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SO YOU WANT TO BE A CONTRACTOR…

August 24, 2016

HERE ARE THE FIRST 9 STEPS TO TAKE ON THAT PATH

How do people become independent contractors in home improvement and repairs? To do it right, it’s a lot more work than printing out business cards and passing them around to friends or calling the state to ask them to put you on their list of businesses.

In Arizona, becoming an independent licensed contractor may be tougher than it is in many other states. We found many pages of instructions online, detailing what a potential contractor needs to get a license from the state’s Registrar of Contractors. Often people complain about how complicated it is, but certainly the process can help protect homeowners who hire licensed contractors only. And everybody knows how much we urge Arizona homeowners to avoid unlicensed workers.

Despite the time and trouble, many people really want to have their own contracting business. Some are already working as employees of a contractor. (Employees don’t need licenses.) Some went to trade school. And some people who have done a lot of DIY projects successfully decide that they want to go out of their own.

So here are some of the key steps that potential contractors need to take:

1 | What’s your name?

Reserve the legal name of your business with the Arizona Registrar of Contractors and Arizona Corporation Commission.

2 | Take the test.

Take a business management test given by the state and score at least 70 percent. It costs $56 to take the test.

3 | Take the specialized test.

In many trades, you also have to take a specialized test — things like electrical work, elevators, air conditioning, sewers and drains, and many other specialties. You can even take a test preparation class to help you get a good score. There are registration fees for all the exams.

4 | What’s your ID?

Get an employer identification number from the IRS.

5 | Protect you and your clients.

Get a license bond to protect you and your clients in case of bankruptcy or malfeasance.

6 | Protect your employees.

Get worker’s compensation insurance if you have employees.

7 | Apply with the ROC

Complete the Registrar’s application forms and the contractor’s license forms. When you fill out your application form you must send in a fee, the amount changes depending on the type of contractor you want to be. A commercial contractor, for example, will pay about $900.

8 | Verify your experience.

Depending on the trade, you may need some years of experience and you have to submit notarized statements of employers, fellow employees, homeowners or other who will verify your experience claims. Many trades require four years of experience.

9 | Explore technical or manufacturer’s training.

Technical training from a college or a manufacturer’s training program can be substituted for part of the years of experience you need.

It’s a complicated and costly list of requirements and that’s before you start buying or renting tools and equipment, trucks, office or storage space and more. To the aggravated trades person who navigates this route to becoming a properly licensed contractor, this may seem like running the gauntlet of barriers to entering the field. But as someone who has seen both sides of the home improvement industry both inside and outside Arizona, I have to say what we have here is as good as I’ve seen in protecting the homeowner. Anyone wanting to become a legitimate contractor should support the system by committing to 100 percent compliance.

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