Getting Started With The Rich Contractor

Welcome to the Rich Contractor, the ultimate business resource for contractors, service professionals, and those who dream of some day dumping their dead-end job in exchange for the wild world of small business ownership.  Consider yourself lucky, because you’ve just found the playbook that I wish had been available to me when I was getting started.


Around the time of my 30th birthday I decided that it was time to rock the boat, so to speak.  My day job was sucking the life out of me, and the idea of breaking free and starting my own business was the only thing that got me through each workday.  Finally, after years of dreaming about it, I got off my butt and did it.  I started my own home services business.  But it wasn’t a walk in the park.  I was tackling an industry in which I had little experience, and I was clueless about how to get started and how to run the operation.  Searching the internet for answers, I realized that there wasn’t much in the way of helpful information on the web for people like me.  I also noticed that many of the other contractors in my city were just as “lost” as I was when it came to running and marketing a business.


Well, I forged ahead with my new business anyway.  I learned a lot during those first few years and devoted myself to consistent improvement whether it came to marketing, customer service skills, or simply running a more streamlined operation.  As time went on my tenacity and willingness to learn began to pay dividends, and I eventually became one of the most highly-regarded professionals in my chosen niche worldwide.

But it still nagged at me that so many of my new-found friends and peers in the contracting industry were having a difficult time with their business.  I realized that many of them were still as lost as they had been years earlier, and would always struggle financially unless they learned a new way.  I knew that it was time for somebody to step up and develop an online resource that was truly helpful and comprehensive, and since I had some basic web publishing knowledge and the work ethic to see it through I decided that person would be me.


So I started towards the end of 2007, my primary goal being to educate, inspire, and empower other contractors and would-be contractors who were eager to succeed but lacked basic business know-how, just as I did years before.  The rest, as they say, is history.  It’s now one of the most authoritative sites in the world on the subject of starting and running a successful contracting or home improvement business.  So how can it help you?

Well, let me point you toward a few different entry doors:

Door #1:  If you want to become a professional contractor but haven’t started yet, first read my epic post about how to become a contractor.

Door #2:  If you’ve already started your business and need help with marketing or getting new business, I would suggest you begin by reading my posts about starting a blog, getting free construction leads, and choosing construction business cards.

Door #3:  Other popular points of entry include my rant about how to make a lot of money and my comprehensive introduction to nailing contractor leads.

Then just keep working your way through the site.  There’s a mountain of information available to you here, so you’d be wise to bookmark the site for later reference.  Well, that’s all for now, folks.  Now go grab a cup of coffee and start reading…it’s time to turn that dream of entrepreneurship into a reality!

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Registering A Domain Name and Setting Up Blog Hosting

Okay, so if you’ve made it to this post then you should have already read the previous two posts in this series: How To Start A Successful Blog For Your Business and Choosing A Domain Name For Your Business Blog.  If you haven’t, go back and read those first.  Then jump back to this post, where I’ll be giving you a step-by-step guide for registering a domain name and setting up hosting for your blog.

I’m actually going to let you follow along as I do this for MYSELF.  I’ve decided to start a local handyman service as a complement to my other business interests, and so you’re about to get an exclusive peek over my shoulder as I go through the process of starting up MY new blog.

Step 1: Take out a pen and pad and write down at least five ideas for your blog’s domain name.  Remember the general guidelines we laid out in my previous post.  Using my own rules I came up with these five:


Step 2: Click here to go to  The landing page I’m sending you to should look similar to this:

Click the green button that says “get started now”.

Step 3: Select the hosting plan that best suits your needs.  The starter package is good enough for what we’re trying to do here, but if you will be starting more than one blog  (if you have more than one business, for example) then it would be smart to get the plus or business pro plan:

bluehost-step-3-select-planFor my new blog I’ll be selecting the starter plan.

Step 4: Register your free domain name.  In the left box titled “new domain”, start entering the domain names that you came up with in step one.  Bluehost will tell you which names are available and which ones have already been registered by someone else.


The first three on my list were already taken. is available but it looks a bit long and is not very memorable. is also available, and I like that it has both my city and service in it.  It’s also shorter and will probably be easier for people to remember.  So that’s the domain I’m going with.

Step 5: Enter your account, package, and billing information.  The top of the page will look something like this:


After you’ve entered your general account information you’ll be presented with package options to choose from.  Select the plan from the drop-down menu that best suits your needs.  There are other upgrades available here to choose from if you are so inclined.  It just depends on what you want and your particular situation.  As for me, I won’t be needing any of these so I unchecked all the boxes:


Finally, enter your billing information and click the green “next” button.

Step 6: You’ll be presented with a number of available upgrades for your account.  You don’t need any of them, but if something looks useful to you then be my guest.  I’ll be skipping them all and clicking the green “complete” button at the bottom of the page:



Step 7: Create an account password.  First, click the blue button that says “create your password”:


Now click the box that says you agree to the terms of service, choose a password, and click the green “create” button:


Step 8: Log in to your account.  Use the password you just created and click the blue “submit” button:


Step 9: Click the “Hosting” tab near the upper-left corner of the page:


Step 10: Click the “wordpress” icon under “website builders”:


Step 11: Install WordPress.  A new tab will open and you’ll be taken to a site called  It should look similar to the image below.  Click on the green “install” button:


Step 12: Click the green button that says “Check Domain”.  Don’t change anything in the dropdown menu!  Just leave it alone and hit that green button:


Step 13: Check the box to accept the terms and conditions and click the green “install now” button.  You don’t need to check the “advanced options” box:


Step 14: Find your blog’s login credentials.  Click the black box in the upper-right corner that says “View Credentials”:


Next, scroll down a bit and click the link that says “View”:


Now you’ll be shown your unique blog login credentials.  This information is very important.  Write it down or save it in a protected spreadsheet!



Your blog setup is now finished.  Woo hoo!  If you had any problems along the way or need help getting this set up just contact me – I’d love to help! Next up: Configuring your new wordpress blog.  Stay tuned…

Please Note: Some of the links above are affiliate links that will provide me a commission (at no additional cost to you). I am not recommending these products and services because of the commission I would earn but rather because I know they are helpful and are companies that I find to be competent and trustworthy.

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Choosing A Domain Name For Your Business Blog

Choosing the right domain name for your business blog is very important.  This is not a decision to make hastily.  The domain name is the one thing about your blog that can never be changed (without doing some url redirecting which is for advanced web experts only). Nearly everything else can be easily edited, fixed, or altered in some way.  Once you’ve registered a name, it’s pretty much a done deal.  So, you’d be wise to make sure you get this step right.

Criteria That Should Be Met When Picking A Domain Name

Every blog expert has slightly different ideas about picking a good domain name, but I’ll tell you the things that I personally take into consideration when I buy a domain name for a business blog.

