How to Start Your New Electrical Business (Plus Costs)

By George Leon | Posted on March 10, 2021 | Updated on July 5, 2022
how to start an electrical business

Whether you’ve spent the past few years as an electrician and you’re looking to branch out on your own or you’re making the transition into the electrical industry, you might be considering starting your own electrical business.

While running your own company can be an extremely rewarding job, you want to make sure all the right steps are taken to set you up for success. We’ve put together a guide to explain why an electrical business is a good venture and how to get started:

  • Market Size – Electrical services are primarily need-based which means that your customers are going to need your services now and in the future. As the business owner, you can choose your target marketing — do you want to work on residential homes or commercial properties? Will you specialize in new build construction or work retrofit existing electrical systems? From retail stores and apartment buildings to new residential developments, the options are endless! Plus, you’ll be paving your way in a recurring market — your customers can become customers for life.
  • Profitability – No one goes into starting a new business without hoping that they will turn a profit. Luckily for you, an electrical business is very profitable. While it will differ from job to job, the majority of the electrical services offer high-profit margins allowing you to bring in revenue to cushion your bottom line. It’s important to keep in mind that working solely in a residential or commercial can impact the profitability of the electrical company.
  • Competition – Before starting any business, you must analyze the existing competition in your local market. First and foremost, are there competitors or is it a completely untapped market? If there are competitors, how are they marketing their business? What electrical services are they offering? Are they focusing on the commercial or residential market? In most cases, electrical companies aren’t very tech-savvy which means there is ample opportunity for you to swoop in and dominate the market.

Now that you understand why it’s a great idea to start an electrical business, let’s go over how to start an electrical business of your own.

How Much Does it Cost to Start an Electrical Business?

There isn’t a set cost for starting an electrical business and it will vary greatly depending on where you are located, but you need to consider the costs for licensing, insurance, overhead, equipment costs, office space, employees, and other associated costs.

As a good rule of thumb, you will need approximately $5,000 to get your electrical business up and running. However, you will also need to factor in any additional schooling or training needed to be an authoritative figure in the industry.

Once your electrical business is up and running, ongoing expenses are relatively minimal. You will need to cover the rent for your office space, license renewals, and insurance. It is recommended that you budget $2,500 for your license renewal and annual insurance costs.

An easy way to cut costs is to make sure your office space is the right size for your team — there’s no reason to spend extra money on square footage that you and your team don’t need.

Getting Started: Business Details

Although starting an electrical business is exciting, there are a lot of details that need to be organized behind the scenes before you can bring in your first customer.

Before opening your doors, set aside some time to work through all the necessary paperwork and licensing required to start an electrical business. To get started on the right foot, get the following business elements sorted:


Every business needs a name. While this name needs to be recorded with the Internal Revenue Service, it’ll also be the name you go by without the community.

Before choosing your name, make sure you do an analysis of the competitors in the area so you don’t accidentally choose a name that can be mistaken for another company.

You want to choose something that will be easy to remember so you’re always top of mind with your customers. Whatever name you choose for your electrical company, make sure you use it consistently across the Internet — this includes your website, Google Business Profile (GBP) listing, online directory listings, etc.


When looking for a local service business in your area, where do you go first? The majority of prospective customers turn to a trusted search engine like Google to find a reputable company to work with.

But if your company doesn’t have a website, prospective customers won’t be able to find you — they’ll only find your competition! Creating a website not only increases your visibility on search engine results pages but makes it possible for customers to learn about your business no matter the time of day.

Take the time to build a professional-looking website that clearly lays out your company information and details on the various electrical services you provide.


One of the most important steps in the process is to register your electrical business as an LLC so it’s recognized by the government. This is a mandatory step in the process for you to legally work with customers.

It’s important to get started on this step as soon as you’ve narrowed down what your company name is because this part of the process can take anywhere from a few weeks to a few months.


If you’re running a one-man electrical company, you might not need office space just yet. But if you have a team working for you, it can be beneficial to rent out an office space.

Most importantly, you need a business address to promote on your company website and Google Business Profile. However, you don’t want to just choose any location — even if it’s the cheapest option on the market.

For your electrical business to appear in the local park, Google factors in your company’s proximity to the prospective customer. This means that you should choose an office location that is in or near your desired service area.

