How to Become a Subcontractor
Obtain all necessary licenses., Learn all the rules and laws for the type of work you will do., Obtain liability insurance: In most cases, subcontractors pay for their own liability insurance as opposed to an employer who provides this for their...
Step-by-Step Guide
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Step 1: Obtain all necessary licenses.
Depending on local government requirements, you may find you only need a business license, but some jurisdictions will require you to obtain professional licenses specific to the type of work you do.
Subcontractors working on construction projects, for example, may be require to have a Contractor's License in certain jurisdictions. -
Step 2: Learn all the rules and laws for the type of work you will do.
Much information is available from small business advocacy groups, local regulatory offices, and even the public library.
Because laws and regulations vary greatly depending on the type of work you will be subcontracting, specific details are not in the scope of this article. , Subcontractors may also be required to have risk indemnification, workman's compensation insurance, and other coverages specific to their work. , In construction, a subcontractor may be able, for example, to exercise a builder's lien against a general contractor on a project to insure he is paid in full for work performed. ,, Subcontractors are more likely to work off-site.
Employees generally work on-site under direct control of the employer.
To be a successful subcontractor you may find you have to travel to pursue your desired work. , Subcontractors may set their own hours and how and when the work will be performed, depending on the project schedule and contractual requirements. , Subcontractors pay all of their expenses and bill for reimbursement for the job.
By contrast, employers may pay an employee’s expenses, such as travel costs, lodging, and meals when working away from home.
Subcontractors may provide all of their own equipment, whereas an employer usually pays for all supplies and equipment required for the job. , A subcontractor gets their own customers, while an employer generally provides the customers. , Subcontractors seek out and pay for their own training. , Subcontractors receive the full contracted pay for the job whereas employers pay salaries or wages for the job.
Subcontractors are responsible to pay all of their taxes.
This is in contrast to employers, who have to withhold taxes from an employee. -
Step 3: Obtain liability insurance: In most cases
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Step 4: subcontractors pay for their own liability insurance as opposed to an employer who provides this for their employees.
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Step 5: Know all the laws and know your rights as subcontractor or employee to protect yourself from those who might try to take advantage of you.
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Step 6: Make sure your subcontract agreement covers the entire scope of work of your project
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Step 7: scheduling requirements
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Step 8: insurance requirements
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Step 9: performance bonding
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Step 10: materials furnished by you/by others
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Step 11: and details of how and when you will be paid for completed work.
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Step 12: Be prepared to work in different places.
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Step 13: Set your hours as required.
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Step 14: Have adequate cash flow.
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Step 15: Find your clients.
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Step 16: Expect to have to keep improving yourself.
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Step 17: Understand the finances.
Detailed Guide
Depending on local government requirements, you may find you only need a business license, but some jurisdictions will require you to obtain professional licenses specific to the type of work you do.
Subcontractors working on construction projects, for example, may be require to have a Contractor's License in certain jurisdictions.
Much information is available from small business advocacy groups, local regulatory offices, and even the public library.
Because laws and regulations vary greatly depending on the type of work you will be subcontracting, specific details are not in the scope of this article. , Subcontractors may also be required to have risk indemnification, workman's compensation insurance, and other coverages specific to their work. , In construction, a subcontractor may be able, for example, to exercise a builder's lien against a general contractor on a project to insure he is paid in full for work performed. ,, Subcontractors are more likely to work off-site.
Employees generally work on-site under direct control of the employer.
To be a successful subcontractor you may find you have to travel to pursue your desired work. , Subcontractors may set their own hours and how and when the work will be performed, depending on the project schedule and contractual requirements. , Subcontractors pay all of their expenses and bill for reimbursement for the job.
By contrast, employers may pay an employee’s expenses, such as travel costs, lodging, and meals when working away from home.
Subcontractors may provide all of their own equipment, whereas an employer usually pays for all supplies and equipment required for the job. , A subcontractor gets their own customers, while an employer generally provides the customers. , Subcontractors seek out and pay for their own training. , Subcontractors receive the full contracted pay for the job whereas employers pay salaries or wages for the job.
Subcontractors are responsible to pay all of their taxes.
This is in contrast to employers, who have to withhold taxes from an employee.
About the Author
Matthew Gutierrez
A passionate writer with expertise in practical skills topics. Loves sharing practical knowledge.
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