  1. It should be short, if possible.  Three words or less is ideal.  Four is okay if one of the words is “a” or “in” or “the”.  Any more than four words and it will be hard for people to remember.  Do you really think a potential customer is going to remember your domain name if it’s something like  Of course not.  Instead, Jack would be better served to go with something easier to remember.  Better still:  Which leads me to criteria number two:
  2. If your services are specific to a city or geographic region, then the domain should have your city name in it, if possible.  This, more than anything, is for the benefit of the search engines so that they will send you more traffic and qualified leads.  One of the things that the Google algorithm takes into account when returning results for a search phrase is the text within the domain names of websites.  It uses the logic that if some or all of the text in the domain matches some or all of the text in the search phrase, then it’s a site that is more likely to give the user exactly what they’re looking for (whether it be information, products, or services).  If a user searches for “house painters in Memphis”, then all other variables being equal, Google is more likely to display results that have “Memphis” in the domain name than results (sites) that do not.
  3. It should have your most popular service in it, if possible.  This is for the exact same reason as #2.  If somebody searches for “house painting” in your area and your domain name has the words “house painting” or “house painters” or “house painter” in it then there is a much better chance that Google is going to give you a favorable location in the search results.  The higher you are in the search results, the greater the chance that a user will click on it, which lands them directly on your blog and gives you the opportunity to grab a new customer.
  4. Choosing a Domain Name for your BlogTry to get a .com, and stay away from hyphens.  Domain names that end with .net or .biz or .org extensions are at a disadvantage, in my view, because most people will forget the extension and assume it’s a .com.  If somebody at a party asks you what your website is and you say “HoustonWindowReplacement.NET” (maybe you had to settle on .net because the .com was taken), when that person goes to look for your website the next day I can almost guarantee that they will type in “HoustonWindowReplacement.COM”, which sends them to your competitor’s site, in all likelihood.  Epic failure.  Instead, try slightly different wording and go for a .com.  You could try or or  For the same reason, I recommend staying away from hyphenated domain names.  Nobody will remember the hyphen!

It’s not always possible to nail all four of these criteria, but get as many as you can.  Some of these things might sound nit-picky, but it can mean the difference between a blog that just sends you the occasional lead and a blog that takes your business to a whole new level.

“But These Blog Name Ideas Aren’t Cool…”

It seems like I hear this a lot.  People think their blog domain name has to be clever or cutesy in some way, but for a business blog that targets a specific geographic region or service this simply isn’t the case!  In this situation you’re not trying to become the next big blogger about sports or politics or entertainment (in which case a more brandable name would be understandable); you’re simply trying to pull in more local leads for your service business.  Sticking your city name and service in the domain name might look a little ugly and weird at first, but it’s a necessary evil in my view.  Sure, if you can find a way to meet all of the above requirements AND make it sound good, too, then go for it!  But, I think you’ll find that this could be difficult.

Alright, so now I want you to write down a list of five or ten potential domain names for your business blog that meet all or most of the above four rules.  If you missed the first post in this series, then I recommend you go back and read it: How To Start A Successful Blog For Your Business.  If you have your list of contender domain names then you’re ready to move on to the next step in this series: Registering A Domain Name and Setting Up Blog Hosting.

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How To Start A Successful Blog For Your Business

Usually when I tell contractors and service providers that they should start a business blog they look at me like I have two heads.  I think most people hear the word “blog” and associate it with politics, entertainment, or sports, but the truth is that blogging is one of the best kept marketing secrets of successful small business owners.  It is, hands down, one of the most effective and efficient methods you can employ for growing your business.  Intrigued?  Read on.  I’m going to walk you through the entire process of setting up a blog that gets superior results.

But, you might ask, what qualifies me to speak with authority on this subject?  Simple. Because I AM an authority.  I have started dozens of blogs over the last several years for a variety of ventures and purposes, and I know from experience what does and doesn’t work.  I also know that there’s a right way and a wrong way to set up and promote a blog.  I feel like I’m getting ahead of myself.  First, let’s address that question that is probably already on your mind: How on earth is a blog going to grow my business in any sort of meaningful way?

Blogging For Your Business Can Hook Boatloads Of Leads

Hooking Leads With A Blog

Consistent blogging is one of the smartest ways to hook leads for your business. With every post you write you are essentially throwing a new line in the water. More lines equates to more leads. It’s simple math.

I want you to imagine all the potential customers in your city as fish in a lake.  You are the fisherman, sitting in your boat, and you’ve just cast your line into the water.  A single rod and reel.  A lonely worm wriggling on the hook beneath a bobber. Though you know the lake is teeming with fish, there are only so many you can catch in one day with one rod and reel. You go home that evening with four respectable catches, but nothing to brag about.

The next day, determined to catch more fish, you take ten different fishing poles with you. You stick a worm onto the hook of each one and cast all ten lines into the water, all in different directions off the boat.  Not surprisingly, by the end of the day your boat is literally overflowing with with new customers (ahem…I mean fish).

Okay, so this analogy is a bit silly, but it’s an illustration of how active blogging can pull in boatloads of new leads for your company.  If all you have is a one-page website, or if all you’re doing is relying on your facebook page to hook leads, then you’re the fisherman who only has one line in the water.

On the other hand, if you have a company blog set up and actively write new posts week after week, then you are the smart fisherman with many different lines in the water at the same time.  With each new blog post you write, a new line is cast into the lake.  I’ve worked with several contractors who have consistently added to their blogs for years, and literally have hundreds of different posts.  That’s a lot of bait in the water!

Search Engines Will Send Traffic And Leads To Your Business Blog

I won’t get too much into the geeky details here because I don’t want to lose your attention, but basically this system works because of the search engines (most notably Google).  When you publish a new blog post it gets indexed by Google.  It puts more skin in the game for you as far as the search results are concerned.  If, for example, you only have a one-page, static website then there are a limited number of search phrases that are going to pull up your site in the results.  But if you have a blog with dozens or even hundreds of posts then the chances of one of them being displayed in the search results for any given phrase are exponentially better.  In essence, it casts a wider net and provides a much greater opportunity for potential customers to find you on the web.

And, yes, people really do look for contractors and home improvement advice on the internet.  Lots of people, as a matter of fact!  Many people, myself included, don’t even use their phone books anymore.  When they arrive at my doorstep every six months I throw them directly into the recycling bin.  When I need something I go to the internet first.

Here’s an example.  Let’s say I’m a homeowner and I have a plumbing issue in my home. The kitchen sink is clogged and I don’t know how to fix it.  I go online to and search for “how to clear a clogged drain in the kitchen”.  The search results pull up and I see that one of them is a blog post titled “How To Unclog a Kitchen Sink” (I see the worm dangling in the water, to continue with our fishing analogy).  I can also see that the web address of the post has the name of my city in it (we’ll dive into this part more later), so I click on that result (I take a bite of the worm and a hook snags me).  This is a very possible scenario, by the way, because Google often tailors results to your exact geographic location, whether you know it or not.  Now I’ve arrived at a post that perfectly answers my question.  But I realize that it looks like a messy job and I don’t want to fool with it (I’m being reeled in).  I think I’ll hire a plumber to fix it.  Who do I hire?  Well, the plumber who writes this blog sure seems to know what he’s talking about, and his blog sure looks professional, and he provides services in my city.  I think I’ll give him a call for a quote. Oh, there’s his phone number conveniently placed in the header of his blog.  I pick up my phone and give him a call (the fisherman pulls me out of the water and into the cooler I go).

The real beauty of this is that that same worm will continue to catch fish after fish after fish in the future.  Once I’ve written the blog post and published it online it stays there perpetually.  Yes, writing that post took a few hours and I had to take some photos to put into it, but at the end of the day it’s going to pull in leads for my business as long as search engines are in existence.  I work once and reap the benefits for years to come. What could be better?  And we’re just talking about one post.  Imagine if your blog had 20 posts?  Or 100?  Or 500?  Throw more lines in the water and you’re going to catch more fish – it’s simply a numbers game!

