Knowing how to start a contract business will allow you to create a successful independent venture whether you're a carpenter, electrician, plumber, or general contractor. With this type of company, the customer can make a single phone call to get in touch with the home professional required for his or her project.

Gaining the Required Skills

A good general contractor must possess outstanding organizational, communication, and planning skills. You should have the knowledge and expertise to fully understand your client requests and make sure that deadlines and budgets are met as efficiently as possible.

For best results, work in the construction industry to gain experience before starting your own contracting business. Investigate the county, city, state, and federal requirements for licensed contractors. Be sure you understand core skills like bidding and negotiating contracts, supervising workers, reading blueprints, and construction best practices.

Common types of legal business entities include the corporation and the limited liability company (LLC). You should understand the benefits of all entities to choose the structure that works best for your business. An experienced business attorney can help you make this important decision.

Writing a Business Plan

The business plan should be a comprehensive outline of your first three years in business, including:

  • Vision and mission statements
  • Projected revenue
  • Start-up and operating expenses
  • Funding sources
  • Pricing strategy
  • Marketing plan
  • Competitors in your area and/or market

Assessing the Competition

Unless you're the only contractor for miles around, you need to know who your company will be competing against. Learn as much as possible about other general contractors in your area through reviewing their website, prices, customer reviews, and internet presence. This knowledge will help you find a missed customer need that you can fill or provide insight into your ideal niche.

Registering With the State

In most states, you'll need to register with the office of the secretary of state. Depending on your city or county, you may also need local business licenses and permits. You can learn more by contacting the small business office where you plan to start your company.

Those who offer certain services may need specific licenses. This is common for plumbing, HVAC, and electrical professionals. Keep in mind that requirements vary, sometimes dramatically, by state.

Choosing and Outfitting a Space

You'll need a business location where you can use and store vehicles, equipment, and surplus materials. This location should also include an office for administrative services. Consider the number and size of vehicles and equipment when searching for the right warehouse.

You should also consider whether it makes more financial sense to rent or buy the machines and equipment you need. Renting is often more affordable in the short-term. Make sure you know how to operate everything and inspect it at regular intervals to catch potential problems early.

Marketing Your Business

Once you've registered your company, you can choose and purchase a domain name. You need a user-friendly website that ranks well on Google and other search engines. A strong social media presence allows you to capitalize on customer word of mouth and share photos of your work with potential clients.

Kickstart your marketing plan by joining your local industry associations and chamber of commerce. Although marketing may not be your strong suit, investing the time and money to create a comprehensive advertising plan can make your new business a success.

Hiring Employees

To start a general contracting business, you'll need skilled and experienced contractors and subcontractors, including landscape professionals, architects, masons, electricians, and plumbers. Everyone you work with should be licensed and pass a background check.

You must pay for worker's compensation insurance if you have employees. You should also buy general liability insurance to cover damage and injury that occurs on the premises.

Using Local Resources

Life as a new business owner can be overwhelming. It makes sense to learn from those who were once in your shoes by seeking an industry mentor. You can get matched for free with someone in your industry through the SCORE Mentors Program.

Other valuable resources include the Small Business Development Center, Women's Business Center, and Veteran's Business Outreach Center.

If you need help with starting a contract business, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.