8 Key Steps For Starting an Electrical Business

Are you thinking about starting an electrical business in your city?

According to Statista, there are more than 45,000 electrical businesses scattered throughout the country, employing less than 5 people. That number will likely grow in the coming years as more electricians decide to leave their employers and create their own businesses.

Before you take the leap of faith and start an electrical business, there are some steps you should take to set it up for success. By following these steps, you’ll put yourself and your business in a much better position to be profitable in no time!

8 Steps To Starting An Electrical Business

Look at the 8 critical steps for starting an electrical business below.

1. Where to Operate Your Electrical Business

Before starting an electrical business, you’ll want to determine how much your area needs another electrical business.

Do your research and get answers to these questions on ‘demand for the service’:

Is your community growing by leaps and bounds every year? More homes and commercial properties mean more Electricians are needed.

Is there a big electrical business that recently went out of business or moved to a different area? If your local area isn’t building new homes, there could still be an opportunity for you in the existing market. When a big player shuts up shop, customers are left looking for another service provider. This could be you and your business. As the saying goes, timing is everything!

Are homeowners in your area happy with the electrical services currently provided to them? Understand the general sentiment about the service levels and what it would take for competitors to switch their customers over to you.

Demand is one factor in deciding whether to enter a market. You must also plan for additional staff, funding equipment, an office, insurance, and an online presence. Plus, how will you get customers? You’ll want a marketing plan and a brand.

2. Create a Name for Your Electrical Business

Once you’re sure you want to start an electrical business, come up with a name. Try to choose something that will set your business apart from others.

Some electricians use their names to build trust with their customers. Others get more creative to ensure people remember their names once they hear them.

Regardless of which approach you choose, make sure you pick a name that will be easy to market to people later. Attracting customers to your business will make your life a lot easier.

The name is your brand, and with a catchy byline, you or a marketer will use it to attract visitors to your website, blog, and social presence (yes, even Electricians are on Facebook, Twitter, etc.).

3. Obtain Licenses, Permits, and Insurance for Your Electrical Business

When starting an electrical business, you can’t simply come up with a name and start showing up at people’s houses to perform services. How will you legalize your business? Will you start off as self-employed or set up an LLC? Get advice from an accountant.

You must also obtain the proper licenses, permits, and insurance to work in your area. Additionally, start out as you mean to carry on with a compliance management plan. It may seem overkill for a startup, but it will reward you later on should your business become a much larger operation.
Visit your local city hall or municipal building to learn what you’ll need to do to get your business up and running.

Call a few business insurance companies as well to obtain business insurance quotes. You shouldn’t run a single electrical wire or swap out a single electrical outlet without an insurance policy covering you and the homes and/or businesses you work in.

4. Which Services will your Electrical Business provide?

While it may seem obvious to you which services your electrical business should offer and to whom – it’s likely a crowded marketplace where you’ll have many competitors. Therefore, it’s worthwhile to spend a bit of time considering your options. For example, did you know your electrical business could specialize in installing solar energy? Let’s look at your service options.

• Solar Energy Installation – specializes in designing, installing, and maintaining solar power systems. Rising energy costs contribute to the number of homeowners installing solar panels. This is a growth industry that needs more accredited solar energy installation and maintenance electricians
• Standard Electrical– qualified electricians who are self-employed or operate a small business with a handful of employees. They offer a range of services, from designing and installing electrical systems to maintenance and repair for homes and commercial buildings

Then there are more specialized providers, from electrical engineering to manufacturing, including:

• ElectrManufacturingand Inspection – qualified testers and inspectors who audit electrical systems, ensuring they comply with safety standards and regulations
• Electrical Engineering provides consulting services, including system design, planning, and project management. Your electrical engineering business may specialize in computer engineering, power engineering, telecommunications, signal processing, or electronics.
• Electrical Manufacturing – businesses manufacturing equipment, components, and systems
• Electrical Distributors – become distributors of electrical products to contractors, engineers, and other electrical businesses.

You can keep your business small or become a larger entity, maybe even a multinational organization!

However, if you’re firmly fixed on keeping it local and focusing on homes and commercials, you’ll still need to plan for your success.

Speaking of homes and/or businesses, have you decided whether your electrical business will cater primarily to homeowners or business owners?

5. Will Your Electrical Business Need Employees?

If you plan to offer more than a dozen services to home and business owners, you probably won’t be able to do it alone. You’ll need help answering all the service calls you receive.

Hiring employees for your electrical business is a good idea if that’s the case. It’ll allow you to serve more customers in less time.

But there is also something to be said for starting an electrical business small and allowing it to grow organically. Rather than dealing with multiple employees from the start, you might want to consider hiring only one or two helpers if you hire any.

6. Purchase a Vehicle and Tools for Your Electrical Business

Some of the most significant expenses you’ll encounter when starting an electrical business are the trucks and tools you’ll need to buy for your business.

Initially, you might not need to rent a physical location for your electrical business. But it will be impossible to complete electrical jobs without a vehicle and tools.

Think about purchasing a second-hand van or truck when you start and run your business out of it. Look around for used tools you can upgrade once your business starts picking up steam.

7. Set Up a Website for Your Electrical Business

In addition to investing in a truck and tools for your electrical business, invest in a website with a blog as the core online asset.

Your website will inform visitors how to contact you, the services you provide, and the tips you have for them. It’ll also allow you to tell them which areas you cover and your hours.

If you can swing it, optimizing your website’s SEO to attract more attention through search engines is always a good idea. For example, you can use free Google Tools to learn more about SEM, SEO, marketing, and relevant content value. Starting a blog about electrical work on your website could bring in more traffic every month and generate more business.

8. Start Marketing Your Electrical Business

Use experts to set up your site and blog and start a PPC campaign. While you can blog about improving energy efficiency around the home, SEO and marketing are specialized roles that should be outsourced to professionals. For example, a marketer will know strategies to drive sales.

Use agencies or freelancers for marketing, social media, and SEO, and start the hiring process with referrals from your friends or family. Then, research online, e.g., look for feedback and reviews on their business and services.

Also, be open to running ads on a local radio station or putting an ad in the newspaper. However, your marketer can also start advertising by promoting a social media campaign on Facebook, X, or Instagram.  Set up on LinkedIn to network with like-minded businesspeople.

Final Thoughts

Starting an electrical business can be a good career move. Electricians play a crucial role in many industries, ensuring the safe and efficient generation, transmission, and utilization of electrical power. From homes to businesses to telecoms and more, it’s a profession that’s required all year round.

Follow all the steps listed here and engage experts to assist you with the setup. For example, you will need a marketer, an accountant, and a business advisor to ensure your investment is spent wisely and your business is on the right path to success.