How to Start an Electrical Business - An Electrician's Guide to Going Out on Your Own

Tools & Guides Electrical

Kendall Electrical-1There comes a time in every electrician’s life when becoming your own boss is more appealing than working for someone else. You’ve aced your apprenticeship, you’ve got loads of experience under your belt, and now you’re ready to take the next step – starting your own electrical business.

Navigating the path to entrepreneurship isn’t always easy, but the payoff can be well worth it. So if you’re thinking of going solo, this guide is for you. Packed full of information, we’ve covered everything you need to know about turning your hands-on skills into a fully operational electrical business.

Skip ahead:

  1. Setting goals for your electrical business
  2. An electrical business plan
  3. Training and qualifications
  4. Finances for your electrical business
  5. Marketing your electrical business
  6. Strengths and weaknesses
  7. Learn from others in the industry
  8. Build your business

Electricians are always in demand

Employment trends come and go, but when it comes to continuing demand, electricians enjoy serious staying power.

A global electrician shortage means that if you’re thinking of setting up an electrical business, your timing couldn’t be better.

1. Setting goals for your electrical business

First, ask yourself: Why you do you want to start your own electrical business?

Are you trying to grow your income? Maybe you need flexible hours to free up more time for your family? Maybe you're just sick of helping build someone else's business, and want to work for yourself instead.

Whatever your reason, an understanding of your motivation is going to act as the foundation on which you build your business. Once you’ve got your goals and objectives clear, it’s time to start thinking about the more practical stuff.

2. An electrical business plan

Your electrical business won't get off the ground without a business plan. Yes, it takes a little time, but it’s time well spent. That’s because a comprehensive plan gives your new business structure, purpose and a clear-cut strategy.

Read our guide to writing a proper business plan.

Your electrical business plan should include:

  • Financial projections
  • Growth opportunities
  • Marketing strategies
  • Financing
  • Short/long term goals

To make things easier, we've put together a business plan template specifically for trade businesses.

Download Business Plan Template


3. Training and qualifications for electricians

People don't hire unqualified electricians. Of course you know this and likely have the necessary training, but it's important to consider what qualifications you already have and any you might like to get in the future. The minimum requirements are essential to starting an electrical business, while upskilling with further training is beneficial as you become more established.

Gaining further qualifications means you may be able to offer more services, and ultimately make more money. With the right qualifications you can work on things like:

  • Solar panel systems
  • Electric vehicle charging stations
  • Data & security systems

When potential customers check you out online, one of the first things they’ll be looking for are your credentials. Promoting your qualifications up front will help gain trust and win you more work.

It's also good for electrical business owners to stay up-to-date with qualification requirements in case they bring on an employee or apprentice. Programmes vary not just from country to country, but also between states, regions and provinces. The links below should help you get started:

4. Finances for your electrical business

The next thing to get serious about is resources and capital. Starting a business can be pricey, and will almost always require an initial outlay of cash. As an independent electrician, your major costs will likely be a vehicle and equipment. These costs may vary depending on what sort of market you intend to service.

You've got two options here:

  1. Fund your own venture
  2. Find cash from a third party

If you have enough cash to get up and running, then great! Otherwise, you’ll need to approach your bank or other lender about a small business loan. Almost all major banks have small business departments, and they provide a range of financial options:

  • Business accounts
  • Credit cards
  • Small business loans

They often have small business experts who’ll help you through the process of starting an electrical business and be available on an ongoing basis to give you guidance. Just make sure you take your completed business plan with you, because nobody is going to lend you money if you can’t show them you’ve got a plan.

Government loan schemes

Your local government might also have financial schemes set up to help new businesses. Find out for yourself by following these links:

  • UK -Start Up Loans of £500 to £25,000 are available to start or grow your business.
  • AU - Check if you’re eligible for a variety of grants that vary between states.
  • NZ - Government grants, advice, and mentoring are available, depending on your business.
  • USA - SBA provides limited grant funding to eligible businesses.

