How to Become a Contractor

1. Figure out what you want to do. Ideally, your contracting business should involve something that is both lucrative and somewhat interesting to you. It's also good if you already have experience in the trade or service as this will hasten your success all the more.

2. Think of a name for your contracting business. It's best to pick a name that is both memorable and descriptive. For example, something like "Picture Perfect Painting" would be a good one because it is easy for a potential customer to remember, and it will help them to immediately identify what service you offer. They may get only a fleeting glance at your sign or truck somewhere so they need to know what you do quick. Then register your company with your state. Getting set up as an LLC is often a good idea, but ask a lawyer.

3. Get an EIN (Employer Identification Number). You'll need this for all sorts of things, even if you don't have employees. You can easily and quickly apply online at irs.gov.

4. Get a service vendor's license, if your state and service require it.

5. Open a small business bank account with a local bank.

6. Get some insurance. You need this to protect yourself and your customers. It can get expensive but you just need to look at it as a cost of doing business, and also as a selling point.

7. Register with your state's tax department. Collected sales taxes will need to be passed on to your state.

8. Get licensed if necessary. In most states you'll need this if you're involved with general contracting, electrical, or plumbing. Check with a lawyer or your state if you're unsure.

9. Find a suitable location for your business. You should start at home first to gauge if there is adequate demand for your service, then you can move into an industrial space later on if need be.

10. Make sure you get a dedicated business line. Keep the business and home lines separate if you want to keep your sanity and maintain any sort of semblance of professionalism.

11. Get ready for the books/accounting. If you don't want to mess with this just hire it out. It's usually not that expensive. Quickbooks is helpful if you're intent on doing it yourself.

12. Market like crazy. It's all about marketing, baby! Do whatever you can to get the word out. Flyers, postcards, internet marketing - just do it and later on you can weed out the methods that are not very effective for your particular area and industry. This step might be the most important to your success. People can't buy what they don't know about.

For a more fleshed out version of this list, you might check out this guide on how to become a contractor.