How to Start an Electrical Contractor Business

So, you’re ready to start a new electrical business, but where do you start? Starting an electrical contractor business takes more than just business cards and a bank account. If you’ve been working in the trade for a while, chances are you’ve got the skills, experience, and licenses necessary to go out on your own — but you likely need some help in the other areas of running a small business. 

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Long-term, your electrical company’s success relies on attracting enough customers and completing enough electrical projects to survive. That sounds more like a job for a marketing specialist than an electrician, but as a new small business owner, it’s your responsibility to make sure new projects are coming in and things are rolling smooth. Bidmii is here to help you get started right away, without the need for a complicated marketing strategy. 

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Bidmii connects independent contractors with homeowners who need projects done well, and fast. We’re here to help small businesses like yours off the ground — and the good news is that it’s easier than you think. Below, we cover everything you need to launch and grow your business, from planning, to getting your first customers, and getting paid. We’ll help provide the knowledge and resources you need to start a successful electrical business, so you can focus on what you do best.

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Table of contents

• Business Plan
• Selecting a Business Structure
• Register Your Business
• Create a Website
• Get Insurance
• Municipal Licensing
• Get Your First Customers
• How to Bid on a Project
• Complete the Project and Get Paid
• Build your Profile

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Business Plan & Cash Flow

If you're reading this, you've likely decided to start an electrical contracting business — congratulations! On top of your job of pulling and connecting wires, you’ll also need to be a CEO, CFO, business leader, and sales person, along with several other responsibilities. If you’re serious about your business, you’ll have a basic business plan and it's cash flows. You should know the basic services you’ll offer, such as the type and scope of services you’ll be offering, whether commercial or residential, and how much you’ll charge for each service. It doesn’t have to be pretty or complex, but it should lay out your path forward.

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One of the biggest reasons your business should have a business plan and initial cash flow is to apply for a small business loan. If you need vehicles, materials, or equipment for your electrical business, this will be crucial for you. Your business plan will include a description of your business, the services you will offer, a summary of who is involved and their responsibilities, how you plan to market your services and operate and manage the business, and how much funding you need, if any.

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Don’t Forget the Cost of Tools

Electrical workers don’t require as many hand and power tools as some other trades. As an electrician, it’s likely that you may already have some of the tools you’ll need. Some common tools electricians need include:

• Extension ladders
• Drills & hole augers
• Screwdrivers 
• Wire strippers & pliers
• Voltage testers
• Circuit finders
• Conduit bending and cutting tools
• Fall protection equipment

It’s not an exhaustive list, but it’s worth knowing what you’ll need in advance so you don’t get surprised on the job site. If you can anticipate the startup costs, you’ll be able to apply for funding to cover them, if you plan on taking out a business loan. Your next major investment will be your company vehicles and job trailer to haul your equipment. Your company truck and trailer can act as a moving billboard to advertise your business, so it’s worth getting your company logo and phone number on them. This helps build brand awareness and portrays an image of legitimacy and professionalism to potential customers.

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Selecting a Business Structure

A business structure is one of the first decisions you’ll need to make for your professional electrical contractor business. There are 4 standard types of business structures:

• Sole proprietorship
• Partnership
• Corporation
• Cooperative

Each structure type has different pros, cons, and implications, so you’ll need to choose the one that works best for your business. When selecting your business structure, consider your liability. Businesses with higher liability will want to choose a more protective structure, such as a corporation, which costs more than a sole proprietorship but offers benefits such as limited personal liability. Since you’re in the construction business, your potential liability is higher, so it makes sense to protect yourself and your business from the start. Learn more about choosing your business structure.

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Register Your Business

Now that you’ve selected your business structure, you’ll want to get your electrical business registered. Registering your business protects your business name and proves that your company is a legitimate entity, which means that you can hire employees and complete legitimate work, among other benefits. To register for a business license, you’ll need to provide your business name and structure type, along with information including your address and other details. You’ll also need to pay for your business registration.

Register Your Business in Ontario

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Create a Website

In the digital age, if you’re not online, you’re behind. Most owners of small businesses rely on word of mouth and social media to get customers, but a website is a big checkmark that shows potential customers that you’re a legitimate electrical company. Your website can be a simple contact page to prove you’re a real business. Many website builders offer a free trial, so you can get a basic website up and running on your own fairly quickly. 

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Pro Tip: Your Google business profile will be the largest entry point for your business. Start your site there, and you’ll have an online storefront created quickly for less than $20/year.

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Don’t get overwhelmed - just get it launched!

