Starting Your Electrical Contracting Business

Thinking of starting your own electrical contracting business?

I’ve found that one of the most rewarding aspects of owning an electrical estimating software company is that it has provided me an opportunity to get to know people that have made the life altering decision to start their own electrical contracting business.





Starting your own contracting business?

I know from experience that running your own electrical contracting business is not for the faint of heart. It takes up a lot of your time and it can be a lot of hard work.  But it can also offer unimaginable satisfaction. There is a lot to be said for taking control of your own destiny, for having the power to make your own decisions, to make your own mistakes, and to have the opportunity to make a better life for you and your family.



What are some motivating factors?

The reasons that people have for making the decision to start their own electrical contracting business often follow a similar thread.


One of the most common scenarios I hear is one where they had become extremely competent at performing their job duties while working for someone else. Their job duties ranged from working in the field as an electrician, whether as a Journeyman, Foreman, Superintendents, or those that were working in the front office.


They said that as long as everything was rolling along smoothly, they were quite happy and content working for their employer. But the moment grief and aggravation became a common theme in their daily work, nagging whispers of “Why am I putting up with this grief and making money for this company when I know that I can start my own electrical contracting business?” began to awaken the entrepreneur within them.


Another common scenario for making the decision to start their own electrical contracting business is that their employer could not provide them with steady full-time employment. Depending on what segment of the electrical construction industry you work in, some employers struggle with being able to consistently provide their employees with 40-hour work weeks. Unless you’re single and living in your parent’s basement, most working adults need to work full 40-hour weeks.


Looking for a job? Go to the back of the line.


I was a union electrician and I know how bad it can be when the job you’re working on comes to an end. If the company your working for doesn’t have another job lined up, they might be forced to lay you off. In the case of union electricians, if you get laid off, you have to go down to your local International Brotherhood of Electrical Workers  office and sign “the book”. Depending on how many other laid-off electricians are in front of you, it can take a substantial amount of time before they are able to send you out to another job.



My motivating factors

The motivating factors behind my decision to start my own electrical contracting business was a little bit different than most. First, I didn’t hate my job. The truth is that I actually loved my job. Secondly, there was not an issue with having steady work. If work slowed down in the field, I was fortunate enough to have enough additional value from my years working in the office as an estimator, running jobs as a foreman, and later being in charge of foreman as a superintendent, my employer always found a spot for me.


My motivation was simply that I didn’t want to work for someone else. I wanted to take control of my future and start my own electrical contracting business. If you think about, why would anyone want to put their family’s future in the hands of someone else? Why would you willingly give someone the power to give you your last paycheck and say, “I’m sorry but we have to let you go”. Forget that. This is America and it’s still the greatest country on earth. It’s one of the few places where you have the ability to be whatever you want to be. If you’re not afraid to put in the hard work, and if you have enough faith in yourself, you can be as successful as you want to be.


Fortunately, I was able to build a very successful electrical contracting business. I won’t lie and say it was easy in the beginning because it wasn’t. It required a great deal of dedication and a whole lot of hours.



Some things to think about now

You should start planning everything that you’ll need to do to start your own electrical contracting business as soon as possible. I would advise that you start networking potential customers as soon as possible. There are many community organizations you can join that will give you the opportunity to develop relationships with builders and other potential customers in your area.


Start researching the various expenses that you’ll incur. Make a detailed list of expected overhead expenses as well as anticipated burden costs. Our TurboBid estimating software includes an overhead calculator as well as a burden calculator. Feel free to contact us and we’d be happy to show you in a free screen share what these expenses consist of. Don’t let these expenses freak you out. You’ll account for them in your estimate and recoup them in your bid price. Just make sure that you’re accurately accounting for them in your estimate.


I would also suggest that you try to get terms at your local supply store. If you can get Net 30 or Net 60 terms, it means that you will have 30 or 60 days before you have to pay your material invoice. This gives you the opportunity to use cash flow to pay your invoices. Remember the phrase “Cash is King”.


Vehicles can be a big expense. You don’t need to buy new. I would suggest that you get yourself a well-maintained used van, and if needed, a pull behind cargo trailer.


Remember that these vehicles are traveling billboards that you can use to advertise your electrical contracting business. Don’t skimp on the graphics. You want your graphics to make a statement about your company. With that being said,  always keep your vehicles clean and well maintained.


Your vehicles are not just a mode of transportation. They are a means in which to achieve efficiency. We used to set up the inside of the pull behind cargo trailers with shelves and keep a modest material inventory. Rather than tying up a van, we would drop the trailer where the crew was working so they would have the tools and material they needed to complete the job.




Starting your own electrical contracting business, or any contracting business, can be extremely rewarding. While it is a lot of hard work, I believe that the potential benefits are well worth the effort.


When speaking with our customers on this subject, most of them feel that in spite of the hard work that was required to start their business, they absolutely love being in charge of their own destiny and have absolutely no regrets.


There are still many more aspects to discuss on this subject. I will continue my thoughts in a future article.


Best regards,

William Ruffner
Founder & CEO

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