A Guide On How To Become A Contractor (Skills And FAQs)

Updated 2 September 2023

Construction contractors manage various building projects, from residential homes to commercial structures. This job involves multiple tasks, including coordinating with subcontractors, overseeing progress and ensuring quality work. Understanding the necessary duties and skills for this profession can help you determine if it is the right career choice for you. In this article, we discuss the role of a construction contractor, provide steps on how to become a contractor, describe their skills and answer some frequently asked questions (FAQs).

What Does A Construction Contractor Do?

A construction contractor oversees the entire building process for a structure. They coordinate with various parties including clients, architects, engineers and subcontractors to ensure the project's completion according to the specified design, budget, and timeline. Their primary responsibilities include planning, obtaining permits, hiring specialised subcontractors, supervising construction activities, managing materials and maintaining safety standards on the site. They also act as the main point of contact between the client and the construction team to provide regular updates, and address any issues or concerns that may arise.

How To Become A Contractor?

To learn how to become a contractor, follow these steps:

1. Complete your basic education

Finish a minimum of a 10+2 level education, preferably with a focus on physics and mathematics. Though there are no specific educational requirements for becoming a construction contractor, this foundational schooling provides you with the necessary skills for further studies and job growth in the industry. Some aspiring contractors may pursue additional education, such as in engineering or architecture, which can benefit their careers and enhance their expertise in construction-related disciplines.

2. Pursue higher education or vocational training

To gain in-depth knowledge, enrol in a diploma or bachelor's program in civil engineering, architecture or construction management. These courses typically cover construction materials, structural design, project management and building codes. Alternatively, you may attend vocational training in construction trades or project management, focusing on practical skills, on-site administration and industry-specific tools, and techniques. These programs help you develop essential skills and expertise in the industry.

3. Gain work experience

Acquire hands-on experience by working with construction companies, engineering firms or architects as an intern, trainee or junior project manager. Focus on understanding the various aspects of construction such as estimating costs, coordinating with subcontractors, managing timelines and ensuring quality control. By gaining experience with different jobs and working with diverse teams, you develop the necessary skills to oversee projects, and handle challenges effectively.

4. Develop a business plan

Create a detailed business plan outlining your objectives, target market, services and financial projections. In addition, include an analysis of the competitive landscape, a marketing strategy and a method for managing operations, and finances. A well-structured plan can help you secure funding, attract partners and guide business growth, and development.

5. Determine the business's legal structure

Choose an appropriate legal structure for the business, such as a sole proprietorship, partnership or private limited company. As you review your options, consider liability, taxation and ease of management, among other factors. As each structure has its advantages and drawbacks carefully evaluate which option best suits the business needs and long-term goals.

6. Register the business

Register the business with the appropriate government authorities, obtain necessary permits and comply with tax, and labour laws. This process may involve registering your organisation's name, applying for a tax identification number and securing permits or licences. Also, purchase insurance, such as for general liability and employee compensation, to protect the business from potential risks, and financial losses resulting from accidents or legal disputes.

7. Obtain necessary licences and certifications

The licensing process may involve taking exams or training courses to demonstrate your knowledge of construction practices and local building codes. Some common licences and certifications include a contractor's licence, building permit, trade licence and goods and services tax registration. Research the ones applicable to your state or union territory, as requirements vary according to jurisdiction.

8. Find and bid on projects

Identify potential construction projects by researching online, attending industry events and networking with other professionals. Develop a system for tracking project opportunities and evaluating their suitability for the business. Then prepare competitive bid proposals by estimating the required costs, timelines and resources, and submitting them to clients or government agencies. Also, ensure your bids are accurate and detailed and highlight the company's strengths and capabilities.

9. Build your network

To form a strong network, cultivate relationships with architects, engineers, suppliers and other construction professionals. Attend industry events, conferences and trade shows to stay up to date on the latest trends. Establish connections with potential clients and collaborators. Additionally, establish a reputation for quality work and professionalism by completing projects on time and exceeding client expectations. By using referrals, advertising and online platforms, such as social media and directory websites, you can showcase your portfolio and attract new clients to grow the business.

Skills For Contractors

Here are some essential skills that contractors use to do their job effectively:

Project management

Project management encompasses planning, coordinating and executing construction projects. This involves setting budgets, defining timelines, allocating resources and ensuring quality control. A contractor with these abilities can efficiently deliver projects on time and within budget while maintaining safety standards, and client satisfaction.

Estimating and cost control skills

Having proficiency in estimating and cost control involves accurately predicting a construction project's cost, and managing expenses throughout its duration. Contractors require accounting for labour, materials, equipment and other expenses to determine correct estimates. By monitoring and controlling costs, they minimise financial risks, and ensure projects stay within the agreed-upon budget.

Knowledge of building codes and regulations

Contractors require a thorough understanding of building codes and regulations to ensure projects are compliant with local, state or territorial, and national standards. This knowledge helps them avoid legal issues, potential fines and project delays. Familiarity with building codes also helps them maintain high-quality construction and ensure the safety, and stability of structures.

Technical knowledge of construction methods

A construction contractor requires in-depth technical knowledge of construction methods, materials and best practices. This understanding enables them to make informed decisions about project execution, choose appropriate materials and employ effective techniques. Technical expertise also ensures the contractor can address any unexpected issues during the project.

Contract negotiation

Construction contractors use effective contract negotiation skills to secure favourable project terms and conditions. They work with clients, subcontractors and suppliers to reach mutually beneficial agreements. By honing their negotiation talents, they can protect their interests, minimise risks and achieve better project outcomes.

FAQs About Becoming a Contractor

Here are some FAQs about becoming a contractor:

How does a construction Contractor charge for their services?

A construction contractor typically charges for their services according to a fixed-price or cost-plus contract. In a fixed-price contract the contractor and client agree on a set price for the entire project before construction begins. This price includes labour, materials and any other project expenses. The contractor completes the work within the agreed-upon budget and any cost overruns are typically their responsibility.

Alternatively, in a cost-plus contract, the contractor charges for the actual costs of labour, materials and other expenses, plus a markup or fee for their services. This fee may be a fixed amount, a percentage of the total project cost or a monthly rate. Cost-plus contracts offer more flexibility for both the contractor and client because they can more easily accommodate changes in project scope or unexpected issues.

What is the difference between a general Contractor and a Subcontractor?

A general contractor oversees the entire construction project from start to finish. The client or property owner typically hires them to manage the work and employ subcontractors to perform specific tasks. These subcontractors are usually specialists in a particular trade or area of expertise, such as roofing, flooring or electrical work. They operate under the general contractor's direction and complete their portion of the project within the agreed-upon timeframe, and budget.

What are some strategies for growing and scaling a construction contracting business?

The following are a few strategies that construction contracting businesses can use to grow and scale their operations:

Building a strong reputation through quality work and excellent customer service leads to word-of-mouth referrals, and repeat business.
Expanding the services you offer, such as adding design or consulting work, attracts new clients and increases revenue streams.
Investing in technology and automation streamlines your processes, and improves efficiency.
Networking and building partnerships with other businesses and industry associations lead to new opportunities and growth.