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    How to become a Contractor if you are subcontractor now

    Five tips

    I understand how hard the journey is from subcontractor to contractor. I've been one for many years. I worked for a general contractor and he went bankrupt on me.

    I came home and told my wife I'll never work for anyone else, and I never did. But the journey is not always easy. It is a completely different business model.

    I'm going to give you five tips and I will explain what it takes to become a general contractor.

    Be willing to change your mentality

    Tip number one, fair to say that the more risk you take the more reward you get. The difference between millionaires and billionaires is because people who usually accomplish something really big in life, then to solve bigger problems. So, when it comes to the difference subcontracting and contracting the same rules apply. Contractors solve bigger and more complicated problems.

    We also have similar problems. We fix houses, we install products, we provide services, but we do get paid completely differently. Why subcontractors usually don't require a lot of investment is because its low risk. A lot of times it’s literally just labor.

    On the general contractor side it’s a lot of more risk, it’s a lot of more liability. More money funnels through you as a general contractor and the rewards are greater. If you're currently working as a subcontractor and you want to become a general contractor, you must completely change your mentality.

    What is the business of being a subcontractor? A lot of times a sub is just an employee for a bigger employer. On paper a sub is considered an independent. A sub may think, in error, that they own a business. A lot of times a sub just provides the labor.

    Unless you run like 20 crews and you're really monetizing it and you have a patented process of marketing you know maybe b2b, but that's a different story. On the other hand, if you have only a couple guys under you, let’s face it, you're pretty much a crew leader. Yes, you own the business and you do have that LLC and you do know you have to pay taxes but it's not really a business.

    A general contractor on the other hand is dealing with materials, dealing with vendors, sometimes you'll have to manage credit lines, and you will have to advertise. So, it just adds three four more layers to what you already are doing right now as a sub.

    What you need to understand is that you will be taking on more and more risks. You will have to invest more of your money into not only tools but now into marketing and into some other stuff. So, if you don't have that mentality shift yet and you think of a general contractor as someone who is just making more money, forget it.

    I'm here to tell you, make absolutely sure it's not just the money that drives you. Make sure you are also ready to take on more responsibilities.

    Never try to be a sub and GC at the same time

    Tip number two, never ever try to be a subcontractor and a general contractor at the same time. I see a lot of guys making this mistake. It comes from insecurity that a lot of subcontractors go through. They don't want to burn bridges. Which is fine but they want to keep taking jobs from other contractors and compete with those contractors. The best tip I can give you is you cannot sit on two toilets at the same time, it's just impossible.

    I've never met one subcontractor who really made it in the contracting world who was trying to do both. You must change your mentality. You have to go all-in and that's the only way to have true success. It's not going to be easy; it's going to be super hard.

    When I started the roofing business my number one goal was not to depend on any other contractor. I want to own my future. I'm okay if my future depends on 1,000 customers that I serve. But I'm not okay for my financial future if I must depend on one contractor.

    The contractor I used to work for filed for bankruptcy and it hurt badly. I mean he owned me thousands of dollars. I didn't get paid and it hurt me. I already have you know two kids and a pregnant wife at the time. It was not a nice place to be in at the time.

    So, when you decide to go on your own, do it, go on your own, don't be dependent on anybody else. You want to be a general contractor then learn to be independent. See the change of mentality there.

    You will always have risks

    Tip number three, you should understand that contractors have a lot of risk. The risk of losing it all is always going to be there. It only takes one job gone wrong, one lawsuit, something bad can happen and you're not going to be able to pay your bills.

    Okay you messed up one job maybe insurance will pay for it. Maybe you don't even have insurance. You took money for a job, now you have to find a good sub and you have to find good materials. Maybe you have a material failure or something bad happens on the job site. You have to return the money, but you don't have it, you spent it already and you’re in the hole.

    I mean bad things happen all the time, so you have to be mentally prepared to take those risks.

    Overcome your fears

    Tip number four, overcome your fear. I understand that fear of owning a business is huge, but I always think about the bigger picture. Once you start moving in a certain direction, you'll be amazed how easy it is to find somebody to join you on your new journey.

    Today I employ between 15 to 20 people but when I started it was only me. I was scared to employ people. As a matter of fact, most of my employees that I hired early on, I didn't even have money in the bank to pay them. But I knew that if I'm going to be a good manager and make my people accountable then we will all make money together.

    You must overcome your fear when you go into business for yourself as a general contractor.

    Have faith in yourself

    Tip number five, have a lot of faith. With all of that, with working hard, and overcoming your fear, and understanding risk, and all that stuff, you still need a lot of faith. If you don't have faith that you're going to make it, you’re probably not going to make it. And if you don't have faith that you are going to be a better boss, a better contractor than the contractors who have given you jobs in the past, then don't even try and become a general contractor.

    I've seen the construction world inside and out. I was very disappointed with some of the contractors who were giving me jobs. I've seen a lot of people lying to me, stealing from me, stealing from other people, mismanaging money, doing a lot of shady stuff, because I've seen all of that, I had to have faith in me.

    I told myself that I'm going to be able to build a different business and be a better leader. So, if you do have faith that you will become a better contractor than the contractors who have been giving you jobs, I salute you. I welcome you to the contracting world. Maybe one day we'll do something together.

    I invite you to come to one of our classes. I want you to be surrounded with good contractors. And I'm telling you this, this world, this country, we need good solid reputable contractors. Because there's still a lot of bad ones out there. So, we do need solid subs to move up and replace some bad apples who we have right now in the industry.

    If you feel like you're the one, comment below, I would like to hear from you. If you need that push maybe kick, I'm happy to be that guy for you let me know.

    Dmitry Lipinskiy
    Host of Roofing Insights YouTube channel, Founder of Roofing Business School

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    1 Comment

    1. Hello Sir,
      Just found your site. I really enjoy your videos. Thank you for posting on Youtube!
      I am a licensed master plumber & licensed building contractor.
      Most of the house I have built I have subbed out almost everything.
      From years of hard work in construction, my knees & back are wearing down.
      I don’t have a lot of actual installation roofing labor experience myself.
      Do you recommend I hire a roofing crew or just use subs starting out my new roofing company.
      I know I can do the sales myself. The labor would be tough for me physically.
      I appreciate your thoughts whether positive or negative about the roofing contracting business
      for my situation.
      Thank you for your time,
      Kyle Hall

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