How to Become a General Contractor in Texas

Everything you need to know to build and operate a contractor business

Co-authored by Perryn Olson and Danielle Blinka, MA, MPA

Last Updated: January 31, 2023 References

Basic Requirements

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Building Your Business

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Operating as a Contractor

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Expert Q&A

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Tips

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Warnings

If you know your way around a toolbox and you’ve been working in construction for a while, you may be wondering how you can set out on your own and start a business. If you live in Texas, we’ve got good news; you don’t actually need a general contractor’s license. This doesn’t mean you’re totally off the hook, though—you’ll need a license for specific types of work (like electrical, or HVAC). There are certain counties and cities with specific requirements as well. In this article, we’ll cover everything you need to know about getting past the red tape so that you can get your business off of the ground.

Things You Should Know

Get on-the-job training with an entry-level construction job to work toward the specific licenses you need to be a contractor (like electric, HVAC, or well drilling).
Register your business name with the state and create a business plan that includes outlines for marketing, operations, finances, and growth.
Apply for a work permit in your county and meet all Texas Minimum Construction Standards listed on the Texas Department of Housing & Community Affairs website.

Part 1

Part 1 of 3:

Basic Requirements

1
Take classes at an accredited school. Enroll in a college, university, technical school, or trade school to gain needed skills. In Texas, general contractors are not required to satisfy any educational requirements, but taking classes or earning a degree can help you gain the knowledge and skills to perform the job.^{[1]
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Expert Source

Perryn Olson
Construction Specialist
Expert Interview. 3 August 2021.} Additionally, an education will increase your appeal to clients or employers.
- A degree in civil engineering, construction management, or construction technology from a 4-year college or university can provide you with the needed skills and credentials.^{[2]
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2
Acquire an entry-level construction job. Look for jobs in the local classifieds or through employment sites like Indeed.com or Monster.com. You can also search for construction companies in your area and call to see if they're hiring.^{[3]
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Expert Source

Perryn Olson
Construction Specialist
Expert Interview. 3 August 2021.} Starting at the bottom might not seem glamorous, but it will get you started on your path to success as a general contractor.^{[4]
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- Remember, you can always work up to a better position.
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3
Seek on the job training. Although it can take years to attain all the skills you need to be a general contractor, you can start earning money in the industry by taking an entry-level construction position.^{[5]
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Perryn Olson
Construction Specialist
Expert Interview. 3 August 2021.} Once employed, take on new tasks to gain more skills and expand your work history.^{[6]
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- It's a good idea to watch how your construction managers perform their jobs as well so that you have a good idea of what the job entails.
- Volunteer to assist others with tasks you can perform so that you can watch up close how they perform their job. For example, you might offer to hold an item in place while it's installed, or you might offer to perform a supportive task such as handing over supplies.
4
Attain a license if you plan to perform certain types of work. While you don't need a license to operate as a general contractor, you will need a license if you plan to undertake certain jobs. In Texas, electricians, plumbers, HVAC technicians, fire sprinkler installers, and well drilling/pump installation specialists must attain proper licenses.^{[7]
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- You'll be required to pass a test and pay a fee to attain your license. Fees vary depending on what type of license you need.
- Check online to locate a testing site in your area.
5
Check the city where you live for stricter local requirements. Some cities in Texas require you to register with the city and pay a fee in order to operate in the city. If this is the case, then you will need to satisfy these additional requirements.
- For example, the City of San Antonio requires general contractors to register with the city if they plan to do home improvement or residential construction projects. Since this applies to many contractors, it's a good idea to contact the city and complete the necessary paperwork. Home improvement contractors would pay $75 per year, while construction contractors pay $170 every two years.^{[8]
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Submit to a background search. You must submit to a criminal history search in order to attain the proper licensing to work in people's homes. You may also need to be fingerprinted, depending on the requirements in your area.^{[9]
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- You will pay a separate fee for your background search, which commonly costs about $25.

Part 2

Part 2 of 3:

