CashFinders × TradeAtlas
Starting your own trades company
Disclosure: Both sites are run by the same team. TradeAtlas maintains the state data on this page; CashFinders covers taxes, insurance and getting paid on side work.
1. Form the business
Most one-person trades businesses start as an LLC. It keeps business debts and claims apart from your personal assets, as long as you keep the money separate too. You file with your state's Secretary of State, usually online. Many contractor boards license the business entity, so this step often comes before the licence application.
For when an S-corp election starts to make sense and what to set up after filing, see the entity setup guide and the business banking guide.
| State | LLC filing fee | Source | Checked |
|---|---|---|---|
| Alabama | $200 | Secretary of State | |
| California | $70 | Secretary of State | |
| Colorado | $50 | Secretary of State | |
| Florida | $125 | Secretary of State | |
| Georgia | $100 | Secretary of State | |
| Illinois | $150 | Secretary of State | |
| Michigan | $50 | Secretary of State | |
| New York | $200 | Secretary of State | |
| North Carolina | $125 | Secretary of State | |
| Ohio | $99 | Secretary of State | |
| Oregon | $100 | Secretary of State | |
| Pennsylvania | $125 | Secretary of State | |
| Texas | $300 | Secretary of State | |
| Virginia | $100 | Secretary of State | |
| Washington | $180 | Secretary of State |
Standard filing fee only. Annual reports, franchise taxes, registered-agent fees and any publication requirement are extra. Not verified yet: Nevada.
2. Get licensed and bonded
A trade licence shows that you are qualified. A contractor licence or registration lets the business sell jobs and pull permits. In many states you need both. The full state-by-state path (experience, exams, fees) is in from gig handyman to licensed contractor.
A contractor bond is a guarantee to your customers and the state that you will follow the licensing law and finish or fix the work. If a claim is paid, you owe it back. You usually buy it from a surety company for a yearly premium that is a fraction of the bond amount. These states set one for the licence covered here:
- California: $25,000$25,000 contractor bond (or cashier's check). Separate $25,000 Bond of Qualifying Individual may apply; LLCs also need a $100,000 employee/worker bond.Source and date
- Oregon: $25,000$25,000 residential surety bond per ORS 701.081(1) (2023 ed. through 2024 session) and the CCB licence page; the Business Xpress directory still shows $20,000, which conflicts and looks stale.Source and date
- Washington: $30,000$30,000 surety bond for general contractors ($15,000 for specialty); an assigned bank account of the same amount is an alternative.Source and date
3. Insure the business
General liability pays if your work damages someone's property or injures someone. Some states set a minimum policy for the licence. Many customers and general contractors also ask for a certificate of insurance before you start. A personal auto policy may not cover a work truck, and workers' compensation becomes a question the day you hire. Your state's workers' comp agency decides when it is required.
What each policy covers and how to shop for one: insurance guide. State minimums we could confirm for the licence:
- CaliforniaNone stated for sole-owner licences; LLC licences must carry liability insurance of $1 million aggregate (5 or fewer personnel of record) plus $100,000 per additional personnel, max $5 million (BPC 7071.19)Source and date
- Florida$100,000 public liability / $25,000 property damage (all categories other than general and building contractors); general and building contractors: $300,000 / $50,000Source and date
- GeorgiaGeneral liability of not less than $300,000 for the residential-basic category, plus workers' compensation as required by Georgia lawSource and date
- Oregon$500,000 per occurrence general liability (ORS 701.073 / CCB)Source and date
- PennsylvaniaAt least $50,000 personal injury liability and $50,000 property damage coverage (or the AG self-insurance attestation)Source and date
- Washington$200,000 public liability and $50,000 property damage, or $250,000 combined single limitSource and date
A state minimum is the floor for the licence, not a recommendation. A state missing from this list either sets no minimum or we could not confirm one; its row in the licensing table says which.
4. Write your first bids
A bid is a written offer for one job. The ones that hold up when something goes wrong usually have:
- A written scope: what you will do, what you will not, and the materials, so “while you're here” becomes a priced change order.
- Payment terms: the deposit, any progress payments and when the final payment is due. Some states cap the deposit on home-improvement jobs, so check your board.
- Your licence number where your state requires it on contracts and ads, plus any notices the state requires on home-improvement contracts.
- An expiry date, because material prices move.
Where first customers tend to come from: first clients guide.
5. Price from your costs, not the app's rate
Gig apps set the rate for you. Once you run your own company, you set it, and it has to cover the hours you cannot bill: driving, quoting, buying materials, paperwork. Work out a break-even hourly rate before you quote:
break-even rate = (the pay you need + yearly business costs) ÷ billable hours per year
Yearly business costs include insurance, the bond premium, licence renewals, the truck, tools, software and phone. Billable hours are the hours you actually charge for, which is usually well under the hours you work. Charge materials at cost plus a markup, and add profit on top of break-even. Break-even is the floor, not the price.
Flat rate versus time and materials, and how to build the number: pricing basics guide. The whole launch sequence, including a starter software stack, is on going independent.