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Should You Get a Contractor’s License?

Unfortunately we can’t just go out, buy a few tools, and offer to build houses.  That’s illegal without a contractor’s license and for good reason.

Otherwise, the quality of our homes would be seriously compromised.  People who have no business in construction would be scamming and endangering homeowners (more than they already do).  Despite my issues with the contractor’s board, I understand that they are a necessary evil.

However, there are many home services that can still be offered without a contractor’s license.  In fact, I run a quite profitable handyman business without one.  For me, getting licensed in a trade doesn’t make sense.

But, should you get a contractor’s license?  Many of my readers have asked me this question so I’ve decided to write this article.

Disclaimer:  Construction law varies significantly in every country and state.  Make sure to check your local regulations to help you make your decision.

Benefits of getting a contractor’s license

I’m sure there are many more benefits, but here are the two primary benefits I see.

Gains you credibility – This credibility can help to build trust with your customers.  There are other ways to gain credibility, but this is a big one.

Higher earning potential – Having a license allows you to tackle larger and more profitable jobs.  Plus, many customers are more inclined to pay higher rates to licensed contractor’s opposed to unlicensed handymen.

While these benefits make getting a license seem like a no brainer, here are some other things to consider before deciding.

How much contracting experience do you have?

If you are like me when I first started, meaning you have no experience bidding jobs, then a contractor’s license is probably the wrong choice.

For example, if you have never quoted a job, what are the chances that you are going to quote it accurately?  Close to zero.  And, you’re probably going to quote too low which means you’re going to lose money.

Trust me on this one.  I’ve bid way to low on way too many jobs.  In fact, I lost over 50 grand in my first year to underbidding small jobs.  If I had to learn my lesson on $10,000 jobs, I’d be out of business.

Regardless of how skilled of a handy person you are, there are several business skills you need to develop, first.  Business skills that are arguably more important than your handy skills.

What services do you plan on providing?

Before getting a license, make sure you will still be able to offer all of the services you are planning to offer.

In many states, including mine, getting a contractor’s license can actually limit your services significantly.  Without a license, I can do just about anything as long as it’s under $1,000 and not plumbing, electrical, or HVAC.  This leaves a lot open.

If I was to get a contractor’s license, I would technically be limited to only performing jobs within that license.  Meaning, if I got a carpenters license, I would no longer be able to legally offer painting, tile, drywall repair, and several other services that I occasionally offer.  Even a general contractor’s license would limit my services.

Since I actually like the smaller jobs and quick repairs while doing a wide range of trades, a contractor’s license doesn’t make sense for me.

Are you sure you want to provide those services?

Way too often, people go get licensed in a trade for the wrong reasons.  Maybe because that is the trade they know how to do, or that is the trade they think they can make the most money.  I recommend against this.

I’m a strong believer that you should enjoy what you do.

Without a lot of experience, it’s hard to even know the types of projects you enjoy.  I didn’t know what types of jobs I actually liked doing for at least a few months and I’m still figuring that out.

I’ve actually talked to many contractor’s that don’t like what they are doing.  I even received an e-mail from a plumber saying that he hated plumbing!  Too bad he put all that effort into getting a license.

So, before getting a contractor’s license, you should be sure you like offering services related to that specific trade.  Even though you may enjoy plumbing in your own home, doesn’t mean you’ll like fixing other peoples toilets!

Here’s what I recommend.

Before running out and getting a license right away, get some experience offering several services first.  Starting out as a handyman is a great way to expose yourself to a multitude of different projects.

Not only will acquiring experience help you to choose a path you enjoy, but it will also help you uncover very profitable services that you didn’t even think of.

You’re handyman business experience will also teach you the business skills you need before risking your ass on huge jobs.

After a while, you’ll know what you enjoy, what is profitable, how to get customers, and how to run a business.  At that point you can graduate to the next level and go big with a contractor’s license.

Regardless of what you decide to do, make sure you understand your state laws by visiting your local contractor’s board website.

What do you think?  Is a contractor’s license right for you?

