- 1). Establish a legal contracting business entity, even if it just a sole proprietorship. You will need to contact the department of commerce in your state and register your business. You can usually find business registration information online for your state and in some cases even register and set up your business entirely online. Once you register and your business name is approved, your state will send you a business license. Some states may also require that you get a state contractor's license. Those requirements will vary by state. (See Resources)
- 2). Apply for all required permits and licenses at the local level. These will vary depending on where your business is located. Most towns and cities will require some form of permit to do construction work within their limits.
- 3). Visit the website for the IRS and register for your employer identification number (EIN). Most suppliers will need your EIN (also referred to as the Federal Tax Identification Number) and your business license number to set up a contractor account and to extend to you contractor pricing. Unless you want to use your social security number, you will need an EIN for tax purposes regardless of whether or not you hire employees.
- 4). Prepare a bid sheet that lists in a column all items you will need to purchase on a regular basis. Beside the column leave several rows for your suppliers to plug in pricing information for comparison. Send this bid sheet to all suppliers with whom you may do business. The suppliers will respond to the bid sheet with a detailed list of contractor pricing offered on all items on your list.
- 5). Review all bid sheets when you get them back and determine which suppliers offer the best pricing for all supplies. Contact each supplier that offers the most savings on materials and request to open a cash account. Fill out the required application and provide your business license number, state contractors license where required, EIN and evidence of local permits.
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