In the construction business, a contractor is a person or organization who is hired by a client to complete an element or elements of a building project. There are several types of contractors with various roles and responsibilities, so the type of contractor hired will depend on the nature of the job. Typically speaking, however, the term ¡°contractor¡± will refer to either a general contractor or a subcontractor.
Looking to hire a professional contractor for an upcoming home improvement project? Learn all about what a contractor is, the different types of contractors, and how they contribute to the home renovation process.
When I was planning my kitchen remodel, I quickly realized how overwhelming it can be to navigate the world of contractors. From understanding who does what to ensuring the job meets code, there’s a lot to consider. Based on my experience, here’s a bit more insight to help you make sense of it all. For instance, did you know that according to the U.S. Census Bureau, over 700,000 construction businesses operate in the U.S., with many specializing as contractors? This sheer number shows how critical it is to pick the right one for your project. A good contractor doesn’t just build¡ªthey manage timelines, budgets, and expectations. To make the process smoother, I’d suggest starting with a clear project scope and asking for referrals from friends or neighbors who’ve had similar work done. It’s a practical way to find reliable pros without getting lost in online reviews.
A general contractor (or GC) is hired by a client to take a set of plans and ensure the building project is completed on a timeline. They coordinate and supervise workers and their tasks, order materials, and handle the paperwork and billing processes. The GC makes a profit by marking up labor and materials costs by a percentage (usually between 10 to 30 percent). This contract stipulation is also known as a cost-plus contract.
Some handy homeowners may consider being their own general contractor. While this can be an effective means of saving money and ensuring that the project meets expectations, it’s also crucial for homeowners to consider whether they have the time, money, management skills, and home renovation expertise to take on this task. Acting as one’s own GC also requires a person to have their own builder’s risk or file policy (at minimum, during the building phase) in the event that something goes wrong.
Having tackled a small bathroom reno myself, I can tell you that being your own GC is no small feat. The markup a GC charges¡ªtypically 10-30%¡ªmight seem steep, but it covers their expertise in juggling multiple moving parts. For example, a 2023 report from HomeAdvisor estimated that hiring a GC for a mid-sized project can add $5,000-$15,000 to your budget, but it saves you hours of stress. If you’re thinking about going the DIY-GC route, make sure you’ve got a solid grasp of local permitting processes. I learned the hard way that missing a single permit can delay your project by weeks. A pro tip? Keep a detailed spreadsheet of tasks, costs, and deadlines to stay organized if you’re managing it yourself. And don’t skip the builder’s risk insurance¡ªit’s a lifesaver if a pipe bursts mid-project.
While most contractors fall under the category of general contractor, there are several different types of contractors, including construction managers, design-build contractors, and prime contractors.
A construction manager is typically hired to help during the design process, helping the team develop the project and even initiate the construction phase. Conversely, a design-build contractor stays with a project from start to finish. They are in charge of both designing the project and managing its development, and in some cases may even help with the physical construction or maintenance.
A prime contractor is a broad category that refers to the relationship between a contractor and their clients. Prime contractors and their clients develop long-term commitments that may include future or ongoing projects. This is often seen in large-scale clients, such as organizations that frequently need construction work.
Choosing the right type of contractor can make or break your project. I’ve seen friends opt for design-build contractors for additions because they streamline the process by handling both design and construction. According to the Design-Build Institute of America, design-build projects can cut delivery time by up to 30% compared to traditional methods. If you’re dealing with a complex project, like adding a second story, a design-build approach might save you from coordinating between separate architects and builders. For ongoing work, like a series of office renovations, a prime contractor’s long-term relationship can ensure consistency. My advice? Ask potential contractors about their experience with your specific project type¡ªsay, kitchens versus bathrooms¡ªand request a detailed timeline upfront to avoid surprises.
While some general contractors will tackle parts of the building process, they will generally hire subcontractors to complete specific parts of the project. GCs often have long-standing relationships with subcontractors who possess specific skill sets, allowing them access to specialized expertise for even the most niche of project requirements.
Subcontractors tend to focus their work in a single area such as plumbing, electrical work, HVAC, and tiling or flooring. These subcontractors may be self-employed or they may work under a subcontracting business. Homeowners will likely have little to no interaction with subcontractors, as they are hired, managed, and paid per project by the general contractor.
