How to Become a General Contractor

A general contractor manages and oversees construction projects, handling a range of responsibilities to ensure everything runs smoothly. They plan the project, manage the budget, and coordinate the work of different teams. They also ensure the construction complies with legal standards, manage the quality of materials and work, and maintain safety on the site. Essentially, a general contractor acts as the main point of contact, making sure the project is completed on time, within budget, and to the required standards. If you wanna know how to start your own construction company, click here.

Here are the easy step by step guide on becoming a general contractor:

STEP 1: Educational Background

First, it’s important to understand what a general contractor does. General contractors manage all aspects of a construction project, including hiring subcontractors, obtaining permits, ensuring compliance with building codes, and ensuring that the project stays on budget and schedule. They must also often interact with clients and resolve any issues that may arise during the construction process.

While you can start in construction with a high school diploma, advancing to a general contractor typically requires more formal education:

High School Diploma or GED

This is the basic educational requirement. Focus on relevant subjects like mathematics and science.

Associate’s Degree:

Focuses on basic construction technology, project management, and technical drawing.

Bachelor’s Degree:

Degrees in construction management, civil engineering, or architecture are highly beneficial. These programs cover project management, construction law, cost estimation, economics, and environmental design.

Master’s Degree:

For those interested in the most advanced positions or running large-scale projects, a master's in construction management can offer deep insights into business management, advanced construction theories, and project control techniques.

STEP 2: Gain Experience

While it is possible to become a general contractor with only a high school diploma and extensive work experience, many contractors pursue formal education. A degree in construction management, civil engineering, or a related field can provide valuable knowledge and make you more competitive in the job market. These programs typically cover project management, construction science, economics, and other relevant subjects.

Entry-Level Work:

Start your career in construction by taking on entry-level roles, such as a laborer or an apprentice. This stage is crucial for learning fundamental skills in specific trades such as plumbing, electrical work, or carpentry, providing a solid foundation in the practical aspects of building and construction.

Progressive Responsibility:

As you gain more experience and demonstrate your capabilities, aim to advance to roles with increased responsibility. Positions like foreman or site manager allow you to develop leadership skills and manage more significant aspects of construction projects, from personnel management to resource allocation.

Internships:

If you are pursuing formal education in construction management or a related field, internships are essential. They provide practical, hands-on experience and help you understand the daily workings of the construction industry. Internships are also a great way to network with professionals and potentially secure future employment opportunities.

Step 4: Licensing and Certification

Licensing:

Most states require general contractors to be licensed. The requirements for licensing vary by state but typically include passing a test, having a certain amount of experience, and proof of insurance and bonding. Certifications, while not always mandatory, can enhance a contractor’s credentials. Organizations like the Associated General Contractors (AGC) and the American Institute of Constructors offer certifications that validate your skills and knowledge.

Certification:

Voluntary certifications can enhance credibility. Consider certifications from:

The American Institute of Constructors (AIC) offers the Associate Constructor (AC) and Certified Professional Constructor (CPC) certifications.

The Construction Management Association of America (CMAA) offers the Certified Construction Manager (CCM) designation.

Step 5: Establishing Your Business or Joining a Firm

Many general contractors operate their own businesses. Starting your own contracting business requires a business plan, obtaining necessary licenses, purchasing insurance, and developing a network of reliable subcontractors. Alternatively, you can gain experience and contacts by working for an established construction firm before branching out on your own.

Starting Your Own Business:

This involves registering your business, obtaining insurance (like liability and workers’ compensation), and possibly bonding. Develop a business plan outlining your services, target market, and financial projections.

Step 6: Continuous Learning and Adaptation

Continuing Education:

To stay competitive and effective as a general contractor, it’s important to keep up with the latest advancements in the construction industry. This includes new technologies, materials, and changes in regulations. Engaging in continuing education courses and staying active in professional organizations can help you maintain industry standards and expand your skill set.

Professional Associations:

Joining professional organizations, such as the Associated General Contractors (AGC) or the Construction Management Association of America (CMAA), is beneficial for networking, gaining industry insights, and accessing professional development resources. These associations play a crucial role in providing members with the tools needed to advance their careers and adapt to the evolving landscape of the construction industry.

Step 7: Reputation Management

Reputation is key in the construction industry. Deliver quality work, complete projects on time, communicate effectively, and handle disputes professionally. Satisfied clients are likely to recommend you to others, which can be crucial for business growth.

Quality Workmanship:

In the construction industry, your reputation hinges on the quality of your work. It is crucial to consistently deliver high-quality results, which involves meticulous attention to detail and the selection of dependable subcontractors. This commitment to excellence helps build a strong reputation that attracts more clients.

Effective Communication:

Maintaining open and regular communication with all project stakeholders is essential. Providing frequent updates and engaging in clear, transparent discussions helps to preempt potential issues and builds trust among clients, subcontractors, and team members.

Handling Disputes:

Professional dispute resolution is key to maintaining a positive reputation. Effectively managing conflicts minimizes project delays and avoids legal complications, thereby safeguarding your business's reputation and ensuring continued client satisfaction and referrals.

