David Allen
Founder, Licensed Local Contractor
David spent over 20 years as a W-2 employee at a prominent and highly respected privately-owned roofing company. He worked his way from laborer to foreman, supervisor, estimator, purchaser, manager, safety officer, and ultimately Director of Operations. This firsthand experience across every level of a major contracting operation informs the standards behind this directory.
The "Valley of Death": Years 0–5
The construction industry has one of the highest business failure rates of any sector. The first five years are particularly dangerous — a period industry analysts call the "Valley of Death."
44.1%
of construction businesses fail within their first five years, according to the U.S. Bureau of Labor Statistics.[1]
By requiring 10 years of continuous licensure, we filter out the nearly 50% of contractors who are statistically most likely to go out of business mid-project — or before your warranty expires.
The 10-Year Stability Benchmark
Ten years isn't an arbitrary number. The data shows that after a decade, a company's risk profile changes dramatically.
| Metric | Data | Source |
|---|---|---|
| 5-Year Failure Rate (Construction) | 44.1% | BLS |
| 10-Year Failure Rate (All Industries) | 65.1% – 65.3% | SBA |
| Annual Failure Rate After Year 10 | 5% – 7% | BLS BED |
The Survival Inversion: A contractor with 10 years of experience is 8x more likely to be in business next year than a startup.
Why Star Ratings Are Mathematically Flawed
Star ratings are "soft data" — easily manipulated and statistically unreliable. Verified licensure is "hard data" that can be cross-referenced with government records.
| Factor | Star Ratings | 10-Year Licensure |
|---|---|---|
| Data Type | Soft data (user-generated) | Hard data (government-verified) |
| Can Be Faked? | Yes — bot farms, fake reviews | No — verified with state boards |
| Sample Size | 10 friends = 5 stars possible | 500+ projects over 10 years |
| Recency Bias | 50 reviews in 3 months = red flag | Longitudinal data over a decade |
| What It Proves | Popularity (maybe) | Financial stability, operational excellence |
A new contractor can get 5 stars from 10 friends. A 10-year contractor has likely completed over 500 projects, making their reputation a product of "statistical significance" rather than anecdotal fluff.
Our Verification Process
We don't rely on contractors to self-report. Every listing is verified against official state records.
Query State Licensing Board
We check the Idaho Division of Building Safety (and equivalent boards in other states) for each contractor's license record.
Verify Original Issue Date
We confirm the license was originally issued at least 10 years ago — not just renewed recently.
Confirm Continuous Active Status
We verify the license has been continuously active — no lapses, suspensions, or revocations during the 10-year period.
Display Verified Badge
Verified contractors display their license number and verification date on their profile, with a direct link to the state licensing board record.
The Bottom Line
When you find a contractor through Licensed Local Contractor, you're connecting with the top 35% of businesses that survived their first decade. These are professionals who have:
- Weathered economic cycles and market downturns
- Perfected their safety and financial systems
- Built lasting reputations in their communities
- Demonstrated the operational excellence to stay in business
Sources
- U.S. Bureau of Labor Statistics, Business Employment Dynamics. "Survival of private sector establishments by opening year."bls.gov/bdm
- U.S. Small Business Administration, Office of Advocacy. "Frequently Asked Questions About Small Business."advocacy.sba.gov