You’ve decided you want to take your future into your own hands. You have the skills, you have the drive, now you just need to start your business. Easy…right?
For many new contractors, getting into business for themselves, figuring out what steps are necessary in-order to get licensed, and ultimately start working on homes and businesses in and around Spokane can be stressful.
From our perspective, here are some basic steps to get your business off the ground, and become a licensed contractor in Spokane and Washington state.
These steps are largely the same in Idaho, Oregon, and Montana. If you have any questions, be sure to consult with your attorney, accountant, or even the SBA.
- Decide on a name for your business.
- Be sure to research the name of your business THOROUGHLY to ensure you haven’t decided on a name thats already taken. You can conduct a basic search online, or there are services that will do this work for you.
- Decide on a Busines structure, and file the paperwork to form your business with the Washington Secretary of States office.
- You can do this online, or on paper, there typically is a filing fee. Many services such as Legal Zoom, or a local attorney can also help you with this process, however you don’t have to involve an attorney simply to register your business and get things off the ground.
- Once your application for your business is approved, you’ll typically receive your completed articles of formation shortly thereafter from the state. Hang onto this, you’ll need it often.
- You will also need a registered agent, see registered agent for details.
- Once you have your business formed, apply for a federal EIN.
- This is essentially the social security number for your business, and is required in-order to file taxes, and complete many basic taxation requirements of running your business.
- This is FREE, but please be sure to apply from the irs.gov website
- Many new business owners mistakenly click on the first Google link they find when completing this step. This is unnecessarily paying 3rd party companies to do this step on yourr behalf. It eats up time, and is expensive to do it this way.
- This is also a good time to decide on the tax structure for your businesses. S-Corp, single-member LLC, each business is different. We’re not accountants, so consult an accountant for more information!
- Apply for a business license through the Washington Department Of Revenue
- The Washington DOR helps you with the appropriate taxation for your particular business.
- Some businesses need to collect sales tax, or pay use taxes for example. The department of revenue licensing wizard can help you identify the appropriate state taxation for your business, as well
- The DOR licensing wizard will also allow you to apply for the appropriate state, and city licensing, registration, or endorsements you need, all in one application.
- Start shopping for general liability insurance, and the appropriate bond. Coverage is required prior to applying for your license, and You’ll need both to finish your licensing.
- THIS IS WHERE WE COME IN! Call us, text us from our website, or submit a quote request online.
- Specialty contractors typically need a $6,000 surety bond, and are recommended to carry at least $300,000 in general liability coverage.
- Our agency recommends at least a $1,000,000 liability policy. The cost difference is minimal, it covers you better, and eventually customers and businesses you begin to work with will require a policy providing $1,000,000 in coverage.
- Some specialty trades such as contractors working with plumbing, electrical, elevators, mobile home installation, boilers, and asbestos have additional licensing and education requirements, see the Washington L&I website for details about your trade.
- General Contractors in Washington state, generally have the same insurance requirement, however a $12,000 bond is required
- If you plan to hire employees, you’ll need to setup the appropriate workers compensation account with L&I.
- Washington is a Monopolistic Workers Compensation state which means all workers comp insurance is administered and handled by the state. Employers pay into the fund, at rates different for their particular class of business, and varying rating factors of their specific business.
- Contact Washington Labor & Industries for more details on hiring employees and Washington Workers Comp.
- Finally, take all of your official documents and visit the local L&I office to complete your contractor registration.
After everything is all said and done, this is a good time to have a beer, and focus on growing your business!
We hope this helps, again we’re humble insurance agents so we’ve covered the main points. If you have specific questions, the SBA is a great resource, as well as your accountant, or attorney.
2022, Lilac Insurance Group, LLC