You’re a capable electrician with years of experience under your belt. Full of energy and confidence, you’ve decided that the time is right to branch out on your own and start your own contracting business. To give your new venture the best chance of success, there are some essential steps you need to consider before going ahead. Have a look at the list below and consider how you’ll approach each one.
No matter how good you are at your job, no matter how experienced you are, you’ll need to have the right qualifications to gain the trust of clients, suppliers, and insurance companies, among others.
If you’re not qualified, expect to undertake the training required to demonstrate your proficiency. If you achieved your qualification several years ago, it will also be worth undertaking some refresher or advanced training to ensure you’re up to date with the latest legislation. The more qualifications you gain, the more your clients will feel confident about your ability to deliver a first-class service, so your efforts will translate into clear business results.
In addition, have a look into the standards published by certain industry bodies, and aim to achieve accreditation for your business. For example, the National Electrical Contractors Association runs a wide range of educational programs for members. These not only keep you updated and growing professionally, but they also let clients know that you are committed to providing high-quality work.
- Write your Business Plan
You may be tempted to skip this -don’t. It’s an essential tool for any startup. The act of writing your business plan will help you to evaluate the strengths and weaknesses of what you’re planning. It will make you think objectively, not only of ‘what’, but also ‘how’. As just one example, you’ll need to consider the market you’ll be aiming for. Will you become a domestic or commercial electrical contractor? What will be implications in terms of the start-up costs? How are you going to finance the initial investment, and what will you need to repay any loans?
You’ll also need to take a clear-eyed look at your competitors, which will force you to be realistic about your pricing and the level of service you’ll have to deliver.
It’s one thing to say that you’ll be doing ‘marketing’ but how much will it cost you to get results the results you want?
If you’re not sure where to start there are plenty of free Business Plan templates online to guide you.
- Obtain Finance
Another benefit of your business plan is that it will force you to be realistic about all the costs involved in your start-up. Will you need to buy/lease a truck or tools? If you’re planning to employ others, how will you pay their salaries until work comes in (and clients actually pay)? Come to that, how will you cover your own living costs?
Then there are the myriad other expenses: business set-up costs, accountancy, insurance, etc, etc.
Ensure you have enough finance to cover at least 6 months of operation. If necessary, consider a bank loan, or finding a partner or investor.
- Choose your business set-up
As part of your planning, you’ll need to consider whether you want to operate as a self-employed contractor, or to create a company. This is a major decision that can impact your finances for years, so ensure you take expert advice, from an accountant.
- Obtain your insurance and permits
Virtually every state requires electrical contractors to have a valid license in place before providing any electrical services, bidding on projects, or even hiring other licensed electricians. Consider how long it will take to obtain this, and what you’ll need to provide.
Likewise, you’ll require valid insurance for the work you carry out, as well as cover for public and employee liability.
You’ll need to market your business to attract clients, but have you considered exactly how you’re going to do this? A social media presence is essential, but how are you going to create and manage it? How much time and effort will it take?
Is marketing really your area of expertise? If not, it may be worthwhile to hire a specialist to ensure that you’re visible to potential clients and get the best return on any marketing investment you make.
In addition, don’t forget that you will be the ‘face’ of your business. Using local media and community events to raise your profile can be a great way to attract attention from potential clients.
- Branding – first impressions count
First impressions count, so you’ll need to consider how you brand your business. Business cards, flyers, invoices, a website, and even headed paper will all be needed. If you’re not a skilled graphic designer, consider using an online service to create a professional logo according to your specifications.
- How are you going to organize the work?
Before launch, it’s vital to consider how you are going to manage your time. Your electrical skills will be at the core of the business, but you’ll need to spend your time pitching for business, preparing bids and estimates, organizing supplies and labor, following up on payments, meeting with accountants, etc. What are you going to prioritize and what will you delegate?
Additionally, how are you going to handle incoming inquiries? Will all contacts come to your phone, or by email? How can you guarantee a prompt response and a great first impression? Will you need full or part-time admin support so that you can focus on what you do best?
- How are you going to measure success?
Finally, how are you going to know how well you’re doing? How much bottom-line profit is your business generating? How does the cost of supplies correlate with the cost of each job? Before you launch, invest in a specialized software package for electrical contractors, which will be capable of tracking and analyzing every aspect of your business. This will provide objective data to ensure you make the best decisions to help your business to grow and thrive.