How to Get Your General Contractor License and Start Bidding Jobs

General contracting sits at the top of the construction food chain. You manage projects, coordinate subcontractors, and earn margins on total project value. A kitchen remodel that costs $30,000 in materials and labor might bill at $45,000, with $15,000 going to the GC. Multiply that across 15 to 20 projects per year, and you see why experienced GCs earn well into six figures.

Rafael, a finish carpenter in Denver, spent 12 years working for other contractors before getting his GC license in 2024. His first year as a licensed general contractor, he completed 8 projects and grossed $420,000. His net profit was $126,000 after paying subs, materials, and overhead. "I was making $72,000 as an employee," he said. "The license changed everything."

Here is the path from tradesperson to general contractor.

How Much Does It Cost to Start a General Contracting Business?

GC startup costs range from $10,000 to $40,000:

Licensing and exams: $500 to $2,000 (exam fees, application fees, study materials)
Surety bond: $500 to $5,000 per year (required in most states, amount varies)
Insurance: $3,000 to $8,000 per year (general liability + commercial auto; add builders risk for active projects)
Vehicle: $5,000 to $15,000 (pickup truck)
Office and admin: $500 to $2,000 (estimating software, accounting software, phone, laptop)
Marketing: $1,000 to $3,000 (website, Google Business Profile, business cards)
Working capital: $5,000 to $15,000 (you will need cash to bridge the gap between paying subs and getting paid by clients)

The surety bond is a unique GC requirement. It protects consumers if you fail to complete a project. Bond amounts range from $10,000 to $50,000 depending on your state, and annual premiums run 1% to 10% of the bond amount based on your credit score.

What Licenses and Certifications Do You Need?

General contractor licensing is state-specific, but most states require some form of contractor license:

States with contractor licensing exams:

California (CSLB B license), Florida, Arizona, Oregon, Nevada, Utah, Louisiana, and about 20 others require passing both a trade exam and a business/law exam.

States with registration (no exam):

Some states require registration and proof of insurance but no exam (Washington, Maryland).

States with no state-level GC license:

Texas, Colorado, Kansas, New York (though NYC has its own requirements), and several others have no state license. However, cities and counties often have their own requirements.

Common requirements across states:

Minimum years of experience (typically 3 to 5 years in construction)
Pass a licensing exam (trade knowledge + business/law)
Proof of general liability insurance
Surety bond
Workers' compensation insurance (if you have employees)
Business entity registration (LLC or corporation)

Exam preparation: Most state exams cover building codes (IRC/IBC), project management, contract law, safety regulations, and business practices. Study courses run $200 to $500 and typically take 2 to 4 weeks of focused study.

Essential Equipment and Tools

Unlike most trades, GCs do not need a lot of personal tools. Your primary tools are business tools:

Business essentials ($1,000 to $3,000):

Laptop or tablet for estimating, email, and project management
Estimating software (Buildertrend, CoConstruct, or spreadsheets to start)
Accounting software (QuickBooks)
Project management app
Printer for contracts and plans

Field essentials ($1,000 to $2,000):

Tape measure (25-foot and 100-foot)
Laser distance measurer
Level (4-foot)
Digital camera or smartphone for documentation
PPE (hard hat, safety glasses, steel-toe boots, high-vis vest)
Basic hand tools for light work

Vehicle:

Pickup truck (your primary tool for site visits, material pickups, and subcontractor meetings)

The majority of physical work is done by your subcontractors. Your job is to estimate, bid, manage, coordinate, and ensure quality. Invest more in business tools than trade tools.

How to Get Your First 10 Customers

Start with your existing network. If you have been in construction for years, you know homeowners, real estate agents, architects, and designers who need a GC. Let every one of them know you are now a licensed general contractor.

Architects and designers are your best referral source. They design projects that need a builder. Introduce yourself to 5 to 10 local architects and interior designers. Offer to bid on their next project. One good architect relationship can feed you 3 to 5 projects per year.

Real estate agents need renovation partners. Agents representing buyers of fixer-uppers need reliable GCs. Agents flipping homes need them even more. Network at real estate events and offer to do walk-throughs with their clients.

Houzz and Google are essential platforms. Create profiles with photos of your best past work. Many homeowners start their contractor search on Houzz. Google Business Profile reviews are the number one trust signal for GC hiring decisions.

Bid on smaller projects first. Do not chase a $200,000 renovation as your first project. Start with $15,000 to $40,000 remodels. Build your portfolio, collect reviews, and grow into larger projects.

How to Price Your Services for Profit

GC pricing follows a cost-plus or fixed-bid model:

Cost-plus: You charge actual costs (materials + subcontractors + permits) plus a percentage markup (typically 15% to 25% for overhead and profit). Transparent and fair, preferred for large custom projects.

Fixed-bid: You estimate total costs, add your markup, and quote a single price. Riskier but preferred by most homeowners who want cost certainty.

Typical GC markups:

Materials: 10% to 20% markup
Subcontractor labor: 15% to 25% markup
Overall project markup: 20% to 35% (covers your overhead, profit, and risk)

Example project pricing:

A $30,000 kitchen remodel (sub and material costs) bills at $39,000 to $42,000 (30% to 40% markup)
A $60,000 addition bills at $78,000 to $84,000

Target net profit of 8% to 15% after all costs. This means on a $100,000 project, you should net $8,000 to $15,000 in profit. Overhead (insurance, vehicle, office, marketing) typically runs 8% to 12% of revenue.

Mistakes That Kill New General Contractors

Underbidding to win jobs. The temptation to lowball is strong when you are new. Resist it. Underbidding leads to cutting corners, unpaid subs, and a reputation that takes years to repair.

Not having contracts. Every project needs a written contract specifying scope, timeline, payment schedule, change order process, and warranty terms. Verbal agreements are lawsuits waiting to happen.

Poor cash flow management. GCs fail when they pay subs before collecting from clients. Structure payment schedules so you collect before each phase of work begins. Never fund a project out of pocket.

Taking on too-large projects too soon. A $500,000 project requires a different level of management, bonding, and cash reserves than a $30,000 project. Scale up gradually.

Neglecting subcontractor relationships. Your subs are your business. Treat them well, pay them on time, and they will prioritize your projects. Burn subcontractor relationships, and you will struggle to staff your jobs.

Frequently Asked Questions

How long does it take to become a general contractor?

Most states require 3 to 5 years of construction experience before you can apply for a GC license. The exam preparation takes 2 to 6 weeks. Total time from entering construction to earning your GC license is typically 4 to 7 years.

How much do general contractors make?

Solo GCs typically earn $70,000 to $150,000 per year. GCs managing multiple crews and subcontractors earn $120,000 to $300,000. Large contracting firms with $2M+ in revenue can generate $200,000 to $500,000 in owner profit.

Can you be a general contractor without trade experience?

In some states, yes. If you can demonstrate project management experience and pass the licensing exam, you can get your GC license without being a tradesperson. However, field experience gives you credibility with subs, better estimating accuracy, and the ability to spot quality issues.

What is the hardest part of being a general contractor?

Managing cash flow and coordinating subcontractors. Every project has competing demands for money and scheduling. The GCs who build systems for tracking payments, schedules, and sub performance survive. The ones who wing it do not.

Related reading: