Category Archives: Business

How To Earn Your General Contractor License in Texas

General Contractor License Texas

Being a general contractor is appealing to many different types of people. People who like to work with their hands, people who have a skill for task delegation, and people who garner satisfaction from seeing a job through to the very end all flock to the trades, and many of them eventually become general contractors. 

It’s also easy to imagine that many general contractors get into the business because of job security. In addition to making an above-average income, general contractors’ job growth projection through 2026 is 11%

And if you are one of the people who want to be among Texas’ fine general contractors, you probably have some questions about the process. Luckily, obtaining a general contractor license in Texas isn’t as hard as it is in other states. But the process is still riddled with red tape and bureaucracy.

In the following post, Contractors’ Society of America will be helping all the hopeful general contractors out there by answering some of the questions associated with how to get a general contractor license in Texas. 

Can I Use my Contractor License in Another State?

While some states have contractor license reciprocity agreements (meaning that you can obtain a contractor’s license in a state other than the one you became licensed in without taking another test), some do not. At the time of this writing, Texas has no such reciprocity agreements with other states. 

Furthermore, “state jumping” is not allowed. State jumping refers to when you get a reciprocal license in one state and then go to another state and obtain a license there and the merits of the reciprocal license you got in the previous state.   

Do I need a General Contractor License in Texas?

The short answer is no. Texas does not require any testing or specific licensing if you want to operate as a general contractor. But there’s always a short answer and a long answer. The long answer is that while Texas doesn’t require anything to operate as a general contractor, some cities within the state might. 

Of course, it gets complicated for many general contractors. The city you are working in may have its licensing requirements. But to get your general contractor business set up in Texas, there aren’t any specific licensing requirements. 

Contractors that need a License in Texas

Chances are if you are a general contractor, you probably offer other services that do require state licensing. For example, if you plan on providing plumbing, HVAC, or electrical services in-house, you will need to obtain a license for those services. Of course, if you plan on subcontracting all of those services out, you won’t have to worry about getting those licenses yourself. You must be sure that any subcontractor you are working with is fully licensed and insured.

Do I need General Contractor Insurance in Texas?

Again, the short answer is yes. If you are working for public clients, the state requires that you have workers’ compensation insurance. Workman’s comp protects your clients and your employees should they get hurt on the job. The workers’ compensation insurance will foot the bill for any medical costs. 

And yet again, there is a longer answer. You may also need a builder’s risk insurance and put up a surety bond to work with some clients or in certain cities in Texas. The surety bond protects the client if they fall short of building codes or a project is left incomplete. The builder’s insurance protects against any damages that may occur during any given project. 

Some cities may require you to have all of the insurance types mentioned above to get your work permit. The best way to find out which Texas cities you will need a license and insurance in is by visiting the Texas Municipal League’s website and clicking on the specific city. That link takes you to a city-specific website that lists general contractor licensing and insurance requirements.

Get your Career Started

If you are ready to start your journey as a general contractor, why not become a member of Contractors’ Society of America. We provide you with the valuable resources you will need throughout your career. Plus, we offer unique networking opportunities for contractors of all kinds so you can find quality subcontractors or pick the brains of industry leaders. 

Should Contractors Be Bonded and Insured?

Should Contractors Be Bonded and Insured (Blog Cover)

Should contractors be bonded and insured? Well, only if you want to win the most customers possible. Savvy homeowners will know the difference between liability insurance and a bond. And if a contractor isn’t bonded, they may very well stay away from them. 

So the short answer to these questions is yes. All contractors, whether you fit pipes, install electrical boxes, hang drywall, or shingle roofs, should be bonded and insured. But for those of you with inquiring minds, Contractors’ Society of America will be explaining why you should be licensed and bonded as a contractor. But let’s start with the basics.

What is the Difference Between Being Insured and Bonded?

There is a common misconception that insurance and bonds are essentially the same things. That isn’t the case. In straightforward terms, a surety bond protects contractors’ customers while liability insurance protects the contractor. 

A surety bond is a certain amount of money that a contracting company puts up to a surety bond company. If the contractor fails to follow local building codes and regulations, leaves a job incomplete, or detriments the property, the consumer, can go after the company’s surety bond. 

The bond protects the customer from an ill-intentioned company and keeps contractors honest. On the other hand, insurance means that you won’t be on the hook if a contractor is injured while working on your property. 

There are different insurance types that a contractor should carry, like liability and worker’s comp. Still, these policies are more to protect the contractor and his/her company more so than the customer. 

On the consumer end of things, there is one significant difference between insurance and bonding. As erstwhile mentioned, a bond will protect the customer if the contractor fails to follow building codes. Adhering to regulations is very important.

Say, for example, you hire an electrician to wire a room you recently added to your house. The project goes off without a hitch; you pay the contractor and say goodbye. But a few months later, your new addition doesn’t pass inspection because of faulty wiring. 

In this case, the electrician’s insurance can’t help the consumer at all. But the bond can. The customer could file a claim against the company and go after their bond money to help cover the cost of rewiring. 

Do you Need to be Bonded?

The tricky thing about bonding is that some states require it to get your contractor’s license, while others are laxer on the rule. Here is a full list of which states require a bond, but it’s best to contact your local licensee board for specific regulations. 

That’s because some states require a bond for some trades but not others. The county you are operating in may be a determining factor as well. For instance, if you are a contractor in Montana, you may be required to be bonded in one county but not the neighboring one. 

Do you Need to be Insured?