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  • John Lannon August 26, 2013

    Good points D. I was a estimator for a very large drywall and paint company here in the Tidewater area until the housing market collapsed a few years ago. There is a world of difference between estimating smaller handyman jobs than that of a licensed contractor. It takes years of practice, and a sound working knowledge of materials and blueprints. Most good handymen should never really need to get a contractors license because there are plenty of smaller scale jobs out there. I like to call them ” hit and run” jobs because I seldom have to make a return trip to finish up. They are much more fun as well. I was thinking of getting a Virginia Class B builders license, but I am having too much fun with the handyman jobs right now. I just bought a new Texas Bragg 14′ foot tandem axle trailer to cut the cost of truck and dumpster rentals. I paid cash for it from the money I made from doing a couple Fannie Mae trash-outs and sales cleans.

    • Dan Perry August 27, 2013

      Hey John. Thanks for the comment. I totally agree, small jobs are way more fun. They are also less stressful!

  • nick allen December 21, 2013

    hey guys dont know what to say besides couple years ago i started a handyman business didnt last long but i didnt really know how to go about starting it besides buying a cargo van and tools and business cards

    • Dan Perry December 23, 2013

      Hey Nick,

      I’m sure you learned a lot in the process that you can use this time around to succeed. Thanks for the comment and please don’t be shy. If you’ve got a question, me or somebody else would be glad to try to answer it.

      Dan

  • Grigor A December 26, 2013

    Hey guys thanks for the tips.. finished a 2 year HVAC/R program a couple weeks ago and I’ve already been in the trade for 6 months and would like to work on the side. Is there a $ amount I can’t pass if I were to do a repair/install with out a contractors or handyman license? (Im in southern California)

    • Dan Perry December 26, 2013

      Hey Grigor,

      I’m not from California, but I believe you need a handyman license to do any home repairs in your state. To find out for sure go to the California state contractor’s board website and it should have the info you need there.

      • Chris J June 25, 2016

        In California, any job $500 and over that includes material and labor requires a state contractors license. If you are doing 2-3 separate jobs, at different times and the total is under $500 for each, no, UNLESS these jobs were discussed at the same time. It is illegal to split up work to skirt the law.

    • Brian Allen October 2, 2016

      you can do any job as a handy man in CA. as long as the cost of parts and labor dont exceed 500.00

  • Michael m June 6, 2014

    Hey me and my dad are trying to start a business my dad is a really good handy man he has been doin this job for over 40 years now im planing to get the license and put the business under my name my dad will work with me for a few years show me how to do all this stuff. Quick question is this a profitable business to get in to? I mean I really like this job. Oh and do I have to be 18 and older to get the license?

    • Dan Perry June 13, 2014

      This is absolutely a profitable business to get into. As far as needing to be 18 I have no idea. You’ll have to check with the contractors board in Illinois and with you city to see if you can get a business license.

  • Chris October 12, 2014

    How do you advertise. I’m a licensed general contractor in California , have had my license since 2007. I stopped contracting when the market hit the fan. I love doing handyman work more than anything else and that’s all I want to do now. I used to just put a small ad in the newspaper buy now there are so many more options out there.

    • Dan Perry October 13, 2014

      Chris,

      Not as many people check the paper for help. They now use the internet. It’s all about creating an online presence (website, online directories, youtube, etc.) Other traditional methods like door flyers and radio can work, too. But online will give you more bang for your buck.

    • Eli October 25, 2016

      Would you be looking for a job?

  • barbara d June 1, 2015

    My Brother is a handyman. A friend of his wants to get him in his development. Putting new dryer hoses in. Do you need any kind of licensed for that. I’m sure he needs lnsurance.We live in New Jersey.Thanks so much!