Building Your Business

1
Develop relationships with fellow contractors and local businesses. As soon as you start working in the industry, put your best foot forward and work to build solid working relationships. Maintain a professional demeanor and demonstrate a good work ethic. You never know when a coworker, boss, or client could become a future business contact.^{[10]
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- Keep business cards of people you meet.
- If someone offers to help your career, get their contact information and stay in touch.
- Remember that the person who is working beside you today may be able to help you secure a contract in the future.
2
Register your business name with the state of Texas. The name cannot be used by another business, so check online and in county records to make sure no one is using it. You can use your own name or a business name. Then file an assumed name certificate with your local county. You will owe a local fee, which varies, as well as a state fee of $25.^{[11]
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- It's a good idea to come up with 3 different name options to ensure that 1 is approved. The state will not let you use a name that is already in use or is too similar to 1 that is in use. For example, you may not get approval for Top Builder if there is already a Top Building in operation.
- Alternatively, you could do business under your own name or register as a DBL, which means “Doing Business As.”^{[12]
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3
Choose a business structure that fits your needs. You may decide to operate as a sole proprietorship if you are working alone. If you have a partner, you can form a general partnership. If you want to hire employees, you can create a corporation or a limited liability company (LLC). You should speak to an attorney or accountant to choose which structure is best for your business.^{[13]
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- If you choose to form a partnership, corporation, or LLC, you will need to file paperwork with the Secretary of State's office. You will need to either consult a lawyer or use a legal help website.
- If you plan on hiring employees, you should apply for an Employer Identification Number with the federal government. You can do that by visiting https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. You will also need to register your company to pay taxes in Texas by visiting https://comptroller.texas.gov/errors/404.php.
4
Write a business plan. Perform research into the market in your area and determine how you will compete. Prepare a business plan that demonstrates you have a plan for success. Include a description of your company, the work you will perform, a marketing plan, an operational plan, the company's management and organizational structure, and a financial plan.^{[14]
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Perryn Olson
Construction Specialist
Expert Interview. 3 August 2021.}
- You may be able to find a template for your business plan by looking online.^{[15]
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5
Insure yourself and your business. The construction business can be dangerous, and accidents do happen. Not only could you or someone who works for you become injured, but you could also damage property. You need to get a policy that fully covers your business operations.^{[16]
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Perryn Olson
Construction Specialist
Expert Interview. 3 August 2021.} Talk to an insurance broker to design the best policy.^{[17]
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- Depending on the scale of your jobs, you may need to purchase additional policies for some jobs. It's a good idea to check with your insurer to make sure that you are covered.
- You may need to provide documentation proving you're insured before you are able to pull permits.^{[18]
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Get a business loan if you need to expand your business. If you decide to get a loan, you'll need to present your business plan, resume, and financial documents. Before applying, you should determine how much you need and write out an explanation of how the funds will be used. You're more likely to get approval if you can provide a clear plan for how the money will be spent.^{[19]
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- You and your business will need a good credit score.
- You may want to explore other options, such as attracting investors or borrowing from family.

Part 3

Part 3 of 3:

Operating as a Contractor

1
Attract clients. You will likely need to market yourself to find jobs. It's a good idea to create a website, business cards, and flyers. Place your company in the local yellow pages, and reach out to your local contacts. When you first start your business, you may need to make cold calls or personally deliver your cards to potential clients.^{[20]
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- For example, you could go into a business whose facade is damaged and offer them your services.
2
Pull a permit with the county. You will need to get a permit before you can start work, which will require a fee. A permit will take at least 24 hours and may take longer depending on the county you're working in and how busy the county clerk's office is. Make sure that you consider permit times when providing a timetable for your clients.^{[21]
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- In some cases, you may need to pull multiple permits. For example, you may need a demolition permit to tear down a wall and a remodel permit to rebuild it.
- The fee will vary, so check costs in your county before submitting a quote. You should include the fee in your cost estimation.
- If the area you're working in has a lot of construction jobs happening at 1 time, such as after a natural disaster, it may take more time for your permit to get approval.
3
Meet all building and enforcement codes. To maintain your business and ensure that your clients are safe, you need to make sure that you meet all legal requirements. If you don't, you could risk both lives and your business's reputation. Code enforcement will inspect the property to make sure that your work complies, so don't cut corners.
- You can consult the Texas Minimum Construction Standards by visiting https://www.tdhca.state.tx.us/single-family/training/docs/14-TMCS.pdf.

Expert Q&A

Question

Do I need to go to school to be a general contractor?

Perryn Olson
Construction Specialist
Perryn Olson is a Construction Specialist and the VP of Marketing for REX Construction Services, REX Engineering Group, and REX Technology Solutions. He holds a BA in Visual Arts from Loyola University New Orleans and is a Certified Marketer with the Society of Marketing Professional Services and the Construction Marketing Association.

Perryn Olson

Construction Specialist

Expert Answer

Most general contractors get started in the field by either going to school or learning a trade.
Question

How do I get a job if I don't have enough experience?

Perryn Olson
Construction Specialist
Perryn Olson is a Construction Specialist and the VP of Marketing for REX Construction Services, REX Engineering Group, and REX Technology Solutions. He holds a BA in Visual Arts from Loyola University New Orleans and is a Certified Marketer with the Society of Marketing Professional Services and the Construction Marketing Association.

Perryn Olson

Construction Specialist

Expert Answer

Work at a few companies to get some work experience for yourself. Study how they run, and use these jobs as opportunities to meet people in the industry.
Question

What qualifications do you need to be a contractor?

Perryn Olson
Construction Specialist
Perryn Olson is a Construction Specialist and the VP of Marketing for REX Construction Services, REX Engineering Group, and REX Technology Solutions. He holds a BA in Visual Arts from Loyola University New Orleans and is a Certified Marketer with the Society of Marketing Professional Services and the Construction Marketing Association.

Perryn Olson

Construction Specialist

Expert Answer

You need to work with numerous other companies with be familiar with specialized skills and equipment to get any job in the construction industry.