Top Ten Things to Do to start a Construction Business in Michigan

Launching a construction business in Michigan requires navigating state licensing rules, legal protections, and business strategy. Following these 10 steps will help set up your company for long-term growth.

Step 1: Complete Your 60-Hour Course at Detroit Training Center

In Michigan, any residential contracting job over $600 requires a license issued by LARA. Register for the state-approved 60-Hour Michigan Residential Builders License Class at the Detroit Training Center (DTC).

Detroit Training Center

• What it Covers: State building codes, MIOSHA safety guidelines, job costing, risk management, and project scheduling.

• Investment: $750 total (includes course manual). DTC offers a split-payment option ($375 to start and $375 at the midpoint).

Step 2: Apply for Licensing & Pass the PSI Exam

After receiving your completion certificate from DTC:

1. Submit your Individual Residential Builder License Application to LARA along with a $195 fee.

2. Once LARA approves your application, schedule your computer-based exam via PSI Testing Services ($117 exam fee).
   Detroit Training Center

3. Pass both the Business & Law and Trade & Practice sections.

Step 3: Choose & Form Your Legal Entity

Register your business structure through the Michigan Department of Licensing and Regulatory Affairs (LARA). Forming an LLC or S-Corp protects your personal assets from workplace liability and unlocks key business tax deductions.

Step 4: Register for Federal & State Tax IDs

• FEIN: Apply for a free Federal Employer Identification Number via the IRS website.

• Michigan Treasury: Register with the Michigan Department of Treasury for Michigan Business Taxes (Sales Tax, Withholding, and Unemployment Insurance).

Step 5: Secure Insurance and Surety Bonds

Uninsured contractors cannot secure major commercial permits or bid on municipal contracts in cities like Detroit.

• General Liability: Minimum $1,000,000 coverage recommended.

• Worker’s Compensation: Required by Michigan law as soon as you hire your first employee.

• Surety Bonds: Necessary for bidding on large private projects or municipal jobs.

Step 6: Set Up Dedicated Business Banking

Never mix personal and business finances. Open a business checking account using your LARA LLC approval document, FEIN, and builder's license. Establish a line of credit early to smooth out cash flow between project billing cycles.

Step 7: Tap Local Capital Resources & Incentives

Detroit contractors have access to local funding sources to help purchase equipment or secure working capital:

• Detroit Development Fund (DDF): Offers specialized contractor lines of credit and microloans for Detroit-based trades.

• Motor City Match: Provides cash grants of up to $100,000 for local businesses.

• Michigan SBDC: Offers free financial forecasting and business plan coaching.

Step 8: Establish Job-Costing & Pricing Systems

The main reason early-stage construction businesses struggle is underbidding. Build a standardized estimating system that factor in:

• Direct labor and materials costs.

• Subcontractor markup.

• Overhead expenses (insurance, fuel, vehicle wear, software).

• Target profit margins (typically 15%–25%+ net margin).

Step 9: Pull Permits & Ensure MIOSHA Compliance

Prior to breaking ground on any project, pull proper permits through the local municipality (such as Detroit's Buildings, Safety Engineering, and Environmental Department—BSEED). Ensure all job sites strictly comply with MIOSHA regulations to avoid costly safety fines.

Step 10: Register on Local Supplier & Procurement Portals

Get certified and list your new firm on local contracting portals:

• BuyDetroit: Connects local trade firms directly with major corporate and city developments.

• SIGMA VSS: Register with the State of Michigan's Vendor Self Service system to bid directly on state-funded public works and infrastructure projects.

Grant and Loan Programs For New Construction Businesses in Detroit

For a small construction business in Detroit, securing working capital to cover payroll, purchase materials upfront, and obtain equipment can be a major hurdle. Fortunately, Detroit has a robust financial ecosystem designed specifically for contractors, women- and minority-owned trade businesses, and local developers.

1. Dedicated Contractor Loans & Lines of Credit

Unlike traditional retail banks that require extensive collateral, local Community Development Financial Institutions (CDFIs) offer specialized loan products tailored to a contractor’s cash flow cycle.

• Detroit Development Fund (DDF) – Contractor Line of Credit: DDF offers direct lines of credit and pre-construction loans built specifically for Detroit-based contractors and subcontractors. Financing is tied directly to active contracts or purchase orders, giving you working capital to start projects before receiving owner draws. They also offer microloans ($5,000 to $50,000) for new companies.

• Invest Detroit: Offers flexible gap financing, real estate rehab, and working capital loans for small contractors working on residential or commercial developments within the city limits.

• Michigan Women Forward (MWF): Offers microloans up to $50,000 with flexible terms, specifically serving women and minority entrepreneurs looking for start-up or equipment funding.

2. Grants & Non-Dilutive Capital

Grants do not need to be repaid, making them the most valuable resource for early-stage capital.

