How to start a small electrical contractor business

Written by kathryn christ
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Electrical contracting is a lucrative career for the skilled professional. As a licensed contractor, you will have taken the first and most important step towards earning significant money in this field. In addition to the salary you will pay yourself as a contractor, you will reap the financial benefits of running a profitable business. As a business owner, you will be in control of determining which projects are most profitable, marketing to this end and controlling expenses, all of which will directly impact your profit margin. In some communities, the competition may be intense, so excellent work quality and good business skills will be important to your success.

Skill level:

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Things you need

  • Electrical Contractors License
  • Business License (sometimes called Occupational License)
  • Electrician Tools
  • Computer
  • Telephone

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  1. 1

    Secure your electrical contractor license in the region or community where you intend to work. Many government entities require licensing in professions that have the potential to cause harm to the public. The license is credible proof of your proficiency, as well as, your ticket to making money (See References).

  2. 2

    Get your local business license. Your business license is generally a requirement of your local community, enabling you to do business legally. In addition, you may require a zoning ordinance, if you plan to work out of your home.

  3. 3

    Create a list of potential customers and develop ways to reach them. Determine if you will serve the residential, commercial or industrial markets, or a combination of the three. Visit your local library for business resources, such as ReferenceUSA, a database of residences and businesses in the United States. Use the available data to target your best and most profitable customers.

  4. 4

    Generate a system for estimating and/or bidding on potential projects. Decide if every residential estimate requires a walk-through of the home, or if some projects, such as ceiling fan installation or recessed lighting installation, can be quoted over the phone.

  5. 5

    Investigate your ability and cost to secure a surety bond, which is required by many governmental and commercial entities before beginning work. The surety bond guarantees that you will carry out the work, as agreed. In the event that you are not able to complete the job, the homeowner can seek financial restitution up to the amount of the project cost (See References).

Tips and warnings

  • Once you open your business, give your business card to everyone you know. Tell them what type of work you are specialising in, and ask for referrals.
  • Do not attempt to set up shop as an unlicensed electrical contractor. In addition to being illegal in most areas, you may cause irreparable harm to the work sites and the people who live and work in those places.

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