Angel investors

If the above isn't helpful, there may be other options when it comes to finance. Sometimes that might be family – and often that means no interest to worry about. But there are angel investors out there too — successful entrepreneurs in search of investment opportunities with promising businesses.

They’re looking for a piece of the action, but they also have their own investment criteria and expectations. Angel investors provide capital for new businesses and startups. They often receive convertible debt in return, or a percentage of ownership. They are often more willing to provide money than traditional lenders.

Purchasing electrical equipment

Unless you already have your own equipment, an initial investment in tools is going to be your biggest cost. While the administrative costs of setting up a business are fairly low, you’ll definitely need to invest in a set of wheels if you don't have some already.

Typically, electricians need a van or ute that can house all of their equipment and tools. It’s a mobile business, and you want to have everything you need on hand as you travel around your customers’ sites. There are some great financing options out there, so you won’t necessarily need a huge stash of cash to drive away in a new van. You can even claim tax back on the purchase!

Equipment costs will also vary significantly, depending on your needs and preferences. This isn’t generally the best place to cut costs, as cheap tools are unreliable, and will deteriorate much faster than better quality counterparts.

Electrical stock

  • Electrical tape
  • Solder wire
  • Solder flux
  • Solder wick
  • Flux cleaner
  • Cotton buds
  • Freezing spray
  • Kapton tape
  • Wire wrapping wire
  • Single-core wire
  • Multi-core wire

Electrical tools

  • Approved Voltage Indicator
  • Insulated screwdrivers
  • Wire cutters
  • Wire strippers
  • Multifunction tester
  • Battery drill
  • Electrical wall chaser
  • Fish tape

Cost to setup an electrical business

Costing up your initial business requirements can be daunting, but remember that your vehicle and equipment are assets, not liabilities. All can be resold if necessary, or added to the total value of your business if you decide to source capital based loans or funding.

We've created a handy Cash Flow Forecast Template & Guide to help you forecast businesses cash flow and keep everything on track.

Accounting and taxes

Have you thought about how you're going to stay on top of your books? Perhaps you'll transfer your business data to accounting software, hire an accountant, or both.

For an all-in-one fix that’ll cover your day-to-day quoting, scheduling, job management and invoicing processes into one streamlined system, Tradify is a must-have tool. Take control of your electrical business with intelligent, trade-specific features designed to keep your business in top gear.

To make things even easier, Tradify also integrates with your favourite accounting software:

As a small business, the last thing you want to do is get on the wrong side of the tax man. Guaranteed, he’s going to come knocking eventually. When he does, you could get hit with hefty back payments, interest rates and fines that could cripple your venture. Avoid this by playing by the rules from the word go. Find an accountant, and cash in on big time savings in the form of both time, and money.

Find out if you need an accountant.

Government regulation

The other annoying thing you can’t afford to ignore are government regulations. They can be a chore, but if you’re not compliant it could cost your business big-time. Make sure you get it right from the start:


You’ll need insurance for your vehicle and equipment, as well as other essentials like general liability insurance. Depending on your priorities, you may also want to take out other policies like worker’s compensation, a general business owner’s policy and income protection insurance.

If you’ve got your very own small business expert at your bank, the package they set you up with will probably include insurance. But if it doesn’t, you’ll need to do your homework to find a reputable provider of business insurance.

How will you manage your electrical business?

