As history continues to repeat itself, it is clear that the construction and development industry is valuable. Becoming a licensed general contractor can produce tremendous cashflow and is a market that requires the best and brightest to actually be successful.
Now, many articles will continue to give you the basics of ‘how to become a contractor’. You may see “learn your building codes” or “find the right crew” or maybe even “work in the trades first”. While these are all valuable tips, we are here to focus on one aspect; how to get your general contractor’s license.
Each state has different requirements. Some states may require little to no testing to become a licensed general contractor. However, most states have requirements which will force you to take a licensing exam, or even have years of experience in the field. (This is a good thing!) We are here to focus on the ins and outs of states that accept and administer the NASCLA exam. These states are Alabama, Arizona, Arkansas, Georgia, Mississippi, South Carolina, Florida, Louisiana, Nevada, New Mexico, North Carolina, Oregon, Tennessee, Utah, Virginia, West Virginia and the US Virgin Islands. As you can see, if you were to take the NASCLA exam you could more easily become licensed in numerous states than if you were to take your state specific exam.
Get Your Experience
Some states require a number of years of experience, or reference letters on your application. For example, Florida requires four years of experience or a combination of college and experience before applying to become a licensed general contractor. Also, getting experience in the trades or working for a GC will give you knowledge that you need to be more efficient in your studying. There are indeed states that may not require a certain number of years of experience, but this 23-book exam is not easy and having the background beforehand can be critical to passing.
Take a NASCLA Study Course
We would hope that this step would almost be a known and that you are considering courses already. Tackling 23 books and gaining the knowledge to pass this 330-minute exam would be EXTREMELY challenging on your own. There are a number of courses out there. Most courses will give you the background of each book with tutorials and study guides, practice quizzes and even practice final exams. We offer passthenasclaexam.com which includes tutorial videos, tips, quizzes and practice final exams. This course is sure to get you ready for the exam and have you prepared to pass on the first attempt.
Know Your State’s Regulations
We recommend printing off your state’s application and reviewing before you start filling it out. Highlight all topics that will be important to handle on the front end. If you need recommendation letters, go ahead and start reaching out to your references before or during your studying for the NASCLA.
One of the biggest front-end mistakes that we see students make is not creating and filling out the state’s application on behalf of the entity that they plan to have the license under. They think that this can be done after getting the license, which it can. However, you will have to go through the application process again which can be a big headache and delay. If you are planning to be an LLC or corporation, go ahead and set that up and fill your application out under the entity rather than yourself.
Most states require a contractor to have a license if they are performing work over a certain dollar amount. For example, in Alabama a contractor license is required if you are completing a project at or above $50,000 or swimming pool construction at or above $5,000. These regulations vary from state to state, so be sure to do your research on the state that you want to be licensed in.
The Business and Law Exam
Most states require that a business and law exam be taken to get your general contractor’s license. The NASCLA exam serves as the trades portion for the states that accept and administer it. However, after completing the NASCLA exam you will need to take and pass the business and law exam in each state. We stress to students not to sweat the business and law exam. Focus on the NASCLA exam, as this is by far the most challenging of the two.
The Business and Law exam typically includes a lot of information that is in the NASCLA Business and Law book and one or two additional documents. It is a much shorter exam. Also, if you are proficient in navigating the Business and Law book from the NASCLA exam, you are a step ahead on the Business and Law book for your state. Much of the information comes from the same Business and Law book that is part of the NASCLA book set.
Make Sure Your Financials are in Line
This is a crucial step in becoming a contractor. Be sure to review your states requirements before you even start your studying course for the NASCLA exam. Most states require a minimum net worth, cash on hand or a bond limit to get your contractor’s license. For example, a ‘limited’ contractor’s license in North Carolina allows you to complete any single project with a value of up to seven-hundred-and-fifty-thousand dollars ($750,000). For this license you will need to have a net worth of $80,000, current assets that exceed liabilities by seventeen-thousand dollars ($17,000) or provide a one-hundred-and-seventy-five-thousand-dollar ($175,000) surety bond. Notice we say “or” in this statement as each scenario would suffice for being eligible to get your contractor’s license. Be sure to have all of this lined up and set before you pay the money for the books and a course.
The NASCLA Exam
Definitely review the NASCLA information bulletin before you begin your journey studying for the NASCLA exam. This bulletin contains important steps and tips to studying for the NASCLA exam. One of these is the number of each type of question. Below is the current list of each question type on the exam, that comes directly from the information bulletin.
- General Requirements – 25 questions
- Site Construction – 15 questions
- Concrete – 6 questions
- Masonry – 4 questions
- Metals – 6 questions
- Wood – 5 questions
- Thermal and Moisture Protection – 5 questions
- Doors, Windows, and Glazing – 4 questions
- Finishes – 5 questions
- Mechanical and Plumbing Systems – 6 questions
- Electrical Systems – 3 questions
- Procurement and Contracting Requirements – 31 questions
Conclusion
Experience and knowledge of the field is critical to becoming a licensed general contractor. Knowing the sequencing of construction and install methods are a must when starting your general contractor or subcontractor company. However, some people underestimate the need for a license. If you want to perform work at a more substantial dollar value, there is a good chance your state requires you to have a license. Also, your competitors who carry a license are more likely to gain the trust of clients and be awarded more work. The NASCLA exam is not an easy exam by any means, so putting the effort in studying is a must. The benefits of getting a general contractor license far outweigh the studying sacrifice that you will make for this exam.