If you’re a certified electrician looking to make your own schedule and earn more money, starting an electrical business may be a wise career move for you.
With the right experience under your belt, being your own boss lets you decide what jobs you take on and how much or how little you work.
And the best part? You’ll get to keep all the profits.
In this article, we’ll walk you through how to start your own successful electrical business in eight steps.
Here’s how to start an electrical business:
1. Get the required training and state license
The electrical industry is highly regulated, which is why you’ll need to be a certified master electrician to run your own electrical business in most states.
However, training and licensing requirements may vary from state to state and even city to city.
Check with the National Electrical Contractors Association to see what certifications are required for your region.
If you’re just starting out, join an apprenticeship program and get work experience alongside a journeyman electrician or master electrician.
2. Secure funding to start your business
Starting an electrical business is an expensive endeavor. It can cost anywhere between $5,000 and $25,000 to get your business set up, purchase tools and equipment, and advertise your services.
This cost could double if you still need your electrical certification or need to buy a work van.
Unless you’re sitting on a large savings account, you’ll need a loan or funding from a third party to get your business up and running.
Luckily, there are a few options available to help you get financing to start your electrical business:
- Apply for a small business grant through your local government
- Get a small business loan from your bank
- Ask family, friends, or angel investors to invest in your business
To help you secure funding for your new electrical business, you’ll need to create a business plan to share with potential investors or lenders.
Here’s what your business plan should include:
- Cover page – Include your business name, logo, and contact information
- Executive summary – A one-page summary of your business plan that includes how much money you need to get up and running and what sets you apart from the competition
- Business overview – A quick summary of your business structure, company name, and when you registered the business
- List of services – A full list of the electrical services you plan on offering (like electrical wiring, electrical installation, etc.)
- Market analysis – A description of your target customers and the competition in your region
- Business operations – A detailed overview of your pricing strategy and how profitable your business can be
- Marketing and sales – A breakdown of your marketing strategy and sales goals. Outline how you’ll attract new customers to your electrical business.
- Financial plan – A summary of the money coming into and going out of your business for the first year. It should include your sales forecast, a detailed budget for expenses (like electrical software and equipment), and marketing costs.
3. Get set up: registration, business license, insurance
You’ll need to register your electrical business before you start working. Here’s how to get set up to legally operate your business.
Choose a business structure
Before you can register your electrical business, you’ll need to decide what business structure to operate your business under. For small electrical businesses, these are your typical options:
- Limited liability company (LLC) – For electricians, registering as an LLC protects your personal assets just in case you run into legal trouble and are being sued for damages.
- Sole proprietorship – If you’re starting a business alone, register as a sole proprietorship and you’ll have complete control over your business.
- Partnership – If you’re starting your business with two or more partners, you’ll want to register your business as a partnership.
Register your business name
Pick a business name that’s professional, unique, and easy to remember. Then register your business with your regional government.
Pro tip: To check if your business name is available, Google [NAME + LOCATION] or run a quick search in your country’s trademark database.
Get a business license
Check with your local city or state to see what licenses or permits you’ll need to operate your electrical business.
Insure your business
Electrical work can be dangerous. Get the right insurance to protect your business and your customers. Then speak to your insurance provider to discuss what coverage you’ll need for the electrical services you offer.
The types of business insurance you may need include:
- General liability insurance
- Commercial automobile insurance
- Workers’ compensation insurance
- Professional liability insurance
- Equipment insurance
- Property insurance
4. Set up your business accounting
Open a business bank account to separate your personal assets from your company’s assets and make things easier at tax time.
Then use Quickbooks Online to keep your business’s finances organized and manage your electrical inventory.
Investing in electrical contractor software like Jobber that syncs with Quickbooks lets you easily manage your accounting in the same place you schedule and manage your work.
5. Purchase electrical equipment
Stock your electrical van with the right tools and equipment to get the job done. Here’s what you need to purchase before your first job:
- Voltage tester
- Wire cutters
- Electric drill
- Fish tape
- Tape measure
To save yourself from running to a hardware store before every job, stock up on other electrical supplies like:
- Electrical tape
- Solder wire
- Cotton buds
- Solder flux
- Solder wick
- Freezing spray
- Flux cleaner
- Kapton tape
- Single-core wire
- Multi-core wire
- Wire wrapping wire
6. Learn how to price your electrical services
Knowing how to estimate electrical work will help you quote faster, win more jobs, and grow your electrical business. Here’s how:
Choose what services you’ll offer
Make a list of the types of services you plan to offer. For example, if you’re targeting residential customers, your services may include:
- Doorbell installation
- Wiring a new outlet or switch
- Installing an electric car charging station
- Installing a video surveillance system
- Installing a new electrical panel
- Removing knob and tube wiring
Then jot down the materials you’ll need to complete each job, determine your hourly rate, and calculate your profit margin.
Pro Tip: To make sure your pricing is competitive, check online to see what other electricians in your service area are charging.
Build an estimate template
Creating an estimate template will speed up your estimate process and help you win more work, faster.
Your electrical estimate template should include:
- Your business name, logo, and contact information
- Your customer’s name and contact information
- An estimate number
- A breakdown of the electrical services you’ll be providing
- An approximate cost for the services
- How long the estimate is valid for
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7. Get your first electrical customers
Investing in marketing will help attract new electrical leads—but you don’t have to spend a ton of money to get new customers through the door.
Here are a few marketing strategies to help you get new business:
- Build a brand for your electrical company by designing a logo, picking company colors, and ordering business cards and uniforms.
- Use website builders (like GoDaddy) to create a website for your business that lists your services, tells people where you work, and makes it easy for potential customers to request work.
- Set up your Facebook Business page to connect with new customers
- Use Google’s Local Service Ads to advertise your electrical contracting business to clients in your area
- List your business on lead generation websites like Thumbtack, Angi, or HomeAdvisor to get more electrical leads.
- Start a customer referral program that gets happy customers to find new leads for your business.
8. Hire electrical contractors and grow your business
If you’re struggling to keep up with new quotes and are turning down work, it’s probably time to hire an electrical contractor to help grow your business.
To find qualified contractors to join your team, you’ll need to write a descriptive job posting that includes:
- Job title
- Position summary
Then compile a list of interview questions that test the candidate’s electrical knowledge and how they would handle specific situations. This will give you a better understanding of their skillset, on-the-job experience, and work values.
Find out how much to pay your electrical workers
Get up-to-date U.S. salary reports to help your service business hire and retain a great team.GO NOW
Starting an electrician business is a big step, but the freedom of doing what you love and being your own boss is highly rewarding.
Once your business is off the ground, Jobber has all the features you need to manage your work orders and get paid faster.
Run an organized electrical business from day one
Start your business on the right foot. Use electrical business software to send quotes, manage jobs, invoice clients, and get paid—faster.GET STARTED