It's no secret that being a contractor comes with a lot of responsibility and hard work. Getting your license might seem like the time-consuming cherry on top, but it pays off in more ways than one.
Not only does being licensed and bonded empower you to take on a wide variety of work, but being “licensed and bonded” can also be used to grow your business in a very real marketing sense.
Why Being Bonded Is Important
While many projects don’t encounter complications, it’s important to recognize cases of damage, poor craftsmanship, or unfinished work. Gaining licensure to operate professionally helps to minimize these situations, but this is where bonds come in.
A surety bond is a contract that protects the customer. The contractor agrees to complete a project and follow the law — and is financially guaranteed to do so. While many contractors are required to get bonded for their license, this requirement varies from state to state.
Regardless of what your state’s requirements are, bonds are marketing tools that pay for themselves. Marketing yourself as “licensed and bonded” sets you apart from the competition. Unlike insurance policies, a bond’s coverage applies to customers, not to the contracting company itself. This is a significant upside for the customer’s benefit, as it underscores a business’s professionalism and desire to do things the right way.
Different types of bonds provide specific coverage. Some coverage centers on the actual job to be completed; other bonds protect the public’s interest.
Contractor license bonds protect the public’s interest. These bonds ensure that contractors will abide by the terms of their license and may even guarantee the contractor’s work performance is up to par.
Contract bonds, such as bid bonds, performance bonds, or payment bonds, ensure that a contractor will complete their work within the guidelines of the contract and that they will pay related subcontractors or suppliers accordingly. These are required to work on public construction projects and can be requested for large private projects.
Why Being Bonded Is a Business-Critical Marketing Tool
Getting your business bonded provides proof that your customers can trust you. Abiding by the regulations of your license, you will signal to customers that your work is safe and up to code.
Financial Upside
The bond protects customers' wallets and yours. Having the outlet of filing a claim ensures that customers won’t be financially burdened by any mistakes or oversights made by your company. If a claim is found to be valid, your company would have to reimburse the surety for any damages paid out — meaning it’s in your own best interest to avoid claims.
However, the backing of a surety makes sense for both customers and contractors. Customers benefit because they’ll see a payout much faster than they would from an insurance claim. Contractors benefit because the upfront cost of a bond is much less than the cost of the coverage provided. That means contractors can keep that money in their pocket — it would only leave if a claim were made and paid. Not only can you pay for more marketing itself with that money, but you can also invest in more projects that benefit your company and your customers.
Third-Party Endorsement
Bonds serve as third-party endorsements of your services — essentially, a third party is vouching for you by extending coverage to you as a contractor. Bonded companies pledge not to conduct business fraudulently.
Contractors with a bad reputation or a history of claims have a hard time getting bonded. A rocky history can include upfront payments for work not done, falsified payments, a lack of required permits, or even adding unnecessary tasks to the scope of work, making the job seem endless to the customer.
Two-Way Investment
Committing to a professional and reliable relationship with your clients means investing in it early by being licensed and bonded. Some people want to hire the most affordable contractor they can find. Bonded contractors put their money on the line with these agreements to protect the customer’s investment in their work. If you were the customer in this case, would you choose the bonded contractor or the lower-cost contractor who may cost you more in the long run with repairs?
Clients and businesses prefer to work with secure companies, not with contractors who could go bankrupt because of lawsuits. Managing the risk involving your services and transferring that risk to your “endorsers” is vital in securing your business’s future.
How to Market your Business as Bonded
Being bonded is great for both you and your customers. But marketing takes it to the level your business needs to be at. Ask yourself: Where do you get your business from? Online groups or ads? Referrals? More traditional methods like billboards or flyers? Once you answer that question, your next step is to touch on all those bases to promote your “licensed and bonded” status.
- Upgrade your profiles. Marketing can be as simple as providing “licensed and bonded” in your profile bios on your social accounts and aggregator website profiles. By including and promoting your status in these profiles, you are setting yourself apart from the competition. For better results, list your license number for each state that you are licensed in.
Aggregator websites will be able to link to your service from their content. When potential clients perform searches on these platforms, they can include “bonded” as a qualifier.
- Update your website and email signatures. Many prospective customers start their search with their old friends Google, Bing, and Yahoo. They check out websites until they find one that “clicks” with what they need in a provider regarding location, cost, and specialties. Make sure your website’s homepage includes references to your licenses and bonds in the states where your business operates.
Likewise, many will fill out a contact form and ask questions before selecting the contractor they need. When you respond, you want your “licensed and bonded” status serving as a reminder of your qualifications — add your license number(s) to your email signature.
- Review your “permanent” signage. Do your company trucks say “licensed and bonded”? Do your billboards use this language? Do your referral coupons or agreements mention it? These are all word-of-mouth advertising methods that deserve an update when you’ve achieved licensed-and-bonded status.
- Maximize your content. If your company has someone who handles marketing, make sure this person updates your social media profiles and makes the most of the content opportunities.
Write about why being licensed and bonded is essential when vetting contractors on your blog. Explain the process you took to become licensed and bonded in your newsletter or marketing emails. These content pieces can also double-dip and be shared on your social accounts!
- Keep your certificate handy. If you're not savvy with online marketing, that’s OK. Copies of your license and bond that include information about the surety company are great resources, too. Reliable contractors don’t have an issue providing proof to customers, and encouraging prospective clients to ask for these documents can help you rise to the top over time.
The Bottom Line
Getting licensed and bonded pays off in many ways. If you’re a contractor in need of a bond, call 1 (800) 308-4358 to talk to a SuretyBonds.com surety expert or get a free, no-obligation quote. As the No. 1 Online Surety Bond Agency in the Nation, we would love to help you do more of what you do best: build the future.
Brad Bullerdieck is the chief production officer at SuretyBonds. the No. 1 online surety bond agency in the nation. With more than a decade of experience as a licensed surety agent and high-volume sales producer, Bullerdieck prioritizes the customer experience. He's worked with the SuretyBonds.com team to streamline the bonding process and help thousands of professionals get bonded.