How to Start Up an Electrical Business
Learning how to start up an electrical business requires training, licensing, equipment, a sound business plan and marketing strategy. Formal electrical education and training is required, and most states require testing before a license is issued. On the business end, setting up the business follows procedures similar to those of other businesses -- you may start your own electrical business from scratch or purchase an electrical contractor franchise for startup assistance, business expertise and company branding.Proper Training and Certification
Obtain education and training from a certified trade school or apprenticeship program. Your state's department of licensure or local electrical union representative can advise you in training and education requirements in your area. Obtain your state electrician's license by taking the exam and filing necessary paperwork. Contact your state's department of licensure for specific information. Take business and accounting courses at a local continuing education school to learn about running a business.Lay the Groundwork
Create a business plan for your electrical business containing all business details, financial projections, marketing and advertising strategies. Hire a business consultant, visit the U.S. Small Business Administration website for help in writing your business plan. A business plan will be required if you will are seeking outside financing from your bank or other lending institution. File your business structure paperwork with your secretary of state. Your business structure may be a sole-proprietorship, limited liability company, partnership or corporation. Your state website will have the necessary forms and instructions, and you will find information on different business structures on the SBA website.Build Your Business
Obtain a local business permit from your town hall, state contracting license and tax registration certificate from your state's taxation and licensing offices, and federal Tax Identification Number and Employer Identification Number from the Internal Revenue Service. The IRS, most states and some local governments have forms and online filing services on their websites. Secure financing through a lending company (if required). You will need your business plan, official business and personal documents as required by the lending company. Purchase business liability insurance from your insurance company. Your insurance agent will advise you as to how much is required in your state, and advise you if additional surety bonding is necessary. Consider union affiliation with the International Brotherhood of Electrical Workers. Although not required, some commercial, industrial and government work contracts favor contractors with union affiliation.Purchase Your Tools
Purchase your equipment and vehicle with your own funds, or with funds financed through your lending company. Your equipment and vehicle needs will vary according to the scope and type of electrical work you will offer.Running Your Business
Being an electrician is a dangerous profession. Be certain that you are willing to take the necessary risks and follow all published industry safety procedures. This includes things such as double-checking all work areas for cleanliness after jobs are completed, and being sure your vehicles and workers are presentable and professional to help build business credibility and reputation. If you hire licensed electricians, be sure to check their credentials with your state's licensing board. Allowing unlicensed workers to perform licensed work unsupervised can result in serious fines and penalties for the worker and your business.