If you’re interested in launching your own electrical business but don’t really know where to start, or need a general overview of a few essential steps, then take a look at our five steps listed below to get you on the right track.
Choose a Suitable Business Structure
Whether you’ve already begun developing the business or not, you should look into which business structure is going to work out the best for you. This will affect the time it takes to launch the business, and some business structures will suit teams better than others.
Sole Trader
A sole trader business is one of the most common, and it’s also one of the easiest to launch as just one person is required to register it.
The first step to launching a sole trader business is to register the business name with the ASIC or the Australian Securities and Investment Commission. It can usually be done online and only takes a few days.
This business type doesn’t feature a separate entity for the business itself, so expenses, income, and other finances will be featured on your own personal tax return.
Partnership
Another common business structure for small businesses is the partnership. This option is chosen if two or more people wish to co-own a business venture as well as pool their skills as well as finances together.
Company
A company must be registered with the ASIC before it is able to be called a company and it is a separate entity from the owners. This means that the company is a standalone business with its own liabilities as well as benefits.
Choose the Best Tools
To get your business off the ground in the most effective and cost-efficient way possible you’ll need to look for the best tools. This doesn’t mean wire cutter and physical tools – but rather the tools that will work as the backbone of your business.
Digital frameworks and programs that make your business operate in an effective and legally compliant way. Cloud-based entirely digital software programs work best here as they allow you to add and edit information wherever you are, from any device.
A few tools that are an absolute must-have when starting your own electrical business are listed below:
Xero or QuickBooks for easy real-time accounting. These applications are your best option for getting a solid look at revenue and making sure that you’re finances are legally compliant when taxes and other requirements are concerned.
ServiceTitan for effortless management of your entire business workflow. This program makes it easy to get a good look at your customer relationship management, technician locations, and duties as well as how your marketing activities are doing and more.
Payment services like PayPal, Square and others are also essential to make sure you can be paid in other ways that don’t include cash and traditional invoicing. This way you can easily accept client jobs knowing that there’s an easy and seamless way to be paid.
Develop a Strategy
Particularly important in the trade industries is the development of a differentiation strategy. There’s a lot of competition, most of which is exceedingly similar to the services you’ll be offering, so it’s essential to take the steps to develop a tactical strategy that places your services above your competitors in a way that customers will understand.
Firstly you’ll need to understand your target market. Who are your ideal customers? Where do they live? How do you reach out to them? Once you answer these basic questions you can begin to formulate a strategy that will attract their attention.
The best way to do this is to develop a plan on a single page that you’ll be able to easily see in a glance and follow easily. It should cover ways you can use your skills to undercut competitors and attract customers in a way that works best for you.
Understand your Profit and Loss
Keeping your business running profitably and optimally means you’ll need to determine how much you need to earn and charge before you start selling your services. The best way to do this effectively is to work backward, starting with how much you want or need to earn to meet your targets.
How much do you want to earn?
What are your operating costs?
Work out your profit margins.
Determine how much to charge for your services.
Once you create a pricing strategy based on this, you’ll be able to implement a few other things like your marketing costs.
A solid profit and loss plan is essential and will be the backbone of your business as it’s ultimately the factor that determines how much you earn and whether you’ll be able to sustain operations.
Stay Aware
When starting your own electrical business you’ll have to be in total control of everything that’s going on at all times. You can’t afford a financial ‘leak’ in the early stages and you also have to keep the ball rolling at all times if you want to make sure that the business grows sustainably.
A few major fundamental steps you should stay on top of are:
Planning
Keep organise with apps and writing things down and try to stay focused at all times when you’re planning new service offerings and developing price structures for older ones.
Be sure to stay on top of your taxes and how much you’re earning so that you can pay your taxes on time, as well as paying yourself.
Monitor
As soon as you begin operation make sure to keep tabs on your work, income, and client number growth. This way you’ll be able to see whether you’re meeting all of your sustainability and growth targets.
Stop every few weeks and do a mini-audit of the business to make sure everything running smoothly. Don’t wait until it’s too late to stop a financial issue.