A growing housing market means more demand for construction and general contracting. Homeowners and landlords want to keep their houses and buildings up-to-date to increase their resale value and appeal to consumers.
Even if you make a good living doing small repairs and handiwork around town, you may be interested in expanding your business prospects. A general contractor can take on bigger projects for more customers – and make a lot more money in the process.
If you’re thinking of making the leap to contracting, there are a few things to keep in mind. To help you get started, here’s what you should know about turning your handyman job into a contracting business.
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Get Your Contracting License
The first step to building any contracting business starts with the proper licensing. A contracting license means you’re legally permitted to perform certain kinds of work. To your clients, it’s also a guarantee that you know your stuff and have the construction knowledge to pass the license exam.
The precise laws around who needs an official contracting license vary from state to state. Generally, in the US, contractors need a license if they’re making structural changes to a building or are doing work above a certain monetary amount.
If you already have a license, make sure it’s regularly renewed. Each license is issued for a set timeframe before expiring. Working without a current license can put you at risk of severe legal trouble when you’re caught.
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Start Marketing
Lots of small handyman businesses rely on word-of-mouth to generate leads. But full contracting can be competitive, so it may be time to start building a brand.
Your brand includes a lot of different factors. Ultimately, your brand is how clients will identify you and recognize your work from competitors. You’ll need visual components, like a website and a logo, and then a way to get the word out.
It’s possible to do marketing on your own with a little online research. Alternatively, you can reach out to a marketing firm that will help get your name out on the web, on billboards, or even in commercials.
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Check Your Budgeting and Financing
A general contracting business is going to have many costs associated with it. Materials, employees, equipment, insurance – basically, things are about to get more expensive. That’s why it’s important to practice good budgeting habits and explore finance options.
There are lots of loan options for small businesses, thankfully. Options include US Small Business Administration loans, local credit unions, and traditional banks loans. You’ll even have different options depending on your state and town, so be prepared to do some research.
As for budgeting, it’s important to keep good records. Track everything you spend for your business and be prepared for unexpected costs. Things like licensing, permits, insurance, and marketing will cost more than you think.
It’s also important to review your pricing models. A general contractor is generally expected to charge more than a simple handyman, after all. Make sure to price yourself according to the local market.
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Consider Forming an LLC, Corporation, or Partnership
It’s not a requirement, but you may want to look into forming a limited liability company, corporation, or general partnership.
These business organizations are excellent if you want to partner with another contractor or attract investors. There are certain tax breaks and growth opportunities for LLCs and corporations, but they’re not the best option for every business owner.
Each state has its own requirements, so you’ll have to check with your state agency to learn about the filing process.
