Yes you have to have a license at least in Idaho. You can contact the Labor and Commerce department in your area and also your Secretary of the State, and the IRS to report the illegal builder. It just don't seem fair to have someone like that out bid you and steal your business when You and I (the honest people) get raped on taxes, workers comp, and all other expenses of owning your own company and paying employees.

You have to have a business license in most cases, there are cases where states do not have a state license, only cities, and if you live outside the city limit, no business license may be required. This is common in some states where I live.

There is seldom in most business needs for bonding, there are dozens of types of bonding, but most business do not require bonding.

Insurance, most should have it, but if you don't, in most there is no crime.

People can be paid in cash if they wish, there will be requirements to still report their income, but that is a IRS issue,