Part of our guide: How to grow a service business without working more hours.
Written by Dan Sagar, FoundationsAI. Updated October 2026.
To go from subcontractor to business owner, build your own customers before you give up subcontract work, price jobs to cover your overheads and profit (not just your day rate), sort out the money side (a business bank account, tax and insurance), and set up simple systems for enquiries, quotes and invoices from day one.
What changes
| Subcontractor | Business owner | |
|---|---|---|
| Who finds the work | The main contractor | You |
| How you price | A day rate | A job price that covers overheads and profit |
| Tax | Often CIS deductions taken for you | You set money aside and deal with HMRC yourself |
| Admin | Very little | Quotes, invoices, chasing and booking |
| Risk | Lower, but your income is capped | Higher, but with more upside |
Step by step
- Keep some subcontract work while you build your own customers.
- Get found locally. Set up your Google Business Profile, a simple website, and ask your first customers for reviews. See why local SEO matters for trades and how to get more Google reviews.
- Work out your real costs (van, tools, insurance, phone, software, time spent quoting) and price each job to cover them plus profit.
- Open a business bank account, and ask an accountant whether to be a sole trader or a limited company.
- Sort out tax. If you've worked under the Construction Industry Scheme (CIS), contractors have been taking 20% (or 30% if you weren't registered) off your pay. Your own household customers won't, so set money aside for tax yourself. You must register for VAT if your taxable turnover goes over £90,000 in any 12 months.
- Get insured. Public liability insurance is the minimum. Employer's liability insurance is a legal requirement once you take anyone on.
- Set up simple systems for enquiries, quotes, follow-up and invoices, so nothing gets missed while you're on the tools.
Common questions
Can I keep subcontracting while I build my own business?
Yes. Many people do both for a while, so they're not without income while their own customers grow.
Do I need to register for VAT?
Only when your taxable turnover goes over £90,000 in any 12 months. Check GOV.UK for the current threshold.
What insurance do I need?
Public liability as a minimum. Employer's liability is a legal requirement once you employ someone.
Should I be a sole trader or a limited company?
It depends on your profits and plans. Ask an accountant.
How do I get my first customers?
Tell everyone you know, set up your Google Business Profile, and ask every happy customer for a review and a referral.
Want your systems set up from day one?
Book a 45-minute demo and we'll show you how enquiries, quotes and invoices can run in one place.