You know a thing or two about construction. In fact, your knowledge of construction is so substantial that you're looking to become a general contractor.
The question is: how? More specifically: how do you become a general contractor in Arkansas?
We're going to go into that below, explaining the specifics of licensing for general contractors in Arkansas. Let's go!
Do You Need a Contractor's License in Arkansas?
A contractor license is not always needed for a person to do construction in the state of Arkansas. That said, if you're looking to make a career out of general contracting, you're going to need a contractor license from the state.
In fact, a contractor license is required for commercial projects that are valued over $50,000 and for residential projects that total over $2,000 in value. If you can manage less than this on your projects, you could legally work without a license. However, since obtaining a license is easily viable, there's no reason to subject yourself to such practices.
Benefits of Getting a Contractor License in Arkansas
There are many benefits to getting a contractor license. Some of the biggest benefits of doing so include:
Ability to Take on Big Projects
We just noted that a contractor license is needed for a contractor to make more than $2,000 on a residential project in the state of Arkansas. That alone is enough reason for you to get your license.
Simply put, if you ever want to take in big construction projects and therefore earn the big bucks, you're going to have to get your contractor license.
Credibility
Another benefit to getting your contractor license is that it will give you credibility. Clients will take you more seriously, as they'll see that your company is regulated by an overseeing body and that you have all of the skills and knowledge needed to do the job.
Without a license, you could be anybody. For all the client knows, you just took up general contracting on a whim. That thought doesn't inspire a lot of confidence and will turn most legitimate clients away.
Indication That You're Insured
In order to have a contractor license in Arkansas, you must carry insurance. Therefore, by displaying your contractor license, you are essentially showing clients that you are, indeed, insured.
Considering how much money is at stake during construction projects and considering the high risk for damage, it's imperative that clients know you're insured. It proves that you'll cover the damages in the event of accidents.
Earning Your Contractor License in Arkansas
When it comes to earning your contractor license in Arkansas, you first must decide which type of license you're looking to earn. There is a commercial contractor license and a residential contractor license. We'll discuss the specifics of earning each below.
Commercial Contractor License
If you're looking to build structures outside of single-family houses, you'll need your commercial contractor license. Again, this is needed for any commercial project over $50,000 in price.
Once you've decided that you need this license, fill out and submit the Arkansas Commercial Contractor application. You'll need to pay a $100 fee along with this application.
In addition to the application, you'll also need to submit 3 typed references from past clients, other contractors, and the like. These should be no more than 3 months old.
You'll also need to submit proof of a contractor's bond. This is essentially insurance and can be purchased from a variety of insurers.
Financial statements will need to be submitted as well. These should include your earnings, tax returns, and the like. For more information on specifics, simply consult your application.
Finally, you'll need to submit the score to your Arkansas Business and Law exam. You'll learn more about this exam below.
Once this information is processed, you'll be given your license and will be allowed to work on commercial construction projects at all expenses.
Residential Contractor License
Next, we'll discuss how to get your Arkansas residential contractor license. Again, this is for residential projects that pay over $2,000. It allows you to work on all single-family houses. That includes residential units with up to 4 separate living spaces.
This license is technically referred to as a residential builder's license. That's what you should search for and inquire about when looking for further information.
Regardless, you can obtain your residential contractor license by first filling out an application. You can find this application and more by clicking the link.
To apply for this license, you'll need to pay a $100 fee. In addition, you'll need to submit 3 references from past clients, fellow contractors, and related individuals. These should be no more than 3 months old.
As far as financial records go, you'll need to submit a balance sheet from at least 1 year of your work history. As such, you'll need at least a year of experience working on lower-budget projects.
At last, you'll need to submit your score on the Arkansas Business and Law exam. Again, this is to indicate that you understand state laws pertaining to business and trade.
And with that, you'll have officially put yourself in a position to obtain your residential contractor license. As long as everything goes through, you'll receive your license within a few months.
Taking the Arkansas Business and Law Exam
In order to earn your contractor license in Arkansas, you'll need to pass the Arkansas Business and Law exam. This is a 50-question exam covering business laws in the state. You have two hours to complete it and will be allowed to use the internet and other sources as a means of finding answers.
