Parenting is a full-time job that leaves you with an erratic schedule to work around when it comes to the other jobs that actually make money. For many, working as a general contractor is an awesome opportunity with more flexible hours than a traditional 9 to 5.
To work as a contractor, one thing you absolutely need is a license. While for small independent contractors, a license isn’t always necessary, it is essential for most major contracts.
License requirements vary wherever you go. While Texas has no statewide laws in place, each city has its own requirements. On the other hand, neighboring state Louisiana has strict regulations, such as requiring its subcontractors to be licensed in order to bid on any job costing more than $10,000, including materials and labor. Architects, plumbers, electrical engineers and handypersons of all sorts may be working on contracts that legally obligate them to hold a license without knowing it.
Beyond the legal reasons, there are plenty of benefits that make a contractor’s license a worthwhile investment long before it’s technically required. Here are just a few reasons to get licensed:
- It Gives You More Credibility
A license just looks good. It doesn’t always mean one contractor is better than another. There are many builders with years of experience who have simply not yet sought out a license. Word of mouth might say that one builder is just as good, if not better, than the next. However, the client can’t tell that at a glance.
A contractor’s license sets your business apart. The license itself may not make you a better contractor, but for similar prices, clients will almost always go for the contractor with official recognition.
- It Just Might Make You a Better Contractor
While a license may be ‘just a piece of paper’ to some, that piece of paper requires some actual training. Getting a contractor’s license involves a rigorous test that proves you know your stuff. And if you don’t, then it’s time to hit the books. The license test is a welcome push for many contractors to brush up on their knowledge.
Beyond the test, many licenses require 6+ hours of actual training by certified instructors. So that piece of paper might be worth more than it seems.
- It Saves You Money
The adage “you’ve gotta spend money to make money” rings true here. A contractor’s license might be pricey up front, but in the long run, it can lead to tax breaks and even discounts at major suppliers.
When that old set of tools finally starts to break, or the time comes for a bigger truck or even a home office, those things get pricey. They’re even more costly when it comes time to pay taxes. A properly licensed contractor will have the option to write these off as business expenses.
If you’re looking for more immediate savings, licensed contractors have the option to purchase materials such as lumber, wiring, fasteners, and anything else required for a job at wholesale prices.
- It Protects Your Money
In case of non-payment, a contractor’s license gives access to the Mechanics Lien Rights—allowing contractors to place a lien on the property in question when payments have not been made.
For new small businesses, it certainly makes sense to hold off on paying certain dues until they are truly due. But when it comes to a contractor’s license, there’s more to it than just payments and paperwork. The benefits of a contractor’s license go well beyond what’s listed here and prospective, and unlicensed contractors might think twice before putting it off any longer.