Since the invention of electricity in 1879, electricians have always been needed. But to succeed with an electrical contracting business there are certain things you should keep in mind to plan for success. A business plan is a great way to set measurable goals for your business.
A business plan should include a summary or description of your electrical business, the company’s financial budget and plan, a market analysis of customer needs and competitors, and the expectations of your team. Each are a necessity because they will not only help you start your company, but you can revisit and revise your electrical contracting business plan goals every year to help it grow!
Electrical Contracting Business Plan: How to Plan for Success
Calculate the Cost of Doing Business
The first thing you should know is what the true cost of running an electrical contracting business is. If you are just starting the business the cost of tools, phone, rent, transportation, licenses and legal fees. But there are also ongoing expenses in the true cost of business such as marketing, equipment maintenance or replacements, employee training costs, etc.
Use these figures in your electrical contracting business plan to calculate your break-even number. A break-even number allows you to see how much you need to charge for your services to be profitable. A lot of businesses make the mistake of only having a vague idea of what this number is and it can get them into trouble down the road.
Your break-even number, correct pricing of products and services, and your profit margin all make up the true cost of day to day business and help determine your budget. Use our detailed breakeven calculator here.
Create a Budget and Financial Plan
After seeing what your true cost of business is, you can determine a budget and set a financial plan for your business. The financial plan can prepare for unforeseen issues, or lack of business due to seasonal demand. Having a financial plan can protect your company, and help you avoid taking out or defaulting on loans. This also ensures that discounts with vendors don’t end because of lacking credit.
Make a List of Services
Be sure to list out what services you will be offering in your plan and the scope of work for each service. Don’t short change yourself on how many hours it will take to get the job done. Apply this information to your budget.
Create a Marketing Plan
A marketing plan is always necessary for your business plan and your financial plan. If you don’t market yourself, how will people know how to find your electrical contracting business? You should first find out who your target audience is and what type of service they are looking for. When you understand your customers’ wants and needs, where they hang out, and what their daily activities are you can better determine how to reach them.
How are you going to market yourself? You should, if you haven’t already, come up with a brand identity for your business. This will help people recognize your brand. A customer should be able to identify your business on a sign, work truck, etc. When you think about branding, think of what sets your electrical contracting business apart from others. This is called your differentiator. What is it that makes your business unique? All of this should be included in your electrical contracting business plan.
Although word of mouth still remains one of the best ways to get business, you need to do more. Word of mouth doesn’t happen all on its own without exceptional service and its important to create buzz around your business in other ways. People can’t hire you if they don’t know about you.
Digital marketing tends to be more popular than direct mail, but direct mail advertising can still be effective. There are many marketing options that are available for electrical contracting businesses such as: websites, ads on social media, marketing through emails, business cards, etc. Knowing your target audience will help you determine which options will be most effective for your business.
Don’t forget to include networking events and business-to-business opportunities in your plan. Partnering with other service companies such as HVAC, plumbers, etc. can also help lead you to more business opportunities.
Plan To Train Your Team
Your business plan should include plans to train and take care of your team. A company cannot be successful without a successful team. There should be room in the financial plan to not only grow your team, but training programs to extend the team’s knowledge as the electrical industry evolves. You should also put aside enough to give the company the ability to hire top-notch employees who are already well-trained.
Well-trained employees do the job right the first time, saving the business and the customer time and money. They are the heartbeat of the business. They engage with customers and determine what people will think about your business. Whether a customer leaves a positive or negative review depends on their experience with technicians.
If you’re just starting out, you may be the only employee of the company. If that’s the case, you’re probably a rockstar electrical contractor already. But do you have sales skills to upsell that additional service? Do you have marketing know-how and management skills? There’s always more you can learn, and should learn, to be able to grow your business.
Well-trained employees are happier and more engaged with their job and deliver better customer service. A well-trained employee is more likely to get a good review and acquire a return customer, which will help you grow your business to success.
Beyond getting business licenses, naming your business etc., business plans are one of your most important documents. An electrical contracting business plan is a way to not only help start your company, but a great way to set and achieve measurable goals from year to year.
What are your financial goals? Training goals? Marketing goals? Be sure to list measurable goals that can be achieved.
A business plan should include a summary of your electrical business, the company’s financial budget and plan, a market analysis of customer needs and competitors, the expectations of your team, and measurable goals. If something is not working as you begin implementation, you can always look to your business plan. When you plan from the start and compare the figures during implementation, you’ll be able to see what is working, what’s not, and why. Business plans can be living documents you update as your company’s vision begins to grow and become more focused.
Beyond what you’ve learned here —
The Blue Collar Success Group trains electrical contracting business owners and their employees how to implement processes and systems for a successful business. From sales training, tech training, office training, management training, and more, the Blue Collar Success Group helps electrical contracting companies build and achieve goals from start to finish. Learn more about us here.