• Motor City Match (Cash Track): Administered by the Detroit Economic Growth Corporation (DEGC), this program awards quarterly gap-funding grants up to $100,000 for Detroit businesses. If you are setting up a physical shop, yard, or office in a Detroit commercial corridor, you can qualify for cash awards, architectural assistance, or pre-construction technical support.

• Detroit Industrial Revolving Loan Fund (DIRLF): Operated by the DEGC, this fund provides gap-financing grants and low-interest loans up to $200,000 (covering up to 40% of eligible costs) for fixed-asset purchases, equipment acquisition, and facility build-outs.

• Local Foundation Grants: Keep an eye out for rolling micro-grant opportunities from local philanthropic networks (such as the Skillman Foundation or Hudson-Webber Foundation) routed through local incubators like TechTown Detroit.

3. State-Level Capital Programs

The State of Michigan leverages federal and state funds to back lenders so small contractors can secure funding even with short credit histories.

• Michigan Economic Development Corporation (MEDC) Capital Access: MEDC’s Collateral Support Program helps contractors who qualify for a bank loan but lack sufficient collateral. MEDC pledges cash collateral to a participating bank on your behalf, allowing you to secure working capital or heavy equipment loans.

• SSBCI (State Small Business Credit Initiative) Microloans: Michigan distributes federal SSBCI funds through participating local lenders, prioritizing socially and economically disadvantaged individuals (SEDI) entering the trades.

4. Technical Assistance & Bidding Opportunities

Capital is only half the battle; winning contracts keeps the cash flowing.

• BuyDetroit: A DEGC procurement portal connecting Detroit-based certified suppliers and contractors directly with major local buyers, corporate developers, and municipal projects.

• Detroit Means Business (DMB): Offers free access to technical advisors who assist with financial forecasting, preparing loan applications for CDFIs, and bidding strategy.

How To Choose The Right Construction Bond And Patterns

Article By: Reylord Ayop

A brick bond is a pattern where the bricks are lying. It is applicable for brick paving and brick walls, especially for paths and patios, including other types of masonry construction, such as concrete blocks. You can pick different brick bonds suitable for your buildings, just like choosing the most suitable general-purpose access doors and panels.    

Photo By: Jordan Harris

How Can You Brick Bond Your Work   

Brick bonds mostly need bricks or masonry units having the same size or at least the most compatible size. A uniform size will make a regular and repeatable pattern that you may apply to any size of the area. Several bond patterns have the interlocking method for each brick row and are very well known as a course.    

The bond will add solidity to your building in this method, making any mortar wall much more robust than ever. If you use mortar between your bricks, consider that each brick size includes mortar thickness.  

What are the common wall brick bonds?   

Brick walls can be decorative, like the brick-veneer wall, or structural, like load-bearing walls. Structural barriers will need a specific type of structural bond. On the other hand, decorative walls can use any kind of bond. We have listed a few popular and common types of brick bonds you may use on your walls.   

Running Bond: The bricks are staggered into ½ brick above and below its course, in the classical way one-over-two method. It is a simple structural bond that has been accessible long enough for the basic construction of walls. Every brick is lying lengthwise—the "stretchers," also known as the long sides facing outwards.   

Common Bond: Running bonds style with an intermittent course of the header bricks is usually for double-thickness walls, which is why header bricks are flushing on the edges with two stretchers lying side by side.   

English Bond: It is the same as the common bond. However, it is running alternatively with all header bricks and stretcher bricks.   

Flemish Bond: Header and stretcher bricks alternate to every course in this type of bond.   

Stack Bond: Every stretcher brick is lying in identical grid courses. The joints aren't staggered on each between systems. It is a non-structural bond that is for interior wall decoration.   

Common Paving Brick Bonds   

Underlying surfaces support brick paving, unlike the walls, which need to sustain themselves and load from the top. It means the paving brick bonds can be decorative and flexible. Such bonds are chosen by many due to their easy installation, not only by their style. Patterns that have lesser cutting parts are much easier to apply.   

Paving may also include wood timbers or other materials you can integrate into your style. Brick pavers commonly lie flat, and one of their larger sides faces upwards.   

Running Bond: The pattern for this bond is the same as the wall bricks. It can also be perpendicular, diagonal, or even parallel to the length of your building's patio or path.   

Herringbone: With each brick placed perpendicular to its neighbor, these bonds will create a simple zigzag pattern. Although these are aesthetically pleasing, they can take too much time to install as it requires you to cut the brick at the edge of every course to form a straight line.    

Basketweave: The brick pattern is squarely lying paired to each other and side-by-side, and every one of these is perpendicular to its neighbors. It is the best option for locations that are rectangular or square.   

Jacked: It is also known as Jack-on-Jack paving, the even rows in square grids are pleasing, and you can't find any staggering between its courses.   

Find the correct bond pattern for your building.   

We know that it can sometimes be hard to find the right choices for your buildings, especially if you want them sturdy and lasting longer than usual. Don't be afraid to ask for professional help, especially regarding the safety of your buildings.