After you pass - step 10
Running the Business Once the License Arrives
Updated September 2026
The license is a permission slip. What turns it into income is a repeatable way to price a job, bill it, get paid, and keep records the state, the bank and the bonding company will accept next year. Here is the short list.
Before the first job
- Local business license. Most cities and many counties require their own business or privilege license on top of the state contractor license, and some states (Alabama and Tennessee among them) have local licensing on top of that. Call the city clerk where you will work.
- State revenue registration. Register with the state department of revenue for sales/use tax and withholding before you hire or buy materials tax-exempt for resale.
- A certificate of insurance on file. Have the COI ready before the first GC asks; they always ask.
- Lien-law calendar. Every NASCLA state has preliminary-notice and lien deadlines. Miss them and you lose the right to lien for unpaid work. Learn yours now - it is on the business-and-law exam for a reason.
Estimating and invoicing
A spreadsheet works for the first job and fails on the fifth. Field-service and contractor software does estimates, change orders, invoices, payment collection and scheduling in one place, and most of the small-business tools run $50-$200 a month. The one habit that matters: every estimate becomes a signed contract before work starts, with a change-order process the customer agreed to in writing.
Bookkeeping the board can read
Remember the financial statement from the licensing application? You will produce a new one at renewal, and in some states any time you raise your limit. That is easy if the books are clean in standard accounting software from day one and impossible if they live in a shoebox. Pick QuickBooks or an equivalent, connect the business bank account, and have a CPA who knows contractors close the year. The job-costing features - knowing what each project actually made - are the ones that keep you profitable.
Keeping the license alive
- Renew on time. Boards renew yearly or every two years; late renewals carry penalties and a lapsed license means unlicensed contracting, which in several states voids your right to be paid.
- Keep the qualifier attached. If you ever leave the company, the license usually has a short grace period before it dies with you.
- Keep the bond and insurance continuous. Most boards are notified when either cancels.
- Continuing education where the state requires it - check your board page.
Set up the tools before the first job
Estimating and invoicing in one place, and books a CPA can close. Both are cheaper than one unpaid invoice.
Keep reading
ForemanPrep is an exam-prep company, not a law firm, insurance agency or licensing service. Figures were checked in September 2026 against the sources named; your board's current page is the final word.