Are you thinking about starting an electrical business in your city?
There are more than 43,000 electrical businesses scattered all across the country – employing less than 5 people according to Statista. That number will likely grow in the coming years as more and 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 right away.
Take a look at the 8 key steps for starting an electrical business below.
1. Determine the Need for an Electrical Business in Your Area
Before starting an electrical business, the first thing you’ll want to do is figure out how much your area actually 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 need for Electricians.
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? Seek to understand the general sentiment for the service levels and what it would take for competitors to switch their customers over to you.
Demand is one factor for deciding to whether enter a market. You will also need to 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 for it. Try to choose something that will set your business apart from others.
Some electricians opt to use their names to build up a sense of trust with their customers. Others get more creative to ensure people remember their names once they hear them.
Regardless of which approach you choose to take, make sure you pick a name that will be easy to market to people later. It’ll make your life a lot easier when it comes to attracting customers to your business.
The name is your brand, and with a catchy byline, either you or a marketer will use it to attract visitors to your website, blog, and social presence (yes, even Electricians are on Facebook, Twitter, et al.).
3. Obtain the Proper 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.
Plus, you need to obtain the proper licenses, permits, and insurance to work in your area. Make a trip to your local city hall or town municipal building to see 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 that will cover you and the homes and/or businesses you work in.
4. Think About Which Services Your Electrical Business Will Provide
Speaking of homes and/or businesses, have you decided whether your electrical business will cater mostly to homeowners or business owners?
Some electricians choose to do both. But you may want to pick between providing residential or commercial electrical services based on your level of experience and expertise.
You also want to decide which services you’ll provide for customers, regardless of whether you choose to serve homeowners, business owners, or both. You may want to specialize in one or two services or offer a long list of services to customers.
5. Consider Whether or Not Your Electrical Business Will Need Other Employees
If your plan is to offer more than a dozen services to home and business owners, you probably aren’t going to be able to do it alone. You’ll need help answering all the service calls you receive.
If that’s the case, hiring employees for your electrical business is a good idea. 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 only hiring one or two helpers, if you hire any at all.
6. Purchase a Truck and Tools for Your Electrical Business
Some of the biggest expenses you’re going to encounter when starting an electrical business are the truck and tools you’ll need to buy for your business.
At the start, you might not need to rent a physical location for your electrical business. But it’s going to be impossible to complete electrical jobs without a truck and tools.
Think about purchasing a used truck when you first start and run your business out of it. Look around for used tools that you can upgrade later 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 what your hours are.
If you can swing it, it’s always good to have your website SEO optimized to attract more attention through search engines. For example, you can use free Google Tools to learn more about SEM, SEO, marketing, and relevant content value. By starting a blog about electrical work on your website, you could bring in more traffic every month and generate more business.
8. Start Marketing Your Electrical Business to Potential Customers
Use experts to set up your site, blog and maybe start a PPC campaign. While you can blog about improving energy efficiency around the home, SEO and marketing are specialised roles that should be outsourced to professionals.
Use agencies or freelancers for marketing, social media, and SEO and start the hiring process with referrals from your friends or family. Then go online and do your own research, 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. But your marketer can also start advertising by kicking off a social media campaign on Facebook, Twitter, or Instagram.
Starting an Electrical Business Can Be the Best Career Move You’ll Ever Make
If you’re an experienced electrician and you know there’s a demand for an electrician like you in your area, starting an electrical business on your own is smart.
You can make your own hours, bring in your own money, and run your electrical business the way you think it should be run. You’ll find it very fulfilling, and you will be glad you started a business if you follow all the steps listed here first.
Read our blog for more tips on launching a successful business.