Owning your own business as a general contractor in Alabama (also called prime contractor) comes with many benefits. And, getting your general contractor's license as efficiently as possible is the best way to go about it. This article will discuss the basic steps to getting your license, what the future for construction looks like, and what you can earn.
Why You Should Get a General Contractor License Now
Construction ranks #8 in the state for business volume, and contractors are in great demand. Although 2020 was a bad year for everyone, construction in Alabama has seen an average of 3.2% annualized growth, and contractor employment has increased 1.8% every year since 2014.
The Associated Contractors of America recently reported that one-third of all businesses are back to, or ahead of, where they were a year ago. Meanwhile, another 12% say they expect to be back to pre-pandemic levels within six months.
So, almost half of all contractors have or will soon resume normal operations. According to ZipRecruiter, Alabama general contractors earn an average of $57,122 a year, with some reaching as much as $101,543. Below, we look at the steps you must take to get your general contractor’s license.
Steps to Getting Your License
General contractors must be licensed to work on residential projects of more than $10,000 or commercial projects of more than $50,000. Being licensed in Alabama means you are automatically authorized to work in Arkansas, Louisiana, Mississippi, and Tennessee.
This gives you a lot of flexibility, and you can reap great rewards if one of those neighboring states suddenly has an immediate need for new construction or repair work.
The 5 Basic Steps to Becoming a General Contractor in Alabama
- Set Up and Register Your Business
Start by registering your business with the Alabama Secretary of State. Decide what sort of business entity you want. You may decide to register as a sole contractor, go into partnership with someone, or set up a particular type of corporation. This link to the Small Business Administration explains the differences for you.
- Arrange Insurance Coverage
You must have general liability insurance. If you have employees, you’ll also need worker's comp insurance. You must prove you have the appropriate coverage when you register with the state. Your insurance carrier will let you know whether you also need to be bonded. Alabama only requires you to be bonded in certain situations.
- Get Your Documents Together
General contractors must send in a financial statement signed by a CPA or other Board-approved professional. You need working capital of at least $10,000 and a line of credit to cover this requirement. You also need to show that you have construction experience. So, be sure to list contracts you’ve worked on, the locations of projects, and the dates of completion. Also include three letters of reference. If you already have projects under contract, include their details.
- Complete the General Contractor Application Form
You can get a copy here. Complete the form, have it notarized, and send it in with your $300 application fee. You must submit the form at least 30 days before the Board's quarterly meeting. Here’s a calendar with the filing deadlines to help you plan accordingly.
Our Done-For-You Service
We offer a full service to complete and submit your application accurately and correctly.
- Take Your Exam. Pass Your Exam
Passing the General Contractor exam is a must. As well as passing the National Accredited NASCLA exam, you must also pass the Business and Law exam. Once you pass, the Board will issue your general contractor’s license.
The most efficient way to pass is to follow a detailed plan and do the proper exam prep. At Contractor Training Center, we provide:
- In-person classes.
- Online live-streamed classes.
- Online, pre-recorded exam prep classes, which include practice exam questions to maximize your success.
- Executive 1-on-1 training sessions.
Every course we offer includes online videos, reference manuals, and exam prep books to help you every step of the way.