contractor business

Tips to starting a contractor business

How to start a Contractor Company

Setting up a small contractor business can be a perfect balance between freelance self employment and small business ownership. Contractors formalize their personal skills by offering a suite of services to the public under a registered company name. The process of setting up as a contractor is hassle-free and fairly straightforward, making this a popular type of business for independent-minded professionals.

Step 1
Register your business name. Contact the agency that oversees business name registration your state to begin the registration process; Texas entrepreneurs can contact any county clerk’s office. Choose a name that is unique, relatively descriptive and non-offensive of the types of services you offer. If you are starting a construction contracting company, consider using the word “construction” or “builders” in your name. If necessary to meet the guidelines set forth in your state, alter you chosen name.

Step 2
Write a business plan. Put together a marketing section, financial analysis, company overview and management biographies section, at minimum, to showcase your understanding of your industry, company and business model. Your business plan not only helps to guide you through the process of planning and designing your operations, but it can be your number one tool for obtaining startup funding. If you are setting up as a construction contractor, place emphasis on your building experience. Show business plan readers that you have established sufficient professional contacts and advanced orders to help you get on your feet in the first few years.

Step 3
Pitch your business plan to venture capitalists and angel investors if you are willing to give up a temporary management stake in return for capital inflows and industry contacts. Tailor each pitch to the specific lender or investor you are dealing with; make small changes to your pitch and business plan to suit the specific preferences and address the major concerns of each.

Step 4
Purchase all necessary licenses and permits. Contractors often do business in heavily-regulated industries, such as accounting and construction. Small business owners in these industries are legally bound to obtain licenses at the state or local level before conducting business. Search the business license requirements database at to determine if your state requires licensing in your industry. According to the database, for example, home builders in Texas are simply required to register with the state; specialty contractors, including HVAC and plumbers, however, must obtain specialized permits.

Step 5
Purchase business and liability insurance policies. Construction contractors can be especially vulnerable to lawsuits related to faulty services, financial or physical damages caused by sub-contractors or services’ accidents on the job.

How to Market your Contractor Business

Step 6
Market your services to your contacts and the public. Devote a significant portion of your time to marketing during the growth stage of your business. Contracting can be a personality-driven business, meaning that clients will go and come based on their personal interactions with the business owner. Notify business contacts and peers about your services to stimulate word-of-mouth advertising. Place advertisements in local or industry newspapers, magazines and web portals. Establish a social networking presence to collaborate and communicate with existing and potential clients. Call local real estate agents and building supply stores and build strategic partnerships through cooperative advertising, promotions-swaps or other innovate agreements.