Additional Benefits Of Having An Active Business Blog

Taking up more space on the search engines is reason enough to start a blog, but there are lots of additional advantages:

  • An active blog that gets traffic has value.  It is a business asset, no different from the company pickup truck or table saw.  If you sell your business at some point your blog will enable you to command a higher asking price.  This assumes that you’re using paid hosting with your own domain name and not a free blog platform (more on this later).  I’ve personally sold a handful of blogs over the years, and I can attest to the fact that if they are cared for and pull in traffic then they are worth cash money!
  • Your ability to connect with other local contractors increases dramatically. Contractors in other trades will often stumble across your blog while researching on the internet.  Many of them will reach out and contact you through your blog in efforts to swap leads or help each other grow.  Or they may offer to send you qualified leads in exchange for cash (this has happened to me on several occasions).
  • It helps to prove that you are a legitimate authority.  If you have a blog that is chock-full of helpful and and detailed information, it demonstrates to anyone who reads it that you know what the heck you’re doing and you’re not going to screw up a project.  It demonstrates COMPETENCE, which is what consumers really want.  This perception will also allow you to charge a little bit more for your services.
  • Local media outlets may occasionally contact you in an effort to get a quote for a story.  When a local reporter or news writer is researching an item intended for the nightly news or the daily paper they quite often will go to the internet to look for local experts they can quote.  Let’s say the weather is unusually cold and a writer wants to put together a quick piece about how to prevent pipes from freezing and busting.  Odds are good he’s going to search Google for a local plumber who looks experienced and intelligent so he can ask some questions.  Low and behold, he sees a post from your blog in the search results that is titled “How to Prevent Pipes From Freezing in Winter”.  He calls you up, you give him a few helpful tips, and he mentions you and your company in his article.  The next day the article is published in the newspaper and BOOM, your phone is ringing off the hook with new prospective customers.
  • If your blog becomes popular, there could be opportunities to make money directly on the site.  Using a blog to generate leads for your company is the main purpose, but if you really put in the effort over months and years then you will discover ways to monetize your blog’s traffic with ads or by selling products or information on the blog itself.  I won’t get too deep into the weeds with this topic, but take my word for it that having a very popular blog opens up all kinds of new avenues for generating additional revenue. Google AdSense is the easiest way to make money with ads on your blog, but often times you can make more with your own product, ebook, or service that is sold directly on the blog. The majority of you just starting out with a blog will want to focus on harvesting leads for your service, but just keep these other ideas in the back of your mind for the future.
  • Unique opportunities will present themselves out of nowhere.  Having a popular blog literally gives you a global audience, and there’s just no telling who might stumble across it in the search engines.  The blog that you’re currently reading ( is a perfect example of this.  A year or so ago I was contacted by a representative from a major publisher who enjoyed this blog and wanted me to write a book for them about how to become a successful contractor.  I respectfully declined because I’d rather focus my efforts on the blog and not a book, but this is an opportunity that would have never presented itself if I didn’t have a blog.  More recently, a director of programming from HGTV stumbled across my blog and made contact.  Where that could lead is anybody’s guess, but, again, if this blog did not exist I would never have heard from this person.

There are so many reasons to have a blog and so few reasons not to have one.  It’s just a no-brainer, in my opinion, if you’re a contractor or service provider of any kind.  Bottom line: it elevates your profile and can help to take your business to the next level.

Starting A Blog Is Relatively Cheap And Easy

Try Something New To Generate More Business

Both in business and in life, if you’re not willing to try new things then it’s difficult to grow. Starting a business blog might be different than the marketing tactics you’re used to, but it could just be that fresh new approach that takes your sales to a higher level.

But this all sounds like it’s probably expensive and too technical for me to figure out, you might be thinking.  Not true!  Use the host that I prefer for my blogs and you’ll get a free domain and hosting for $3.95 a month.  And if you set things up the way that I’m about to teach you, then you don’t need to know a lick about coding, programming, or web design. If you can type and use a mouse then you can create a nice blog.  There really is no excuse to not do it.  I’m sorry, but if you aren’t willing to spend less than five bucks a month trying something new to grow your business then I don’t know what to tell you.  I honestly don’t.

Okay, sorry for tangent.  Now let’s get to work creating your blog.  In my opinion, there are four main things you can do to give your blog the best chance of success:

  1. Set it up properly.  In other words, don’t even think about using a free platform like or  I’ll explain more in the next post of this series, but take my word for it that you need to use the blogging platform on your own domain with a paid hosting account.  I prefer Bluehost for most of my blogs.
  2. Make it as helpful and useful as possible.  Let’s say you have a deck-building business and your blog has a post entitled “The Pros and Cons of Using Composite Decking”.  A searcher who finds this post in the search engines should read your post and think to themselves, “Wow, that was an amazing post.  It answered my question in detail, it had photos to illustrate concepts, and it even gave me some new ideas and options that I had not previously considered”. Every post on your blog should aim for this high standard of quality.  As with most things, the more effort you put into your blog the more you will get back out of it in the form of new business leads and increased exposure.
  3. Have patience.  It will take time for your blog to really take off and flourish.  If you start a blog on Monday and expect the phone to start ringing with leads on Tuesday then you’re in for disappointment.  It will likely take months of effort before you start to see an effect on your sales.  I’ve noticed that the most successful bloggers are the ones who stick with it for years and just keep writing amazing post after amazing post.  It has a compounding effect that eventually can take a business to staggering new levels of success, but you have to be in it for the long run.
  4. Take guidance from somebody who has already had blogging success. That would be me, of course.  If you get stuck or have a question, leave a comment below or send me an email.  I’m happy to help!  Use Bluehost and I’ll be better able to understand any issues you might have setting things up.

This is the first in a series of posts about creating a successful blog.  Now please read part two: Choosing A Domain Name For Your Business Blog.

Please Note: Some of the links above are affiliate links that will provide me a commission (at no additional cost to you). I am not recommending these products and services because of the commission I would earn but rather because I know they are helpful and are companies that I find to be competent and trustworthy.

Posted in Business Marketing / Advertising | Tagged , , , | 2 Comments

Generating No-Cost Construction Leads Through Realtors – A Tutorial

This is a guest contribution from Jonah Canter of Canter Construction.

When I first started out with my construction company I actually had zero customers. This is a typical problem when you first branch out into the trade and figuring out how to quickly and effectively gain a reoccurring clientele base is a key strategy to success. I didn’t want to spend money on internet marketing nor did I want to go house to house with flyers. I personally find those types of methods land you window shoppers or those who smell blood in the water and expect you to basically work for free. That is not to say that these are not successful for some contractors but I personally did not find value in them.

I had a couple of neighbors who were in real estate and I had learned that they all needed a contractor who could help them when issues came up with inspection reports. The issues themselves range from minor punch out items to major structural issues. They could not find a contractor who was willing to take the small and the large jobs.. They also had a preference for working with one contractor to repair all the items. The less hands in the process the higher the rate of actually getting through to the closing table. So it dawned on me that I should start to develop a strong relationship with the real estate community in my area.


