Contracting vs. Construction: What’s The Difference?


When starting a business, it’s essential to understand the difference between contracting and construction. This will help you decide which type of company you should start. 

This article will explore the differences between contracting and construction so you can make an informed decision about which route to take.


What Is Contracting?

Contracting is the process of agreeing to provide goods or services. A contract is a legally binding agreement between two or more parties. It can be verbal or written, but it must be agreed upon by all parties involved.

In the realm of construction, contracting typically refers to the act of hiring a contractor to provide services. This could be anything from hiring a company to build a home, to contracting someone to do landscape work.

There are two main types of contractors:

  1. General contractors are responsible for the overall coordination of a project. They hire and manage subcontractors, order materials, and oversee the budget.
  2. Subcontractors are specialized workers that general contractors hire to complete specific tasks. For example, a plumber would be considered a subcontractor.


What is Construction?

Construction is the process of creating or assembling structures. Construction can be divided into two main categories: commercial and residential. Commercial construction includes projects like office buildings, retail stores, and hospitals. Residential construction includes projects like houses, apartments, and townhomes.

Construction workers are responsible for the physical labor of a project. This could include anything from demolition to erecting scaffolding. There are a few different types of construction workers:

  • Carpenters build the framework of a structure using wood.
  • Electricians install and maintain the electrical systems of a building.
  • Plumbers install and repair the plumbing systems of a building.


What’s the Difference? 

The main difference between contracting and construction is that contractors or typically individuals that are hired to do work or provide a service. In contrast, a construction company specifically works on buildings and architecture. Contractors usually have more flexibility — they can specialize or be a jack of all trades.



Now that you know the difference between contracting and construction, you can decide which route is best for you and your business. If you want to work on your own and have more control over your projects, contracting may be the way to go. If you want to work as part of a team and be involved in the construction of buildings, working for a construction company may be a better fit.