How Becoming a Licensed Contractor Can Increase Your Salary

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If you’re passionate about the work you do, why not turn it into a profitable full-time career? By applying for a contractor license, you can do just that. Doing construction work without a license isn’t preventing you from earning more money, it’s also illegal in some states.

Some people still avoid becoming licensed because they think that the application fees are too high or that the whole process is just a waste of time. But acquiring a contractor license is an investment that pays for itself in no time. Here are all the ways a becoming licensed can help you increase your salary and get ahead in business.

Take on Bigger Projects

The number one way obtaining a contractor license will help you earn more money is by allowing you to take on bigger and more complex projects.

Without a proper contractor license, you cannot legally take on projects that exceed a certain amount – in most states, this limit is between $500 and $1000. But with the proper licensing, you’ll be able to bid on much larger and more profitable projects.

Take on More Projects

As a licensed contractor, you’ll also be able to hire subcontractors to work for you. This gives you more flexibility and allows you to work on multiple projects at once, further increasing your bottom line.

Win More Customers

One of the main reasons states require licensing is to protect consumers from inexperienced and incompetent contractors. That means that even if you’re the most qualified person in a 50-mile-radius, homeowners will still pass you by if you don’t have your license because they think that you’re either an amateur or a con artist.  

The US construction industry is highly competitive. By having a license, your business will seem more credible than an unlicensed business, giving you an edge over the competition. Plus, people are willing to pay more for a service that they know they can trust, earning you more than someone who is unlicensed and underqualified.

It’s not just customers who may refuse to work with an unlicensed contracting business – some vendors and organizations might also look the other way, leaving you only low-quality partners to work with.

Advertise Your Business

A contractor license lets you legally advertise your services. Without one, you have to rely solely on word of mouth, and that only goes so far. A combination of digital and print advertising will raise awareness for your construction business, bringing in more paying customers.

Licensure is almost an advertisement in and of itself – it tells people that you’re professional, competent, and trustworthy without you having to convince them that those things are true. 

Save on Project Costs

When you work for someone else, you notice everything that they do wrong – where they could have saved money, where they got ripped off, and how they could have done something more efficiently. You know what they say – if you want something done right, do it yourself.

Earning your contractor license lets you be your own boss and manage your own projects. You’ll be able to choose the vendors you want and negotiate deals on materials, labor, and equipment. What you save through smart management practices can be invested back into your business.

Avoid Paying Fines  

Becoming licensed won’t just help you earn more money – it can help you save money too. If you’re caught contracting without a license, you can face heavy fines and even jail time if you’re caught more than once.

Most people avoid applying for a license because they don’t want to pay the application and examination fees, but the penalties for working without one are much greater. Paying a few hundred dollars to obtain a license is much better for your bottom line than paying thousands of dollars in fines.

You’ll also be able to legally write off expenses such as a home office, fuel, trucks, and tools, saving you money when tax season rolls around.

How to Earn Your Contractor License

While there are many benefits to becoming licensed in your state, the process of acquiring a license can seem overwhelming at first. You’ll need to be insured, meet experience requirements, and pass one or more licensing exams.

At the Contractors Institute, we help make it easier by providing you with the right tools to tackle your licensing exam and pass the first time, guaranteed. We even offer application assistance services so that you can get approved as quickly as possible. Sign up for one of our prep courses today so that you can get your license and start earning more money.


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