How to Start Your Own Electrician BusinessWritten by Bernard on April 05, 2017
The electrician business is really making a strong comeback after the global financial crisis commonly known as the Great Recession.
This is because the electrician business is very closely connected with the housing industry. Therefore, as more and more houses are getting built, more electrician services will be needed.
Furthermore, with more homeowners having more disposable income as the economy moves upward, they are able to spend money on projects they were reluctant to only a few years ago.
In fact, according to the US Bureau of Labor Statistics, the electrician market is expected to grow at a rate of 14% from 2014 – 2024, which is much faster than the average growth rate (7%).
In the UK, the National Employer Skills Survey (ESS) identified the electrician market as a hot industry, with many needed. The Australian Department of Employment has also identified electricians as being a member of the occupations skills shortage category.
This means that there is more work for electricians than available electricians. If you’ve ever considered getting started on your electrician business, now is the perfect time to start!
The Different Types of Electricians
There are in general four different types of electricians that require slightly or vastly different skills and experience.
These electricians work in residences (homes, apartments, etc.) and regularly install, maintain and upgrade electrical equipment. They often also install outdoor landscape lighting.
This type of electrician normally works in commercial buildings (offices, shopping malls, etc.), on construction sites, or on mechanical electrical systems.
They normally do installation work, such as installing water heaters, commercial security systems or electronic key systems.
This category of electricians normally works with lighting installations, mechanical connections, power supplies, security systems and communications for both commercial and residential properties. Most of them tend to work in construction and even manufacturing plants.
Journeymen need to pass an exam to receive certification and usually trains apprentices who want to be certified.
These highly skilled electricians are normally involved in the top responsibilities of supervising and even contracting for themselves. In many states in the US, master electricians require 7 years’ experience along with other qualifications.
Today we’ll look at everything you need to know to start your own successful electrician business.
Table of Contents
I. The Advantages and Disadvantages of the Electrician Business
It is important to understand the overall benefits and disadvantages of the electrician business before beginning.
1. The Advantages
There are many advantages of being a self-employed electrician. While you surely know some of these, it’s important to have a good overview of all the benefits that come with having your own electrical business.
This is a general advantage that applies to all self-employed people, but it is also one of the biggest benefits for you: you’ll be free.
You won’t have a fixed 9-to-5, you won’t have a boss and bureaucracy. You can choose your own clients, when and where you want to work, and all other things.
You’ll have good pay
One of the great things about electricians is that you can make a lot of money, depending on your experience and how much you work.
There is lots of work for electricians, and you can build up a solid reputation with good-paying, loyal customers.
You’ll have job stability
Another important thing to realize, which I sort of mentioned above, is that you’ll have great job security.
While there are many items and services that people cut down if there’s an economic downturn, one of the more solid, necessary services is for electricians.
You’ll have low startup costs
While many larger electrical businesses have lots of high-end tools, in order for you to start your own electrical business, you only need a few things.
This is great news if you want to get started now but don’t have a lot of startup funds. And, with the right work ethic and skills, you can start building up your customer base.
2. The Disadvantages
While the advantages surely are important to keep at the front of your mind, you should also be aware of the disadvantages that often come with starting your own electrical business.
You’ll have all the responsibility
Unfortunately, freedom comes at a price. You will be free to choose your clients and working times and locations, but you’ll also have to responsibility for finding those clients, marketing to them, upselling your services, and keeping them happy.
If you don’t work to find them, you won’t have any, and the success or failure of your business rests squarely in your hands.
You’ll need continuing education
Depending on what your education level is now, you’ll probably need more, including certification, in order to start in many places. Becoming an electrician isn’t a breeze, and requires serious commitment and knowledge.
Therefore, before you can even start, you need to take care of those basics. We’ll cover what education and certifications you require later in the guide.
You’ll have difficult, sometimes dangerous work
Working as an electrician means that you’ll have to do a lot of kneeling, heavy lifting and fitting into tight spaces for sometimes lengths of time.
This is fine if you’re younger and in good physical health, but is more difficult the further along you go. Also, there’s a danger of injuries from cuts, falls or, of course, electrical shocks.
You’ll have non-traditional working hours
You won’t be working a 9-to-5 anymore, that’s for sure. While that’s great during the day when you’re free, it is hard when you have to work the other hours.
This includes overtime, late nights, on weekends, and being on-call, meaning you have to work whenever you’re needed.
II. The Fundamentals of the Electrician Business
Going over the advantages and disadvantages is a good way to get you into the mindset and help you figure out if you really want to start to become a self-employed electrician.
If you’re still reading, it means that you’re ready to get started. But before we look at what you need to have or what you have to do to get your first customers, let’s look at your business fundamentals.
These are absolutely necessary before you even start marketing yourself, so make sure you have this part of your electrical business down pat. We’ll look at making your business plan, how to set your prices, and the software that will help you the most.
