Contractors license

[aaronblaron]

Hi! New here, i hope this is the right place.

I am just getting started working my mini excavator and dump truck in california and i have some questions.

What can i do without a contractors license? So far i have been limiting myself to jobs under $500 even for land clearing, this sucks as i am undercharging by a huge amount. Is that law just for construction related things?

Also- can i get liability insurance without a contractors license?

And- what is the best approach to getting one? I have over four years of experience in forestry stuff, demolition, and pick and shovel excavation; how far from related to the specific license can i go and still have it be considered applicable journeyman experience?

And- what is the best license for me? I love demolition and excavation, but i have a lot experience in clearing and trees.
How much do they enforce the idea that general contractors are not allowed to do non framing related things unless there are three or more?


Thanks for any help, and i hope that this is not to far off topic for this forum.

 

[Raspy]

As part of the procedure you will have to have signed forms from people explaining your experience. These will state that you acted at a journeyman level, planned and managed jobs. They will have to show four years experience. The sick part is you have to swear you acted as a contractor while you were not licensed, but that is how it works.

Then go to a school to prepare for the test. There is the legal section and the trade section of the test. Two parts.

Do not try to learn the stuff by reading a book or studying the law books or just knowing your field. It will never work. You need sample questions. The state has questions that make no sense and have various answers. You need to know what they want you to answer.

The most efficient way to get through the test is to simply take sample tests at a school over and over until you are at about 95% proficiency. Then go take the state test and you are done.

You have to swear you are worth a certain amount and you have to get a bond.

Will you be licensed as a sole proprietor or a corporation?

Then you will need liability insurance to protect yourself. This will be on your business and your equipment and your truck.

Then you need a bank account with a fictitious name filing and a business license in the city you are working in. Get the business license after you get the contract on each job and in what ever city it is.

Once all that is in place go out and be a professional. Don't hide and don't be afraid to charge for your expertise. At this point you'll be spending $7,000.-$10,000. per year for insurance and licenses. Plus fuel, and other overhead expenses. What seemed like a fun job now has demands. You'll have to find enough work to pay all the overhead and make you enough profit to justify all the responsibility.

Hire an accountant to manage your payroll, taxes and California required fees and forms. The Franchise Tax Board requires quarterly reports. Payroll taxes must be sent in each month. You need to be out working and finding jobs instead of managing forms, so get help or plan to fail. Tax planning is VERY important.

If you want to wait until you have more experience, you can work under someone else's license as a Responsible Managing Employee or Responsible Managing Officer. This requires paperwork and delays too, but can be a useful tool.

Develop relationships with contractors that will bring you in for their needs because they like working with you.

Once you do all of this you are legit and you have a career. Is this the career you want?

OR

You can just work casually under the table. Charge a lot less and have much lower overhead. This is best if you have little to lose, no house and no family.

Complicated isn't it.

It doesn't matter what kind of business you run, only how you run it. And once you've been in business, you'll probably never go back to working for someone else. I recommend taking responsibility and doing things your way instead of taking orders from someone else.

 

[jenkinsph]

Raspy's post is pretty accurate imo. Think it through, make sure you like what you are doing as that is very important.

 

[RDrancher]

Yep, Raspy has it explained nicely. There are a lot of guys in Ca. that don't have much work going on, so if you have work lined up I would start working now and go after the license as quickly as you can. Great time to establish and position yourself. You always have the chance of having one of your out-of-work licensed competitors turning you in, but life is about taking risks IMHO.

I have a C8 concrete and B general building contractors license in Ca. and worked there for many years. The contractor's license school that Raspy mentioned is the way to go. They'll get you ready for the test and walk you through the requirements. The law portion is the hard part...luckily you only have to take it once. When I went back to get my GC license I just bought a study book and took the test. No law=pretty easy.

If you don't do much underground work you may want to check to see if you can license under a specialty contractors classification. Insurance can be very high for underground and overhead work, so check that out before you decide as well.

When I started over here in Texas I decided that I would only work with equipment and run with no employees whenever possible, which has been 95% of the time. It's been a lot of work getting established, but also one heck of a lot of fun. Find a niche and (for awhile) you'll have the market cornered.