Fishing for Email Addresses

Harvesting the email addresses of local realtors is a smart way to give your business a boost. It could start with smaller jobs, but if you are professional and do good work then it’s just a matter of time before you start catching some real whoppers.

I started out by going onto the websites and manually harvesting all of the publicly available e-mail addresses. One thing I quickly noticed was that not all real estate companies listed their agent’s emails publicly. Other websites had contact forms they required you to fill out in order to get in touch with the agents. Using a bit of common sense and a little bit of searching I realized that companies, in general, standardize their e-mail naming convention.  For example the email may be If you know that this is the naming convention for the end of every email the next step is to find out how they organize the first part of the email address. A search for the company name and any press releases can be helpful. Usually, press releases will contain the name of a person within the organization for contact.

For instance:

For general inquiries please contact

For this example you know that they use first name {dot} last name as their email naming convention. From here you are armed with the information that can help you when harvesting clients at this company. Now you can look at the names of the agents and know exactly what their email address should be.

I organized my spreadsheets by the company names and tailored each of my messages specific to their organization. For instance, I had started work for one realtor and in my pitch to his colleagues I mentioned that I work with other agents at your company. This provided confidence that if Agent A was using me they should inherently trust me and at least consider me for jobs. In total I harvested around three hundred leads and sent each e-mail personally. They were all template driven by company and the copy and paste effort this was much better than using an automated email service. Typically, emails from these types of companies are in HTML format and have a high rate of ending up in a person’s junk mail folder.


Out of the 300 e-mails I had 32 replies. Out of those 32 replies I actually picked up 15 new realtors that wanted me to start looking at jobs for them. You may think that is a small percentage at 5% (15 realtors) but that is actually a wonderful response rate and actually 10% if you include everyone who responded in general but may have not given me immediate work.

The immediate impact of this was not apparent until I realized how my network expanded. Agents who were on the buying side and had no knowledge of my company were now hearing that my company was doing the repairs. So I not only gained the selling agent but also work from the buying agent. In the middle of all of that were the customers, both buying or selling who potentially would provide me with more work. It was a wonderful situation to find myself in because in a lot of cases the clients buying the house had ideas for what they wanted to add or update and I was the first person that came to their mind.

In the example above, the one realtor contact I made actually gave me the opportunity to put my company in front of three other people. And at only 15 realtors, say giving me only one job each, that has a potential for 45 new jobs. I can also tell you that if you impress a realtor they will always use you for their own clients, refer you to future clients or within their own internal network of agents. So the benefits of harvesting real estate leads are exponential.

This process lends itself specifically to General Contractors because they are capable of doing a wide range of trade work for customers. Specialty contractors may find results that vary from what I have mentioned since they limit the amount of work they may be able to perform.

I have found no better way to quickly gain leads at zero cost. The key to this is taking the time to compose a direct and professional email that targets what realtors are looking for. It also helps out to have a website with pictures of your work and client testimonials. On my website I also included a tab that was specific to realtors and the needs they have. Remember, they do not know you from Adam so placing silent reminders that you are professional and trustworthy will go a long way in your pitch.

Jonah CanterJonah Canter is the owner of Canter Construction, a full service building and remodeling company. For more information on this article or for general questions you can reach him directly: or visit his website

Posted in Leads | 2 Comments

Funding Options for Small Businesses and Contractors

Deciding to start your own business isn’t a decision to be taken lightly or one that you decide upon like adding items to a grocery list (hopefully!). So it stands to reason that if you are ready to move forward with a business venture you’ve given a great deal of thought to the specific risks and benefits of ownership. Obviously one of the biggest details to deal with whether starting a business or operating one after 20-years is always money. If you’ll be building from the ground up, financing is of the utmost importance as the decisions you make can ultimately be a huge factor in whether you are successful or not, plus giving you a more solid-foundation to grow upon. Maybe you’ve just received a generous inheritance from Great-Aunt Hester and money will be no issue for you, but for the other 98% of entrepreneurs, it’s a huge source of anxiety. Let’s look at the ups and downs of the most viable options, which will help make it clear what will be the best decision for you and your business.

Personal Funds

This is perhaps the easiest source of money to deal with but the hardest to secure. If you’ve known for years that owning a business is your life-long goal then hopefully you’ve had the insight and ability to save towards its creation. This would obviously lend a huge helping hand towards the financial ability to start a business. If, however, you’ve only recently made this decision, you might not have a huge chunk of change lying around, or it might already be designated for a dream home or a college fund. If you’ll be starting slowly, as a weekend handyman, you can probably get by on your own money, even if it’s a little at a time, but if you plan to work exclusively at your trade then the cost of tools, vehicles, advertising materials, employees, insurance, and possibly an office can easily deplete even a pretty “padded” savings account.

If you do elect to use personal monies, keep in mind the need for cash flow and emergencies. While you are just beginning, chances are it might be a while before you have a steady source of income as you are trying to build up business and it takes a while for payments to be received, so make sure that you don’t totally deplete your day-to-day money, particularly if you also have to live off of it. It’s no fun to use every dime you have to keep a business afloat while the lights have been turned off at home or you can’t afford to send your child on a school field-trip. In case you haven’t already learned this in your personal life, owning your own business will be a great introduction into the reality that things will always go wrong, break, blow-up, or fall-thru at the most inopportune time. This is simply a fact of living and can’t be avoided, but it can be prepared for, so resist the urge to spend all of your cash up-front and make sure to leave some stashed for an “emergency fund.” Maybe you’ll be uninsured for a while and end up needing stitches, maybe your only nail gun falls off a roof, or maybe you get a little excited and dig through someone’s buried cables, the scenarios are endless but you can guarantee there will be unexpected and un-planned expenses so do yourself a favor and have a little cash to cover it.

Under the personal funds umbrella there is also the option to borrow from a private source, such as a parent, sibling, friend, or business partner. This is a great option to secure cash without the hassle of a bank and legal stipulations however it can be extremely risky to the health of the relationship. You’ve probably always heard that “money does funny things to people” and while you might have bummed lunch money from your brother or buddy a time or two, this would be more than a $10 loan. Carefully consider the ramifications of this situation if for some reason you cannot repay the money, or at least in the time or amounts expected. What would this do to your relationship? Would the insult to your pride be worse since it’s a personal acquaintance? How would that person handle the situation? Also, make sure you consider how secure their source of funding is or how trustworthy that person is in general. While many people use this option and it certainly can be a useful tool, just make sure you have carefully considered and thought through this before making any decisions you might come to regret.  If you do decide to borrow from a personal source, draft a contract with an attorney or have an agreement notarized to make the terms you’ve decided upon legally binding and secure.

Business Credit Card

According to the commercials on TV, a business credit card is a guaranteed way to have business success and peace of mind, or at least that’s what they portray. While a business credit card can be very helpful it might also be the easiest way to get in over your head if you aren’t careful. As opposed to pulling money out of your bank account, which will continue to deplete and you’ll see the difference, it’s much easier to swipe a piece of plastic over and over throughout the course of a month, not realizing how much you are adding up to be due at once. Now if you are the type of person who uses a card and pays it off every month, then you could truly benefit from a business card, particularly if you shop for a rewards program. Depending on your needs, you could be earning towards a new vehicle, airline tickets, or simply cash back every time you buy a box of nails, which is a great way to maximize the benefit of a credit card. What the credit card companies are hoping, though, and the trap that so many fall into, is that you’ll be lured in by the promise of rewards and purchasing-power but then overextend yourself and be forced to pay in installments, which are penalized with extremely high interest rates. A credit card is a great tool to have on hand in an emergency situation where you can’t easily access cash or to give yourself a “cash advance” until the checks come in at the end of the month, but do proceed with caution as the interest rates are staggeringly high, sometimes 3xs the amount a traditional loan would charge. If you have problems managing your money or limiting spending, use extreme caution before taking this route.

