Here’s a hard pill to swallow: 90% of startups fail.
How do you ensure your electrical business is part of the 10% of startups that succeed? Step number one is creating a business plan.
Not sure where to start? We’ve got you covered.
In this guide, we will share a business plan sample that you can replicate for your business.
What Is a Business Plan?
A business plan is essentially a roadmap for your business — it details your company’s objectives and lays out the plan for achieving specific goals.
Your electrician business plan should focus on the following components:
- Financials; and
Why You Need to Have a Business Plan for Your Electrical Business
“Failures don’t plan to fail; they fail to plan” - Harvey Mackay
If you’re planning to start an electrical business and don’t take the time to create a business plan, you are doing yourself a major disservice.
Creating an electrician business plan is a great way to set your business up for success. And this isn’t just a piece of advice — it’s backed by research. Companies that create business plans experience a 30% faster growth rate than businesses that do not implement business plans.
Writing a business plan can also help walk you through some of the initial steps of starting your business.
Have you thought through how you plan to market and advertise your business? What about your finances?
Do you know how much money you need to make to break even?
Do you have a budget forecast?
Your business plan should answer these questions.
Electrician Business Plan Sample
Many hopeful business owners struggle with creating their business plan from scratch. We recommend using an electrician business plan template, like the one we provide below, so you can ensure that you don’t miss important components in your business plan.
For the sake of providing an example, let’s say the sample below is a business plan for an electrical company called “Kerry Electrical” below.
The executive summary is the introduction to your business plan. Use this section to outline your business status and the type of electrical company you plan to build.
Are you a start-up company focusing on fast growth?
Are you an experienced electrician and starting your own business after years in the career field?
Do you plan to open a physical location? Will you operate in multiple service areas?
This is all key information that you will want to include in your executive summary. Since you may not know all of the details about your plans until after your business plan is written out, write the executive summary last.
2.1 The Business
The electrical business will be registered as Kerry Electrical and shall be located in Fayetteville, Arkansas. The business is owned by Paul Kerry, an experienced, professional electrician.
2.2 The Management Team
Paul Kerry, owner of Kerry Electrical, is a skilled electrician with more than 15 years of experience. Paul is a third-generation electrician ready to start his own legacy business.
Jason Kerry is the sales manager at Kerry Electrical. As Paul’s nephew, Jason has learned the trade from his uncle and grandfather.
Cale Johnson is the service and repair manager. Cale has over eight years experience working as an electrician in Fayetteville, Arkansas.
2.3 Customer Focus
As a family business operator, Paul prioritizes customer satisfaction.
Kerry Electrical will earn a reputation for always going the extra mile for clients as a trustworthy, family-oriented business.
2.4 Business Target
With over 15 years of experience, Paul has expert knowledge on how to attract customers to bring in revenue. He plans to gain an exceptional level of business in the Fayetteville area by implementing industry best practices and marketing strategies.
This section details the following information about the company logistics:
- Who is the company owner?
- What is the purpose of starting your electrical business?
- What goals and milestones are you hoping to achieve with your electrical business?
- What are the anticipated costs of starting your electrical business?
3.1 Company Owner
Paul Kerry is a highly-experienced electrician with a successful track record in the industry. Paul has worked on both small and large-scale electrical projects and has gained a diverse set of skills during his 15 years of working as an electrician that will aid him in running a successful business.
3.2 Purpose of Starting the Business
Paul Kerry is a third-generation electrician. He wants to start his own electrical business to leave a legacy behind for his children.
Paul’s expert insight into the industry helped him recognize the potential and demand for a new electrical business in the area.
Thanks to a booming residential housing market in Fayetteville, there is a high demand for electrical services needed by builders and remodelers. Paul believes it is a great time to launch his electrical business while electrical services are in high demand.
3.3 Logistics for Starting the Business
Paul understands the technical details of running a business but has also taken the initiative to hire a team of financial business experts to create a comprehensive financial analysis. This analysis will help Paul create a budget that accounts for each part of the business, including:
- Company vehicles
- Marketing and advertising
- And more
Services for Customers
Kerry Electrical will offer a variety of services for residential and commercial clients in the Fayetteville area. Offering a variety of services will allow Paul to leverage his diverse skills and experience to service a larger target audience.