1. Your Business Plan
Many people, especially freelancers or self-employed, think that they don’t need business plans. This is because they view business plans as archaic documents needed a long time ago for all businesses, but not anymore.
Or they think you only need business plans if you have a large company or you want to get investors. Both of those ideas are patently false.
In fact, business plans are crucial for getting your business off the ground, because they help you get your ideas on paper.
Many people can be quite impulsive and focused on doing the thing without really writing down what it is that they want to do. They are missing, in on word, what’s known as a ‘strategy.’
That’s why you need to have a business plan: it will be a road-map for you to determine where you want to go and then how you’ll get there.
When you create your business plan, it doesn’t have to be of any specific length. You can make it as long or short as you’d like. However, you’ll need the following sections:
- Executive Summary: the summary, which shows off your business plan’s strengths, should actually be written last
- Business Description: in this section, you’ll review all the most important parts of your business
- Industry and Competition Overview: here your research pays off—show of what the electrician industry’s growth, competitors and trends are
- Operations and Management Plan: what are you business operations and exactly how will they work together to meet your goals?
- Service Description: what are the competitive benefits your service provides?
- Marketing Strategy: how will you place your service in the market? You should include the promotion, price, distribution and sales channel
- Financial Projections: this part covers your finances and how profitable your business can be
For more in-depth information, check out our epic, 8,000-word business plan guide that takes you through all the steps of creating your perfect business plan.
2. Your Electrician Prices
One of the most difficult aspects of starting service work like the electrician business is figuring out how much to charge for your work. These prices will change depending on:
- your experience
- your location
- the quality of your work
- the competition in the market
- your education and certifications
- whether you are doing residential or commercial work
For the most part, there are two ways to price your electrician work: by hour or with a flat rate.
One of the most common pricing strategies for electricians is to charge by the hour. For the most part, this includes setting a base, labor charge per hour and then adding on parts and labor to that.
For example, the average prices in the US for various jobs are as follows:
- Electrical fixture installation: $82.84/hr + parts and materials
- Electrical remodel or addition: $108.17/hr + parts and materials
- Lighting fixture repair: $75/hr + parts and materials
You may also change your hourly prices based on the time of the day. For example, for weekday hours from 7am – 7pm, you can charge the normal prices.
For weekdays between 7pm and 11pm, you can add on an extra $30 to the hourly rate, and an extra $60 for work after 11pm.
You can also determine extra charges for the weekend and holidays.
While many electricians do prefer to use hourly rates, there are many reasons that flat rates may be more beneficial.
- the customer won’t hope that the bill will be too high because you’re working too long on the job
- when the customer knows the price of the bill, he is more willing to go for upgrades, options, maintenance, etc.
- with hourly rate, you lose income by doing your job faster, while with flat rate you benefit by becoming better
- with hourly rates, the customer is unhappy or unwilling to pay for non-billable hours (such as transportation, waiting at the supply house, making phone calls, etc.)
- with hourly rates, customers will always compare what you charge for all your work vs. what they can pay at a store for the particular items
Flat rate fees will give you and your customer more peace of mind by knowing the price upfront.
Sample flat rates include:
- 240 v electrical fixture installation: $170
- upgrade electrical panel to 400 amps: $2525
- repair lighting fixture: $215
However, charging a flat rate still means you need to take into account important factors like competition, your qualifications and others.
3. The Software and Apps to Help Your Business
Any business that hopes to succeed needs to find the right tools to help them do their business better. These software and apps are some of the best to help your electrician business.
This app is particularly useful (for British and other electricians) for providing the necessary information about electrical safety, a calculator, and other useful features.
Electricians need more than just software for their core business. They need to take care of their finances as well, which is why InvoiceBerry’s easy invoicing software helps you to send your invoices quickly, easily, and professionally.
This is one of the most popular electrician forums on the internet—right in your pocket. You can ask and answer any question and get help quickly and easily.
This is a full-service software for electrical businesses.It covers electricians servicing residential, commercial, and even non-building constructions.
III. The Qualifications and Documents You Need
We’ll now look at what kind of documentation (qualifications/certifications, licenses and insurance) you need in order to have a successful electrical business.
Of course, it goes without saying that these requirements will vary from state to state, country to country, so it is important to follow up on these requirements based on your location.
Electricians need to have certain qualifications in order to become an electrician.
This can begin in high school, with electricians getting exposure to classes focused on certain electrical principles, including math, physics and other technical sciences.
In higher education (wither with associate’s or bachelor’s degree), the education you receive will be much more in-depth. An associate’s will take two years, while a bachelor’s degree is four years.
You should also get into an apprenticeship, as any such type of job will require lots of hands-on experiences.
For example, in many US states it is required for electrician students to have completed 144 hours of technical training and 2,000 hours of on-the-job training. Apprenticeships can take from four to five years.
As mentioned above, before being allowed to become an electrician, you will need to be appropriately licensed in your state or country.