  • Jay August 23, 2015

    So, you don’t need a license to do jobs under $1,000 in Virginia? Does anyone have a link to the specifics? I just did a job for a guy. It was set up in three parts, each $1000. He won’t pay the last bill (including material $1,700). I want to sue him but don’t want to get in trouble for working without a license.

    thanks

    • Dan Perry August 23, 2015

      Jay,

      Visit the contractor’s board website in Virginia and read up on the laws so you know for sure. And honestly, it’s probably best to seek an attorney’s advice at this point. Even if it is legal to do the work that you did whether or not you can successfully sue your customer is going to depend on several other factors.

    • Marie Rios October 27, 2015

      Sue him. The court is not going to deal with whether or not you were licenced. They will deal with civil side of things, money owed. You didn’t work for free. Do not let this customer think that you did. I do hope you had a signed contract. That will save you in court.
      I take before and after picture, keep all receipts etc.

    • Kevin November 2, 2015

      You can’t sue him. You can do under $1000 in a 12 month period. You can’t do a $4700 contract and chop it all up into 4 different contracts. I have to disagree with everyone and get your license. It was the best thing I ever did. I’m now a Class B paint contractor and I started 6 years ago and was going door to door trying and doing whatever to get my name out there. Last year I did $325,000 in sales. You can’t do that without a license. You can do contracts under a $1000 over and over. If your sales or contracts exceed $1000 in 12 month period then your illegal no matter what your doing. You have to still have insurance at least general liability.

    • Sergio Loera September 22, 2016

      U won’t get into trouble because u are a day labor u can still sue if u got a written signed agreement then your good

  • Lee August 24, 2015

    I have been a Handyman for over 10 years in Tampa,Fl. had many jobs and all satisfied customers. I place ad’s on craigs list and other internet sites.
    the other day I received a certified letter from the City of Tampa Police department, building Construction Investigation unit. Inside was a citation for $2150.00 stating that I advertise on craigslist construction trades and I do not have a license. however, my AD’s say Handyman Service and a list of things I do.( Repairs, Drywall, Painting, Carpentry, etc;) According to my County, a handyman’s license is not available nor required ! However, since I placed cretin key words in my ad, like “minor plumbing” “minor electrical” Carpentry, They consider that Construction trades and without a license, you can NOT solicit this type of work. I am going to fight this but, it is a lesson cause the law is always out to screw you! so be careful of the wording in your ad’s!!!

    • Dan Perry August 24, 2015

      Yes, it’s very important to be careful what you advertise. I think craigslist and grocery store flyers are the most common ways for the investigators to catch unlicensed service providers.

    • John October 17, 2016

      It’s all about the money, i agrre that on big projects u should have a licence. A handy man cannot advertize plumbing,electrical, hvac. These areas require u to have a licence. Or someone that is licence, and u can use there licence doing business as etc etc. the system makes it hard for the small guy to get ahead.most costomers don’t want someone with so much credentials. Because they don,t want to pay too much money. I was once told thet i needed a contractors licence to patch some dry wall.

  • Tony September 17, 2015

    Hi i am just starting out i plan to do painting jobs. I never did estimates before but i did work for a painting company not to long ago and i liked it. Guess I just really want to ne my own boss and lead. I pland on starting with small jobs first then levitate to the bigger jobs eventually. Questuion is, ok i understand that its any job under 1000 but does that 1000 include supplies and paint or is it just for the actual work and you can charge for supplies and thing as well. Also wouls i still need my business license for this and if so would it still but technically under painting and construction or a handyman business

  • Benjamin carter October 10, 2015

    I have a question I just recently got a business liscense for paving and sealing driveways not a contractor liscense most jobs I do are small repair work and sealing of driveways under 1000k but I had a guy hire me to cut down a tree for 650$ then when I got done he wouldn’t pay me what he owed me then proceeded to call his law enforcement family that came down and redneck me acting like I was a scammer and called me a piece of shit in front of the whole neighborhood where I worked not only did this embarrass me but called out the integrity of who I am as a person what can I do to handle the situation and to keep myself protected from homeowners that want to scam people out of hard work and to protect me legally

    • Dan Perry October 12, 2015

      No matter what you do there will be people like this in the world. Your best bet is to try to avoid them and do your best to continue offering a great service and communicating clearly with your customers. Don’t let one customer experience ruin your friendly nature and how you approach the business.