Management of business processes It’s one thing to spin tools and work wonders with wires, but actually managing day to day business processes is an entirely different ball game. In-between call-outs you’ll need to find the time to manage your core business processes, or allocate this role to someone else. A good place to start is to look at your existing workflows and map them out on paper. If you don’t have any workflows to personally refer to, seek insight from your current employer or someone with relative experience running a similar business. Look at the individual inputs at each stage, and hone in on exactly what’s required, and how much time this will take. Here’s a glimpse of what to factor into the equation: Job inquiries How will you receive job inquiries? Possible mediums include your website, Google advertisements, Facebook page, phone calls or word of mouth referral. Once received, think about who will respond, and whether there’s a protocol in place. Quoting How will you generate accurate quotes, and how long will the process take? Individual job management How will you manage each job as it unfolds? This includes tracking progress, labour and materials used. Scheduling employees If you plan on taking on employees, how will your scheduling system work? Invoicing How will you draft, distribute and track invoices? Materials usage How will you track your materials inventory, and know when to place new orders?

5. Marketing your electrical business

It’s unlikely that you're going to be the only electrical business in town. Scoping out the competition is not a sneaky task to keep on the down-low, it’s an important step and you shouldn’t skip it. At a minimum, you should be checking out their websites and getting a sense of what they're all about.

Finding out about their strengths and weaknesses can provide insights you can use to beat them. Remember, there’s a big difference between imitation and inspiration. Hone in on a concept or idea that you love and find a way to make it your own. Your goal here is to stand out from the rest — one way or another.

How much should you charge for your labour/time?

Pricing up your service can be difficult, and the trick is to strike a balance between quality and quantity. Yes, there are clients out there that will always opt for the cheapest electrician, but competing on price isn’t always the best business model. Low prices will attract clients who want everything for nothing, while high prices may attract clients with high standards. Think about what you plan on delivering, and price your service accordingly.

To help you with this, we’ve developed a Charge-Out Rate Calculator that makes crunching the numbers super easy.

Growth opportunities

As a small business, you’re going to want to put yourself on track for growth. Especially if one of your goals is to get a cracker-jack workforce in place so that you can get off the tools. So how can you get there?

Do some research into the economic outlook for electricians in your area. For example, setting up a business in an up-and-coming neighbourhood or a new suburb will likely translate into increased demand a few years down the line.

To start with, at least consider:

Electricial Business Growth Opportunities

Where is your electrical business going to operate?

The nature of an electrical business means you’re mobile. When setting up your business, think about what areas you’d like to service, and how you can take a geographical approach to optimising business. For example, if you live in an area that’s saturated with electricians, but an hour away there’s hot demand, it could be worth the time and petrol to include that area. The trip will pay for itself with lots of new customers.

You can also factor pricing into the mix. If the market for low-cost suppliers in your local area is saturated, try opting for a higher price point, and ‘boutique’ service.

Finding your competitive advantage

You’re probably not going to be the only electrician providing a service in your local area. That’s why it’s important to differentiate yourself from other electricians. It's known as a competitive advantage.

A competitive advantage is what you do better than anyone else. The smarter you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed.

  • Do you specialise in a particular area? You might want to build a reputation for dealing with hard jobs other electricians shy away from.
  • What kind of guarantees can you offer? 
  • Is there a tech solution you could harness, something that no-one else is using? 

Whatever it is that sets you apart from everyone else — own it. It’s what will make you stick in people’s minds and help you win more work.

Get ready for launch

Now you’ve got all your tools and equipment ready to go, your business plan is looking robust and shiny, and that new work vehicle is itching to get out on the road. So what’s next? 

Start by testing your plan, and working your way towards a business model that works for you. Go lean with your approach, and remember to spend less time planning and more time doing. This will allow you to test ideas quickly, build on your success, and learn from your failures. Speaking of lean…

The Lean Start-up Methodology is solid when it comes to learning to drive your start-up, steer it in the right direction and eventually, switch into top gear. The key concepts are definitely worth reading up on.

Scoring new clients

When launching a new electrical business, your family and friends can be your most valuable network. Pretty much all households need electrical work at some point, so the people close to you should be your first point of call. Once you’ve got a bit of a following you can start to build clients via other channels. Word of mouth is invaluable, but marketing channels like social media can drive exceptional growth.

Check out our Marketing Toolkit that offers practical advice to building your customer base, including examples of what other trades businesses are doing to generate more work.

