This page will help you understand the steps to opening a small contracting business in San Francisco. It is a resource from the Office of Small Business, San Francisco's central point of information for small businesses.
Set up your business
Set up your business
- Create a plan that determines what type or range of contractor services you will provide.
- Choose a business structure. LLCs, Corporations and Limited Partnerships must register their structure with the CA Secretary of State before registering locally.
- Apply for an Employer Identification Number (EIN), also known as a Federal Tax ID Number from the Internal Revenue Service (IRS). This is used to identify your business and allows you to hire employees. If you are a sole proprietor without employees, you may choose to use your Social Security Number instead.
- Register your business with the City and County of San Francisco through the Office of the Treasurer and Tax Collector.
- Resource: https://sftreasurer.org/business/register-business
- Note: You may choose to obtain a separate business address, or you may use your personal address for your registration.
- Choose and file a business name. File a Fictitious Business Name (FBN) Statement at the SF Office of the County Clerk if you will be using a name other than your given name, the names of your partners, or the officially registered name of your LLC or corporation. Research the name's availability in the county before filing.
- Obtain a General Building Contractor License through the CA Department of Consumer Affairs, Contractors State Licensing Board (CLSB). This is required for anyone doing construction in California.
- Resource: www.cslb.ca.gov
- For projects where the combined value of labor, materials, and all other costs on one or more contracts is less than $500, you do not need a General Contractor’s license.
- In addition to the General Building Contractor license, there is a Residential Remodeling Contractor License, and there are several Specialty Contractor Licenses covering specialized work. Applicants may apply for one or multiple license classifications. Visit the CSLB website for a description of license classifications.
- Purchase workers’ compensation insurance through an agent or broker. California employers are required by law to have workers' compensation insurance, even if they have only one employee.
- Resource: Insurance.ca.gov
- Note: If you are a roofer and don't have any employees, you are still required to carry workers' compensation insurance.
- Adopt workplace safety measures that comply with Occupational Safety and Health Administration (OSHA) requirements. These include providing a workplace free of hazards, training employees to do their jobs safely, notifying government administrators about serious workplace accidents, and keeping detailed safety records.
- Resource: Osha.gov
- Obtain the tools you need. General and specialized tools vary depending upon the type of services you provide, so decide which tools you need, and whether you should rent or buy.
- Solicit work. There are a number of ways to seek out work, including using the web, word-of-mouth, advertising, and partnerships.
- Note: Ask for references from existing customers. Word-of-mouth can be the most effective way to gain new customers.
- Negotiate compensation & payment plan prior to signing a contract. Consider taking a class or seeking other advice on contracts.
- Ensure all building permits are in order. As a contractor, you are ultimately responsible for advising the person or company that hired you. You may not begin working without proof that all required permits are approved.
- Dispose of construction and demolition debris properly. These materials must be removed from a project and properly recycled or reused.
- Resource: sfenvironment.org/zero-waste
- Prepare and pay your local, state, and federal taxes. Learn more from these departments: