30 Tips on How to Open Commercial Electrical Business Near People

Commercial electrician near me

This business is right for individuals who are good with their hands, have good people skills, are good at solving complex conceptual and mechanical problems, and can work in a variety of different environments. To own and operate an electrician business, you must also be a skilled electrician. Most business owners are master electricians who have studied for many years as an apprentice.

1. Get the Business Background:

Electrician businesses focus primarily on servicing electrical systems in homes and businesses. Because it is a trade business, it is highly specialized. Furthermore, local and state governments typically restrict non-tradesmen from working on electrical systems. Due to these factors, skilled electricians are typically in high demand.

We have put together this simple guide to starting your electrician business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Read on: How Do I Locate the Best Trade schools near me( Read this)

2. What is a Commercial Electrician?

A commercial electrician is a trained and licensed electrician who focuses on wiring and electrical systems in commercial buildings rather than residential buildings. These electricians work with bigger systems, in large buildings like shopping malls, office buildings, restaurants, government buildings and high rises. Many aspects of the job and training are similar to those of residential electricians, but there are also some important differences to consider when choosing your future electrical career.

3. What happens during a typical day at an electrician business?

Day-to-day activities of an electrician include repairing or replacing electrical systems, including main systems, fuse and breaker box panels, running electrical wiring, repairing and maintaining electrical wiring, transformers, and related systems. Electricians also spend a fair amount of their time on a job troubleshooting electrical problems.

Because wiring in a home or business is often hidden behind walls, electricians need to know how to diagnose what might be wrong with a system before fixing it. They may not have the luxury of taking down all the walls in a building to solve the problem, either.

Read on: 13 Tips to Become 24/7 Master Electrician

4. What Commercial Electricians Do

Commercial electricians install, maintain, inspect and repair electrical systems in commercial buildings. These are any buildings that are not used as residences, so they are generally larger than the buildings in which residential electricians work. An exception is a large apartment building, which may be considered commercial rather than residential. Some of the duties of these electricians are:

• Installing wiring and electrical components, like switches and lights
• Maintaining electrical systems
• Inspecting electrical systems to be sure they work, are safe and are up to code
• Diagnosing and fixing problems in wiring or electrical components
• Reading and using technical drawings
• Planning electrical systems for new construction
• Using and following state, local and national guidelines for wiring and electrical systems
• Leading teams of electricians and training apprentices

5. Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns.

6. Give a name to your business

Naming your business is one the most important and challenging steps for entrepreneurs. How you decide to brand your business will play a large role in your success.

See also: 29 Tips to Become Residential Electrician

7. Questions To Ask When Choosing A Brand Name

Now that you’ve come up with name choices, it’s time to think about some important tips for naming a business.

12 Important Questions to Ask Yourself:

1. Is my name simple?
2. How does the name sound when I say it out loud?
3. Is the name easy to pronounce and spell and does the acronym look ok?
4. Is my business name shorter rather than longer?
5. Did I include a geographic location in my name? Usually, you shouldn’t.
6. What do other people think of the name?
7. How does the name compare to other business names in the industry?
8. Does the name convey my mission as a business?
9. Did I avoid trends?
10. Does my name contain obscure words?
11. Is my name too narrow or too literal?
12. Is my name memorable?

8. What are the costs involved in opening an electrician business?

The costs for starting an electrician business vary, but generally include licensing, insurance, fees for union dues, overhead and equipment costs, and rent for office space. In general, many startup companies spend at least $5,000 to get started. These costs do not include schooling or apprenticeship, which can range anywhere from $3,000 to upwards of $20,000, depending on whether you choose to attend a community college, a technical school, or a private university.

See also: How to Open Trade Schools for Carpentry Training

9. What are the ongoing expenses for an electrician business?

Ongoing expenses of running an electrician business are minimal. Most businesses must cover the cost of rent, licensing, and insurance. License renewal can cost up to $200 – $300 per year, depending on your state. You should budget $1,500 – $2,000 for annual insurance premiums. Rent costs will vary dramatically depending on your location. Price per square foot of office space can range anywhere from $1.50 – $6.00 or more. The best way to cut down costs would be to work from home or share office space with other small business owners.

10. Who is the target market?

Electricians make money by charging customers for their services. They may charge on an hourly basis, or they may request a flat fee for services.