To prepare for the Business and Law exam, you will need to familiarize yourself with Arkansas-specific tax and labor laws as well as general construction industry knowledge. You can ensure you're ready for the exam by preparing with our self-paced online exam prep course available here.
The test is administered through Prometric, a company solely dedicated to administering tests and examinations. You can register for your exam through the posted link or register by phone at 1-888-763-0131.
When searching for your exam on the website, search for the Arkansas Business and Law exam. This carries the abbreviated name of AR04. Note, in order to register, you'll need to pay an $80 fee with a credit card or a bank routing number.
Upon registration, you'll be told where your exam location is. Show up at this location 15 to 30 minutes early and be sure to have your driver's license or alternative ID on you.
Once you've completed the exam, Prometric will have your results prepared on your account on their website.
Insurance Requirements for Arkansas General Contractors
You're also going to have to get insurance so that the work you do is covered. This is required by law in the state of Arkansas.
In particular, you'll need at least $100,000 in both workers' compensation insurance and general liability insurance combined. In addition, you'll need to sign a form stating that you will maintain all of the insurance requirements necessary to uphold a general contractor license.
In some situations, general contractors are required to submit surety bonds as a means of demonstrating their ability to financially cover damages. This will depend on the extent of your financial history. You can learn more about your duties in this matter by speaking to the Arkansas State Licensing Board.
Getting Work as a General Contractor in Arkansas
Getting your Arkansas general contractor license is one thing. The real question is: how do you get work as a general contractor? There are a number of methods you can use for finding construction projects, and they include the following.
Use Lead Generation Services
Perhaps the easiest way to find work as a general contractor is to use lead generation services. These services essentially do all of the work for you, finding jobs in your area and putting you in a position to bid on them.
Most of these services require an upfront payment. Note, though, that this payment will generally be small in comparison to how much money you'll make from the jobs found.
Sign Up for Government Opportunities
You can bet that state and local governments are almost perpetually going to be building something. As a general contractor, these jobs could make you a pretty penny. As such, you need to sign up for bid invitations.
You can sign up not only with the Arkansas state government but with local municipalities and the federal government as well. Some of the sites at which to sign up for these opportunities include USA.gov and Fed Biz Opps.
Speak With Construction Management Firms
When it comes to large-scale construction projects, they're usually led by construction management firms. The firm manager will be responsible for the project as a whole but will often hire general contractors to manage smaller components of the project.
As such, if you have your commercial general contractor license, you should strongly consider calling up construction management firms and inquiring about work.
Getting to know high-ranking individuals at these companies will likely land you some good gigs down the road. Once you've landed some of these gigs, you stand a chance at landing even bigger projects.
Ask Universities
Universities and colleges have substantial amounts of money and often use that money to facilitate construction projects. In fact, if you drive onto a college campus, you're almost certain to see a construction project going on, regardless of the time of year.
How do you obtain work on these projects? By identifying who at the college manages construction projects and then giving them a call or an email. If you get your name put on a preferred contractors list, you might very well get some good work down the road.
Contact Hospitals
Hospitals are also doing construction on a regular basis. Whether it's a renovation or new addition, there's bound to be some sort of construction project happening on the hospital campuses near you.
Contact various hospitals and let them know that you're a general contractor. Build relationships with those in charge of construction and you could very well find yourself with work someday.
Network
Perhaps the most important part of being a general contractor is networking. The more people you know, the more jobs will come your way, and the more money you'll make in the long run.
The key is to start building relationships as soon as possible. Talk to developers and property managers and make them aware of your existence. Try to continue consistent communication with them over time and with any luck, a relationship will be built.
Once you've established a relationship with someone, they're bound to think of you when new work comes in. If you do a good job for someone, they're likely to recommend you to others. This allows your business to grow rapidly in an organic way.
Make networking a regular part of your work week. Schedule time to send out emails and make cold calls. You might even consider attending events as a means of meeting potential clients.
Ready to Become a General Contractor in Arkansas?
Are you ready to become a general contractor in Arkansas? Then, go forth and start preparing for your exam. Once you pass it, you'll have everything you need to get your license.
In the meantime, we are happy to serve as your resource to build your career. If you need help sorting out the steps to prepare for your contractor's exam and obtain a license, you can book a start-up consultation with a licensing expert here!