Career Guide
By Phazahn Odom | Founder of Phixmo | Former bookkeeper for residential GCs | Former NFL tight end, Pittsburgh Steelers
Becoming a general contractor is one of the more accessible paths to running a real business with strong income potential. You don't need a college degree. You need experience, a license, and the discipline to run the business side well.
This guide walks through the full path: gaining experience, getting licensed, setting up your business, getting insured, and landing your first jobs. It also covers the part most new contractors underestimate: the financial and operational side that determines whether you actually make money.
A general contractor manages construction projects from start to finish. On residential work, that means remodels, additions, ADUs, and new home construction.
The GC is responsible for the whole project: estimating the cost, signing the contract, scheduling the work, hiring and coordinating subcontractors, ordering materials, managing the crew, handling permits and inspections, communicating with the homeowner, and delivering the finished project on budget and on time.
It's part construction expertise and part business management. Many skilled tradespeople become GCs and discover that the business side (estimating, job costing, contracts, cash flow) is where the real challenge lies.
Most states require documented construction experience before you can get licensed.
Many states, including California, require around four years of experience at a journey level (skilled, not apprentice) in the trade or classification you're licensing for. This experience must usually be documented and verified.
Work for an existing contractor. Start as a laborer, move up to a skilled position, and learn the trades. Pay attention not just to the construction but to how the business runs: how jobs get bid, how costs get tracked, how the owner makes money or loses it.
Keep records of the projects you work on, your role, and the dates. When you apply for your license, you'll need to prove your experience.
Licensing is handled at the state level, so requirements vary. Here's the general path.
Each state has its own licensing board (in California, it's the CSLB, the Contractors State License Board). Check your state's specific requirements for experience, exams, and fees.
Document the required years of journey-level experience, typically four years.
Most states require passing a trade exam and a business/law exam. The business and law portion covers contracts, lien laws, safety, employment, and the financial side of running a contracting business.
Most states require a contractor's bond (a surety bond that protects consumers). This is typically a few thousand dollars in coverage.
File with your state board, pay the fees, and once approved, you're licensed.
Note: some states have additional requirements like proof of insurance, a business entity, or workers' compensation coverage. Check your specific state.
Getting licensed is one half. Setting up the business is the other.
Most contractors operate as an LLC or S-corporation rather than a sole proprietorship, for liability protection and tax efficiency. An LLC is simple to set up and protects your personal assets. As you grow, an S-corp election can reduce self-employment taxes. Consult an accountant on the right structure for your situation.
A federal Employer Identification Number from the IRS, needed for taxes, hiring, and opening a business bank account.
Keep business and personal finances completely separate. This is critical for taxes, liability protection, and actually understanding whether your business is making money.
This is the part new contractors most often neglect, and it's the part that determines whether you succeed. You need to track income, expenses, and most importantly, job costs. Knowing whether each job made money is the foundation of a sustainable contracting business.
Insurance protects you, your business, and your clients.
Covers property damage and injuries to others. Essentially required to operate and to win work, since homeowners and GCs you sub for will ask for proof.
Required in most states if you have employees. Covers injuries to your workers.
If you use vehicles for business.
Protects your investment in tools and equipment.
The cost varies by state, trade, and revenue, but insurance is a non-negotiable cost of running a legitimate contracting business.
Once you're licensed and set up, you need work.
Friends, family, former employers, and people you've worked with. Your first jobs often come from people who already know and trust you.
In residential construction, referrals are the number one lead source. Do excellent work, ask happy customers for referrals, and collect reviews. Every satisfied homeowner is a source of future work.
A simple website, Google Business Profile, and presence on review platforms. Homeowners research contractors online before calling.
Verified reviews build the trust that wins bids. Start collecting them on your very first jobs so you have a reputation established when you're competing for bigger work.
GCs sub work to each other. Building relationships with other contractors and trades brings referral work.
After years of doing the books for residential GCs, here's what I saw new contractors get wrong most often.
New GCs often bid a job, do the work, and have no idea whether they made money until tax time. By then it's too late to fix anything. Tracking costs against your estimate on every job, in real time, is what separates contractors who grow from contractors who struggle.
New contractors often bid too low because they're afraid of losing the job, or because they don't account for overhead and profit properly. Your price needs to cover not just labor and materials but insurance, vehicle costs, your time managing the project, and actual profit. Markup of 12 to 18% over hard costs is typical for residential.
When a homeowner asks for extra work, new GCs often do it without documenting it, then never get paid for it. Every change needs a documented, approved change order.
This makes it impossible to know whether the business is actually profitable and creates a mess at tax time. Separate accounts from day one.
The construction is the easy part for most new GCs. The business side, especially the financial side, is what determines success. Getting your job costing, pricing, and change order discipline right from the start is the difference between a contracting business that grows and one that just keeps you busy.
Once you're licensed and working, the right tools make the business side manageable.
You need a way to create professional estimates, track costs against budget, manage contracts and change orders, invoice customers, and keep your crew organized. Many new contractors start with spreadsheets and group texts, then quickly outgrow them as the job count rises.
Phixmo was built for exactly this: residential GCs who need to run the business side professionally without an accounting degree. AI estimates, real-time job costing, contracts with e-signature, change order management, and a customer portal, all in one platform for residential contractors. Field workers are free, and it's free to start, free forever, with Pro from $169/month.
The point isn't the specific tool. The point is that the business and financial side of contracting is what makes or breaks you, and handling it well from the start sets you up to grow.
In most states, yes, especially for projects above a certain dollar value. Requirements vary by state. Check your state's contractor licensing board for specifics. Operating without a required license can result in fines and inability to enforce contracts.
Most of the timeline is the experience requirement, typically four years of journey-level work. After that, the licensing process (exams, application, bond) can take a few months. So the realistic path is four-plus years.
No. General contracting is a skilled trade and business path that doesn't require a degree. It requires documented experience, passing the licensing exams, and the ability to run the business.
Costs vary by state but include exam fees, application fees, the bond, and insurance. Budget for several thousand dollars total when you account for the bond and initial insurance.
For most people, the business side, especially the financial management. The construction skills come from experience. The estimating, job costing, pricing, and cash flow management are what new contractors most often struggle with and what determines whether the business succeeds.