Contractor

Get help starting a contractor business in the City.

Create a plan

Learn the steps needed to begin your business.

Research the process

Planning, launching and running a business is a lot of work. Review the necessary steps required to start a business.

View the 10 steps to start your business

Connect with a small business consultant

Building a relationship with a small business consultant can be a crucial step in your journey as an entrepreneur. The Minneapolis Business Technical Assistance Program (B-TAP) is able to connect you to business training, support and advice for opening your business. 

See if you qualify for the Small Business Technical Assistance Program (B-TAP)

Write a business plan

Starting a business can be expensive. You will need to have enough money to run your business for at least the first several months without relying on a profit. Using calculations from your business plan, determine how much capital you will need to start to ensure your business will start and run successfully.

Learn how to build a better business plan

Secure financing for your business

Connect with a lender from a community bank, credit union or community development financial institution.

Determine if you qualify for any of the City’s financing resources

Lenders will want to see that you have some initial capital invested in your business before underwriting a loan.

See business support programs from the City

Register your business

All businesses in Minnesota must be registered with the Secretary of State. Make sure you follow every step so your business is registered properly.

Verify your business name

You can use the Secretary of State Online Business Services page to check name availability. 

Check business name availability

Choose a business structure

Decide what type of business structure is right for your business. 

Organize your business

Register your business with the Minnesota Secretary of State

These businesses must register with the State of Minnesota:

  • Limited liability companies (LLCs)
  • Corporations
  • Nonprofits
  • Limited Partnerships

Register your business

File a Certificate of Assumed Name

You will need to file a Certificate of Assumed Name if you will be using a business name other than:

  • Your given name
  • The names of your partners
  • The officially registered name of your LLC or corporation

See the types of Minnesota businesses

Apply for a Minnesota Tax ID and a Federal employer ID number

Before you begin withholding state taxes, you must register for a Minnesota tax ID number. If you fail to register prior to withholding Minnesota taxes, you may be subject to a $100 penalty. A Minnesota Tax ID and a Federal Employer ID Number are used to identify your business. If you are a sole proprietor, you may be able to use your Social Security Number instead. 

Register for a Minnesota tax ID and a Federal employer ID number

Research the insurance you will need

New businesses often need insurance, such as:

  • Workers’ compensation
  • Liability
  • Disability insurance

If you will have employees besides yourself and members of your immediate family, you need workers compensation insurance. Your policy number is required to complete your business license application. If you register your business before choosing a final location, you will have to update your registration with the new address.

Read about required insurance

Get prepared

Secure the needed equipment, space, and surety bonds. Pass the needed exam to become a licensed contractor.

Acquire the right kinds of equipment

Based on the services you plan to perform, determine what pieces of equipment and kinds of vehicles you will need to buy or rent.

Determine what kind of space you need

Will you be able to store all your equipment in your home garage, or will you need to rent additional storage space? Will you need any office space? Search properties for rent or sale here: 

View available commercial property

You will need to decide whether you will hire employees directly or hire independent contractors. If you hire employees, it changes the insurance you need and the kinds of taxes you have to pay. 

Determine if employees should be independent contractos or an employee

Obtain surety bonds

Surety bonds are a promise from a third-party company that if you do not fulfill your contract obligations, they will pay your client. Most public and many private construction contracts require surety bonds. You can obtain surety bonds by contacting a professional surety bond producer, or through the U.S. Small Business Association (SBA) if you qualify. 

See how surety bonds work

Pass the prelicensing exam

Before you can apply for a Residential Building Contractor or Remodeler License with the State of Minnesota, you or a managing employee in your company must pass an exam. You must apply to take the exam and submit a $50 exam fee. 

Know the exam requirements

Get your license

Review the steps to receive and maintain a license.

Determine what kind of license you need

The Minnesota Department of Labor and Industry licenses residential building contractors, remodelers, roofers and manufactured home installers. 

Find the type of license you need 

Gather all the necessary paperwork

You will need to provide:

  • The passing exam results from your pre-licensing exam
  • Your Secretary of State business filing information
  • A completed criminal background check form

Be prepared to:

  • Pay the new license fee, which ranges from $560 to $760

Complete and submit your license application

Follow the steps on the State's website to complete your application for a new license, exam, reciprocity, or registration application

Start the State's application process

Determine if a Certificate of Competency is needed

If your business will be specializing in a specific trade, such as plumbing or HVAC, you will need to obtain a Certiticate of Competency Card and trade license from from the City of Minneapolis. 

View the Competency Card requirements

Review the trade business licenses

Trade business licenses are required and issued by the City of Minneapolis for certain types of trades. 

View the business licenses needed for contractors

Secure needed permits

Many steps are needed to secure the necessary permits for your business.

Visit the Minneapolis Development Review Customer Service Center

Meet a Development Coordinator (DC) who will provide ongoing guidance on all regulatory requirements for opening your business in Minneapolis.

Learn more about Minneapolis Development Review Services

Obtain a project permit

All construction projects require a permit from the City's Minneapolis Development Review (MDR).

See the MDR permit requirements by category

Note: For permits that don't require plan or site reviews, you can apply and pay for permits online.

Prepare a site plan

Create a drawing of the property you are working on, showing the property lines and any structures currently on the land. Clearly indicate your proposed addition or alteration. 

Complete the plan review and pay the necessary fees

Development Review staff will guide you through the process of the review.

Post your permit

Once City staff complete the review process, you will receive your permit and must post it at the project site.

Schedule an inspection

Once your work has been completed, contact your inspector to schedule an inspection. Your inspector's name and phone number are on the last page of your permit. You can also contact your inspector at any point in the project with questions. 

All work for which you have obtained a permit must be completed within one year from the date of the permit issuance.

After opening

Review the steps you need to complete once your business is open and running.

Create a marketing plan

Knowing who your customers are and creating a plan to market your services is crucial to sustaining and growing your business. The Construction Marketing Association provides many helpful resources.

Get ideas from the Construction Marketing Association

Consider doing business with the City

Contracts with government entities can be an important source of business for your company. The City of Minneapolis offers many opportunities.

See how you can do business with the City

Enroll in the City's Target Market

Through this program, you can compete for City contracts under $100,000 against other similarly-sized businesses rather than against larger, more established businesses. 

If your business is:

  • small
  • woman-owned
  • minority-owned
  • veteran-owned

get your business certified by one of the applicable certifying agencies in the region. Certifications can help you gain preference as a subcontractor on large government or private contracts that have supplier diversity goals to meet.

Learn more about the Target Market

Prepare and pay your local, state, and federal taxes

Businesses must meet federal, state, and local tax obligations to stay in good legal standing. Your business structure and location will influence taxes your business has to pay.

Learn more about business taxes

Complete continuing education courses

If you are a residential builder, residential remodeler, or residential roofer, you must complete 14 continuing education hours at some point within the two years before license renewal. 

See the continuing education requirements

Contact us

Small Business Team

Community Planning & Economic Development

Phone

612-673-2499

Address

Public Service Building
505 Fourth Ave. S., Room 320
Minneapolis, MN 55415