Business Loan

Depending on the size of your business and the scope of start-up costs, this is a great option for someone looking to making the leap to fully self-employed. If you’ll need to purchase several thousand dollars of equipment, materials, or space, this is probably your best bet, although it will require a formal process to satisfy loan requirements. Most banks will want to see a business plan and documents to support your claims of why you deserve the money and how you plan to use it, so you’ll have to do more advance planning and paperwork. You will also have to be willing to answer a lot of questions about your financial standings and provide details about the things you owe and own. This isn’t always a very fun process, particularly if your financial snapshot is a little less than rosy or you’re recovering from a rough patch. Keep this in mind if you can afford to wait a few months to, say, improve your credit score or pay off outstanding debts, if you’re concerned about your ability to qualify for a loan. A bank loan is easier to manage though as you’ll have a specific amount due at a specific time for a specific duration, which makes budgeting easier for someone who struggles to do so. It is also a secured loan and insured by the bank, meaning that the funds can’t simply “disappear” as opposed to if you are borrowing from a personal acquaintance.

Many banks offer programs specifically for small-businesses and start-ups, understanding there is a special set of needs and challenges. There are also grants and federal programs that offer assistance to entrepreneurs with financing, counseling, and management. Research options that might be available to you on a local, state, and federal level. These would be great supplements in addition to any bank financing you might have or need.

Line of Credit

If you are already established in business but might have a huge purchase to make, are looking to expand, or have hit a rough patch, a line of credit is a good option for a little extra cash. Similar to a credit card in that you can “charge” what you need, it usually has a lower interest rate and might not be as enticing to “over-indulge” with. The major drawback with a line of credit is that banks generally will only extend these to lower risk businesses or individuals, meaning those with solid credit scores, an established payment history, or who have been in business long enough for the bank to assume they are secure. If you have an established history with a bank or a banker personally, they might be able to help you secure a line of credit even if you do have a few dings on the credit report. Once you have a line of credit, they also provide a sense of security for unexpected and emergency expenses as you might not have the thousands of dollars on hand needed to replace a costly piece of machinery, but would be able to purchase it through the line of credit and pay it off either in lump sum or at the monthly installment date.

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Direct Mail Postcard Marketing Tips and Strategies

It’s difficult to grow a business if no one knows you’re in business, so spreading the word is crucial to your success. Many contractors forget that advertising is so important and simply assume that word will travel on its own. Unfortunately, it usually does travel exceptionally fast if it’s something negative. Otherwise, people are pleased with the results and it might just slip off their radar until someone specifically asks who remodeled their kitchen or built the awesome deck in the backyard. Considering this, you need to make sure that you take proactive measures to promote yourself in a positive and reliable way. In today’s society, there are endless means of reaching a customer, but some are a bit more suited to one need or another. So we will discuss a tried-and-true method that is a viable option for almost every kind of contractor or service provider.

Many things are handled in the digital world nowadays, and if you have a cell phone and a computer, you undoubtedly get email ads and text notifications from stores. While this is great for a products such as clothing or food, you probably aren’t going to send out a text telling customers that they can show that message to receive a free tub-caulking. The first consideration in any advertising situation is the audience; how best to reach the specific people you are targeting. Obviously in your line of work, you are targeting home owners, and perhaps property management companies, who are able to pay for the work (hopefully). This means it will probably be a slightly older customer you are trying to reach so an actual piece of mail is a great way to reach that demographic. Less likely to rely solely on digital media, an older customer base still reliably checks their mail and reads their newspaper, and gives them greater credibility than other forms of advertising, so a direct-mail piece is a great option to reach these folks. (And by older, we aren’t referring to 98-years-old, but 30ish and above. Old enough to own a home and be responsible about paying the bills and general upkeep).

Chances are you’ve gotten many direct-mail pieces over your lifetime promoting various services and causes. Any responsible person will check their mail and at least flip through the pieces to make sure they aren’t missing a check or, more often, a bill. This is your opportunity to grab their attention. Bright colors and bold text are essential to stand out in a sea of papers so consider a neon shade (safety yellow, anyone?) or a solid red or other striking color. Make the first words they see catch their eyes with suggestive questions or statements like “Did you know that little roof leak could land you in the hospital?” or play up the time of year with “That tax refund would look great as a new and improved patio, kitchen, etc etc…” Coupons and offers are always a great way to give customers incentive to use your services. Consider offering a discount on a specific service, a package deal for “Spring Cleaning”, or promoting that you always provide free estimates.

This probably seems a bit intimidating to someone who has never done a formal advertisement, but another perk to using a direct-mail option is that you’ll have help from whomever you select for the service. Most newspapers offer a direct-mail option which is a great way to be a bright-and-early reminder of their need for a reliable contractor. Using this option, and depending on the local paper in your area, you can generally select the day of the week you’d like to be included in the paper as well as a specific area or zip code for delivery. Generally you will pay more to be in a weekend edition, particularly the Sunday paper, than a weekday press, but there are pros and cons to each. Work with the advertising consultant at the paper to determine what options are available to you and would best suit your needs. Many places will offer bulk discounts for inserting a higher number of mailers and/or having a larger number printed up. Even if you only plan to distribute a few thousand, it might be worthwhile to have more printed initially to achieve a lower “per-item” cost, and then you could run them a few additional times in the paper at a later date, or keep them to personally hand out at bids or with potential clients. There are many private services that also offer direct-mail, which would generally be delivered in the actual mail. A quick internet search will help you identify many of these or if you already get direct mail pieces, look at the fine print for information about the publisher and how to contact them. Keep in mind that most places will have a minimum requirement, either in dollars spent or in total number of pieces printed or distributed, so don’t think that you can only send out 50 at a time.

As a good advertising consultant will tell you, frequency and repetition are essential for print-advertising success. While this probably seems like a sales tactic, it truly is better to budget your money to send a smaller number of ads, several times than thousands of ads, one time. It’s just like studying for a test, the more often you see something, the more of a presence it builds in your brain. Plus, even if your piece gets thrown away or overlooked the first time, the more chances you present to be seen, the greater your odds of, well, being seen. You also create a kind of rapport with people when you’re persistent. How many of us have declined a product or service the first time but when the same salesman keeps asking, you eventually feel more inclined to listen because they obviously have something to say that they feel is worth working at to get you to listen. People start to think “This is the third time I’ve gotten this. I wonder what it is.”

Many people forget how essential advertising is to their success and cut it first when the budget gets lean. It is somewhat of a catch-22 situation when funds are limited but you can’t increase those funds without people wanting your services, and they can’t want your services if they don’t know they are available so plan wisely to accommodate for advertising and promotion.


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Sole Proprietorship vs. LLC vs. Partnership vs. Inc.

