How to Start an Electrical Business

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The electrical service market holds a net worth of $100 billion. This figure is expected to only increase at an astonishing pace in the upcoming years, making it an excellent market choice to start a business. 

Once your business is all set, and in the operational phase, you’ll find it extremely rewarding. But before that, you have to learn how to start an electrical business. 

From licensing and accreditations to capital investment and business planning, multiple factors need to be covered. This guide will teach you all the steps you need to follow before starting an electrical business. 

How to Start an Electrical Business

Starting an electrical business isn’t all that difficult if you know which steps to follow. But before proceeding with anything else, you must conduct a thorough market analysis to find out which services are in demand the most. 

It will also give you an idea about how much competition you will have to face. But don’t be intimidated by looking at your competitors. Remember, electrical services are need-based, and it is highly likely that you will get repeat customers once you establish a working relationship with potential clients. It’s all about using the best practices to market your business and, of course, the quality of services you provide. 

So, once you’re done with the market research, you can develop a business plan that will map out the goals that you need to achieve. But before you can step into the field, several other tasks must be performed, including the following: 

Name Your Business

The first step is to name your business. Every business needs a name, and your electric business is no exception. But you have to ensure that the name isn’t already taken or similar to a local competitor, or it will confuse your clients. 

Despite seeming like a simple task, business naming is quite tricky. You must select a name that makes it easier for anyone hearing it for the first time to understand the kind of services you offer. 

Once you have decided on a name, use it consistently for marketing. The name you chose will be used everywhere, be it on social media, business directories, Google Business Listings, or your webpage. 

Create a Logo

After picking a name, the next thing on the list is to create a logo. Unless you have experience in graphic designing, you should get your logo made by a professional. 

Logos hold great importance, even for small businesses. They are what makes people distinguish your business. It will be used on your webpage, social media, business cards, work clothes, hats, etc. 

Get LLC Registration

For you to work with customers legally, getting your electrical business registered as an LLC is essential. Doing so makes your business recognized by the government. Typically, it takes a few weeks to months to complete the registration process, so you must get started as soon as you have your name picked out. 

Follow this link to learn how to get an LLC for your electrical business. 

Find a Suitable Location

If you plan to run your business alone, you don’t necessarily need an office space. But if you plan to hire a team, it makes sense to have a business space where clients can contact you directly. 

However, choosing the cheapest location isn’t the way to go about it. Instead, you should pick a location that is in close proximity to your target market. The same location will also be registered on your Google Business Profile, and when potential customers search for electrical services near them, your business will definitely pop up on the search engine. If you can’t afford to rent out a place, consider renting out a P.O. box. 

Set Up a Website

Once you have a business name, a logo, and a location, the next thing on the list is to set up a website. Since most people like to search for businesses and services online, it is important to have a website. But your webpage should offer an excellent user experience. 

Make sure your website loads quickly, is easy to navigate and allows customers to learn about your services. But most of all, your website should also feature online bookings and payments as most customers prefer making appointments through websites instead of calling. 

You can get all these features and more by letting Trady handle your website design. We can launch an easy-to-use webpage for your electrical business at affordable pricing plans. 

Capital Investment for Starting an Electrical Business

After getting through the initial steps, you have to get to the main part, budgeting. The first thing that you will need to calculate the cost for is your electrical equipment. Once you’re done with that, other expenses, such as insurance, licensing, schooling, traveling, etc., must also be factored in. 

While there is no specific cost for starting an electrical business as it varies from state to state, if you were to round off all the expenses, they could reach approximately $5000.  

Get the Necessary Licensing

Every state has different licensing requirements. Generally, electrical businesses require a state-issued license. 

You can contact the state licensing department to learn which licensing, and permits are needed to run an electric business. Depending on your location, you may also need to acquire health and safety permits to ensure all safety standards are followed during work. 


Insurance is an essential part of running a business. Without insurance, your business can easily lose money and put you on the brink of bankruptcy. 

Here is a list of the types of insurance policies that every electrical contractor business should have: 

  • General Liability Insurance: Electricians don’t always work on-site. Sometimes clients also visit to get something fixed. But during the repairs, if an accident occurs, the other party can hold you accountable. Fortunately, all costs for claims of libel or slander, damage to a person other than you or staff members, and property damage are covered with general liability insurance. 

  • Professional Liability Insurance: Professional liability insurance covers the expenses for claims of faulty workmanship. 

  • Worker’s Compensation Insurance: Worker’s compensation insurance covers all medical expenses if an employee gets injured during the job. 

  • Equipment insurance: Tools and equipment are everything for electricians. Equipment insurance covers the cost of repairs and replacement if your tools get stolen, lost, or damaged. 

  • Cyber Insurance: Cyber insurance covers all expenses of the damages sustained from a cyber attack. 

Market Your Business

Marketing is the key to expanding your business outreach. Today, having an online presence is the best way to market your service. While having a website will help, you have to ensure that the website is SEO-optimized to make it reach the top of the search engine ranking. 

Additionally, paid marketing campaigns on social media also help you gain more leads. But if you want an even more convenient solution, Trady is here to help. We can take care of all your marketing needs while you focus on improving your business. 

The Bottom Line

Now you know how to start an electrical business. Though it is not a challenging task, it requires you to follow the necessary steps, but above all else needs dedication and commitment. 

Before anything else, you must pick a business name and get a logo made. After that, an LLC registration is essential to make your business functional legally. Once you have the LLC, find a suitable location and set up a website. 

With the initial steps completed, the next step is to calculate your capital investment. From tools and equipment to licensing and insurance fees, your cost can go up to $5000. Obtaining insurance will save you from bankruptcy, while licensing is a legal requirement that varies from state to state. 

Lastly, you need to market your business and reach potential customers. SEO can help you reach the top of search engines organically, while paid social media marketing can also expand market outreach. But above all else, you must work on forming customer relationships. Be consistent with your marketing and always ask for review and feedback. 

The good thing is that the electric service market is quite vast and gives you opportunities to expand your services at any point. Moreover, it is a highly profitable business that can help you earn a handsome income in no time.