  • Carl October 13, 2015

    So no contractors license to be a handyman in the Tidewater, VA area but do I need any type of license? Will I be able to get insurance without a license?

    • Dan Perry October 13, 2015

      Carl, you will still need business licenses no matter what. Here’s an article to help you out with that.

      http://www.handymanstartup.com/license-your-business/

      • A Fredricks October 19, 2015

        In California I do both. I’m a licensed tradesman and unfortunately can’t get enough work in my trade to stay busy, so I’m also a handyman. The only way to do this legally is (A) Have two business with two sets of books or (B) Combine the two and risk the assessment of a (less than professional) perception. It may be a detriment on my website to list handyman services along with my specialty trade but a man’s gotta do what a man’s gotta do!

  • Natoshia Sanderson December 28, 2015

    Hi so I live in Northern California and I was going to obtain a business license etc to start up my company with my fiancee. He has a contractor license for flooring, so I guess my question is if I’m the one obtaining the jobs for him is there a way I can just contract him out to do all the jobs and be able to pay myself and him too? I’m the one who keeps all of his records together as well as his clients and I’d like to get paid for my services as well hehe. Any advice would help thank you

    • Dan Perry December 29, 2015

      Hi Notoshia,

      The easiest way to do that is just form a partnership between you and your fiance. No need for another contractor’s license and you would just share the profits of the business.

      If you are trying to form your own separate business and sub-contract to others you are going to need a contractor’s license.

  • kain February 7, 2016

    This is for all California thinking about handyman or license. A small job is $500 labor & materials with No license! Handyman in California need license and insurance. I can understand all I just read if no one lives close to big city’s, I would stay handyman in that case. Big City’s have the opportunity to earn money contracting plus it all is how you also do contract with clients. I have done both, I found license is a way the State protects me and there is also the Mechanical Lien that helps.

  • andy February 8, 2016

    What about Washington state. .will I need a handyman license?

    • Toby April 5, 2016

      In Washington State Handymen are considered a Specialty Contractor and require a license, surety bond and general liability insurance. Don’t need to take any tests though 😉

  • Rich March 13, 2016

    FYI for Maryland, as of March 2016:
    Pretty much any work you do at somebody’s home (“home improvement”) for compensation, inside or outside, requires a Maryland Home Improvement Commission (MHIC) Contractor License.
    Home improvement is defined by the Annotated Code of Maryland as “The addition to or alteration, conversion, improvement, modernization, remodeling, repair, or replacement of a building or part of a building that is used or was designed to be used as a residence or dwelling place, or a structure adjacent to that building or an improvement to land adjacent to the building.”
    The only activities specifically exempt are new home construction; replacing an appliance that requires alteration of existing plumbing lines (huh?!); work in apartment buildings with 4 or more units; work in common areas of condominiums; and sales of materials if the seller is not also installing the materials. However, salespersons of home improvement services must also be licensed by the MHIC, so if you grow enough to hire a salesperson, that person needs a license, too.
    If you want to look it up, it’s Title 8 of the Business Regulation Article of The Annotated Code of Maryland (look for Subtitle 1; Section 8-101, “Definitions”).
    Hope this helps. When in doubt, ask a lawyer. It’s cheaper than paying a fine.

    • KJW May 30, 2016

      I see that every where and have been trying to find out more about this MHIC but can’t find any info. When looking for the MHIC # in the DLLR database for many companies, I can find their HVAC# but not their MHIC#. If a company has an HVAC license does that cover the MHIC # as well? Very confusing looking for the qualifications of contractors.

  • Crystal March 22, 2016

    I have been doing property preservation work for about 6years now. First in Georgia now in Washington state. Question for you all: if I will only be doing lock changes, grass cuts, winterization etc. Nothing to do with plumbing, dry wall or building, then I don’t need a contractor license or so I? I already have my 1 million insurance. I don’t believe I need anything else. Any postive feedback is greatly appreciated.