When launching your own business there are many decisions to make ranging from minute details to “make-or-break” enormous ones. Will you have an office location? Will you hire an accountant or bookkeeper? Will you have red or blue ink on your business card? Will you work only on weekdays? Will you target residential or commercial customers? The list goes on and on. While some of these decisions will have a small impact on the future of your enterprise, reaching a conclusion about your business model and ownership structure is one of the biggest and most important decisions you’ll have to make.

Maybe you’ve totally got these decisions in the bag and know exactly how you’ll move forward, but for many entrepreneurs this process can seem confusing and overwhelming. Not to be misleading, these are huge decisions with many little details woven throughout, but it’s not nearly as intimidating as you might think if you just have a little background knowledge. Luckily for you that’s exactly what you’ll be armed with after reading this post.

Sole Proprietorship

As opposed to many of the other terms and options, the name here kind of explains itself. If you plan on being “where the buck stops” then this is the structure for you. As owner, boss, manager, foreman, or whatever term (or combination thereof) you’ll call yourself, you won’t have to debate decisions with anyone or worry about their standards and performance, because if you find yourself displeased with someone’s actions or performance, you’ll have the ability to dismiss them without repercussions. That sounds like an easy way to avoid conflict and it can definitely have its advantages, but on the flip side, don’t fool yourself into thinking it’s always easy to be flying solo. What happens if you’re sick or injured for an extended period? There is no one there to automatically pick up the reigns and move forward. What happens if you’re facing a major decision? While you don’t have to answer to anyone else, you also don’t have anyone else to share in the weight of responsibility. Maybe you’re really good at pouring footers and driving nails but your people skills are a bit rusty at best…as sole proprietor you’ll still have to be nice to the occasional customer-from-hell and deal with trying to convince people to select you during the bid or initial consult. In many instances, contractors simply have no need or desire to move past sole proprietorship, but do be aware that being the boss isn’t always easy; that even if you’re on vacation, you’re still technically on call and that you are responsible for making sure all the bills get paid. However, there is undoubtedly a huge sense of pride and accomplishment to say you built a business from the ground up, on your own.


This name is also pretty indicative of what you could expect as you’d obviously be working with one or more partners. When compared to a sole proprietorship, everything about a partnership is pretty much the exact opposite, for the good and for the bad. There are a few specialty types of partnerships, but for the purpose of this article we’ll assume you’re only interested in a general partnership, which basically means you would be required to share profits, decisions, and ownership with at least one other person, which can lead to disputes and confrontations when you inevitably butt heads over a tough decision (surely contractors aren’t ever stubborn though, right?).  Many times partnerships are formed when one person has the start-up funds but doesn’t want to actually handle the day-to-day work, while the other person (or people) have the ability but not the money to begin. This might be your scenario or you might be working with a spouse, friend, or sibling in completely equal roles. It is comforting to know that there is someone else’s shoulders on which burdens can rest, but partnerships have the potential to end very badly if someone becomes upset or feels they have been cheated. For you and your partner(s) protection, spending a few extra dollars to have a legal partnership agreement detailed, defined, and drawn up by an attorney is an irreplaceable investment.  You would like to think that a handshake would be enough but, unfortunately, as with marriage, no one sets out in a partnership hoping or expecting it to end miserably, but they sometimes do and it will be to the benefit of all parties involved if you have a clearly drawn-out plan of what the responsibilities and rights are.


Don’t be intimidated by these initials, they simply stand for “limited liability corporation”. Obviously the sound of being limited on your liability seems like a win-win, but there is a little more to it than that.  The biggest advantage of operating under a LLC is that you, as a person, are protected, because you are legally viewed as a separate entity from your business, whereas in a sole proprietorship or partnership you are seen as belonging in and of each other, meaning that if your business defaults on a loan or goes bankrupt, the bank or financiers can legally assume your personal assets, essentially meaning you could lose your home to pay off your business debts. This obviously is a huge benefit should something go wrong or end up less profitable than hoped for, however, all of these extensive legal details mean exactly that: there are more extensive legal details. LLC’s are more complicated to establish and will require more formal processes as there will be more paperwork to fill out and file, plus extra precautions will have to be taken to make sure that personal details, business, and money are kept entirely separate from business ones. (That whole “being protected” thing becomes much less reliable if a bank or court can’t see where your personal money ends and the business money begins.) It is also a much more formal organization where there can be partnership or ownership interests, which can be sold. This obviously means more money available for operating costs but increases the complications when dealing with legal matters or disputes about decisions. LLC’s will provide some tax advantages, though, as you will only be responsible for paying taxes on the portion of your income as opposed to having to pay the total amount of tax on profit generated by the entire business when you are a sole proprietor.


There are two main types of corporations in the U.S. today, an “s-corp” and a “c-corp”. The most common type of corporation in our market is the c-corp, which provides similar benefits of an LLC in that you are shielded as a person from any judgments or rulings levied against your business. Corporations are obviously much more complicated business structures as they have shareholders and generally stocks for sale. This obviously isn’t a simple business model that would apply to “Joe’s Home Repairs” but if you’ve been in business for years and have created an impressive network of contacts and investors, you might consider moving into this business model. There are two major differences between the “s” and the “c” type corporations. First, a c-corp is usually larger, having an unlimited number of shareholders, although there are regulations on how many you can have before having to file with the SEC, the nice folks who regulate our stock exchange. In an s-corp, which is usually a smaller business, you can only have 100 shareholders and one class of stock. The second major difference is how you are viewed for taxing. Many businesses choose to be an s-corp because they can avoid the dreaded “double taxing” of a c-corp. In an s-corp you would only be taxed on the income you personally gain from the business, while shareholders also have income and losses through the business, meaning the burden of taxation is distributed among yourself and anyone else who has a stake in the business. In a c-corp however, profits are taxed when earned and then are taxed again when passed along to shareholders in the form of dividends, where shareholders cannot claim any corporate losses to offset the tax burden, as opposed to an s-corp.  Corporations do have more power and credibility as they are usually such large business entities and have such huge earning potential. Obviously these business structures are not for the faint of heart or the first-timer, but it’s also useful to be armed with a better understanding of the business world around you and to know what you could potentially grow into.

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Writing a Business Plan – For Beginners

So you’ve decided to make the leap and after all these years of being “Mr. Fixer-upper” you realize it’s time to let those handy-man skills start truly paying for themselves. Plus, you think the idea of having a business card with your name as owner is pretty darn awesome. So you’re actually going to start, or legalize, your business and you’re really excited, but what exactly do you need to do to make that happen? Well there are lots of steps and things to consider but first and foremost, you need to lay some groundwork for the future. It’s hard to find a new destination with absolutely no directions, map or GPS and setting out on a business venture is very much like this. If you are hoping to end up at the intersection of profit and success, you need to know the exact way to get there and an invaluable guide to reaching those goals is a business plan. A business plan in no way will guarantee that you’ll never have any issues and that what you think is a great idea now won’t change in 6 months or 6 years down the road but it’s a great place to outline the direction you’d like to see your business take plus can help you think through some issues on the front-end that could be much more problematic if they arise unexpectedly.

Luckily for you, our buddy “Pete” is in the process of writing up a business plan and has agreed to let us peek over his shoulder as he goes through the steps. Pete has been doing little side jobs here and there for years but is ready to be his own boss and step up his earning potential. Pete has successfully completed the steps of becoming a licensed general contractor and is now ready to start building his home-remodeling business from the ground-up.

