April 22, 2021 Last updated April 22nd, 2021 987 Reads share

5 Tips For Running a Small Contracting Business

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If you are passionate about construction but are worried about getting lost in the bureaucracy of a large company, then an independent business might be right for you.

Running your own small company puts you in control from the top to the bottom of your operation and removes oversight from anyone else. To be a successful independent contractor, you need to be a successful businessperson.

Let’s go through some important tips to be aware of before launching a company with your name on it.

 

1. Get Licensed

You wouldn’t hire a driver without a license or go to a barber that’s not officially certified, and the same principle applies to contracting. You must pass an exam and any other requirements necessary before you can open a reputable business.

Each state has different requirements; Florida contractor exam prep is one of the hardest in the country, with a difficult test and many pre-requisites. But Illinois, for example, only requires a high school degree. Make sure you are prepared before taking any test and have studied both your state’s and local county’s rules and regulations.

 

2. Advertise

How will people hire you if they can’t find you? Get a good, easy-to-navigate website set up as the first point of contact for your clients. Your website should help clients get quotes, learn about you and your history, and provide examples of your work.

Use social media like Facebook and Instagram to cast a wider net. If online advertising is difficult for you, consider hiring a tech-savvy marketing expert who can guide you through the finer points of internet advertising.

But don’t discount old school methods — get listed in the yellow pages, put up flyers, and send a monthly email newsletter to loyal customers and new leads.

 

3. Find Good Insurance

Construction is a job that comes with accidents. While you will always run a safe and OSHA-compliant job site, you need to have liability insurance. Financial protection against accidents can pay off in the long run, as it is only a matter of “when” before you will need the coverage.

 

4. Learn Business Basics

If your work history is in construction, you may need to figure out how to run the nuts and bolts of your company.

Bookkeeping, invoices, scheduling, and assigning tasks all need to be meticulously organized. Employees and clients both will rely on you to send paperwork in a timely fashion. There are online organization tools that can help streamline all these processes.

You’ll also need to determine your business structure. You can either be a sole proprietor or a Limited Liability Corporation (LLC). Each of these will affect how you pay taxes and organize your finances. Speaking of which, learn how to pay taxes as a corporation. An independent contractor will owe the IRS taxes based on yearly profit, so make sure to track every cent you make.

 

5. Stay Ahead of The Pack

Every town or city will have several competing contractors, and you will want to stand out. That means being up to date on all technology and equipment so that you can advertise your use of state-of-the-art machinery.

Visit expos where you can meet other contractors and expand your network. The more people you know in the industry, the more connections you can make, plus you’ll see what the competition is up to.

Try to specialize based on your area. If your town does not have any independent contractors who focus on refrigeration, learn that trade to close in on that gap in the market.

Soon, your small business will grow, and a great reputation will follow.

Dmitry Kozlov

Dmitry Kozlov

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