a general contractor without a college degree. You can soak up a lot of experience by working or apprenticing for a reputable construction company, especially on mid-sized or large jobs where you can see every aspect of a project. 

Be on the lookout for experiences in these general contractor job areas:

• Bidding on projects
• Planning a budget and tracking expenses
• Navigating the permit process
• Scheduling and managing subcontractors
• Complying with building and safety codes
• Working with clients, especially to manage expectations
• Good, overall knowledge of construction

If you’re not an expert at these experiences now, don’t worry! Just keep learning and improving.

Remember, whatever path you choose, most states require time in construction before you can apply for a general contractor’s license, which brings us to our next step.

Step 2: Pass the general contractor exam (if required).

It’s a legal requirement in most states that GCs be licensed — but before you apply for your license, you typically have to pass a general contractor exam. Each state has its own requirement for general contractor licenses.  

So the first step is to find out how contractor licenses are granted where you live — at the city, county, or state level, so be sure to research local requirements. Once you know which government office handles licensing in your state, visit its website for information regarding the contractor’s exam, including when and where the exams are conducted.

We also have a handy state-based contractor licensing hub — click on the state where you’re located to find a step-by-step guide on how to get a contractor’s license in your state!

In general, you’ll be tested on the following:

• Business structure and organization
• Financial management
• Contracts
• Estimates and bids
• Labor law, tax law, and construction-related law
• Safety and risk control

Remember, you’ll know a lot about these subjects, thanks to your general contractor’s on-site experience — but you also can buy test prep materials or take general contractor classes online to get ready. Pass the exam, and you’ve shown you have the know-how to become a certified general contractor.

Step 3: Set up a business plan.

Once you figure out how to become a building contractor, where do you go from there?

“Construction” is a term that covers a lot of ground — from banging nails on a backyard deck to electrical contracting and building skyscrapers. Creating a business plan might seem like busywork, but it’s a great way to help set your business up for success. Plus, if you need financing, banks will almost always ask to see a business plan before making decisions.

In its most simple form, your business plan should outline the kinds of general contractor jobs you intend to work on and the financial support you have to do it. It also should include your best estimate of what your GC business will look like in the future — say, three months, six months, and a year down the road.

Step 4: Bond. License Bond.

Contractor license bonds are required in most states, and you’ll likely have to show proof of yours when you submit your license application. Your license bond acts as a guarantee that you will abide by and meet all contractual agreements.

Contractor license bonds, however, are different from performance bonds, which guarantee that you’ll fulfill the terms of a contract for a specific construction project.Speaking of contract obligations, we recommend getting insurance for your contractor business. Having insurance coverage helps protect your business, your clients, and your professional reputation if you experience mistakes or accidents on the job — plus, many clients may not hire you without that coverage.employees, contractors, and subcontractors in the mix, the right insurance coverage helps protect your business, your clients, and your professional reputation.

Step 5: Prepare the paperwork.

Depending on where you live and work, licensing might be managed by your city, county, or state. Some ask for professional references. Others require a background check. And everyone wants you to have construction experience — but the number of years will vary.

Look online for a list of documents to include with your license application or on the application form itself. Common requirements might include:

• A signed application
• A copy of your driver’s license or state-issued ID
• Exam results
• Background check (and possibly fingerprinting)
• Financial statements, including working capital or net worth
• Proof of insurance and license bonding

Step 6: Build your general contractor reputation.

One of the most important jobs of a general contractor is building a strong professional reputation. Here’s how you can accomplish that:

Prove yourself: Show clients that you’re thorough and dependable at each stage of your general contractor jobs. Communicate effectively and pay close attention to detail. When you have a rock-solid work ethic, clients may be more likely to recommend you to friends or give you a great review. 

Be a leader: Remember your on-the-job general contractor schooling before you got licensed? Now’s your chance to pay it forward. Learn how to motivate workers to give their best efforts. When problems come up (and they will!), offer solutions quickly and decisively. 

Develop your network: Keep in touch with other certified general contractors — and network to meet more construction industry pros. Networking helps establish you as an expert in your industry. Plus, the stronger your professional community, the more possibilities for word-of-mouth business!

Continue to learn: Stay on top of changing codes or regulations. Keep abreast of emerging technology in your industry. Add new skills whenever you have the opportunity, whether by reading general contractor books or through firsthand experience.

One more tip: Don’t be afraid to get help from experts when you need it. Small business insurance is what we do. We can help you decide on the insurance coverage for your GC business — so you can focus on what you do best.

We’ve also gathered resources to help you continue learning and grow your business. Check out these relevant articles to start:

• Contractor license by state page
• General Contractor Insurance: Everything You Need To Know
• FREE Contractor Invoice Template

References:

1. Learn more at Buildops.com.