Initial things to consider…

Pete will be undertaking this venture by himself, but it’s important to know at the very beginning how your ownership will be structured. Will you have a partner or co-owner? Will you be the “sole proprietor” listed on all formal documents but have a spouse, sibling, or friend who you share all of the major decisions and responsibilities with “off-the-books”? Obviously if more than one owner/partner is involved, the major issues are usually responsibility, power and division of earnings. It’s understood that sometimes relationships just don’t work out, whether personal or business, so the decisions you make today can obviously change tomorrow, but making it perfectly clear who does what and who owns what at the beginning of a business’s life can greatly reduce the chances of issues or upset later.

It might seem petty or even funny, but another major decision is the name of your business. Maybe you want something catchy or witty, maybe you just want something simple, or maybe you’ll simply use your name, which is what Pete will be doing. Either way, make sure this is something you’re comfortable saying many times a day and being represented by. Not to be pessimistic but also consider that if you will be sharing the ownership with another person and both of your names are involved in the business’s name/title, if there were an issue someday, it could mean lots of extra legwork to get their name removed, plus the added embarrassment of having to potentially change logos, cards, materials, or simply explain it to customers. This is obviously a worst-case scenario but bear these things in mind.

Pete has been squirreling away money for several years with this possibility in mind and has a nice chunk of change to purchase a few extra tools and a designated work truck. If however, you need a little help from a bank, investor, or well-to-do friend a business plan is a crucial tool to proving your case for funds. Banks will almost always require a well-written and thought-out business plan to help them decide whether or not your business is credible, you truly understand the risks and necessary steps of operating it, and to determine your abilities as a manager. Any private investor or financier who is responsible and of good business-mind will also want to see your detailed plans for the future, because honestly, who enjoys loaning money to a friend or family-member and then being taken-advantage of or not getting repaid?

Designing a detailed plan…

Since these crucial steps are out of the way, Pete is ready to dig into finer details of business planning. Since he is much more comfortable with blueprints than business plans, he has asked a friend with years of banking experience to help him draft and finalize his plan. There are plenty of online guides and templates available if you’d like to complete this yourself or you could ask a friend or even attorney. There is no specific formula for the length or detail of a business plan but you would do yourself a favor to really think it through and cover all aspects possible, as opposed to sketching out a few lines of notes on the back of a napkin.  There are also several organizations available to help small businesses or entrepreneurs as they start a business. The U.S. Small Business Administration would obviously be the biggest and most credible of these, with lots of online resources and guidance to local assistance, but there might be other smaller, more locally-based organizations in your area as well if you simply check into it. Don’t be afraid to ask for help, especially from people who are willing to help and have first-hand experience with what you’re going through.

Pete’s banking buddy explained to him that most business plans will deal with the short-term future, generally planning for the upcoming 3-5 years. The overall goals of a business plan are to outline what the company will do, how they will do it, who they will be competing against, how to advertise or promote their business, and the structure or organization of the business itself. A well designed business plan will have easy to read and understand sections that address all of these issues in an organized manner. The Small Business Administration has very helpful resources that explain easy ways to design, organize, and explain your content, as well as an actual step-by-step tool that helps draft the plan itself.

The essentials…

Whether you plan to have a very formal plan with details down to the type of nails you prefer and where you’ll buy them or a broader overview, there are a few topics that rank a bit higher on the priority list of things to consider and outline.  As previously mentioned, management and organization are crucial to discuss and plan for. Pete will be making all decisions and handling all the day-to-day responsibilities himself, so this makes things a bit easier for him. If you will be working with someone else make sure the roles and responsibilities are clearly defined for your benefit, as well as that of the other partner and the understanding of any investors. No one will probably have to remind you that making money is of utmost importance so another crucial consideration is income, profit potential, and how much you might need to get your business off the ground. Banks in particular will be highly interested in your reasoning for how much you need to borrow and how you’ll manage it once it’s loaned. They also will want to know more detail about what areas or markets you’ll serve, how you’ll set yourself apart from and compete with other businesses of a similar nature, and the projections you can offer for future income and growth potential.

Pete was also encouraged to consider how he’ll “get the word out” about his business and services. Many old-school craftsmen might overlook this consideration but it’s important to remember that a business with no customers can’t succeed, no matter how great their product or services. While designing your business plan, it’s important to think on these things and outline what methods of advertising will be best for you. Obviously in contracting, there’s an undeniable benefit to word-of-mouth referrals so encourage any clients to speak highly of you and your skills when you complete a job to their satisfaction (you might even consider a referral bonus or discount.) Will you have a website featuring pictures of your handiwork? Will you advertise in local papers or publications? Are you or will you become involved in local business organizations such as the Better Business Bureau, the Chamber of Commerce, or a builders organization? These are all important things to consider and detail in your plan.

After a couple of revisions, Pete and his friend feel confident in the business plan they have produced. Consider printing and putting together a couple of copies, one for more easier access and frequent reference, and one to be kept in a safe or protected area. Consider including permits, contracts, licenses, and other official documents in this copy so you’ll always have a central location for relevant documents. You might also need or be required to leave a copy with an investor or bank so plan for that as well.

It might seem a bit tedious at the beginning and if you are like Pete, you might have grumbled a bit about having to spend that much time thinking and writing, but the most successful business people realize that planning and preparation greatly increase your chances of success, no matter the industry. It’s guaranteed you’ll thank yourself later if you take the little extra time and attention required to hammer down the details before you start hammering down the nails.

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How To Get A State Contractor’s License

Maybe you started out as the household handyman and slowly developed a knack for plumbing or maybe you apprenticed as an electrician from your teens, but either way you have honed your skills to that of a true craftsman and realize it’s time to step up your game. Whether you are or are considering becoming a general contractor or a specialized trade, getting your contractor’s license can substantially increase your trustworthiness to prospective clients, not to mention boosting your business potential from weekend spending money to an impressive annual income. This isn’t something to pursue lightly though as the licensure process requires a great amount of dedication, studying, and follow-through, as well as meeting certain stipulations and paying for the testing and/or certifications. Hopefully this article can help shed some light on a somewhat-intimidating process and help you feel better prepared to don your thinking cap (or hardhat).

Do I need a license?

First and foremost, what are your business aspirations? Are you content to be a weekend warrior who slaps up a few coats of paint or fixes the elderly neighbor’s leaking pipes? If so, you’re probably fine just to run a side business. If however, you want to focus on your trade as your primary source of income or increase your business reputation as a solid and reliable company to do business with, a contractor’s license can prove invaluable. Most states have certain stipulations as to what actually requires licensure in regards to the dollar amount of the job at hand. Some states identify certain project costs as a requirement for licensure while other states have classifications of responsibilities and the extensiveness of the project to deem what license would be required. As with most things you can find plenty of companies online that are there to help “ensure” you can pass the tests but the most reliable place to find out the ground rules are with the actual state you hope to be licensed with. All states have a government appointed board or commission of some sort who are in charge of licensure requirements, testing, and certification. It’s fairly easy to find these with a simply internet search based upon your state or the state in which you hope to be certified. Make sure you fully understand any and all fine print in regards to your actual trade. For example, many states have a set of requirements to be a general contractor but slightly different terms for a subcontractor trade (such as masonry, electrical, plumbing, etc.) or to be a construction manager. Some offer “umbrella” licenses, some require independent certifications. It might seem tiring to read all of the legal wording and boring government documents, but being completely armed with the knowledge of what you need to do and how to do it is crucial to your success in the licensure process.

