How to Start an Electrical Business? An Ultimate Guide to Follow

When you intend to start your own electrical business, things might just be a bit challenging for you at the start, but ultimately it will be rewarding and fun. 

With your own electrical business, you get to decide the working hours and amount of work you do and follow your own specified goals. 

Every individual who has worked or studied to work in electrical jobs has the urge to start something that can multiply their income. Hourly or monthly payouts as an electrician are good, but owning a business can give you impeccable profits. 

But yes, greater things come at a risk, for which you need to be ready with the sleeves rolled up. Running a business and having electrician skills are two different things. So, be ready to learn something new in the pursuit of opening an electrical business. 

If you are sure about it, you would need to embark on a few evident steps to learn how to start an electrical business.

A Simple Step Guide to Start an Electrical Business

Starting an electrical contractor business is more like opening up a retail store. You got to do many things that you didn’t have to do as an electrician, employee, or trainee. You will need marketing, finance, and sales. 

The research data states that the US electrical contracting industry consists of over 75,000 establishments as single and multi-location companies. The combined revenue of these companies is around $170 billion, which states the profitability potential of this industry. 

This explains why electricians are now inspired by the idea of entrepreneurship in this field. But before you proceed with the steps on how to start an electrical business, here are the common types of electrical business you can offer, including residential and commercial electrical services. 

Depending on your team’s potential, you can either pick to offer just one of these two trades or both of them. 

Under residential electrical services, your electrical contracting business will mostly care for homeowners and work around the residential properties. 

Under commercial electrical services, your electrical contracting business will mostly handle electrical jobs at schools, offices, buildings, malls, hospitals, and other commercial sites. 

Now that you know about the types of services you can offer, it is time you learn how to start an electrical business

Step 1: Set goals and build a business plan

For creating a business or growing it, you will need a proper execution plan. You will need short-term and long-term goals to decide what you expect to do with your electrical business. 

The business plan you make will be the blueprint for you to approach systematically to get the operations on track. You might need to analyze the marketplace, estimate operational costs, and calculate the startup cost. 

The things you should consider while making an electrical business plan are

  • Market analysis
  • Personnel plan
  • Business structure
  • Financial projections
  • Business strategy
  • Business bank account
  • Equipment costs

Step 2: Choose your ideal location

You will need an office to operate your business. People need to know where to find you when they require electrical services. 

So, once you have the plan ready, it will become important for you to decide where you can start the physical office. 

It is better to consider a few factors before deciding on a location to be sure that it won’t hamper your business operations:

  • Make sure that there are no electrical businesses or shops nearby in the entire area and even in the neighboring areas. 
  • Even if there is an electrical shop, do some research to know if the customers are happy with its services or not. Learn about their services, quality, and pricing to determine what better you can offer. 
  • Look for a residential community or area that is newly built or is under construction. It can be a perfect place to start your new electrician business. 
  • There might be a place where an electrical shop existed but has been shut down or is not providing services anymore. The people nearby have to go to faraway places for their electrical work. 
  • Commercial electrical businesses can establish offices close to industrial or corporate offices. With the right marketing, one can get big contracts with higher profit margins. 

Consider these factors to ensure that your electrical business will get the maximum attention from local customers nearby with less or no competition at all. 

Step 3: Name the business

The next important step is to name your own electrical contracting business. The name should be simple to pronounce and must be impactful. Do not make it complicated by adding name initials, prefixes, or suffixes. Keep it easy so that your potential customers can remember it.

The name should be picked with the thought that it builds trust among the customers for your brand and services. A trustworthy name will encourage your potential customers to try your services. 

It is a suggestion not to add any philosophy, religion, or belief to the brand name. It is because you want to target the general public instead of just a particular community or society. 

Step 4: Choose the services that you will offer

You do not have to limit yourself to serving just the residential or commercial sectors. Pick ideal services and hire skilled electricians to take on all big and small projects or contracts that come your way. 

The next step in building your electrician business is to choose the services that you want to offer. Electricians can operate as outdoor or indoor electricians. 

The outdoor electricians, also known as linemen, prefer to work on the electrical transmission lines. They are trained and skilled to operate at higher voltages of electrical systems. They can be trained to work on telecommunication lines, wind turbine electrical systems, and outdoor lighting. 

The indoor electricians, also known as wiremen, work on installing, maintaining, and repairing the interior electrical systems. Being an electrical contractor, you can offer indoor services such as setting security alarms, installing electrical wiring, installing gate systems, and others. 

Here are some of the common services that you can offer for both residential and commercial buildings:

  • Electric panel installation, replacement, and repair
  • House or building surge protection
  • Power outlet installation, repair, and replacement
  • Carbon monoxide and smoke detector installations
  • Electrical safety inspections and upgrades
  • Ceiling fan installation, repair, and replacement

Step 5: Get done with the paperwork and obtain licenses

Different states or local governments might have different licensing requirements for an electrical business. After completing your electrical education, obtaining an apprenticeship, and getting experience in the field, you will need various licenses and certifications to start your electrical business. 

