If you’re a contractor somewhere in the U.S., you’ve probably thought about the potential for obtaining multiple contractors licenses, across multiple states. 

In theory, it sounds great: more licenses means the potential for more profit – but does reality match our initial thought process? Is it worth it to get multiple state contractors’ licenses?

Let’s find out.

The Pros of Having Multiple State Contractors Licenses

More Opportunity For Jobs

The most obvious pro of having multiple state licenses means you have more access to more construction processes, especially as the construction industry in America is expected to continue to grow by 9% every year.

This doesn’t mean that construction jobs will magically fall into your lap – if you’re operating in Oregon, you might struggle to build a reputation in Alabama – but if you have a way to find jobs in other states, holding multiple licenses will allow you to take advantage of these opportunities. 

This will also help you build resilience for your business – by increasing the geography where you can do construction, you insulate yourself from things like natural disasters in your state or regulatory issues that could make it more difficult to do your job in your home state.

Larger Revenues

More opportunities naturally lead to a larger stream of revenue. According to the Bureau of Labor Statistics, the median annual wage for construction managers was just shy of $100,000, so by expanding into other states, you can see that number rise quickly. 

Competitive Edge

In a crowded marketplace, holding multiple state contractor’s licenses can give you the edge over your rivals. It showcases your commitment, adaptability, and a willingness to go the extra mile – qualities that clients admire and seek in a contractor. 

It also allows you to work on projects that cross state lines – putting you at the top of the list when potential clients are evaluating bids on their RFPs.

The Cons of Having Multiple State Contractors Licenses

Administrative Headaches

More contractor’s licenses = more administrative work. 

Juggling all the red tape and bureaucracy of just a single license can be difficult – let alone navigating the byzantine labyrinth of renewal dates, regulations, and certifications and qualifications required by each state.

In addition, as you expand your business beyond your state of origin, you’ll inevitably have to hire more people to take advantage of the new opportunities that have opened up. Yes, you’ll be able to raise your revenue, but that brings with it the need to manage teams of people across state lines – and ensure quality across projects, so your reputation stays intact.

Rising Costs

Obtaining multiple state contractor’s licenses can weigh heavily on your wallet. Each state imposes its own set of licensing fees, and they can quickly add up. The National Association of State Contractors Licensing Agencies (NASCLA) states that license fees can range anywhere from $200 to $1,000 per state.

In addition to just the fees for obtaining your license, in many cases, expanding into other states requires you to hire additional employees or subcontractors to help you perform the work. As you grow your team, so will your costs – cutting into any additional profit you may gain from expanding into other markets.

Compliance Nightmares

As with the administrative load that comes with expanding into new states, simply keeping up with the constantly changing rules and regulations of multiple states can be a daunting task. 

A slip-up in one state could potentially jeopardize your licenses in others. Maintaining compliance across the varied political and ecological frameworks present across America is like walking a tightrope – a delicate balancing act that requires constant vigilance and just plain, hard work.

Should I Get Multiple Contractors’ Licenses?

Everyone’s favorite answer: it depends.

While the prospect of expansion and increased revenue is tantalizing, it’s crucial to weigh these advantages against the cruel realities of expansion: growing your business across state lines is expensive, risky, and requires constant attention and expertise to maintain good standing.

We really can’t decide for you – only you know the health and future of your business – so weigh the pros and cons wisely!