Tradify_Marketing Guide-Social_UK_LinkedIn

Marketing channels for electricians


6. Know your strengths and weaknesses

It’s important to be realistic and honest with yourself here. If you know that admin isn’t one of your strengths, look for tools that can help. In this day and age, there is technology and apps developed for trade businesses. Make sure you check out the electrician software available to help save you time and make your business more efficient. 

If you’ve got the gift of the gab, make the most of it when you’re dealing with customers. Electricians sometimes need to solve problems customers might be embarrassed about (blocked toilet anyone?) so use your gift to put them at ease.

Whatever your strengths, work them to your advantage. Then identify weak points, and take steps to work on improving your aptitude, or simply outsourcing to experts. We’re talking specialist processes like accounting and web development.

SWOT analysis

Finding it difficult to figure out where you smash it and where you crash it? Running a SWOT analysis is a great way to not only understand your strengths (S) and weaknesses (W), but also identify opportunities (O), and anticipate threats (T).

What is a SWOT analysis?
Usually Strengths and Weaknesses are internal aspects of your business (what you’re good at, what you’re not so good at), while Opportunities and Threats are external forces (what is likely to impact on your business in a negative or positive way).

  • Strengths – top strengths or benefits of your business, and how you can protect and enhance them.
  • Weaknesses – your top weaknesses or issues, and how you can minimise them or do better.
  • Opportunities – top opportunities for your business and how you can access and take advantage of them.
  • Threats – your top threats, and how you can minimise them and do better.

Use this basic template to write them down – this will help crystallise your thoughts:

SWOT Analysis for electrical business

7. Learn from others in the industry

Mentors, coaches and business associations are great resources to seek out if you're looking for advice. Look to those that have already been through starting an electrical business and learn from their successes and mistakes. If you can't find anyone in your local network, there are a bunch of successful tradespeople making videos on YouTube. Nick Bundy is a very popular electrician and influencer in the UK, with almost 50K subscribers.

Podcasts are also a great way to listen and learn while driving to and from jobs. Tradify's own podcast is made specifically for tradespeople looking to start or grow their business. Most phones have built-in apps for podcasts, or you can try Spotify

With 29 million podcast episodes available across all the different platforms, you’ll be sure to find something worth listening to. And, because it’s a growing medium for content, you won’t have to put up with too many ads.


Behind the Tools with Tradify

Tradify's podcast is called Behind the Tools. It's an inside look at tradespeople from all over the world. Each episode we bring on a guest to answer the real questions you have about life in the trades, running a business, and how to overcome the challenges that come with being a tradesperson.

You can watch the videos on YouTube or listen to our podcast on your favourite platform:

We asked one of our own plumbing clients about the most critical aspect of starting and growing a plumbing business. Here’s some advice to keep front of mind at all times:

“Stay honest and stay loyal with your customers. That way, you’ll always have repeat business and that’s a key goal for any plumber. If you’re dodgy and ripping people off, it will come back to bite you. If you charge fair and always do a great job, they’ll keep coming back and they’ll tell others about you. Repeat business – that’s the goal.”

8. It’s time to build your business

Starting a business from scratch isn’t the easiest path to take. But if you’re dreaming of a better salary, an improved work/life balance, and a genuine sense of achievement, then it may be the path for you. Being your own boss isn’t easy and may require long hours at first. Start off right by setting yourself up with job management software that will grow with your business. It’ll pay off as your business grows and you find yourself starting to hire staff.

Interviewing an apprentice any time soon? Download our free Interview Questions for Apprentices!

Download Interview Questions

Bookmark this guide, keep your business plan on hand, and refer back to them regularly. They’ll help you take a strategic, step-by-step approach to starting and running your electrical business. Keep your goals and objectives in mind, and continually hone your competitive advantage so that your reputation grows.

If you're looking for electrician software to run your business — try Tradify for free!