How to Start a Contractor Business
The setup work before your first job: licensing checks, registration, insurance and crew, then the estimate and the invoice.
This guide is about getting a contracting business ready to take its first job. Billing questions such as progress invoices and change orders sit on the contractor invoicing guide, which this page links to rather than repeats.
On the role, the BLS construction managers profile (In the US, last modified August 27, 2026) says "Either a general contractor or a construction manager oversees the construction phase of a project, including personnel, but a construction manager may also consult with the client during the design phase to help refine construction plans and control costs." On licensing it says "Some states require construction managers to be licensed." Check your state's contractor licensing board for the work you plan to take on.
A first job invoice with sample figures: deck framing labor of 24 hours x $65.00 = $1,560.00 and lumber and fasteners at 1 x $1,180.00 come to $1,560.00 + $1,180.00 = $2,740.00 before any tax.
Step-by-step startup guide
Follow these steps to launch your contractor business on solid footing.
- 1
Decide which jobs you'll take
Pick the trades and job sizes you'll start with, such as decks and small remodels. That choice drives your licensing checks, insurance and crew.
- 2
Check licensing with your state
The BLS construction managers profile (In the US, last modified August 27, 2026) says "Some states require construction managers to be licensed." For what your work requires, ask the licensing board for contractors in your state, plus your city or county.
- 3
Register and get an EIN
The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "Most businesses will also need to get a tax ID number and file for the appropriate licenses and permits". The IRS EIN page (In the US, IRS, last reviewed or updated October 16, 2026) says "You never have to pay a fee for an EIN."
- 4
Look into insurance
The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "You also may be legally required to purchase certain types of business insurance." Ask an insurance agent and your state about the cover your jobs require.
- 5
Line up crew and subcontractors
The IRS page on independent contractors (In the US, IRS, last reviewed or updated May 19, 2026) says "If you are a business owner hiring or contracting with other individuals to provide services, then you must determine whether the individuals providing services are employees or independent contractors."
- 6
Estimate, then invoice
Send a written estimate, get the customer's approval, and invoice from it once the job, or the stage your contract names, is done.
Tips for starting your contractor business
- Check permit rules where each job is. The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "Local governments determine registration, licensing, and permitting requirements, so visit local government websites to find out what you need to do."
- Keep receipts for every material purchase with the job name, so they're ready when you invoice.
- Put scope changes in writing with their price before you do the work.
- Photograph the site before and after each job for your records.
How Billed helps you get started
Features to look at as you set up your business.
Estimate Attachments
Billed's features page says: "Attach important files and images with your estimates."
Flat Rate Projects
Billed's features page says: "Manage your flat rate projects and create Invoice at any stage of the project."
Attach Receipts
Billed's features page says: "Never lose a single receipt again."
Partially Paid Invoices
Billed's features page says: "See partially paid invoices and send payment reminders to your customers."
Frequently asked questions
More Startup Guides
Invoice Your First Job
Create invoices, track payments and keep your clients' details in one place with Billed.
At a glance
| Step | What to check | Source |
|---|---|---|
| Licensing | Your state's contractor licensing board | BLS (In the US, last modified August 27, 2026) |
| Permits | City or county rules for each job | SBA (In the US, checked October 31, 2026) |
| Subcontractors | Employee or independent contractor | IRS (In the US, last reviewed or updated May 19, 2026) |
| First invoice | Labor and materials from the approved estimate | Contractor invoicing guide |
When this isn't for you
If a builder employs you and you don't run your own contracting business, this setup checklist isn't for you.