7 Steps To Start An Electrical Business
Studies suggest that job prospects for electricians will increase by roughly 9% between 2016 to 2026. So if you have been mulling over the possibility of launching an electrical business, you cannot ask for a better time. Considering the growing demand, setting up an electrical business in the current market can pave the way for a fulfilling future.
However, starting a business in the electrical industry is easier said than done. You are likely to face a host of challenges along the way. To help you, we have put together this guide that contains all the knowledge and advice you require to start your business adventure successfully:
- Determine Your Market
Electrical services typically fall into two categories: commercial and residential. When performing residential work, you will interact with homeowners and implement a single-phase service. On the other hand, commercial work involves servicing shopping centers, offices, schools, and so on, dealing with higher power consumption and a three-phase power supply.
Depending on your interest and expertise, you could also narrow your services to an underserved niche, such as repairing and installing outdoor lighting or smart solutions. You may want to increase the scope of your services and cover multiple sectors like Electric Lizard, which offer electrical services to residential, corporate, and industrial customers in the Australian Sunshine Coast area. To do so, you will probably have to hire a larger workforce with varying skills and abilities to offer services to residential, corporate, and industrial clients.
- Buy Necessary Tools
The cost of tools is likely to account for a significant portion of your electrical business start-up costs. If you do not want your tools to fail you in the middle of a project, never skimp on the quality.
Apart from buying various electrical objects, a vehicle could also be a good investment because you will be driving and moving equipment between jobs. Moreover, you can turn it into a rolling billboard by customizing it with an eye-catching logo and contact information for your business. Make sure your vehicle is always spotless. Also, drive with caution because you do not want your company’s reputation to suffer due to your careless driving.
- Determine USP
After conducting a thorough analysis of the local market, you should try to distinguish your electrical business from the pack. Let’s say you provide residential electrical services and are up against stiff competition. In that case, you need to convey to your clients why they should reach out to you rather than your rivals. This process is called USP (Unique Selling Proposition), which enables you to cut through the noise. There is more to a USP than just tossing a catchy slogan or sloganeering at clients. The slogan must be rooted in something profound to be genuinely significant.
The best way to figure out your USB is to put yourself in the customer’s shoes. Take a step back and thoroughly examine what your clients genuinely want. It is essential to remember that pricing is not the only consideration for buyers. If your larger competitors are outpricing you, you can identify another selling point that meets your customers’ needs and then focus your marketing and sales efforts on that aspect.
- Secure Funding
Starting an electrical business is a costly venture. A conservative estimate would put start-up costs in a range of $5,000 to $25,000. If you have yet to earn electrical certification, the costs might be even higher. If you have not already set aside sizeable savings for your business launch, you will need to take out a loan or find some other source of capital to get your firm off the ground. The good news is that you have a few alternatives for obtaining financing to launch your electrical business.
- Explore angel investing platforms
- Apply for small business grants backed by the government
- Reach out to family and friends
- Tap into crowdfunding
Make sure you have a well-written business plan for your new electrical company to increase the odds of securing the required funds.
- Choose A Business Name
Choose a name for your company that clearly expresses your company’s goals, services, and mission. Given that a large portion of your business, especially in the initial stages, will originate from recommendations made by friends, family, and happy clients, you should opt for an easy-to-remember name. You may also leverage online tools to make the process easier.
Once you have narrowed down some potential business names, connect with the relevant authorities to determine whether or not they are available for registration. Also, make it a point to search for similar domain names for your business website. You are better off sticking to domain names ending with extensions of “.com” or “.org” because they can significantly boost credibility and SEO ranking.
Finally, pick a name from the ones that passed this screening. Once you choose a name for your business and start building your brand, you cannot modify it. Thus, you should exercise patience and consider your decision before proceeding further.
- Get Insurance
In the electrical field, there is always a risk that you or your employee may damage something. Your business could be in jeopardy without insurance. Since customers are concerned about putting their belongings and property at risk, a vast majority of them will not do business with organizations that do not offer insurance.
Insurance will not only give confidence to customers to work with you. It will also keep you from burdening yourself with substantial costs and possibly having to appear in court in case of a lawsuit.
- Acquire A Business Credit Card
Using a business credit card will help you keep your personal and business expenditures separate. You have two options when applying for a business credit card – through a bank or a credit card company. Either way, you will need to provide details about your electrical business.
As an owner, your personal information, including your name, social security number, and birth date, will also be required. You can also use the credit card to establish your business’s credit history. Remember, a solid business credit history will make it easier for you to get a loan at low rates and favorable terms and conditions.
For electricians looking to earn more money, starting an electrical business may be a good option. Besides, being your own boss means having the freedom to choose how much or how little you want to work. Though starting an electrical business sounds like a big deal, you can overcome any hurdles you come across by keeping to a simple set of steps as outlined in this post.