Picture this: you’re nearly a decade into your electrician career and you have dreams of being your own boss and starting an electrical contractor business—a noble but intimidating goal. As an electrician, you've spent years honing valuable skills that will always be in demand. But turning those skills into a successful business takes some planning and know-how. Don't worry though, we’ll get you all sorted out right here. 

Get Qualified and Licensed  

Before you can start your own electrical business, you need to make sure you have the proper qualifications and licensing. Requirements vary by state, but typically include the same general steps. 

• Completing an apprenticeship program (usually 4-5 years). 
• Getting your journeyman electrician license. 
• Obtaining your master electrician license (after several years as a journeyman). 
• Passing your state's electrical contractor licensing exam—the master electrician exam can be tough, so make sure you study well.  

Now, here's where things can get a bit tricky because requirements for electrical contractor licenses vary quite a bit from state to state. You'll want to check with your state's licensing board to get the specific details. Generally, though, you'll need to prove your experience (usually several years as a master electrician), pass a business and law exam, and sometimes provide proof of financial stability.  

As an example, in Florida, you need to pass both an electrical and a business exam, show a minimum business net worth of $10,000, and provide a credit report. You'll also need to get liability insurance and workers' comp coverage, especially if you plan on hiring out other electricians for your prospective company. Other states might have different requirements, so always check your local regulations. Some cities or counties also require additional licensing on top of your state license.  

Here's a pro tip: while you're working on getting all these licenses, start thinking about your business plan. You'll need to decide on things like what services you'll offer, how you'll price your work, and how you'll market your business (we’ll break this down later). It might seem like a lot of work, but it's all part of running a legit, professional electrical contracting business.

Gain Experience  

While you're working on getting licensed, it's crucial to gain as much hands-on experience as possible. I mentioned earlier that you should be narrowing down your business plan at this stage. With that in mind, work for established electrical contractors in your desired field to learn the ropes of running a business. Pay attention to how they handle everything from bidding for jobs to managing employees.  

Also, consider joining some professional organizations like the National Electrical Contractors Association (NECA) or Independent Electrical Contractors (IEC). These groups can be great resources for staying up-to-date on industry trends and regulations while also providing you with connections and possible mentors within the industry.  

Write a Business Plan  

Now it's time to put your entrepreneurial hat on and create a solid business plan. This will serve as your roadmap and help you secure any needed funding. Here’s what a business plan should include: 

• Cover page – Include your business name, logo, and contact information 
• Executive summary – A one-page summary of your business plan that includes how much money you need to get up and running and what sets you apart from the competition. 
• Business overview – A quick summary of your business structure, company name, and when you registered the business. 
• List of services – A full list of the electrical services you plan on offering (like electrical wiring, electrical installation, etc.). 
• Market analysis – A description of your target customers and the competition in your region. 
• Business operations – A detailed overview of your pricing strategy and how profitable your business can be. 
• Marketing and sales – A breakdown of your marketing strategy and sales goals. Outline how you’ll attract new customers to your electrical business. 
• Financial plan – A summary of the money coming into and going out of your business for the first year. It should include your sales forecast, a detailed budget for expenses (like electrical software and equipment), and marketing costs. The Small Business Administration has some great free business plan templates to get you started.  

Choose Your Business Structure  

I order to officially become a “business” owner, you need to prove that you are a legitimate business in the eyes of the law. To do this, you'll need to decide on a legal structure for your venture. Common options include registering a Limited Liability Company (LLC)  or corporation.  

An LLC is often a good choice for small electrical contractors as it provides personal asset protection while being simpler than a corporation. If you feel stuck on this decision, consult with a business attorney or accountant to determine the best structure for your situation.  

Once you've settled on a structure, you'll then need to register your business with state and local authorities to make things fully official. This typically involves:  

• Registering your business name. 
• Getting a federal tax ID (EIN). 
• Registering for state and local taxes. 
• Obtaining a business license. 

Your Secretary of State's office is a good place to start to get your hands on business registration info, but most of these steps can be completed online on your county/state’s government website.  

Get Insured  

Proper insurance is absolutely critical for electrical contractors looking to start a business, whether on their own or with the intention of hiring employees. General liability insurance is usually the standard for small businesses as it is a kind of business insurance that helps protect a company financially if it harms or is accused of harming a person or their property. 

