What Does it Take to Build a Contractor Business in Texas?

Becoming a boss is an appealing option for many in the Texas workforce. This entrepreneurial mindset has become a critical pillar of the United States economy, with millions of business owners starting their brands each year. 

One type of business that you could create if you have the right skill set is an independent contractor. Contractors are usually associated with the construction industry, in which there are many specific disciplines. Masonry workers, plumbers, electricians, carpenters, bricklayers, and other construction roles all have both residential and commercial applications. 

Starting your own business as a contractor is a great way to be in charge of your work-life balance, but it comes with significant challenges. Let’s talk about what it takes to build a contractor business in the state of Texas. 

Pursue Education and Licensing

In the state of Texas, you need a license to start bidding on projects for construction. Obtaining this license requires passing a detailed exam depending on the specific discipline you have chosen. There are multiple ways to study for this certification. First, you can attend trade school to learn the concepts and engage in practical activities. Second, you could accept an apprenticeship with an experienced contractor and learn on the job while earning a small salary. If you were studying to become an electrician, you could find a Texas electrical license and exam preparation course online to get ready for the test. Once you pass the test, you will be licensed to accept projects. 

Determine Business Structure

Filing as a business with the IRS is an important step for every business owner. One of the decisions you will need to make is what type of business structure to have. You have several options to choose from. A sole proprietorship makes sense if you are the only employee at your company. If you plan to have a partner, then a partnership is a good idea. You could also form a limited liability company that insulates your personal finances from business assets for additional protection. Other potential designations include a corporation or s-corporation. A business structure can be changed when needed, but it is helpful to establish things early on so you know how to operate according to government regulations. 

Secure Financing

Most businesses have startup costs that are required before they can serve clients, and a contractor brand is no exception. Primarily, you will need tools, equipment, a website, and other resources to get your name out there and be able to perform the services you offer. This may require financing beyond what you have in your savings account. The simplest way to secure financing is to apply for a small business loan or line of credit. There are also alternative financing strategies for businesses, but these often come with higher interest rates and greater risk. If you have some solid relationships and a good business plan, it may be possible to find angel investors to fund your startup costs as well. 

Purchase or Rent Equipment

A poor workman blames his tools. Perhaps you have heard that saying before, but it applies in this situation. You cannot be an effective electrician, plumber, or masonry worker if you do not have the right equipment. This equipment includes both small, handheld tools as well as large machinery. A large percentage of your startup funding will have to go toward buying tools and machines for your client projects. When you do not have enough storage or money to purchase some things, you may have to rent them as needed depending on the needs of each specific project. 

Advertise the Brand

Marketing might be the most important step in this guide. To make money as a contractor, you need to secure projects. To secure projects, you must convince potential clients that you can provide the service they need for a great price. This brand awareness only comes via a strong marketing strategy. How you craft your messaging and where you choose to communicate with audiences will have an impact on the clients you end up signing contracts with. Embrace tools like a strong website, a social media presence, and email marketing to get the word out about your services and start building a local presence in whatever Texas community you plan to serve. 

Be Prepared to Work Hard

If there is one primary downside to working as a contractor, it is that the income potential is somewhat limited. While you can advance and become a master of your discipline, there is only so much money you can make. The potential for a higher income rises when you run your own business, however, so it can become lucrative. However, you will need to work very hard, especially in the early years, to get your business to that point. Building your own contractor business in Texas is very challenging, but it can also be a very rewarding career path if you find success.