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    How to Start a Contracting Business

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    how to start a contracting business

    Running a contract business is great for those who have a pre-existing affinity towards the construction business, as knowing the ins and outs of the industry will give you a leg up on the competition.

    In this blog post, we’ll be taking a look at how to start a general contracting business to help you on your way.

    Related reads: How to Become a General Contractor in Canada

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    1. Have a plan

    Before you even think about a name for your contracting business, make sure you have a plan for what makes your company valuable, as well as mapping out the many possible pitfalls that could end up hurting you in the first few months.A few of the variables you should consider in your business plan are:

    • The cost it will take you to start up your business

    • What price point you’ll want to enter the market at

    • What section of the market you’re planning to target

    These are just a few of the considerations you’ll want to take into account in the early stages of your business. Not performing ample market research into these questions could have your business failing before it gets off the ground.

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    2. Register your business

    Before you can start accepting contracts with your new business, you’ll have to register your business as a legal entity.

    If you are unsure as to what business structure to adopt, you can discover your ideal business entity through this quiz.

    There are a few different types of business structures you can register your business under, such as:

    Sole proprietorship

    This type of enterprise is a good option for those looking for an affordable and simple way to register your business without any distinction between the owner and the company.

    Limited liability company (LLC)

    Making a business a corporation or LLC makes it a separate entity from the owner. This is a great way to avoid being held personally responsible in the event of a lawsuit, so your personal assets remain protected. For those considering a Limited Liability Company (LLC) in Texas, ensuring you're off to the right start is crucial. Performance success requires not only understanding its advantages but also navigating state-specific regulations. A comprehensive guide to getting started with an LLC in Texas offers all the information needed, from selecting a registered agent, filing your Certificate of Formation, to setting up your LLC operating agreement.


    A partnership is similar to a sole proprietorship but involves two or more parties combining resources to start the company.

    Related: Sole proprietorship, partnership, and incorporation—what’s right for you?

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    3. Insure your business

    Now that you’ve registered and named your contracting business, make sure to get contractors insurance to protect your assets in order to build a successful company.Business insurance is generally made up of four different policies:

    Commercial General Liability Insurance (CGL)

    This common policy protects your business against many claims that can occur on a job site, such as damages. CGL can also help cover workers compensation for employees, should they get injured on one of your job sites.

    Pollution Liability Insurance

    Some job sites will require hazardous materials that can cause bodily injury or require clean up costs. Pollution liability insurance protects your company in case of a lawsuit concerning bodily harm, clean up costs, or property damages caused by hazardous materials or pollution.

    Tools and Equipment Insurance

    Tools and equipment are arguably the most important part of a contractor’sbusiness. This policy protects you should any of your equipment get lost or damaged during a job. Generally, tools are considered anything under $1500, while tools are anything below that.

    Builder’s Risk Insurance

    Otherwise known as construction liability insurance, this type of policy protects the company or owner from having to pay out of pocket for any damage to the structure of your building that may happen during the course of construction, such as accidental adherence to building codes.

    Related: What is course of construction insurance

    Professional Liability Insurance

    This policy isn’t necessary for every contractor business. It’s only needed if you offer your customers any kind of consulting. Professional liability insurance protects general contractors against claims from customers or potential customers of incorrect information or failure to deliver agreed upon services.

    Making sure to get the correct insurance policy is an important part of protecting business owners in the construction industry from lawsuits that can potentially bankrupt you with legal fees and penalties.

    APOLLO Insurance can get you a business insurance quote sent directly to your email within minutes.

    Related: What Does Contractors Insurance Cover?

    Need Insurance for Your Small Business?

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    4. Begin promoting your new business

    With a properly registered and insured business, now’s the time to start promoting yourself through various methods and channels.

    Word of mouth is a great way for any small business to start getting their name out there, especially if you have plenty of contacts in the industry that you can utilize and not a lot of cash flow to put into advertising. You should also look for reliable contractor lead generation companies that can send high-quality leads your way.

    Social media is another important tool to garner new audiences and interact with potential new customers. LinkedIn, Facebook and Instagram are all very important platforms to utilize for interacting with your client base.

    Starting your own contracting business can be a lucrative way to make money, as long as you do your due diligence and make sure that everything is by the book. Remember to always check your local legislation, as some regions differ in terms of the requirements for registering and insuring your business.

    Related: How to Become an Approved Contractor for Insurance?

    APOLLO Has You Covered

    Get the protection you need in minutes with custom Business Insurance from APOLLO.

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    Originally published March 23, 2022, updated May 7, 2024

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