Many electricians choose to start their own businesses after mastering the trade, building strong customer relationships, and gaining a solid understanding of industry regulations. However, successfully running an electrical business requires a different skill set than being a top-notch electrician.

In the early years of your business, you likely focused on learning the ins and outs of operating an electrical company. Now is a great opportunity to evaluate your progress as a business owner and identify areas for improvement and growth. Just as you need to stay updated on technical skills to maintain your license, your business also requires regular check-ups to remain successful.

1. Benchmark Your Performance
   If your company is growing and profitable, it might feel tempting to keep things as they are. But are you truly as profitable as you could be? Competitors may have a more effective approach to running their businesses.
   Business benchmarking is like a voltage drop test for your business—it allows you to compare your performance with others in the field. For example, data from CliftonLarsonAllen revealed that electrical contractors took an average of 69.6 days to convert receivables into cash. How does your business compare? Reviewing this data can help you stay competitive.
2. Keep Your Business Plan Updated
   If you don’t have a business plan, now’s the time to create one. A business plan is essential for setting goals and outlining strategies for achieving them.
   Even if you’ve had a business plan in the past, it’s important to keep it current. Market conditions change—perhaps a new residential area is being developed nearby, or a competitor has hired away your best employees. Regularly updating your plan will ensure you’re prepared for such changes. A useful starting point is a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), which can guide you in adjusting your strategy.
3. Stay Attuned to Your Customers’ Needs
   Acquiring new customers is challenging, so retaining them is key. Regularly check in with customers to ensure they’re satisfied with your work. For example, if you recently installed bathroom fixtures, ask if there are additional areas you can help with, like upgrading fixtures in another room.
   As new electrical products, like energy-saving surge protectors, hit the market, informing your customers about them could keep your name top of mind for future projects.
4. Keep Your Technology Current
   New technology is constantly emerging that can enhance your business productivity and safety. While you don’t need to buy the latest tech for the sake of it, investing in tools like customer relationship management software, bookkeeping tools, or job bidding platforms can help your business grow and stay efficient. These technologies often offer long-term benefits that can justify the investment.
5. Maintain Adequate Working Capital
   Cash flow issues can hinder your business in various ways, such as missing out on supplier discounts or struggling to invest in new technology. Using working capital loans or other forms of small business financing can provide a cushion during slow periods, ensuring you maintain smooth operations.
6. Evaluate Your Bidding Process
   To successfully bid on jobs, you need to strike a balance between being competitive and ensuring profitability. If your bids are too low, you could lose money; if they’re too high, you may miss out on opportunities.
   Review how you price jobs and determine which projects to bid on. Are you accounting for all necessary costs, including overhead, while still ensuring a fair profit margin? Also, evaluate your bidding success rate. If you’re consistently losing to competitors, consider how you’re presenting your bids. Are they timely, professional, and clear?
7. Optimize Your Business Size
   Knowing the ideal size for your electrical business is crucial. There’s a balance to strike—being too small may leave you overwhelmed with administrative tasks, while being too large can lead to excess capacity and increased expenses. Finding the right size for your business ensures you can handle the work without overextending yourself.
8. Maintain High Safety Standards
   Safety is paramount in the electrical business. Neglecting safety can lead to costly accidents and reputational damage. Make sure your team receives proper safety training, and ensure you have a workers’ compensation policy in place. Maintaining rigorous safety standards not only protects your employees but also strengthens your business.
9. Develop Your Talent Pipeline
   It’s essential to plan for the future by ensuring you have a steady stream of skilled workers. If key employees are nearing retirement or considering other opportunities, it’s important to have a plan in place to fill those gaps.
   Partnering with local community colleges for internships or apprenticeships can help bring in fresh talent and secure the future of your business.
10. Ask for Referrals
    One of the most cost-effective ways to market your electrical business is by asking satisfied customers for referrals. If they’re happy with your work and stay in touch, they’re likely to recommend you to friends and family. Encourage referrals by simply reminding your customers of the great service you provide.

Growing your electrical business takes time, effort, and often financial investment. If you’re looking to fund some of these improvements, you may want to explore small business loans. Whether you tackle each piece of advice immediately or start with just a few, setting aside time to evaluate and plan for growth is crucial for long-term success.

If you’re considering expanding your electrical business, options like electrical and plumbing business loans from SVP Funding Group may provide the financial support you need.

Author by Vitas Changsao