Are you interested in starting a new career as a licensed contractor?
Becoming a general contractor is a fantastic way to take your life and finances into your own hands with your own business. It gives you a chance to set your own hours and be your own boss.
Meeting license requirements to start your business can be a challenge, though. There are a lot of steps involved in setting up a successful contracting business, particularly where getting the required qualifications are concerned.
If you think you're ready to get started applying for a contractor's license, book a 30-minute call with our licensing experts to ensure you meet the necessary requirements and sort out your next steps in the process.
Want to learn more about getting a Virginia contractor's license? Fortunately, this guide has everything you need to know to become a contractor. Keep reading to find out how to get licensed and start your business.
Set Up Your New Contracting Business
The first step to starting your contracting business isn’t taking the exam. It’s establishing your business as its own entity in your state.
The first thing you’ll need to choose is which kind of business entity you wish to operate as. You can work as a partnership, sole proprietorship, or limited liability company. You might consult a lawyer to decide which is best for you.
Once you’ve chosen your business entity type, you will register your business’s name with the state. You may identify three individuals associated with your business during this process.
The first person associated with your business is a designated employee. They should be a full-time staff member who will work for you at least 30 hours per week.
The second person is a qualified individual with at least five years of experience in their particular contracting specialty. They should also work for you full-time.
The third person you will specify when setting up your business is a responsible manager who will oversee all other staff members.
If you’re setting up your business as a sole proprietorship and you have the necessary qualifications, you may identify as all three individuals yourself.
Choose Which Type of Licensed Contractor You Want to Be
There are different kinds of contractors that operate in Virginia. Part of becoming a contractor is deciding which one you want to be.
Part of this decision involves license specialties, which we’ll be discussing next. First, we need to discuss license classes, which apply to every specialty.
In Virginia, there are three types of license classes for contractors. Each class dictates the maximum value of projects you’re allowed to take on and how much work you’re allowed to do in a year. These classes include the following:
- Class C, which allows you to work on projects worth less than $10,000 and up to $150,000 worth of projects annually
- Class B, which allows you to work on projects worth up to $120,000 each with an annual limit of $750,000
- Class A, which imposes no monetary restrictions at all
At first glance, a Class A license might seem like the best choice. But to qualify for it, you must pass the “Advanced” section of the state contractors exam, which isn’t required for a Class C or B license.
Additionally, you might not have the financial resources to qualify for a Class A or B license. Both of these licenses require you to submit proof of equity to the Department of Occupational and Professional Regulation, while Class C applicants do not need to meet any financial requirements.
As an alternative, you may submit a surety bond instead. Specific amounts of equity currently required for A and B licenses are listed on the DPOR website.
Last, you will also need to prove adequate experience working in the field on projects similar to the type of work you plan to perform. While Class A contractor applicants are required to show at least 5 years of work experience, Class B applicants need to show 3 years and Class C applicants only need to prove two years of experience.
If you currently lack resources and experience, you will need to apply for a Class C license. When you have more money to reinvest in your business, you can apply for a license with fewer restrictions.
Select Your License Specialty
Once you’ve decided which contractor’s license you can qualify for, you will need to choose your license specialty.
There are dozens of contracting specialties that the DPOR recognizes. These include general building specialties such as Commercial Building Contractor (CBC) and Residential Building Contractor (RBC), and more specific trade licenses such as Roofing Contracting (ROC), Concrete Contracting (CEM), Asphalt Paving Contracting (PAV), and even Painting and Wall Covering Contracting (PTC).
You can read detailed descriptions of each specialty on the DPOR’s website. The area you choose to specialize in will be featured on your contractor license in the form of a three-letter abbreviation.
Sign Up for and Complete a Pre-License Education Course
By this point, you’ve set up your business entity with the state and selected a license type and specialty to apply for. Next, you will need to prepare for the state exam requirements.
All Virginia Contractor License applicants are required to complete an 8-Hour Pre-License Course approved by the Board in order to show they understand and comply with Virginia contracting laws and regulations.
