How To Start A Small Electrical Contractor Business

Starting an electrical contractor business, like any other business, requires a lot of hard work. But this business is quite profitable. This article is intended to help professional electricians who are still in doubt about whether or not to start their own businesses. If you have already made a decision, find here useful information about the necessary skills, planning, financing, and legal issues in the electrical business.

Advantages and Disadvantages of the Electrical Contractor Business

If you want to make sure that the idea of starting your electrical contractor business does not bring you disappointment, be honest from the very beginning with yourself as to whether it is worth investing your money, time, and energy in such a project.

There are many benefits of an electrical business. But there are also difficulties, to be considered before you start this journey. Let’s look at the advantages and disadvantages of the electrical business.


You will always find customers

Now it is very difficult to imagine our life without power. But possible technical problems, and power outages, as a rule, entail a lot of problems. That is why the electrician’s services are always so much in demand.

You can earn good money

Experienced qualified electricians are very highly valued. Electricians cost more than other handymen such as plumbers, carpenters, and bricklayers. Plus, if you can develop a relationship with regular customers, you’ll ensure yourself a steady income.

You can do the things you love

You can devote all your time to electrical work, improving your skills, and learning new technologies. And can boring administrative tasks you can delegate to your assistant.

You plan your own working hours

Your working hours are entirely up to you. You decide for yourself how you assign tasks. You can schedule your time to work in the office and go out to clients to perform work according to your preference.


This is a dangerous job

Working as an electrician involves many health and even life risks. This fact should not be neglected, even if you are fond of doing this job. To minimize the risks, it is worth paying very close attention to the safety precautions.

The need for a significant financial investment

The electrical business is not a case where you can launch a business with minimal or no investment at all. To start your own electrical company, you need to pay for the necessary licenses, insurance, and office space, and buy all the necessary equipment and electrical contractors’ management software.

Every business has its pros and cons. But what could be more rewarding than doing what you love? The information in the following section will help you figure out if this type of work is right for you.

Skills and Education Needed for Running an Electrical Business

There is a very high demand in the market for electrical services today, but at the same time, there are many companies and individual contractors offering such services. In order to have a competitive advantage, it is essential to provide services of high quality.

The more knowledge you have and the more qualified you are, the more profit you can make from your electrical contractor business. But how do you get educated as an electrician? To become a qualified electrician and be eligible to provide paid services, you can take an apprenticeship or go to college to study electrical engineering. Apprenticeships are usually organized by professional organizations. It takes several years to train as an electrician. In addition, you should not forget about the constant upskilling, and learning new trends.

So, to become a good electrician and run a successful business, you need professional knowledge, the ability to work with your hands, good communication skills, strong problem-solving skills, the ability to work in difficult conditions, stress resistance, and strong spatial and mathematical skills. But don’t forget also marketing skills that will help you market your business.

Starting an Electrical Contractor Business: What Do You Need To Do

There are many things to consider when starting a business. There is a risk of missing something or making a mistake. Read below what you need to consider when starting an electrical business.

Business plan

A good business plan will provide a solid foundation for launching a business. You will be able to understand in which direction you should go, and you will be able to assess possible difficulties and risks before you start. 

When drawing up a business plan, it is recommended to think through the following points:


The most requested services include the following:

  • work on electrical transmission systems (maintenance of wires that transmit electricity)
  • installation, repair, and maintenance of electrical wiring systems
  • electrical inspection
  • outdoor lighting
  • telecommunication line installation and repair
  • security and fire alarm installation
  • replacing electrical systems, including main systems, fuse, and breaker box panels

In addition to these jobs, an electrician can also work with solar panel systems, electric vehicle charging stations, and data & security systems.

Company size

Will you work independently or hire employees? What kind of employees do you need? Besides professional electricians, you may also need accountants, assistants, marketing specialists, drivers, and others.

Financial issues

The things you may want to consider here are:

  • Start-up costs. This amount can vary depending on what equipment you buy, where you rent an office space, how much insurance and business licenses cost, and other factors. So only by thinking through all of these expense categories, you will be able to calculate the amount you need to launch your business. Also, don’t forget about education. Its costs can range from $3,000 to upwards of $20,000, depending on what form of education you choose.
  • Where you can get money for your business. You can use credits, invest your personal savings, and help from friends or relatives, and grants. 
  • Ongoing overhead expenses. As a rule, this amount is fixed regardless of the number of services sold. These costs can include rent, insurance, and annual license renewal.
  • Price for your services. You can charge by the hour or as a flat fee for services. The cost of your services should be in line with the market average. Too high or, on the contrary, too low prices for services can scare away the client.
  • Profit. This figure may vary from company to company. But you can calculate a rough figure in your planning. Small electrical companies have an average profit margin of 1.5% to 2.0%.

These are the main points that you need to pay attention to. But you can also write in your business plan the information that you consider necessary for the launch of your electrical business.

Marketing Strategy

A good marketing strategy will help you to attract as many customers as possible. you can buy a franchise. In this case, you do not need to pay much attention to marketing, because you are working with an already well-known brand. If you are starting your own company from scratch, the following information will help you to promote your company in the market:

  • Come up with a good-sounding name for your brand. It should be a good representation of the nature of your services as well as easy to remember.
  • Think about your unique selling proposition. Your USP will help you stand out in the marketplace among your competitors and direct all of your marketing efforts to your target audience.
  • Create a website. By visiting your website client should know about you and your services as much information as possible. the site should be intuitive and adaptive.
  • Think about possible marketing channels. You can consider the following here:
    • Google
    • Social networks
    • Word of mouth
    • Your company’s website
    • Newspapers
    • Billboards
    • Newspapers

Also, when planning your marketing strategy, think about the budget you can allocate for business promotion.

After you have everything planned out, you can start taking action – namely, setting up the company itself. To create a company and have the right to legally provide services, you need to do the following:

  • Register the business
  • Register your company’s taxes
  • Obtain the necessary certifications and permits that give you the right to perform electrical work
  • Business insurance, which protects you from possible losses

Business Accounting

Accounting for income, expenses, and taxes are an important part of any business. In order not to have personal finances confused with your company finances, you should open a separate bank account and a separate credit card. Write down all of your income and expenses to assess the efficiency of your business.

Buying necessary equipment and software

So, you have planned everything and resolved all the necessary legal and financial issues. You can start working. But you will need to buy the following electrical equipment:

  • Van. You can also rent a car to start with, to save money.
  • Instruments. For most tasks, you will only need tools like pliers, fish tape, screwdrivers, and wire strippers. For some of the more demanding tasks, you can buy or rent extra tools.
  • Software for efficient operation 
  • Uniform. You can order clothes and shoes with your company logo. That way you will be recognizable.
  • The software to run your business efficiently.


Today it is difficult to imagine our life without electricity. That is why the services of a qualified electrician are so in demand. But the competition in this field is also very high. In order for your business to be successful, you need relevant professional skills, openness to continuous professional development and education, careful planning, and a well-thought-out marketing strategy.

John Harper

#1 File Information bestselling author John Harper loves to dispel the myth that smart men & women don’t read (or write) romance, and if you watch reruns of the game show The Weakest Link you might just catch him winning the $77,000 jackpot. In 2021, Netflix will premiere Bridgerton, based on his popular series of novels about the Why Files.

Related Articles

Back to top button

Adblock Detected

You are missing the best opportunities.