Some of the services that Kerry Electrical will offer include:
- Code Violations
- Ceiling Fan Installation
- Lighting Design and Maintenance
- Track and Accent Lighting
- Security and Landscape Lighting Repair/Installation
- Circuit Breakers and Fuses Repair/Installation
- Circuit Breaker Panel Replacement
- Service Upgrades
- Electrical Outlet and Circuit Repair/Installation
- Electric Water Heater Repair/Installation
- Home Safety Inspections
- Home Generator Repairs
- Ground Fault Circuit Interrupter Installation
- Appliance Circuit Repair/Installation
- Hot Tub and Spa Repair/Installation
- High-Tech Troubleshooting
- Surge Protection
- Data Communication Lines
- Exhaust Fan Repair/Installation
- Pool Equipment Repair/Installation
- Smoke Detector Installation
Electrical services play a vital role in the real estate industry. Building contractors and remodelers are in regular need of experienced and reliable electricians. The demand for building and remodeling provides an excellent opportunity for future growth.
Paul has extensively researched marketing strategies and created a comprehensive marketing analysis to determine the most effective strategies to implement.
5.1 Market Segment
For Kerry Electrical to meet its financial goals, there must be a strong understanding of the target market and demographics in Fayetteville.
5.1.1 Individuals and Households
In Fayetteville, approximately 38% of homes are owner-occupied and renters occupy 62% of homes.
Based on this data, Paul and his team will hone in on connecting with landlords and property management companies to maximize serving the demand for electrical services for renter-occupied homes.
Downtown, Fayetteville has a high concentration of commercial buildings, including:
- Retail stores
- Shopping districts
- And more
Paul and his team will focus on advertising and increasing job leads for commercial electrical services in this concentrated area to keep transportation costs low and maximize profit margin.
5.1.3 Real Estate Owners and Developers
There are over 30 real estate developers in Fayetteville, Arkansas.
Paul and his team will make it a main priority to target and market services to real estate owners and developers in the area.
5.1.4 Government Agencies
Local government agencies reside in downtown Fayetteville and can provide a steady flow of revenue for Kerry Electrical.
Paul and his team will seek to make connections and offer service to government agencies in the area, including:
- Fayetteville City Hall
- Fayetteville Medical VA Center
- Fayetteville Department of Motor Vehicles
- Fayetteville Housing Authority
- And more
5.2 Service Pricing
Kerry Electrical will create a pricing structure to account for a 30% profit margin for each service based on:
- The project’s materials
- Necessary permits
- Labor cost; and
- Overhead costs
Having set service pricing with a set profit margin will help the business obtain its target revenue.
Implementing holistic business strategies will help Kerry Electrical land leads and ales needed to generate revenue.
6.1 Competitor Analysis
Kerry Electrical has conducted extensive research to identify the top five competing electrical businesses in Fayetteville, Arkansas. Each competitor will be analyzed to determine:
- Their reviews/local reputation
- Their most popular services
- What they do differently compared to other businesses
- The type of marketing strategies they are implementing
- And more
6.2 Advertising Strategies
To attract new phone calls, leads, and sales and gain loyal customers, Kerry Electrical will implement the following advertising strategies:
- Direct mail and other traditional marketing efforts such as distributing flyers and brochures in targeted service areas.
- Hosting a grand opening party and inviting stakeholders, potential clients, and other local businesses like plumbers, HVAC companies, and more. This can help create a positive rapport with the local community and also open the door to networking opportunities.
- Investing in PR and advertising Kerry Electrical on radio shows, newspapers, and television.
- Utilizing free web listings like Google Business Profile, Yellow Pages, and Yelp.
- Investing in SEO and ad campaign strategies.
- Implementing referral marketing and word-of-mouth strategies.
- And more
6.3 Sales Forecast
To promote healthy business growth and set a foundation for finances, Kerry Electrical has created a comprehensive sales forecast with the help of financial experts.
This forecast includes:
- A list of services
- The “unit price” charged to the customer
- The “unit cost”, which covers the cost of materials, gas, etc.
- A goal amount of jobs to be completed within a calendar year
Kerry Electrical recognizes that their success hinges on the quality and reliability of their team. Hiring employees to help increase the number of projects that can be completed is a high priority for the company.
7.1 Personnel Plan
Paul Kerry will serve as the Chief Executive Officer.
The following staff will need to be hired for Kerry Electrical to operate at full capacity:
- 5 electricians
- 1 technical manager
- 2 sales and marketing executives
- 1 accountant
- 1 customer service assistant
New hires will undergo extensive training to familiarize themselves with the company’s operations and excel at their positions.
7.2 Average Salaries
Kerry Electrical plans to compensate staff with competitive salaries within the first three years of operation based on company growth.
Kerry Electrical has a detailed financial plan that will serve as a compass for financial success.
Paul Kerry’s personal savings will account for the bulk of the capital along with the contributions of two other investors. A bank loan and the Flexbase Card will also provide additional funding.
8.1 Critical Assumptions
Critical assumptions on interest and tax rates are outlined below: