How to Become a Licensed Building Contractor

Want to move from handyman to building contractor? It’s a big move, but an exciting one that offers the potential for more lucrative profits. If you’re looking to advance your career, the step from handyman to contractor is a logical one.

In general, a handyman performs household tasks that the average homeowner can’t or doesn’t have time to do, like putting up fencing, removing mold or redecorating.

Contractors, on the other hand, usually specialize in one trade area and have qualifications behind them, like plumbers, electricians and building contractors.

Specialist tradespeople can earn more money because they’re qualified in their field and the job usually involves greater risk, like working on high-rise buildings or with electricals. The best part about being a licensed contractor, though, is that you’re usually your own boss. If you don’t want to take a certain job, like if you don’t like to work at heights, for instance, then you don’t have to.

If you’re a handyman who has decided to advance your skills and become a licensed builder, this guide is for you.

To become a building contractor, you’ll need to get yourself licensed. Different states have different requirements. The first place to start for more information is the Contractor Training Center. They provide seminars, support, and training by experienced instructors to get you through those all-important exams.

Here are your next steps:

Check Your Eligibility

You must be at least 18 years old, with a high school diploma or similar. As a US citizen or legal resident, you’ll be expected to pass a criminal background check. You’ll also need to have relevant experience in the construction industry. Keep any other occupational licenses to hand. If you have any violations, liens or citations from previous building work, you’ll need to have a good justification.

Decide Your Specialty

Go for a general contractor’s license or opt for a speciality. Your choice here will affect the class of license you choose. Make sure you check your state’s specific legal requirements, so you know whether or not you need a speciality license.

Identify Your License Class

Each state classifies contractor licenses differently. Some are based on the type of work, others on its financial value. In some locations, a Class A contractor can accept jobs of any value. Meanwhile, a Class B contractor may be restricted to projects of $500,000 or under.

Remember that the particular license class you choose will determine the fees and insurance. Once you have your license, if you accept work that’s outside the scope of the license, you will be operating counter to regulations in most states.

Register Your Named Business

Before you register your business with the relevant state, decide on a name for it – and one that hasn’t already been chosen. Remember to obtain an Employer Identification Number (EIN) from the IRS for any of your employees. Don’t be surprised if you have to pay registration fees at the start of the process.

Successfully Pass a Background Check

Expect to complete a background check before you submit your application.

Take the Exam

In some states, to take the licensing exam, you must send in your application. In other localities, you can take the examination and submit the results together with all the rest of the required details when you apply for the license.

Most states ask for a two-part license: Technical and Business Law. You must pass the Contractor Business Law and Project Management exam, plus a technical exam. To find out what exams are necessary for your geographical area, contact the International Code Council (ICC).

Submit Your Application

Once you pass the exam, in most states, you can submit your license application using the following steps:

Gather All Relevant Information

Once you’ve decided on the relevant contractor license to apply for, gather the following information:

• Company name and address
• EIN numbers
• Contracting class and specialty if relevant
• Company incorporation details
• Certification confirming you have passed the relevant contracting exams
• Copies of ID
• Proof of citizenship or residency
• Documents of prior contracting licenses
• Proof of successful background check
• Proof of education, training and experience
• Proof of your insurance or bond

Send your application together with any fees required. Check beforehand to see if your application needs to be notarized or not.

When Successful Buy Insurance

You’ll need to buy insurance to protect you from any liabilities you may incur in your daily business, plus employee compensation insurance. Some states may require you put up a surety bond instead to protect your clients from any potential loss for half-completed projects.

Once you’ve got all this in place, congratulations! You can now call yourself a bonafide building contractor.