Are you thinking about starting your own electrical business? Maybe you've been working as an electrician for a year or two and feel the time is right to go out on your own. Or perhaps you're ready to expand your small electric operation.
Here are some facts and figures to help you understand what those numbers look like and if now is a good time to get your business going.
With more buildings being constructed, there is an increase in the demand for electrical services.
How much can the owner of an electrical business make?
It's very possible to earn six figures as the owner of an electrician business. Of course a lot depends on your location, business management, skill and market but electricians owning their own business can potentially earn between $150,000 and $200,000 per year. We've even met owners that earn well above that.
If you're wondering if an electrician business owner can make 6 figures, the answer is yes.
How much does an electrician make?
The median annual wage for electricians was $60,040 in May 2021. That's approximately $28.87 per hour.
Important considerations before starting your electrical business
There are a few different startup costs for establishing an electrical business, depending on the niche you intend to invest in.
Electricians who are established in the business of contracting out their services to other electricians can make a good living.
Ask yourself if you have these essential items before starting your business:
Have I created a business plan?
Do I possess the necessary equipment and tools?
What, exactly, are the services my business will provide?
Can we hire qualified employees?
Am I registered and licensed as an electrician and a business?
What is our marketing plan?
Once you have given thought to those questions and have an answer for all of them, then you are ready to proceed in establishing your skilled trades business as an electrician.
Typical electrical business startup costs
The average cost to start a company is approximately $5,000. This doesn't take into account the training and education costs associated with becoming a certified electrician, though.
Documentation and registration
To get a business license, you will need to provide legal documentation and register your business with the government.
If you want your electrical business to thrive and be fully operational, you'll need to get documentation and registration processed. These costs can be as high as $10,000 and include joining the National Electrical Contractors Association (NECA) and obtaining your state and local municipality approval.
A lot will depend on the state you live in and its requirements.
Certification and qualifications
It's important that you have the necessary certification to prove you're a qualified electrician. Again, certifications vary from state to state, but a few examples of being qualified are a certificate in testing, designing electronic installations, and electrical technology engineering.
The cost of such certifications can cost around $15,000. Remember that most electricians undergo formal training and this is an education cost.
How to keep your electrical business running strong
Review your business plan
As time goes on, your business will change. You may begin servicing new markets and bring on additional team members. This requires you to reevaluate your business plan. It's good to refer back to your business plan at least twice a year, if not quarterly.
Continually prospect and ask for referrals
It's crucial to fill your business pipeline. It takes work to get clients scheduled. Just because you had a good week doesn't mean the next week will automatically be the same. If you've been in the electrical business for awhile you know that there are times in the year that are slower than others. Prepare for the slow season by strategically lining up as much business as you can during the busy months and managing your money wisely.
Make safety a priority
Not just for yourself, but also your employees. When your team is putting safety first, you are dealing with less issues that affect your customers and employees. That's why it's important to have comprehensive safety insurance to protect your business.
Get the right software
Don't be like many small businesses that start their journey with pen and paper and things slowly fall through the cracks. You need a professional tool and system to manage your business anywhere you are, whether it be on your laptop or cell phone. Begin on the right foot with an affordable product like Housecall Pro.