The general contractor gets most of the credit for the project’s success, but each moving part is built by subcontractors. Following these steps how to start a successful subcontracting business.
A subcontractor is an individual who performs a specific task for a client, such as construction workers, electricians, plumbers, HVAC technicians, painters, etc. In Each of the specialties, they serve subcontractor. Project would succeed without them.
This line of work requires the use of subcontractors. In many cases, they can accomplish aspects of the job that a contractor alone would not be able to accomplish.
You’re not alone if you want to start your own subcontracting business. However, success doesn’t come easily. Make your business self-sustaining by following the six steps below.
6 Steps How To Start A Successful Subcontracting Business
1). Get Your Contractor’s License
To obtain a contractor license, general contractors must pass an exam in many states. Most people are unaware that subcontractors are also subject to stringent guidelines.
Most states require you to get a license if you want to hire subcontractors or work as one.
The process of obtaining a contractor’s license is not easy. Taking classes, completing an internship, and passing a rigorous exam are all part of the process. The requirements differ from state to state.
California, for example, allows you to take the exam without coursework or apprenticeship. In Iowa, however, all contractors earning a minimum of $2,000 a year, including subcontractors, must be licensed to perform work.
The process will look something like this no matter where you obtain your license:
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Start taking classes at a trade school or an accredited state school with a program in your field once you know what trade you want to work in. To qualify for the license exam, you usually don’t need to take many courses. Some programs can be completed in as little as six months.
In order to begin working in the field, you’ll need to learn the basics of your trade.
Land An Apprenticeship
There are some people who go straight into apprenticeship without taking any courses first. Life is a classroom, as the saying goes. To learn your trade, there is no better way than to practice it. A book can only teach you so much.
You will earn wages while learning during your apprenticeship, which usually lasts between one and five years.
Take The Contractor’s Exam
If you are ready to take your state’s exam, submit an application. Find out how often your state licensing board administers tests by contacting them.
Preparation, preparation, preparation! Exams are grueling, and you don’t want to take them more than once.
2). Register With The IRS And Receive An EIN
The next step is to set up your business once you have your contractor’s license.
You should get all the paperwork in order before you take on any clients or perform any work. Be sure that you have a standardized contract form ready to distribute, that your financials are in order, and that you have good standing with the IRS.
To obtain an EIN, or Employer Identification Number, you’ll need to register your company with the Internal Revenue Service as soon as possible. Tax purposes require this number. The IRS website has an EIN application.
3. Collect References And Samples
Showing off your old work is the best way to get new work. Ask for high-quality photos of jobs you’ve completed as an employee of another contractor. Put testimonials from satisfied clients on your website and hang them in your office.
Yelp is also a great tool for getting new clients. You should encourage clients to leave glowing reviews if they are satisfied with your work. One survey found that 92% of people read reviews before visiting a local business. Bad reviews can’t be afforded!
4. Diversify Who You Subcontract
As an electrician, you are connected to others in your field. Depending on your specialty, you may need to subcontract out other electricians. Do not stop there. Think big.
If you want to land bigger, better-paying jobs, show that you are capable of doing more than what your specialty allows. You’ll land more contracts for more rewarding gigs if you hire subcontractors who can handle diverse aspects of complex jobs.
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5. Streamline Your Hiring Process
Once you’ve lined up a solid group of subcontractors and clients, you can begin to grow. Don’t let yourself get comfortable. Hire more subcontractors from a variety of backgrounds as you expand your business.
Organize your hiring process to avoid major stumbling blocks. Hire recruiters, experiment with online channels, and streamline your interviewing process.
6. Treat Each Client Like They’re Special
The final rule to building a successful business is to treat your clients well. If you do a good job, they won’t return to you.
A client wants to know that they are working with a friend and confidante, someone who won’t lie to them or fudge the numbers. Make all your clients feel special, and they may even refer their friends to you.
Building Something Impressive
It is possible to build a truly formidable contracting business. There are steps to follow, but you have to follow them correctly.
The internet is full of faulty and misleading advice. Additionally, subcontracting is important in the trades. There’s no need to worry about messing up an omelet. The consequences of miscalculating a structure’s dimensions or failing to comply with an AC installation specification can be severe.
Keep your books clean, keep your craft sharp, and hire people who do honest work. Subcontracting offers many opportunities for discovery. Now is the time to build yours.