Every state has different requirements for contractor licensure, and some states don’t require a license for certain trades. If you’re in state that does require a license, then you obviously already have one (otherwise you wouldn’t be in business). But what about those of us living in states that don’t require a license for our trades? Are there really any benefits to having a license?
Yes, a License is Beneficial
The short answer to that question is “yes”. Being licensed may not be a requirement for you to work, but it will certainly be a huge factor in how you find work. If a homeowner has the choice of hiring a licensed contractor versus an unlicensed one, the vast majority of those homeowners will choose the one who holds the license. Right, wrong, or indifferent, simply having a license conveys a sense of authority and competency that’s hard to achieve without one.
While not having a license doesn’t make you any less competent per se, perception is nine tenths of reality. In this case, a license is like a college degree - a computer programmer without a degree might be just as skilled as his counterpart who holds a degree, but the degree holder is much more likely to be hired for a job than the the person without one. The same goes for general contractors, plumbers, carpenters, and pretty much every other tradesman.
Return on Investment
Some contractors believe that the cost of the license outweighs the potential income increase the license can create. This couldn’t be further from the truth. As stated in the example above, licensed contractors are more likely to get jobs. In some states, being licensed may also entitle you to some savings on your insurance! The combined potential earnings from new job opportunities and savings will more than make up for any moneys spent on acquiring a license.
Gained Knowledge
Putting money aside for a moment, another great benefit of holding a license is the potential knowledge base you’ll gain while acquiring the license. In various states, contractors must learn business law, best business practices, advanced safety and first aid training, or various other skills in order to acquire a license. There is literally no way this extra knowledge can be viewed as a downside, as it can only help you to grow and improve your business.
If you’ve put off getting your license because of the expense or because you feel you don’t need it, you may want to rethink your strategy. Having a license gives you a sense of credibility and competency that’s impossible to replicate any other way, and that shows by the increased profits seen by those holding licenses, and that credibility is well worth the cost.
Comments