Being that only around 35% of contractors actually stay in business after becoming licensed, your builder’s longevity in the construction industry may be the best indicator of the future success of your upcoming project. Of course, knowing this could be a deal-breaker, contractors, more often than not, misrepresent their business experience and work history. Here’s a quick “red-flag” check when you’re looking at contractors in California:
License numbers are issued in sequential order. For example, we, at Tellus, hold two GC licenses, and both are 6 digits. One starts with a “5” and was issued in 1987, and one starts with a “9” and was issued in 2009. Recently, license numbers grew to 7 digits and are now 1000000 and something. While there are exceptions and extenuating circumstances to this rule of thumb, if you hear (like we hear all the time when being solicited by Contractors), “We’ve been in business for 25 years,” and then see their 7 digit number like 10020**, take 3 minutes to look it up on the State Contractor’s Board website – http://www.cslb.ca.gov – and ask your potential contractor to explain the discrepancy. If they had to get a new license for some reason, it usually means that something not-so-good happened with the old one… that, or they are just being plain dishonest about their experience.
***The CA Contractors board website makes it easy to check on prospective contractors by personal name, business name, etc. While the board can be difficult to reach by phone, there is a wealth of information posted online. Take advantage of it.