Businesses of all sizes, from small sole proprietors to large corporations, typically need commercial general liability insurance coverage. All major commercial insurance companies sell business liability insurance, either by itself or as part of a larger policy.  

If you’re hiring employees, you’ll also want to be sure that you have workers compensation insurance set up to avoid any legal troubles when it comes to on the job injuries.  

Shop around and compare quotes from multiple insurers that specialize in coverage for electrical contractors. The Independent Electrical Contractors association offers insurance programs specifically for electrical businesses.  

Set Up Finances 

Many contractors will need to have their finances sorted out in order to receive any sort of business loan. The best way to do this is by opening a separate business bank account, setting up a bookkeeping system (QuickBooks is popular for small businesses), and establishing a line of credit specifically for your business.  

Invest in Tools and Equipment 

As an electrical contractor, you'll need a variety of specialized tools and equipment. For residential work, essential items could include things like common hand tools (wire strippers, pliers, screwdrivers, etc.), power tools (drills, saws, etc.), and safety gear. If you are looking to get closer to a commercial setting, you will likely need those things as well, but on a larger scale. Added expenses like heavy machinery and the licensing to operate these come with the commercial territory. 

You also can’t forget about investing in office equipment like computers, phones, and relevant software. Again, even if you’re running a one-person ship, you’ll need these basics just to keep up with clients and marketing. Start with the bare bones if you must and add more as your business grows.  

Build Your Team  

Unless you plan to work solo, you'll need to hire employees. Be on the lookout for licensed journeyman electricians and apprentices to join your team. As a small business, you may struggle to find team members willing to take on the risk of operating under such a small umbrella, so be prepared to offer competitive wages and benefits to attract top talent. Make sure you understand all the legal requirements of being an employer, including payroll taxes, workers' comp, and labor laws.  

“But Julia, where do I even find talent for my business in the first place?” I’m glad you asked! Start networking like crazy—hit up industry events, join local trade associations, and don't be shy about asking your contacts for referrals. Social media can be a goldmine too, so make sure you're active on platforms like LinkedIn and Facebook. Post about your job openings and share some behind-the-scenes content to give potential hires a feel for your company culture.  

Don't forget about trade schools and apprenticeship programs either. These are great places to find eager, up-and-coming talent. You might also want to partner with a recruiter who specializes in the electrical industry. They can help you find those hidden gems that might not be actively job hunting.  

Market Your Business  

Create a business website and make sure it is easy to find with an effective search engine optimization (SEO) strategy. Set up social media accounts on Facebook, Twitter, Instagram and others that make sense for your potential customers. 

To get started, you’ll need a business website. You can create your own website using a site-building tool like Wix or WordPress, but you may want to consider hiring someone specializing in web design to build your site for you. The basics of web design are pretty easy to learn and the benefits of having an attractive and functional website far outweigh the cost of paying someone else to do it for you.  

Once the site is built, make sure it’s easy for people to find with effective search engine optimization (SEO) strategy by optimizing what keywords they use on their homepage and throughout their website. In addition, set up social media accounts on Facebook, Twitter and Instagram among others that make sense for potential customers within your area or industry (e.g., contractors). 

Don't underestimate the power of word-of-mouth marketing in the trades. Doing quality work and providing excellent customer service will go a long way.  

Stay Compliant and Current  

The electrical industry is constantly evolving, with new technologies and changing regulations. Staying up to date on the National Electrical Code (NEC) is crucial for electrical contractors because it provides you with the foundation for safe electrical installations. This helps to ensure compliance with safety standards and reduce the risk of electrical hazards, fires, and other dangers.  

By keeping current with the latest NEC requirements, contractors can produce higher quality work that meets or exceeds client expectations and regulatory standards. Additionally, demonstrating expertise in the NEC enhances a contractor's professionalism and reputation, potentially giving them a competitive advantage in the marketplace. The NEC is regularly updated to address new technologies and best practices, so staying informed allows contractors to work more efficiently and avoid costly errors or rework.  

There are plenty of resources available to support you on your entrepreneurial journey:  

• Small Business Administration (SBA) - offers free business counseling and loan programs. 
• SCORE - provides free business mentoring and education. 
• Local Small Business Development Centers (SBDCs) - offer free consulting and low-cost training. 

Starting an electrical contracting business takes hard work and dedication, but with the right preparation and mindset, you can build a thriving company. So go ahead, take that leap, and light up your future as an electrical entrepreneur!