Again, the short answer is; absolutely. Different states have different license laws. Some require insurance for you even to get your contractors license. But in general, you will need at least some basic insurance to obtain your contractor’s license. 

But apart from the requirements, not having a full complement of insurance as a contractor can cost you customers and income. That’s because some home owner’s insurance policies require that the homeowner works only with insured, licensed contractors. 

So, for example, a homeowner could have their insurance voided if they knowingly work with a contractor who is not insured. For this reason, many savvy property owners will stay away from contractors who don’t carry a full complement of insurance policies. 

Final Thoughts From CSOA

In the end, the bonding and licensing process benefits both contractors and their customers. It may seem like a hassle for a contractor to pay into a surety bond every year, but it keeps your work honest, which in the end is suitable for your business. 

On the flip side, it can be a chore for the consumer to obtain multiple estimates from different contractors (as is the smart practice) and to make sure they are all fully licensed and bonded, but in the end, it’s worth the effort. 

But whether you are a consumer or contractor, we can make the process more comfortable with the wealth of resources we offer here at Contractors Society of America. Reach out to us today.

4 Ways to Mitigate Customer Complaints as a Contractor

Contractor at Work

You know how the old adage goes: you can’t please everyone. This is especially true as a business owner. The fact is that you are going to run into customer complaints at some point. It doesn’t matter if you run an impossibly tight ship and take every precaution to meet the total satisfaction of all your customers; some customers simply cannot be pleased. 

And at the end of the day, that’s ok. Most people don’t expect perfection and are even wary of it. If you are worried about a few bad customer reviews of your contracting business, you may not have all that much to worry about. Recent data suggests that consumers don’t actually trust businesses with perfect review ratings. In fact, the current ideal star rating is between 4.2 and 4.5 stars. The reason for this is that most consumers are aware of the fact that reviews can be manipulated. So when they see a perfect 5-star rating, they tend to think that something is rotten in the state of Denmark.

But don’t take that as license to start giving up all your customer service efforts. You should still try to deliver exemplary service every single time. But customer complaints are unavoidable. So in the following post, we are going to be talking about the best ways to mitigate customer complaints, how to manage bad reviews and answer some common questions related to customer complaints. Let’s start with the basics

Why do Customers Complain?

Why do customers complain in the first place? To truly answer this question one would need a degree in psychology. But on the surface, there are many reasons why a customer may choose to lodge a complaint against your contracting business. Here are a couple of reasons why and what you can do as a contractor:

  • Perceived Quality – Some customers simply have unrealistic expectations. No matter how finely crafted the product is, it may not live up to the lofty expectations of the customer. This is why it’s important as a contractor to have pictures and a comprehensive portfolio of your work so the customer can see what they can expect. Be honest with your customers. Don’t promise anything you can’t deliver. Make sure to set realistic goals for the project and don’t take on any projects that you can’t handle.
  • Unavailability – Communication is key in the contracting business.  Whether you are a roofer, electrician or an HVAC technician, you have to let the customer know what the project will entail, how it is progressing and be there to field their questions and concerns. A customer will feel wronged if they can’t get their questions answered. Make sure that your customers have multiple ways to get in touch with you. And even if you can’t field all their questions yourself, try to make sure that someone on your team is available at all times to speak with customers. Oh yeah, and it helps tremendously if the team member you appoint to speak with customers is knowledgeable of the specific project.

What are the Most Common Customer Complaints?

As a contractor, you are probably going to hear the same kinds of complaints throughout your career. The most common types of customer complaints for contractors have to do with:

  • Long Wait Times – Having to wait too long to talk to a representative is a very common customer complaint for contractors. That’s because a lot of contractors overlook having an ample office staff when they first start out.
  • Follow-up – As a contractor, it’s important that you be available to your customers even after the project is completed.  One of the most common complaints contractors of all kinds get is that no one was available to talk to after services had been rendered. 

Ways to Mitigate Customer Complaints

Want to avoid customer complaints altogether? While there is no way to totally avoid customer complaints, take a look at our list of tips for mitigating as many as possible:

1 – Understand your Business – If you offer emergency roofing, HVAC , plumbing or other emergency contractor services, be aware that the people who call you don’t want to have to call you. They may be in a panicked state and therefore, more irritable. It is important to understand the nature of your business and the types of people you will be dealing with most of the time. Be empathetic, put patient technicians on the job and focus on friendly service. 

2 – Avoid No-Shows – Customers hate contractor no-shows. If you say you will be there, you better be there if you want to avoid a nasty customer complaint. So don’t stretch yourself too thin. And if for some reason you still can’t make it to a service call, be sure to let the customer know. You would be surprised at how appreciative a customer can be of a heads-up phone call.

3 – Respond to Bad Reviews – So you’ve got a bad review. You have failed to mitigate a customer complaint. It’s not the end of the world and believe it or not; you can use that negative review to mitigate future complaints and even get rid of the review altogether. Google data shows that 33% of customers who received a reply from a business they negatively reviewed posted a positive review as a result and 34% deleted their original negative review. So it is very important to reply to any negative reviews your business may receive. 

4 – Do What you Say – Finally, it is very important as a contractor to live up to your promises. Never take on projects that you aren’t sure you will be able to complete on-time and within budget. Projects hit snags. Unforeseen issues arise on the job. It’s natural. But when they happen, communicate the issues to the customer clearly and promptly.

And of course, offering the best possible service you can is an effective method for mitigating customer complaints. For more helpful information and contractor resources, become a CSOA member today.

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