Many business owners will put off launching a website for months because it’s not perfect. In the beginning, you won’t get much traffic, so just make a basic website with relevant information and get it online. You don’t need to spend money on a custom-designed website. Once you’ve got money coming in consistently, you can invest more in your website. Just be clear about what you offer. For example, it’s a good idea to include information about the types of electrical jobs you’re looking for. Your customers need to know whether your electrical business can handle their commercial or residential electrical project.

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Get Business Insurance

Since you’re in the construction industry, you’ll probably want to consider at least 3 different types of insurance for your electrical business. You’ll need to cover your general liability and consider factors like workplace safety and fall protection. It’s worth reaching out to several different insurance agents for quotes and advice. The types of insurance you'll need include:

General Liability insurance: potential damage you may unintentionally create at a client’s property.

Workers' Compensation: potential injuries to you or others while on the job.

Equipment insurance: theft or damage to your tools and equipment.

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Responsibilities of Electrical Contractors

Owning an electrical contractor business comes with a lot of responsibilities. Your biggest responsibility will always be for the safety of your workforce, so it’s important to take this seriously and make sure your workforce and business are protected. If you or your team will be working at heights or near live electricity, it’s advised to ensure everyone is properly trained in fall protection and emergency first aid.

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Additional Licensing

This section mainly applies to general contractors and specific trades, but it’s worth looking into to ensure your business is operating within the laws and regulations of the region where you’re operating. If a contractor or subcontractor doesn’t have the required permits, it can lead to an entire project being halted, which can damage your relationships with customers and other contractors.

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As an example, according to bylaws in the City of Toronto, additional licensing applies to anyone who advertises or solicits for work as a building renovator or building contractor doing renovation work (including altering, repairing, or renovating buildings or structures). This means that if you’re planning to operate an electrical business within the City of Toronto, you may need a work permit from the city. If you’re subcontracting for a home builder or General Contractor, they should know if you’ll need a city permit. You can also check with your local municipality if you’re unsure.

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Get Your First Customers

The biggest step to starting your siding company is getting your first customer, but it soon becomes a struggle between competing priorities. Most new business owners are forced to divide their limited time between lining up new projects and completing those they’ve already agreed to. To ensure you have new electrical projects coming in, you’ll need to spend time on marketing and sales activities, on top of managing your job sites. Traditional advertising can cost up to $100 per lead for lawn signs, flyers, and more, which is unrealistic when you’re starting your own electrical business. That’s why we created Bidmii. It’s the cheapest, easiest, and fastest way to get your first customers. 

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How Bidmii Helps You Earn Your First Customers:

With Bidmii, you’ll lower your business expenses and increase your profitability with one simple tool. You’ll never have to pay for marketing expenses and materials because we’ll provide a direct link to your customers. Just create a free profile, select the types of projects you’re interested in, and receive daily notifications for new projects through SMS and emails that connect you with homeowners in your area. You can immediately start bidding on projects you want, send offers to potential customers, and engage in direct conversations with customers in your area. 

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How to Bid On an Electrical Project

Bidding on a project is easy and it helps provide upfront insight into your profitability on each project. If you’re just starting out, you may want to seek advice from other professional electricians on how to price projects but, in general, you should always make sure you can account for your costs. 

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Example Project Bid: Electrical Job

James from Guelph wants to install a 220v electrical outlet, so he posts a project on Bidmii. You see the email notification on your phone, and decide to put in a bid. You estimate that you will incur around $40 in material costs. With this in mind, you decide to quote the job at $190. James accepts the bid, and you’re left with at least $150 profit on your first job, and you only spent money out-of-pocket on your business registration, tools, and materials.

Your Proposed Price: $190

Transportation & Expenses: $40

Total Profit: $150 

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Complete the Project and Get Paid

This is why you’re really here and why you started your electrical contracting business in the first place. With Bidmii, you won’t have to spend your valuable time chasing payments from your customer. You’re protected by our terms and conditions, so you’ll receive payment directly into your account as soon as a project (or project stage) is marked as completed by both parties. 

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Build your Profile

Congrats! You’ve completed your first project! If you do high-quality work, you’ll be rewarded with honest, verified ratings and reviews from your customers about your completed projects directly on Bidmii. As you grow your business with Bidmii, homeowners will feel more and more confident using your services which will help you compete for more (and bigger) projects. 

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Want To Build Your Business Using Bidmii?

Bidmii is the fastest, easiest, and cheapest way to earn new customers for your electrical business. We’ll help you find new clients and make lasting relationships with homeowners in your area. By completing projects you’ll earn a strong reputation through ratings and reviews based solely on your skillset and communication.

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