How do I get a license?

Again, this will vary hugely from state to state, but all states have a very set process which you’ll have to follow in regards to your testing and approval for licensure. This information can also be found usually found with the standards and requirements for applying so as you search out the fine print of what is required to be licensed, also make notes on this process as well. If you know of or are friends with a reputable contractor or someone who recently received their license, they could also be very helpful in guiding you in the process. Back to those internet companies…There are numerous institutions and websites who can help you prepare for the testing you’ll have to complete. Some are solely internet based, some mail out materials, and some offer classroom instruction. You definitely don’t want to go take the test and be totally unprepared so finding some sort of study help and guidance is highly advisable. However, make sure that you are dealing with a reliable source and not “Joe’s Contractor License and Cosmo School”. Obviously there are lots of businesses that would love for you to hand over your credit card information so they can help you prepare for the test and then they prepare to max out your card, so be aware. In general though, you’ll be able to tell the reputable businesses by their standards and the materials they can help you study with. It is definitely not a requirement to use an outside study-source to be able to pass the tests, but if you are the kind of person who just knows how to get jobs done and isn’t so familiar with formal rules and regulations, this could really be an asset in helping you prepare. If you aren’t interested in an outside source, consider again asking a friend or mentor for direction as well as looking on your governing state’s website for study and reference materials. Most libraries and bookstores will have general resources as well.
There will be certain applications, paperwork, order of procedure, and deadlines for each state so make sure, again, that you know the requirements and what papers need to go where and when. The actual testing might take place only a few times a year or in only one or limited locations, so make sure you plan accordingly for these details. Also, make sure that you have your legal details worked out and decided on as well, as you’ll have to apply as a sole proprietor, LLC, etc. and in some cases might have to provide more detailed plans or information on your business’s current standings or future projections.

What benefit will I get from a license?

As mentioned before, if you really want to break into the big-time projects you’ll be required to have a license so that the state knows you are truly competent and clients have a certain standard to expect from your work. You will also be eligible to bid on government, municipal, industrial and private contracts which, we all know, can make serious money or provide long-term on-going work. You’ll enjoy a more respected professional “renown” as people will find reassurance in your abilities knowing that you have met and surpassed the state’s standards as opposed to someone who can only claim their abilities. Also, most companies that offer insurance and bonding look more favorably on a licensed contractor since they can rest assured that the state or governing board has weeded out the most dangerous and incompetent applicants. You also will be provided protection from penalties and restrictions, as unlicensed contractors caught performing jobs that should be done only by someone licensed can be fined, forbidden to continue working, or a combination of the two. Not that most of us don’t bend a rule now and again, but it pays to be on the “up-and-up” in this line of work. Also, consumers aren’t actually required to pay someone who isn’t state-licensed, plus there are certain benefits and assistances provided to contractors who might need help with small business plans, finding insurance, or need mediation to settle a dispute with a client.

I’m licensed, now what?

Start making money! Seriously, enjoy your accomplishment and use it to boost your business as you can now move onto more complicated and lucrative projects. Do not abuse the privilege because not only will your reputation be forever tarnished but if you misuse or misrepresent yourself and/or your business it can definitely end in jail time. In some states, if you bid on a project, collect payment in partial or in full and fail to complete the project within the parameters or the contract or agreement, it can be considered a felony. Also, make sure you are well aware of what will be required to keep your license up to date. Just because you’ve been a well-known contractor for 15 years doesn’t mean that the state will just assume you’re going to continue operating. Different states have different amounts of time before licensure will expire and many states will mail out a renewal reminder or application a few months before expiration, however it isn’t the state’s responsibility to make sure you stay current so be sure to set a reminder or mark your calendar well in advance to renew any and all licenses as needed. Obviously in our digital world, many states have online applications and/or renewals so you might be able to renew your license without ever leaving home. A contractors license might seem intimidating to earn, but it is truly an investment in your future and definitely boosts your chances of success so do whatever is necessary to successfully complete the licensure requirements, to keep the license current, and above all, to maintain your reputation as a contractor.

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Knowing When To Quit Your Day Job

Okay, so it’s fun to think about quitting your day job and starting a new business.  And I remember how good it felt that day I went to my boss and put in my two weeks notice – there’s nothing quite like it.  But, can I be brutally honest?  The truth is that you need to be very smart about how and when to make this transition.  Do it the wrong way or prematurely and you could be setting yourself up for a world of hurt.

To put it simply, if you just drop your job cold-turkey and have no savings to live off of while your new business gets its footing then you are almost certainly doomed to fail, and you could eventually be reduced to begging your old boss to hire you back.  I know that’s not what a lot of you want to hear, but it’s the cold, hard truth.  You absolutely must have some money put aside for life expenses, because new businesses don’t typically spit off lots of cash flow right from the beginning.  There are considerable startup costs that will eat up most of your profits in the early phases.  Tools are expensive.  Trucks are expensive.  Marketing is expensive.  Getting new projects when nobody trusts you yet is expensive.

There’s no hard and fast number because everybody’s financial situation is going to be different, but in general it would probably be a good idea to have enough money set aside to live off of for at least six months before you quit your day job.  So, let’s say you require $3,000 per month to pay all your bills and meet all your obligations.  That would mean that you really ought to have at least $18,000 set aside before quitting your job.  12 months worth would be even safer, if possible.  The more the better.

I’m sure some of you will read that last paragraph and think that I’m crazy, but take it from somebody who has been there – your profits will be minimal in the early stages, no matter how good things are going!  The startup costs and investments will pretty much devour most of your profit and cash flow.  And keep in mind that if you want to grow as a business then you will need to re-invest a healthy chunk of your profits back into more marketing, more equipment, more people, etc.  If you start taking out too much cash for yourself right from the get-go then you will starve your business to death!  It needs money to grow and prosper.  That’s why it’s so crucial to have backup savings to live off of. Give your business a fighting chance!  The idea is that after six months or a year things will be really rolling and you can then afford to start taking a healthy salary for yourself that will meet your personal financial obligations.

Perhaps you’re thinking that either (A) you’ll go insane if you have to stay at your job full-time for another 6-12 months or (B) you’ll never be able to save up that kind of backup cash before starting the business.  I hear you.  It’s understandable.  In this situation I would try to find some kind of half-measure to make it work.  Do you have the kind of job where you can slowly wean yourself off as your business takes off?  Cut back from 40 to 35 hours, then down to 30 hours a few months later, then down to 20 hours a few months after that, all the while building your business in your spare time.  That way you’re not totally cutting ties with that weekly paycheck until you’re absolutely sure that the business is going to make it.  I’m not going to lie – it will be hard to keep your day job and launch a contracting or service business at the same time, but this is usually the smartest way to go if you don’t have 6-12 months of living expenses set aside.  The alternative, however, is not a pretty picture.  Cut the job off too soon and you could very easily sabotage your new business and your personal finances.  Suck it up, punch that clock for just a little bit longer, and you will be doing yourself and your business a huge favor in the long run.

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