Between 2015 and 2020, the overall electrical industry has seen a growth rate of 2.5%. This means that while more and more people are looking into getting jobs in electrical work, there is still plenty of room for an electrical contractor to set up shop and run a flourishing business. However, there are some key pieces of insight that are required for success aside from the basic understanding of an electrical system. So, if you’re looking for guidance on how to run an electrical company, here are some key starting points.
How to Run an Electrical Company
Choosing a niche
Like any company, it’s going to be difficult to be all things to all people, especially if you are still growing your electrical business. Most successful electrical companies tend to brand themselves towards one niche, like residential, commercial, or industrial electrical work. This makes it easier to buy equipment that services that niche, as well as pursue appropriate business licenses and certifications.
As an added note, this is also quite useful from a marketing perspective. Say that your company gets a lot of business performing electrical inspections for real estate agents. Don’t be afraid to press that niche. By specializing, you can target your marketing specifically towards their demographic. We’ll get into greater detail on how to market properly later.
Keep an eye on working capital
It’s tempting to try and quickly expand your operations as soon as you get a tiny bit of success, but this can backfire very quickly. Looking at your cash flow is key. If you try to do too much too soon, you could find yourself being forced to keep a balance on your business credit cards or not be able to make other essential purchases in an emergency. Having a set plan to maintain your invoice payables as well as smartly using lending for working capital can help here.
Make smart bids
A good bid is a two-fold process for an electrical business. Yes, you need to get a bid low enough that a client will be interested. However, you also need to keep it high enough that you actually make money on a job. The best way to find this balance is by keeping meticulous records on how much it actually costs you to do certain work. This will help you get a better idea of how to price out your work and find things that you can bid on.
Also, there are other factors that can increase the chance of bidding success, like sending them in a timely fashion, as well as using a neat and detailed bidding sheet. There are templates out there if you need help.
Follow industry trends
Something that can’t be overstated is that a successful electrical contractor needs to be a true student of the industry. There are always going to be different trends that drive what type of business is available as well as the best ways to tackle different jobs. Make sure that you follow industry sources and publications to stay ahead of the curve. When asked how to run an electrical company, following industry trends is crucial to stay in the loop of new technologies and trends.
Market yourself effectively
One of the biggest differences between being an electrical contractor and an electrical business owner is the need to master marketing. You need to constantly have materials and content going towards your target audience in order to keep new clients coming in. There are quite a few ways that you can do this. Perhaps the classic one is word of mouth. While word of mouth still carries a lot of sway, you need to adapt that to a digital age. On top of people recommending you to their friends and family, they are now also leaving reviews up on different databases and directories. You can do your part by making sure your business has pages on those directories and that they have all the important details you need.
Of course, we can’t overlook how social media has become a great equalizer in this regard. Even the smallest business should be looking into social media pages in order to better reach their audiences and provide important news/useful content. Some of the key things to keep in mind here are:
— Choosing the right platform for the right audience: Facebook is a good general start, but you may also want to look into Twitter and Linkedin
— Responding quickly: Customers see social media pages as a direct line to your business. Make sure you respond to any comments that are left on them, especially if they are negative
— Regular content: A social media calendar is necessary for any page, whether you’re putting out industry news, images, or other content. Keeping to a schedule gives people a reason to regularly look at your page
Invest in technology
How to use technology takes a number of different forms here. We mentioned how important it is to build up your digital presence for marketing services, but you may want to look in other areas as well. For example, if you’re dealing with primarily residential clients, it may be a good idea to look into credit card readers for your field techs to better serve them.
However, a national electrical company and a small business is making sure that you have the logistical side of things handled. Chances are your business is going to be juggling several electrical contracts, as well as working to keep up your electrical equipment and professional licensing. In the short term, you may be able to handle all these tasks and information with basic spreadsheets. In the long term, though, professional electricians need something more.
As a result, every business owner should consider investing in project management software like eSUB. Make your electrical work as organized and interconnected as possible, using cloud storage to allow all your teams to look at the same data at the same time. Take advantage of advanced financial tools to manage your cash flow and man hours.