Trade Business Startup Checklist

1 Business Registration & Licensing

Get your paperwork right before you take a single job.

• Choose your business structure.LLC is the most common for solo trade operators. It protects your personal assets if a job goes sideways. File with your state's Secretary of State — most charge $50-$200.
• Get an EIN from the IRS.Free at irs.gov. Takes 5 minutes online. You need this to open a business bank account, hire employees, and file taxes.
• Register for state and local business licenses.Requirements vary by state and city. Check your city clerk's office and state licensing board.
• Get your contractor license (if required).Most states require a license for HVAC, plumbing, and electrical work. Some states require it for any job over a certain dollar amount. Check your state contractor licensing board.
• Register for state sales tax (if applicable).Some states charge sales tax on labor, some only on materials. Know your state's rules before you price your first job.
• Get a DBA ("doing business as") if needed.If your business name is different from your LLC name, file a DBA with your county. Usually $10-$50.

2 Insurance Requirements

Don't skip this. One lawsuit without insurance can end your business.

• General liability insurance.Covers property damage and bodily injury on job sites. Most trade businesses need $1M-$2M in coverage. Expect $500-$2,000/year for a solo operator.
• Workers' compensation insurance.Required in most states once you hire your first employee. Some states require it even for solo operators. Check your state's requirements.
• Commercial auto insurance.If you use a vehicle for work, your personal auto policy probably won't cover accidents on the job. Commercial auto runs $1,200-$3,000/year.
• Tools and equipment coverage.Inland marine insurance covers your tools if they're stolen from your truck or a job site. Worth it if you're carrying $5,000+ in tools.
• Professional liability / E&O insurance.Optional for most trades, but worth considering if you do design work or consulting. Covers you if your professional advice causes a loss.
• Umbrella policy.Extra liability coverage above your other policies. Consider this once your business is established and you have assets to protect.

3 Tools & Equipment Starter List

Start lean. Buy quality basics and add specialty tools as you need them.

4 Pricing Your Services

Charge enough to cover costs and actually make a profit. Most new contractors undercharge.

• Calculate your true cost per hour.Add up: your desired salary + overhead (insurance, truck, tools, phone, fuel, materials markup) + profit margin. Divide by billable hours. Most trades land between $75-$200/hour.
• Research local rates.Check what competitors charge. Call a few as a "customer" if you have to. Don't be the cheapest — be competitive and reliable. → Contractor Rate Lookup Tool
• Decide: hourly, flat rate, or per-project.Service calls often work best as flat rate. Larger projects are usually quoted per-job. Know the pros and cons of each.
• Build your price list.Create standard prices for your most common services. Makes quoting faster and more consistent. → Pricing Calculator
• Set a minimum service call fee.You need a minimum just to show up. $75-$150 is typical depending on your trade and market. This covers your drive time and overhead.
• Know your material markup.15-30% markup on materials is standard. Some trades go higher. Never sell materials at cost. → Margin Calculator

5 Getting Your First 10 Customers

You don't need a marketing budget. You need hustle and a few smart moves.

• Tell everyone you know.Friends, family, neighbors, your church, your kid's school. Word of mouth is still the #1 source of business for new contractors. Don't be shy about it.
• Set up Google Business Profile.Free. Shows you in local search and Google Maps. Add photos of your work, your service area, and your hours. This is more important than a website in year one.
• Post on Nextdoor.Neighbors hire neighbors. Introduce yourself, mention your trade, and offer a fair price. Don't spam — be helpful and people will reach out.
• Get yard signs.Put a sign in the yard of every job you do (with permission). 100 signs cost about $200 and they work for months.
• Ask for reviews immediately.After every job, ask for a Google review while you're still standing there. Hand them your phone if you have to. Reviews compound — 10 good reviews puts you ahead of half the competition.
• Join local Facebook groups.Every town has "recommendations" groups. Be helpful first, then mention your services when relevant.
• Door hangers in target neighborhoods.Pick neighborhoods with older homes (more repair work). 500 door hangers cost about $100 to print. Expect 1-2% response rate.
• Partner with complementary trades.Plumbers can refer electricians. HVAC guys can refer insulation contractors. Build a referral network early.

6 Software Setup

Keep it simple. You can run a trade business with 3-4 apps.

• Invoicing.Send professional invoices from your phone. Wave (free), Invoice Ninja (free), or QuickBooks ($30/mo). Get paid faster with online payment links. → Free Invoice Template
• Scheduling.Google Calendar works fine when you're solo. Move to Jobber or Housecall Pro when you're booking 15+ jobs/week or have a crew.
• Accounting.QuickBooks Self-Employed ($15/mo) or Wave (free). Connect your business bank account and categorize everything. Your future self (and your accountant) will thank you.
• Estimating and bids.Professional-looking estimates win more jobs. Use a template or tool to send quotes quickly. → Bid Template Generator
• Mileage tracking.Use MileIQ or the free IRS-approved method. At $0.67/mile (2024), a contractor driving 20,000 business miles saves $13,400 in deductions.
• Communication.Get a separate business phone number. Google Voice is free. Grasshopper and OpenPhone are $15-$25/mo with better features.

7 Legal Basics

Protect yourself on every job. Written agreements aren't optional.

• Use a written contract for every job.Even small ones. Include: scope of work, price, payment terms, timeline, and what's NOT included. This prevents 90% of disputes. → Service Agreement Generator
• Understand lien waivers.If you're a subcontractor, the GC will ask for lien waivers. Know the difference between conditional and unconditional waivers. Never sign an unconditional waiver before you're paid.
• Have a change order process.When the customer wants to add work, put it in writing with the additional cost before you start. Verbal "sure, I'll do that too" leads to arguments.
• Know your state's mechanic's lien rights.If a customer doesn't pay, a mechanic's lien gives you a claim on their property. But you have to follow specific deadlines and procedures.
• Get a cancellation/refund policy.Put it in your contract. Deposits are non-refundable if you've already bought materials or turned down other work.
• Consider an LLC operating agreement.Even if you're a single-member LLC, an operating agreement strengthens your liability protection. Free templates available online.

8 Financial Setup

Separate your money from day one. This is where most new contractors mess up.

• Open a business bank account.Never mix personal and business money. Open a checking account in your LLC name. Most banks offer free business checking.
• Get a business credit card.Use it for all business expenses. Builds business credit and makes bookkeeping easier. Pay it off monthly.
• Set aside money for taxes.Self-employment tax is 15.3% on top of income tax. Set aside 25-30% of every payment in a separate savings account. Pay quarterly estimated taxes to avoid penalties.
• Track every expense.Save receipts. Use an app like Dext or just a folder in Google Drive. Materials, fuel, tools, insurance, phone — it all adds up to real deductions.
• Understand estimated quarterly taxes.Due April 15, June 15, September 15, and January 15. Use IRS Form 1040-ES. Underpaying leads to penalties.
• Get a bookkeeper or learn the basics.A bookkeeper costs $100-$300/month. Worth it once you're doing $5,000+/month in revenue. Until then, learn the basics yourself with QuickBooks or Wave.
• Build a 3-month cash reserve.Slow seasons happen in every trade. Having 3 months of expenses saved keeps you from panicking or taking bad jobs at bad prices.
• Set your payment terms.Net 15 or Net 30 for commercial work. Residential: collect deposits upfront (50% is common) and balance on completion. Don't finance your customers.