Making More Money

If you are building a new business, it is important to financially protect yourself. This means starting out your business with the appropriate amount of cash and tools that you will need to operate. As a contractor, your clients will need to trust you inside of their home. You also want to protect yourself against claims, non-payments, and other issues that can crop up when you own your own business. Her are three ways to financially protect your business as a contractor. 

Have a contractor bond

Contractor bonds work in the same way as surety bonds. If anyone has a claim against you for mishaps or problems with your work, they can make a claim against you with a contractor bond. Depending on the types of contracts that you take on, you should get a high contractor bond, but not much higher than your needs. A contractor bond may be asked of you by most clients, so it will be imperative to be able to provide them with this information when you bid on jobs. Along with the contractor bond, it is a good idea to have a bank account with adequate savings to pay out any claims through negotiation as well. 

Set up milestone payments

One of the best ways to make sure that you get paid for each job that you perform is to set up milestone payments for larger jobs. If you will be working a job long term or if the job is worth a lot of money, you should get a payment after each completed milestone. This way you will not learn at the end of the project that you are not able to get paid, which could bankrupt your business. If you need a payment upfront for materials on certain jobs, be sure to ask your client for a materials payment within the contract before you start the job. 

Keep a lawyer on retainer

If you perform major renovations or major home improvement work, you may run into a situation or two. In order to be able to remedy this situation, you should have a lawyer on retainer. Having a lawyer on retainer to serve papers for nonpayment or to help apply liens to the home of those who have not paid will keep your business running. Be sure that your lawyer has good knowledge of major claims and arbitration, as these are always a possibility when you are running a contracting business.