At Contractor Training Center, we provide an 8-Hour Online Pre-License Course approved by DPOR that can be taken at your own time and pace! Sit down and complete it in a single day, or break up the different modules between meetings and events in your busy schedule. You can see more about the 8-Hour Pre-License Course at the link here.
Sign Up for and Pass the Virginia Contractor Business Law Exam
After completing the 8-Hour Pre-License Course, Class A and Class B license applicants have additional requirements for proving their understanding of Virginia Contractor business laws.
Class B license candidates are required to take and pass two sections of the three-part Virginia Business Law exam: the 'Virginia' and 'General' portions.
Class A candidates have a bigger challenge ahead of them as they need to pass all three portions of the contractor exam. Besides the Virginia and General portions, this includes the Advanced Portion of the exam. Class B applicants can optionally take the 'Advanced' portion if they plan to upgrade to a Class A license in the future, but it is not required until applying for an unlimited license.
You will take all portions of the exam relevant to you through PSI, the testing provider that administers contractor exams in Virginia.
We offer live and self-paced online exam prep for the Virginia Class A/B Business Law exams with practice tests, learning modules, and book highlighting guides. You can see more about our Virginia Class A/B Exam Prep Course backed by a No-Pass, No-Pay Guarantee at the link here!
Fill Out Your License Application and Submit to DPOR
To obtain approval to sit for the technical licensing exam, Virginia Contractor applicants must submit an application for licensure to the Department of Professional and Occupational Regulation (DPOR).
You will obtain a blank copy of the license application from the DPOR Board for Contractors and fill out every applicable section of the form and include supporting documents where necessary.
After submitting your application along with the required fee, you may have to wait around a month for the DPOR board to review and approve it. Once it’s approved and your license arrives, you’ll finally be free to start working as a professional contractor.
Did you know that up to 60% of license applications are rejected by the Board? Let one of our state licensing specialists walk you through the application process and ensure your application is correct and complete with our License Application Processing Service!
Take Your Virginia Contractor Technical Licensing Exam at PSI
Once DPOR approves your application for licensure, the Qualified Individual (QI) for the company must take and pass a technical licensing exam that covers topics specific to the type of work to be performed under the license. These exams can be quite extensive, and even with years of experience in the field the subject matter can be confusing. Luckily, we offer online and live exam prep courses with everything you'll need to prepare for your technical licensing exam, and back our courses with a No-Pass, No-Pay Guarantee! Click here to learn more about our Virginia Contractor License Exam Prep Courses.
Determine Your Insurance Before Accepting Your First Job
By this point, you’ll have gotten started as a practicing licensed contractor. But there could still be some bumps in the road to watch out for.
To start with, you’ll need to sign up for insurance now that your business is in operation. If you don’t have your own insurance policy to protect you from liability issues, you will need your clients to add you to their policies while you work for them.
Learn How to File Taxes Correctly as a Business Owner
Tax filing is an incredibly important and often-overlooked part of running a business. It works quite a bit differently when you’re a business owner from the way it does when you’re just an employee.
To keep things simple, you should consider hiring a qualified business accountant or tax professional. Doing it all yourself isn’t worth the hassle of learning a new tax system or the mistakes you might make along the way.
Report Staffing Changes to the DPOR
As your business continues to operate into the future, you will probably want to begin hiring employees to help you do more work.
As you take on new personnel, remember to always report these changes to the DPOR. You must also report the change whenever you dismiss or replace an existing staff member.
Seek Ongoing Education
Last but not least, you will want to seek continued education as you operate your business.
No professional can reasonably hope to remain successful without ongoing training. Regulations and best practices change over time, and it’s imperative to keep up with these changes.
Start Preparing for Your Contractor’s License Exam Now
Now you know all the steps involved in getting your contractor’s license and starting your contracting business. There’s just one more question to answer: what’s stopping you from getting started?
There’s never been a better time than now to take control of your life and start a new career. And it all starts with getting the right education at Contractor Training Center!