Even if you’re a one-man show, you should consider renting a P.O. box in this area if you can’t justify the cost of office space just yet. Once you have these four business elements organized, you can get started addressing some of the more fun aspects of running a business — prepping for your customers!

Preparing for Your Customers

There are few things more gratifying than seeing the smile on a satisfied customer’s face. Now’s the time for you to plan out how you’re going to provide unparalleled services to your customers.

The happier your customers are, the more repeat business you’ll bring in and referrals you’ll receive. Ensure you have efficient processes in place for:

Appointment Scheduling

What is your desired process for customers to be able to schedule appointments? Do they need to speak with a customer service representative so you can suss out exactly what services they need? Will your website have an online scheduler that allows the customer to book a date and time that works for them directly from the website?

You need to determine what method not only allows you to bring in the most leads but will be the most efficient for you to manage. Just because you choose one method now doesn’t mean you’re stuck with that option forever.

Feel out what your customers respond well to and see which methods not only drive more qualified leads but bring in the most profitable jobs.


There’s nothing more frustrating than trying to get in contact with a business only to find out that the number on their Google My Business profile is outdated or the contact form on their website is broken.

Routinely check your online directory listings to confirm that all of your contact information is up to date — you don’t want to lose leads simply before a digit of your phone number was input incorrectly!

You will also want to consider the desired action you’d like your customers to take once they arrive on your website. If you want them to call to schedule an appointment, consider adding a call to action with your phone number to the website header.

If you would prefer they fill out a contact more, embed one within all pages of your website to make it easy for your customers.


You can’t run a successful business without the inflow of money coming in. How do you plan on invoicing your customers and keeping track of who has and hasn’t paid?

Organizing the quoting and invoicing process is much easier to accomplish in the early stages as you ramp up the number of electrical jobs you take on.

Find an invoicing tool that makes it easy to bill your customers and keep financial records of all transactions.

Getting these processes in place will demonstrate to your customers that their satisfaction is your top priority and that you are a professional electrical company.

How to Market Your Electrical Business

You’ll want to get your marketing sorted out before the opening day. Will you focus primarily on traditional marketing methods like direct mailers, cold calls, and referrals? Or will you invest in digital marketing efforts to increase your online presence?

Here are four ways for you to create a successful marketing campaign that drives electrical leads from day one.

Engage with the Community

As a new business in the area, you need to get your name out there. In the beginning, no one will know who you are or what your electrical business can do for them. Find ways to dive into the local community so you can begin interacting with them face-to-face.

While this is critical in the early stages of your business, it’s a great way to stay relevant and stand out from competitors even after you’re more established. Here are a few ways to increase brand recognition in your target market:

  • Participate at local community events by hosting a booth
  • Create a scholarship that is awarded to a student within the community
  • Host a charity event around the holidays, such as a toy or clothing drive
  • Sponsor a recreational sports team in the town where you’re located
  • Donate to local charities and causes

Claim and Optimize Your GMB Listing

When a prospective customer searches “electrical services,” you want your company to show up on the search results pages. There are three places where your electrical business can be found: paid advertisements, local pack, or organic listings.

To have your electrical company appear in the local pack, otherwise known as the maps listings, you need to have your Google My Business listing claimed and optimized.

This means that it should be thoroughly filled out with important business information including your address, phone number, hours of operation, services, photos, and more. The more you fill this out, the better!

Ask Your Customers for Reviews

Most prospective customers read reviews before deciding to work with an electrical company. No one wants to hire an electrician only to realize that they do shoddy work. This is why your electrical company must have quality reviews on your Google Business Profile.

If it comes down to you and a competitor, the customer is likely going to go with whichever electrical company has a better track record — and this will probably be determined by customer reviews!

To ask your customers for reviews, you can have your electricians ask face-to-face while completing a job, you can ask in a follow-up email, or you can have a call to action on your website asking for reviews.

There are a variety of ways you can ask, but remember, the quality of the reviews is more important than the quantity. It is better to have nine 5-star reviews than 76 3.5-star reviews.

By following these tactics, you’ll be able to get your new electrical business off the ground with a strong marketing campaign in place.

Written by

George Leon is a Managing Partner at Scalebloom. George loves to help business owners scale their business with modern marketing strategies and branding.