You can apply for trade licenses, shops & establishment licenses, labor licenses, and others to be legally ready to run an electrical business. 

You can take the help of a consultant, and they can arrange all of the licenses for you at nominal pay. The electrical contractors might have to produce their certifications, degrees, experience proof, and other valid documents to prove their electrical education and work history. 

Step 6: Accumulate working capital and buy necessary equipment

Starting an electrical business might seem easy till this step. But the reality is that you will need working capital to make the initial business investments. 

You don’t need to ask for money from your friends or family for the initial investments. Instead, you can take government grants or bank loans to set up your business. 

You will need the funds for registering your company, buying equipment, hiring and training electricians, and marketing the brand. 

Different services will need varying types of electrical equipment to work on them. 

Some of the big electrical equipment for the dedicated services can be rented initially per the job request. Later, when your electrical business is stable, and you have more of these big projects in hand, you can prefer to buy this heavy equipment for your business. 

Step 7: Get your business insurance

The next important thing for your electrical business is getting business insurance. Your business services can lead to some serious damage and repercussions due to avoidable or unavoidable causes. 

In such situations, the company might be liable for paying for the mishaps at client sites, which will be expensive for your business without insurance coverage. 

Insurance is not just for the customers but is also for your electrical equipment, tools, employees, and yourself. Get a good policy from a reputed insurer to cover your business and services from all aspects. 

Step 8: Hire a team of electricians

If you are willing to take on big projects by the name of your electrician business, you must have skilled electricians to work for you. You need to do skillful hiring by assessing their qualifications and experience. 

You have been in the field before and know what experience you need to offer better services to your customers. 

Announce the recruitment process over LinkedIn or your website. Let potential candidates send their resumes and profiles to you. When you have sufficient applications, settle down and review them all. You can hire an HR member to help you with the reviewing process. 

After shortlisting a few candidates, you can conduct a telephonic round of interviews to discuss the candidate’s experience and electrical background. 

Further shortlisting can be done based on the telephonic interview, and then you can call your selected candidates for a face-to-face interview. Ask your candidates about their communication and interpersonal skills to interact with the customers. It is equally important as technical skills. 

When finalized, give them an offer letter to join your electrician business and the dates to start their work with you. 

Step 9: Do your marketing for the brand

Digital marketing is the trend for today’s businesses to get wider exposure to their target audience. An electrical company can impose proper marketing measures to extend its business recognition to state and national levels. 

You must have a website for your successful electrical business and promote it with efficient digital marketing implementations. You can impose search engine optimization (SEO), content marketing, local SEO, list your business over Google My Business, and post-Pay-per-click (PPC) ads to get more web traffic to your sales platform. 

Add forms and service request pages over the website to let customers reach out to you online without the hassle of walking through your physical office doors. In this way, the electrical business owners will be able to brand their businesses to a larger group audience. 

Many customers today are looking for their desired services online on priority before even considering walking into any nearby office or store. So it is important for you to have your online visibility. And digital marketing can help you achieve that.

Step 10: Get business management software

Finally, you must get a business management software for your electrical contractor business to digitize most of your business operations. 

Such management software can help you schedule the jobs easily with just one click. You can keep track of your employees and check their availability status. When they are assigned a job, you can track the service’s progress over your portal. 

Moreover, the employees free for the day can be assigned a new job instantly with just one click. Apart from this, you can store the client information, create and maintain invoices, process payments, and do many more things that will help streamline your business operations.

An Electrical Business Software That Helps You

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As an electrical business owner, you must build relationships with co-workers, facility managers, vendors, and other electrical contractors. When starting an electrical business, you can take the help of the existing key players to get referral jobs as well.
An electrical business owner can up-sell and cross-sell the services to customers to get additional returns from every sale. You can also educate your sales team on the right strategies to convert the leads into customers.
A professional electrician prefers to advertise the small electrical business by offering initial discounts to friends and family. It will promote word-of-mouth marketing for you, which is the best way to promote your brand.

FieldCamp – An Efficient Scheduling Software for Your Electrical Business

Small business owners of 2022 need to adopt digital tools to streamline their business operations right from the comfort of their mobile devices. 

The customers would mostly prefer raising a job request through online portals, and when they do, you should be able to respond to them immediately. 

With FieldCamp, you will get instant notification whenever a request comes up. You can then assign an available employee for the job and set a service commencement date with the client’s consent. 

FieldCamp has many more features to help you digitize your business processes. Explore them in a , and you will realize their potential for your new business. 

For any query, you can always talk to our team of consultants. We are here to help you grow your business. 

Author Bio

Gaurang Bhatt

Gaurang Bhatt is a techie in himself with an ability to solve problems technically and present solutions in the form of a product. He is one of the pioneers to curate FieldCamp with his 15+ years of knowledge and expertise in providing solutions to home service industries. Gaurang aims to overcome challenges faced by service business owners through software solutions and blogs.