General Contractor’s Average Salary

The average salary for general contractors varies widely but typically ranges between $50,000 and $105,000 per year in the U.S., with a median around $75,000. Factors influencing a general contractor's salary include:

Location:

Salaries for general contractors can vary greatly depending on geographic location. Urban areas and regions with booming construction markets like major cities tend to offer higher salaries due to the increased demand for building projects and higher living costs. Conversely, salaries in rural areas might be lower, reflecting the lower cost of living and possibly fewer large-scale projects.

Experience:

A general contractor's earning potential increases with experience. Newcomers to the field might start at the lower end of the salary scale but can see their income grow significantly as they gain experience, develop a robust network, and build a reputation for reliability and quality workmanship. Experienced contractors are often entrusted with bigger, more complex projects that command higher budgets and profit margins.

Project Size and Complexity:

The scale and complexity of the projects managed have a direct impact on a contractor's compensation. Large projects such as commercial buildings or infrastructure projects require a high level of skill, risk management, and dedication, which typically leads to higher earnings. Complex projects involving specialized knowledge or technology also tend to be more lucrative.

Business Ownership:

Owning a construction business offers the potential for higher earnings but also comes with increased risks. Successful business owners benefit from the profits generated by their projects minus operational costs. However, their income can fluctuate more than that of salaried contractors, depending on business acumen, market conditions, and the ability to secure contracts.

How much time is required to become a general contractor?

Becoming a general contractor typically takes between 4 to 8 years, depending on your educational and career choices:

High School Diploma(4 years):

This is the basic educational requirement. During high school, prospective contractors should focus on subjects such as math, physics, and technical drawing, which provide foundational skills useful in construction.

Gaining Experience (3-5 years):

Early career experience is essential for understanding the practical aspects of construction work. During this period, aspiring contractors learn how to manage projects, interact with clients and subcontractors, and handle onsite challenges.

Licensing Preparation and Testing (several months):

The process of obtaining a general contractor license typically involves extensive preparation for state-specific exams that test knowledge of building codes, construction laws, and business practices. This period may also include gathering necessary documentation and endorsements.

Options

With a Bachelor’s Degree:

Around 7 to 9 years total, including education and gaining necessary experience. This pathway includes obtaining a 4-year undergraduate degree in a relevant field such as construction management, followed by several years of industry experience. The degree provides a comprehensive understanding of all aspects of construction projects, including cost estimation, legal issues, and project management.

Without a Degree:

Approximately 4 to 8 years of experience after high school to qualify for licensing. This more flexible path requires gaining extensive hands-on experience in the construction industry. Practical experience is paramount, and obtaining a deep understanding of construction through various roles can substitute for formal education when applying for a license.

The time varies based on how quickly you gain experience and meet your state's licensing requirements.

Expenses Involved in Becoming a General Contractor

Educational Costs:

Associate’s Degree:

Enrolling in an associate's degree program in construction management or a related field at a community college is an economical option that provides foundational knowledge in construction principles, basic engineering, and project management. The tuition range of $2,000 to $7,000 makes it accessible, yet the education received arms students with the practical skills necessary for entry-level positions in construction.

Bachelor’s Degree:

A bachelor's degree in construction management or civil engineering provides comprehensive education covering advanced project management, cost estimation, safety regulations, and legal aspects of construction. The cost, ranging from $40,000 to $100,000, reflects the depth and breadth of the curriculum, which is designed to prepare students for higher-level management roles within the construction industry. This investment not only facilitates a deeper understanding of construction but also significantly enhances career prospects and potential earnings.

Licensing Fees:

A bachelor's degree in construction management or civil engineering provides comprehensive education covering advanced project management, cost estimation, safety regulations, and legal aspects of construction. The cost, ranging from $40,000 to $100,000, reflects the depth and breadth of the curriculum, which is designed to prepare students for higher-level management roles within the construction industry. This investment not only facilitates a deeper understanding of construction but also significantly enhances career prospects and potential earnings.

On-the-Job Training:

Practical experience is indispensable in the construction industry. On-the-job training allows individuals to work directly under experienced contractors, learning the trade in a hands-on environment. This training is usually compensated and helps the trainee gain valuable real-world experience, which is crucial for both practical skills development and fulfilling the experience requirements for licensing.

Insurance:

Liability Insurance:

Liability insurance is critical for protecting a business from claims that could arise from injuries or property damage caused during construction activities. Premiums depend on the level of risk associated with the specific construction activities undertaken and the amount of coverage desired. Annual premiums can start at around $500 and increase based on these factors.

Workers' Compensation:

Required for businesses with employees, this insurance covers medical expenses and lost wages for employees injured on the job. Premiums for workers' compensation insurance are calculated based on factors like the total payroll of the company and the risk level of the work performed, making it a variable cost that can significantly impact a contractor’s overhead.

Additional Costs:

Continuing Education:

The construction industry is continually evolving with new technologies, materials, and regulations. Continuing education is vital to stay current and may involve attending workshops, seminars, or certification courses. These programs vary in cost, from relatively minor fees for short courses to more significant investments for advanced certifications.

Tools and Equipment:

Initial investments in high-quality tools and machinery can be substantial but are essential for effective and efficient construction work. Costs can range from a few hundred to several thousand dollars, depending on the nature of the projects undertaken.

Business Setup:

The costs associated with setting up a construction business include legal fees for business formation, registration with local and state authorities, and possibly the initial setup of an office or storage space for equipment. These expenses can add up quickly, especially if the business aims to start on a solid foundation with professional branding and operational tools.