In most US states, you’ll need to have at least five years’ hands-on experience in the electrical field in compliance with the National Electric Code (and have proof of that experience).
In New Jersey, for example, you’ll need:
- to be at least 21 years old
- have a high school diploma or other equivalent certificate (GED, for example)
- at least five years’ practical hands-on experience in electrical field
- alternatively, you can have a bachelor’s degree in electrical engineering with two years’ hands-on training or other factors
In the UK, the licenses/qualifications are different. For example, you’ll need:
- Level 3 Diploma in Electrotechnical Services
- Level 3 Diploma in Installing Electro-technical Systems and Equipment
- Level 3 Diploma in Electrical Installations
You can gain these by working through an apprenticeship program, which will allow you to do on-the-job training while earning money for it.
Because you’re working with electricity and people’s residence or commercial properties, there are some inherent risks you should prepare for. While fortunately these situations that require these are few and far in-between, they do happen and you need to be prepared for them.
For that reason, there are two types of insurance that electricians need to have.
Public Liability Insurance
While not legally required for electricians, it is important that you have this type of insurance. Many contractors who will subcontract work to you will also require you to have this insurance.
This insurance helps to protect you against claims if a customer or other person is harmed due to any work done by the electrician. This also includes any damage to the owner’s property.
This injury or damage will also be covered even if they happen at a later date. If it is found to be the electrician’s fault, the insurance policy will help meet the legal costs and compensation, if any.
Employers’ Liability Insurance/Workers’ Compensation Insurance
This insurance helps cover you if your employees claim compensation for work injury or if they get sick as a result of working for you.
For that reason, this type of insurance is required for all electricians with employees. For example, in the UK electricians with employees need to have at least £5 million in employer’s liability cover and the business may be fined up to £2,500 a day for not having it.
In the US, workers’ compensation insurance can cost anywhere between $2135 and $4857 for general electrical service businesses and $1760 – $3241 for electrical installers.
IV. How to Get Your Electrician Customers
Now that you’ve got almost all the important parts of your business covered, let’s look at the next big question: how to get your first customers.
There are many ways to do it, but the most important fact to remember about electrician business and customers is this: if you’re not working, you should be promoting.
So let’s look at all the ways you can start promoting your electrical business work.
First off, you should be joining your local builders’ association. This means attending events and most importantly meetings, which will put you shoulder-to-shoulder with other important people in your industry and area.
You should also be visiting home shows and expositions with your business cards ready to be handed out. Introduce yourself and give out 3 or 4 cards per person—business cards are cheap after all, and those people will find it easier to pass your information on.
You should also not forget to contact real estate agents, as many new homeowners are eager to change something about their house and they may need your services. If you are working as a subcontractor, make sure to get to know the owner or the property for more opportunities.
You should remember to always be sociable, friendly, approachable and open to work. Of course, as with anything new and desirable, it will take time, but your hard work will pay off.
Besides the traditional methods, you should also be looking at the more modern, digital ways to get your customers.
Get on Craigslist and put up your services. Even better, look for other builders and handymen who will state at the bottom of their post: “It’s OK to contract them with other services or commercial interests.” With that, just send them a quick email for introduction and possible opportunities.
You should also consider having either a Facebook business page or dedicated website or blog where you can present information about yourself and your services and potential customers can find you.
For example, many customers nowadays search online before deciding to make purchases. Usually, they are looking for reviews, or more realistically, complaints about electricians to determine whether they want to work with you.
Even one great review will put you high on their list. Negative reviews will write you out automatically, and you should have no negative reviews if your competitors are active online.
The best way to get online, which is free and offers lots of potential, is of course social media. It allows you to get in touch with your potential customers and can provide a good platform to show off your skills.
For example, you can post before and after pictures of your work, your happy customers, and even your team busy working.
Social media is an entire beast to slay, but its benefits are virtually limitless. For more in-depth information, you should check out our free ebook The Ultimate Guide to Social Media for Small Businesses and Freelancers.
V. To Sum Up…
The electrician business is increasingly more popular and in need of certified, experienced electricians. The advantages of the business include:
- becoming independent
- having job stability
- having great pay
- having low startup costs
The disadvantages should not be ignored. They include:
- having to take all the responsibility
- the need for continuing education
- the difficult, sometimes very dangerous work
- working late nights, weekends, etc.
In order to have a successful electrician business, you need to have:
- you strategic business plan
- your perfect pricing strategy, either per hour or as a flat rate
- the software and apps you need
There are many qualifications and documentations required in order to become an electrician. They include:
- qualifications that show you’ve had the proper education plus apprenticeship training
- the licenses that will allow you to work in your country or state
- the two types of insurance you need to protect yourself
In order to get your electrician customers, you should:
- try traditional methods, which includes face-to-face meet and greets and others
- use modern methods, such as a social media presence
With these steps followed, you’ll be well on the path to having a successful and long-lasting electrician business.