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Turning your Handyman Skills into a Profession: Starting a Construction or Home Improvement Business

by Caron_Beesley, Community Moderator

  • Created: March 23, 2010, 7:50 am
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According to the U.S. Bureau of Labor Statistics, the construction industry is one of the natio;s largest industries, employing 1.8 million self-employed and unpaid family workers in 2008. And i-s not all-heavy constructio' -- 64 percent of these jobs fall in the specialty trade contractors sector, including plumbing, heating and air conditioning, electrical, and masonry!

Despite the recession, the construction industry (in all its forms) still offers more entrepreneurial opportunities than many other industries. Of course, it takes much more than basic handyman skills to become a skilled tradesman and business owner. But if you are interested in starting or growing a construction, home improvement or general contracting business, here are some business and regulatory basics that you need to be aware of.

Getting Started


Do't start anything until yo've done your research and developed a business plan' tha's Step 1.

Other considerations include financing your venture, finding the right business location (zoning laws will play a big part in determining where you base your business and how you use that property), as well as understanding federal and state business registration requirements.

Read 10 Steps to Starting Up to better understand and navigate the key planning, financial and legal decisions involved in starting a business.

Licensed, Bonded and Insured?


Savvy clients will always look for a contractor who is'Licensed, Bonded and Insure'. Why?

A license demonstrates that you are competent and permitted to conduct business in the city, municipality, or state in which the license was issued. To be'Bonded means that a third party has promised to pay (a Surety Bond) if you do not fulfill your work obligations under a contract (giving your clients that little extra reassurance they need when dealing with a stranger.) Insurance ensures that you are liable for on the job accidents - not your clients.

Here is more information on how to get licensed, bonded and insured:

1) Licenses and Permits

Most construction-industry activities are regulated by state and local governments, for example a tradesman license is usually required for electrical, plumbing, HVAC, gas fitting, asbestos abatement and lead abatement work. You'll also need specific permits based on where and how you conduct your business.

Use this handy License & Permits Tool to pin point the exact license and permits you'll need. Search by your city/state and select 'Construction Contractor' as your business type. Your local government can also advise on how and where you need to display your license number.

2) Bonded

The Small Business Administration (SBA) guarantees Surety Bonds, but as with any SBA-backed business loan, you must apply for a surety bond through a surety company or bonding agent.

The SBA has advice on the process here: How to apply for an SBA Surety Bond Guarantee.


3) Business Insurance

Depending on the nature of your work and whether you employ workers directly, you will need to consider several business insurance options. These range from general liability insurance to professional liability insurance and workers' compensation insurance.

The following guides from Business.gov will walk you through what you need to know:

Construction Industry Regulations


From energy efficiency standards to workplace safety regulations and government contracting requirements, the construction industry is heavily regulated. Read Business.gov's Construction Industry Guide, which compiles all the information and additional links you need to know in one place.

Hiring Workers


Whether you choose to hire employees or work with independent contractors, you will need to comply with tax, social security, insurance, and other regulatory requirements. Read Ten Steps to Hiring Your First Employee and Hiring Independent Contractors to understand the different laws and regulations that applies to each.

Marketing your Construction/Contractor Business


While you can get general tips on marketing your small business in this Business.gov Small Business Marketing Guide, some of the best information and advice for how to market your construction or contracting business will come from those in the industry themselves.

From Internet marketing services such as Service Magic and Angie's List to the questionable efficacy of flyers and direct mail - read this discussion thread on the Business.gov Community and get tips from those in the know.

Related Articles


Additional Resources


*Note: Hyperlink directs reader to non-government Web site.

About the Author

Caron_Beesley's Profile Picture
Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley
Tags: Community Blogs, Small Business Matters