Complete Guide to Starting an Electrical Contracting Business

Electrical Contracting Business

The ultimate goal of most electricians is to be their own boss at some point. Owning a business can be very rewarding but also very demanding as it takes more than knowing the trade. 

However, with the right strategies and preparation, it is doable. If you are thinking of starting your own electrical business and don’t know where to start, this guide can help you. 

Below are some important things you will need to do to ensure that your electrical contracting business is up and running.

Invest in electrical estimation software

Business is all about making money. You have to get your estimates right when bidding for jobs to make money as an electrical contractor. But creating correct estimates can be a challenge, especially if you are doing it manually.

If your estimates are too high, you risk losing contracts to your competitors. If they are too low, you risk running into losses.

To avoid such eventualities, investing in a reliable contracting estimates tool can be a good idea. The good thing is that you don’t have to start with expensive tools. Having a free electrical estimation templates tool from a reputable software provider such as ServiceTitan can ensure increased accuracy in your estimation process.

Acquire necessary licensing and permits 

It is important to ensure that you have the necessary permits and licenses before starting an electrical contracting business. Most states require that every electrician pass prerequisite exams and have certification before working as an electrician. 

Besides certification, other business operating licenses may apply depending on your business structure and state of operation. If you are unsure of the business licensing requirements in your state, you may want to confirm with your county, city, or town clerk’s office.

Choose your business structure.

Before starting your business, you will need to decide whether to start as a sole proprietor, a partnership, or a limited company. Electrical contracting business owners often begin as sole proprietors and then change it to a limited company as the business grows. 

While a sole proprietor business is easy to start and manage on your own, its main disadvantage is that you will be legally responsible for debts associated with your business.

If you are partnering with another person in your business, you may also look at a limited partnership or a limited liability partnership as an option.

Talking to a business expert can be a good idea when deciding on the best business structure if you are unsure which option suits you best.

Register for taxes

When starting a business, you want to be sure you are tax compliant. This calls for registering for federal and state taxes before starting your business. 

The good news is that registering for taxes is pretty straightforward. All you will need is to acquire an EIN from the IRS website.

Different business structures require different types of tax registration. You may want to talk to a business expert or lawyer to learn about tax registration requirements for your business. Additionally, a business expert will guide you on how you can benefit from tax exemptions as a startup.

Focus on marketing

Once your business is up and running, you will need to focus on marketing. It doesn’t have to be expensive in the beginning. Start small and build up as you grow. The best place to start is by word of mouth.

Let your friends and family know your business is operational. Secondly, build a presence in all the major social media platforms and ensure that you are active. You may also create a simple website or have an expert do it for you. Today’s business mainly comes from the online audience, so you better be there. 

If you do everything highlighted in this guide, you will successfully start your electrical contracting business. However, you may need to get professional help to keep it running profitably.