Subcontractors are the unsung heroes of any renovation. When I had my floors redone, I never met the tiling subcontractor, but their work was flawless thanks to the GC’s oversight. The National Association of Home Builders notes that subcontractors handle about 70% of the work on a typical home renovation. This specialization ensures high-quality results but also means you’re relying on the GC to vet them properly. One tip I picked up is to ask your GC how long they’ve worked with their subcontractors¡ªlonger relationships often mean better reliability. Also, if you’re curious about a specific trade, like electrical work, don’t be afraid to ask the GC for a quick rundown of the subcontractor’s certifications. It gives you peace of mind without micromanaging.
A contractor will ensure quality and compliance through all stages of the home renovation process¡ªperhaps the most important aspect of the job. If anything goes wrong or does not meet requirements, it is the contractor’s job to correct the problem and cover any associated costs.
When a general contractor obtains building permits, they are filing under their business name. This holds them accountable for following any required building codes, as well as paying any fines if these codes are not followed. In addition to maintaining legal compliance, a GC will also ensure that the conditions for product or material warranties are met. For example, it is common for roofs and windows to have warranties that are only valid if the work is performed by a qualified and certified professional.
Compliance isn’t just a buzzword¡ªit’s a safeguard. During my last renovation, the GC caught a code violation in the initial electrical setup that could’ve cost me thousands in fines. According to the International Code Council, non-compliance with building codes can lead to penalties ranging from $500 to $5,000 depending on the violation. A good GC knows these codes inside out and ensures everything from framing to plumbing meets local standards. To stay on the safe side, I always ask contractors to show me the permits they’ve pulled for past projects. It’s a simple way to confirm they’re legit. Also, double-check that your contractor’s certifications match the warranty requirements for big-ticket items like windows or HVAC systems¡ªotherwise, you might be left footing the bill for repairs down the line.
In the event that something goes wrong in the building process, such as property damage or on-site injuries, the contractor should carry liability insurance. In many states, contractors are legally required to purchase this insurance in order to obtain a business license.
A contractor typically will carry general liability insurance, also known as commercial general liability (CGL) insurance, to cover third-party property damage and customer injury. A general contractor may also carry a separate worker’s compensation policy, which relieves homeowners from liability for any injuries sustained to employees on the job site.
Liability insurance is a must¡ªdon’t skip checking this. When a friend’s contractor accidentally damaged a neighbor’s fence, their CGL insurance covered the repair, no questions asked. The Insurance Information Institute reports that general liability insurance typically costs contractors $500-$1,500 annually, depending on project size, which is a small price for the protection it offers. Before hiring, I always ask to see a certificate of insurance¡ªit’s a quick way to verify coverage. If you’re worried about worker injuries, confirm the contractor has worker’s comp, too. It’s not just about protecting your wallet; it’s about peace of mind knowing everyone on-site is covered if something goes south.
Before tackling a home improvement project, it’s worth considering what type of professional is best for the job. In some cases, especially with large-scale or complex projects, a general contractor is necessary. Other times, a specific subcontractor or even a skilled general handyman can tackle the task.
If the intended project requires multiple subcontractors, will take an extended period of time, or requires dealing with municipal building codes, look into hiring a general contractor. The GC has the time, resources and skill set necessary to successfully manage all aspects of the renovation from start to finish. Conversely, if the project only requires one or two subcontractors, will only take a short time, or does not have municipal building code requirements, a client may be able to oversee (or even complete) the project themselves.
Generally speaking, it is advised for homeowners to only tackle renovation projects they can do skillfully and confidently. Otherwise, it’s best to hire a professional for their insight and expertise.
Deciding whether to hire a GC or go it alone depends on your project’s scope. For my small patio project, I hired a single masonry subcontractor directly and saved on GC fees, but for a multi-room remodel, I wouldn’t dream of skipping the GC. Data from Angi suggests that projects requiring three or more subcontractors¡ªlike kitchen overhauls¡ªcan take 20-30% longer without a GC’s coordination. If you’re leaning toward DIY, start by researching your local building codes online; many municipalities post them publicly. Also, don’t underestimate the time commitment¡ªmanaging even a small project can eat up 10-20 hours a week. My go-to move? Get quotes from both a GC and individual subcontractors to compare costs and see if the GC’s oversight is worth the extra bucks for your specific job.