According to Forbes, the average electrician can make just under $60,000 per year. However, starting an electrical business can send those earnings through the roof. In fact, it could potentially break through the ceiling altogether.
Quanta Services Inc., for example, has revenue of over $7.7bn. Even if you’re just hoping to have an SME that dominates the local market, knowing how to start your own business is vital. Use the following steps to build your electrical business plan and you won’t go far wrong.
First and foremost, nobody is going to hire your electrical services if you are not a certified electrician. Besides, it is a highly regulated industry due to the potential safety hazards. This means that you legally won’t be able to work without obtaining the necessary licenses first. You can check the National Electrical Contractors Association to view the regulations in your part of the country.
Following this, completing an electrical training program will allow you to gain the skills and education needed to provide professional electrician services. Work experience and apprenticeships can also be used to develop your talent, confidence, and reputation.
2.Research The Market
Simply saying “I want to start an electrician firm” isn’t enough. When starting an electrical business, you need to determine your niche. Understanding the difference between residential and commercial electrical services is a great starting point. Even if you plan to eventually cover both, having a defined specialty is vital at the beginning.
This info will guide your future electrical business plan, marketing strategies, equipment purchases, and much more. With over one million electricians working in America, the competition is fierce. Finding your place will be vital.
The harsh reality is that capital is needed to power your dreams. When looking at how to start your own business, an honest breakdown of the costs is vital. You’ll need a van, tools, equipment, marketing supplies, and potentially a small office. Meanwhile, you can expect to pay around $5,500 to get insurance, state fees, employee payroll, and bank accounts set up for your business.
When combined with the other expenses mentioned above, it’s likely you’ll need $25k+. You could fund this yourself, take out a bank loan, through crowdfunding, or get a private investor. Either way, a strong business plan that includes an overview of the business, a list of services, market research, and a financial plan is needed to secure funding.
4.Register Your Electrical Business
When looking at how to start your own business in the electrical industry, finding the perfect name is just the start. You’ll also need to register the company with the IRS as a Limited liability company (LLC), sole proprietorship, partnership, corporation, or S corporation. The first three are far more common for small electrical businesses.
In addition to registering the business, you should buy a domain name and ensure that you have the right insurances in place. Professional liability insurance, equipment insurance, general liability insurance, and commercial automobile insurance will all be required when starting your own electrical business.
5.Do Your Numbers
You should have already crunched the basic numbers by this point. However, you will probably need an accountant or accounting software to keep your finances organized. You should also have a separate bank account to keep your business finances away from your personal finances.
It is also important to know how much you’ll need to spend on various assets. Similarly, you should consider your pricing model. Average hourly rates can vary depending on location, residential vs commercial work, and the project type.
Meanwhile, the hourly rate for a short task like wiring a new outlet may be higher than the hourly rate of a longer job that may take a few days.
6.Assemble A Team
When thinking about how to start an electrical business, it’s important to walk before you run. As such, you won’t hire lots of contractors just yet. Still, you may need to hire a small number of contractors to join the firm. Checking their personalities is as vital as their qualifications. After all, you need to trust them.
It may also be required to outsource some outside services. Hiring a web designer, customer care advisor, or lawyer may be needed at different times. Ensuring that you have a list of reliable contacts can make a world of difference to your electrical firm.
7.Equip Your Business With The Right Tools
As well as the right people, you need the right equipment when starting your electrical business. Drills, screwdrivers, pliers, flash tape, electrical tape, solder wire, single-core and multi-core wire, voltage testers, wire cutters, and a range of other tools will be needed. You need to have them correctly stored in your van with safety equipment and any work attire needed.
It is also important to ensure that you have the right templates in place for invoices, quotes, and other documents. A tablet will allow you to use real-time communications and even take payments from your customers. After all, getting paid is the most important step of all.
8.Market The Business & Provide A Winning Service
Once the business is set up, you need to ensure that your website is supported by local SEO and a strong social media presence. Local radio ads and other solutions are available for marketing too. Getting your first customers will often be the hardest challenge. Once the ball gets rolling, though, word of mouth should lead to further leads and business.
However, none of this is worthwhile if you do not provide a winning service. Be punctual and professional at all times. You will never look back!