How to Start a Contracting Business (and How to Become a Subcontractor or Find Subcontractors)

To start a contracting business: choose your trade and target customers (residential remodelling, roofing, electrical, plumbing, HVAC, general contracting), obtain required licences, bonding and insurance, form a business entity, get the tools, vehicle and software you need, set up estimating, contracts and invoicing, build a network of reliable subcontractors and suppliers, and market with a website, Google Business Profile, reviews and referrals.

Step 1: Choose your trade and niche

General contractor vs specialty trade; residential vs commercial; service/repair vs projects. Niches (kitchen remodels, decks, solar, restoration) help marketing.

Step 2: Licences, bonding and insurance

Requirements vary by country/state/city: contractor licence (often with exams and experience), business licence, general liability insurance, workers' compensation if you have employees, surety bonds where required, and permits for projects.

Step 3: Business setup

Entity (LLC or local equivalent), tax registration, business bank account, accounting system, contracts and templates.

Step 4: Tools, vehicle and costs

Startup costs depend on trade: tools, vehicle, safety equipment, software, insurance, licences, marketing and working capital.

Step 5: Estimating and pricing

• Materials + labour + subcontractors + overhead + profit margin
• Use estimating software or templates
• Written scope, change order process and payment schedule

Step 6: Contracts and payments

Clear contracts with scope, timeline, payment milestones, warranties and change orders; professional invoices (see How to send an invoice).

Finding subcontractors

• Referrals from suppliers and other contractors
• Trade associations and local builder groups
• Online directories and platforms
• Check licences, insurance, references and past work
• Clear subcontract agreements, scopes and payment terms

How to become a subcontractor

1. Get trade skills and required licences
2. Register a business, get insurance
3. Build a portfolio and references
4. Contact general contractors, builders and property managers
5. Register with procurement portals for commercial/government work
6. Deliver reliably to get repeat work

Software

Field service/contractor software for scheduling, quotes, invoicing and job tracking (see What is field service management software?), plus accounting and a CRM.

Marketing

Website with services and project galleries, Google Business Profile and reviews, yard signs, referrals and local partnerships (see How to market your construction business).

Frequently asked questions

How do I start a contracting business?

Choose your trade, get licences, insurance and bonding, set up the business entity, acquire tools and software, create estimating and contract processes, build subcontractor relationships and market locally.

Do I need a licence to be a contractor?

In many places yes, depending on trade and project size; check your state, provincial or local requirements.

How do I find subcontractors?

Through referrals, suppliers, trade associations and directories, verifying licences, insurance and references.

How do I become a subcontractor?

Get trade skills and licences, register a business with insurance, build a portfolio and reach out to general contractors and builders.

How much does it cost to start a contracting business?

From a few thousand dollars for a small trade with existing tools to much more for vehicles, equipment and bonding.

How do contractors get clients?

Through referrals, Google Business Profile and reviews, a professional website, yard signs and partnerships.