Good luck to you!

 

[TCJatko]

As part of the procedure you will have to have signed forms from people explaining your experience. These will state that you acted at a journeyman level, planned and managed jobs. They will have to show four years experience. The sick part is you have to swear you acted as a contractor while you were not licensed, but that is how it works.

Then go to a school to prepare for the test. There is the legal section and the trade section of the test. Two parts.

Do not try to learn the stuff by reading a book or studying the law books or just knowing your field. It will never work. You need sample questions. The state has questions that make no sense and have various answers. You need to know what they want you to answer.

The most efficient way to get through the test is to simply take sample tests at a school over and over until you are at about 95% proficiency. Then go take the state test and you are done.

You have to swear you are worth a certain amount and you have to get a bond.

Will you be licensed as a sole proprietor or a corporation?

Then you will need liability insurance to protect yourself. This will be on your business and your equipment and your truck.

Then you need a bank account with a fictitious name filing and a business license in the city you are working in. Get the business license after you get the contract on each job and in what ever city it is.

Once all that is in place go out and be a professional. Don't hide and don't be afraid to charge for your expertise. At this point you'll be spending $7,000.-$10,000. per year for insurance and licenses. Plus fuel, and other overhead expenses. What seemed like a fun job now has demands. You'll have to find enough work to pay all the overhead and make you enough profit to justify all the responsibility.

Hire an accountant to manage your payroll, taxes and California required fees and forms. The Franchise Tax Board requires quarterly reports. Payroll taxes must be sent in each month. You need to be out working and finding jobs instead of managing forms, so get help or plan to fail. Tax planning is VERY important.

If you want to wait until you have more experience, you can work under someone else's license as a Responsible Managing Employee or Responsible Managing Officer. This requires paperwork and delays too, but can be a useful tool.

Develop relationships with contractors that will bring you in for their needs because they like working with you.

Once you do all of this you are legit and you have a career. Is this the career you want?

OR

You can just work casually under the table. Charge a lot less and have much lower overhead. This is best if you have little to lose, no house and no family.

Complicated isn't it.

It doesn't matter what kind of business you run, only how you run it. And once you've been in business, you'll probably never go back to working for someone else. I recommend taking responsibility and doing things your way instead of taking orders from someone else.

Or you could move to New Hampshire. No contractor's license required. Live Free or Die.

 

[RDrancher]

Or you could move to New Hampshire. No contractor's license required. Live Free or Die.

No license requirements here either. But I still keep good books and have to report sales tax on untaxed materials. License or not, I wouldn't work a day without liability insurance. That's a risk I'm unwilling to take for myself or my family. It's a good selling tool to separate yourself from the bubbas as well.

 

[aaronblaron]

Thanks for all the help.

I think it makes sense not requiring a contractors license.... maybe people would hire based on reputation.

I love the idea of hiring a contractor to make my bids.. sounds like a job i would want if i were a contractor. How would one get in contact with such a person?

Are the long distance schools usable? It almost seems to me that i might as well buy a book at that point...
Does anyone know of a good school in or north of the sf bay area?

 

[jenkinsph]

Most of these licenseing schools are a one or two day class and I should add they work. When we tell you to go to the school for license prep WE MEAN IT!!!

 

[Raspy]

Buying a book to study for the test is a waste of time. It boils down to a very simple question: Do you want to learn the book or do you want your license? And they are not the same thing. Knowing your trade doesn't enable you to pass the state test either.

Just take the sample tests over and over until you are getting about 95% or better. Some of the questions make no sense and you just need to know what answer the state wants. All you want from a school are the test questions. Study them until right before the state exam.

There are lots of schools, just look on-line or in the phone book.

 

[RDrancher]

Most of these licenseing schools are a one or two day class and I should add they work. When we tell you to go to the school for license prep WE MEAN IT!!!

I'll second that! The school I went to had personal coaching for both tests in a room adjacent to the testing area so they could grill it into you right before the test. I also bought a cassette tape (that's showing my age) for the law portion and listened to it nonstop for days while I worked, mowed the lawn, etc.