11. How does an electrician business make money?

Preferred client types for this business are commercial accounts. However, residential customers can also be an ongoing source of income, provided that the business can service a rotating base of clients. This could involve contracting with a Homeowners Association, or some other organized community, to service residential customers.

Read on: Top Electrical Business Cards

12. How much can you charge customers?

Electricians may charge a wide range of fees, depending on their level of skill, the average local rates, and the type of work involved. However, most will charge between $40 and $100 per hour, with master electricians charging $100 to $150 per hour or more.

13. How much profit can an electrician business make?

Profit for an established electrician business ranges from between 1.5% to 2.0%, depending on the size of the company. Larger companies have lower margins, while smaller companies tend to have higher margins.

See also: 24 Ways to Invest in Rental Real Estate

14. How can you make your business more profitable?

Expanding your team with some entry-level electrician helpers to take care of simpler jobs can help you increase your overall efficiency and take on more jobs. Adding additional, ancillary services, might also help. For example, consider partnering with a professional plumber and carpenter to take on larger jobs.

15. Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Read on: Top 50 Fresh Jobs for Agriculturist

16. Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Most states require electricians to pass an exam and receive certification before working as an electrical contractor or journeyman electrician.

Most businesses are required to collect sales tax on the goods or services they provide.

17. Get the Service Agreement

Electrician businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership.

18. Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.

19. Some of the risks general liability insurance covers are:

• Bodily injury
• Property damage
• Medical payments
• Legal defense and judgment
• Personal and advertising injury

In addition to general liability insurance, many electricians carry additional policies to cover specific situations that are excluded from general liability. For example:

• Workers’ compensation insurance
• Commercial auto insurance
• Product liability insurance
• Commercial umbrella insurance

20. Get the Commercial Property Insurance

Your electrician operation will no doubt require expensive professional equipment, tools, and machinery to help you get the job done. You cannot afford to lose these assets to an unpredictable disaster like fire or violent weather. Acquire a commercial property policy to protect your business’ materials, including equipment, tools, machinery, vehicles, and any owned real estate.

21. Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

22. Know how to promote & market your business

If you buy into a franchise, a lot of the marketing is done for you. All you need to do is put up the capital. If you are starting your own brand, then you’ll want to focus on what works in this industry. Referral marketing will likely be the largest source of new clients. You can also hand out business cards and send direct mail promotions to develop a strong customer base.

23. Know how to keep customers coming back

Electricians who outperform their peers are ones who progress from journeyman to master-level. Specialization can help, as can joining a union, since you have more negotiating power when it comes to setting wages and fees. Buying into a franchise may also help, since you can leverage the existing infrastructure and brand recognition, charging clients more than if you had to first prove yourself with your own brand.

24. Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.

25. What are some skills and experiences that will help you build a successful commercial electrical business?

Becoming an electrician is the first step in starting an electrician business. There are two paths to do this: apprenticeship and college.

An apprenticeship is a long-term training program, typically run by a professional organization or a business. There are three types:

• Unionized apprenticeships, which are usually run by a group called the International Brotherhood of Electrical Workers (IBEW).
• Non-unionized apprenticeships, such as the Associated Builders and Contractors (ABC) and Independent Electrical Contractors (IEC).
• Local apprenticeships, which are offered by the federal government.

During your apprenticeship, you will learn everything you need to know to become a professional electrician. This includes knowledge of electrician-specific tools, techniques, and methods. A further advantage of an apprenticeship is that it gives you the benefit of on-the-job training (OJT). You also get classroom instruction, and and the opportunity to study under a master electrician. In total, apprenticeship can last up to 5-6 years.

The major drawback on choosing the apprenticeship route is that competition is fierce. It’s very difficult to get an apprenticeship, which is why many people opt for formal schooling at a community college or university. All you need is a high school diploma or a GED to apply.

Either route you take, you start as a journeyman and progress to a master electrician.

General skills that are valuable to an electrician include strong problem-solving skills, strong conceptual skills, communication skills, the ability to work in harsh and unpredictable environments, and strong special and mathematical skills.

26. What is the growth potential for the business?

Most electrician businesses are run as owner/operator businesses. However, you can take on an apprentice or work with many different partners and establish a higher-volume business. Some electrician businesses are also run as franchise operations. If you go this route, you should be prepared to pay a substantial amount of money upfront. However, franchises do offer several great benefits, such as an established brand name, protected service territories, and ongoing marketing support.

27. Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.