    • Toby April 5, 2016

      Hi Crystal, in Washington you need a Handyman or General Contractor license to do the work you’ve described, sounds like you’ve got the insurance, so now you just need a business license, surety bond and a contractors license. its sounds a little crazy but you need a license to cut someone grass around here, legally anyway.

      Good luck

      • Joel C Wingert May 21, 2016

        You do not need a bond or insurance to cut grass in WA state. Just a business license, at the minimum.

  • Donald April 6, 2016

    I’m curious, in California as a handyman are you limited in the services you can offer? I understand labor and material cost cannot exceed $500 and that services that require a permit cannot be provided, but what about simple yard clean-up, garage cleaning, moving storage containers for elderly folks, or even walking a dog? Is a HandyMan Business License essentially all-inclusive in CA?
    Thanks!

  • marie April 13, 2016

    I live in illinois I am trying to start a pc repair business and refrigeration business and housekeeping business where customer can call or go online and book request for service call. Also i want to hired sub contractor. Als o list the license i will need and everything i need to start my business correct way thank ti everybody who respond

  • Kurt April 20, 2016

    If I hire a person who has a license, can I operate as a licensed business? Or would I need to make them a partner?

  • Ada July 14, 2016

    I am trying to clean apts. ,but I will b my own contractor in doing so. My question is to get insured do I need a license?

  • daniel c August 1, 2016

    I like painting interior of homes. I now work with a guy resurfacing bathtubs and some kitchen and bathroom cabinet painting. Ive painted before and enjoy doing it. Now i would like to make my own painting service. Now my only concern is at what dollar amount do i need to be licensed for? Small jobs, big jobs or both? I mean if business is there and going good I’d legalize my business.

  • Dominick September 4, 2016

    Hey I’m in New York City I want to start a small maintenance business just my self I also waiting on application for license contractor and self contractor thank you for all responses

  • Becca September 7, 2016

    Hi, I have a question for you Dan or anyone who can help. My husband has been running his own business for a few years now and I am starting to help out with the business side of things. The laws in Ohio have been very confusing for me to decipher. I was under the impression in Ohio you did not need a license to be a general contractor. However, when I went to pull a permit, you have to be a contractor to do so. So does that mean you can do jobs that don’t require permits (even if they are higher than $1000)? Or am I all wrong about not needing a license? At this point we are going to get him a license but I’m nervous that most of his experience we can list on his application has been within his own business doing work that perhaps he shouldn’t have been doing without the license…could that hurt his chances of being approved for a license? Also, we have a business id (an EIN) but not a state/city license. Again I am having a hard time trying to find what kind of business license we would need and am only seeing information regarding an Electrical, Plumbing, or HVAC contractor. He is looking to be a Home Improvement General Contractor. Any advice you can offer would help me tremendously. Thanks!

  • Stephanie September 11, 2016

    Do you need to be insured for floor covering and interior\exterior painting? My fiancee and I offered to do a tiling job for a small business in town (local two roomed small movie theatre). We both have experience and knowledge in this area. It is laying VCT. The owner didnt want to ri up old VCT. He wanted us to tile over it. We had never done this. Only tiled on wood or contrete , using epoxy to level and tile glue to adhere. After we had asked a few general contractor friends and did some research , we were advised that putting VCT over VCT isnt the best way to go. The glue doesn’t adhere well to the gloss for lay over. We told owner that we’d do it his way but didn’t recommend it or guarantee the work. After we had drawn a contract to insure us payment and to be clear on job description (protecting us and owner) , mentioning that we were doing lay over and advised owner of not doing so, we then were popped with the question if we had insurance. The owner already had us working , without a signature to remove old seating. Weve been doing sidework , drywall, painting , roof repairs for locals for awhile. Since we’ve not been involved with any contractors or businesses we’ve never thought of legal matters , just the matters of making alittle cash for our family and helping out people who didnt want to p[ay the big contractor to come in. Any advise would be great!!!!

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