How to Grow an Electrical Business in 2020 | The Ultimate Guide
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Ready to power up your company’s electrical business plan? Grow your electrical business with these tips on hiring, marketing, and more from home service industry experts.
Electricians provide an essential service, in good times and bad. Your company keeps electrical systems working properly in residential homes and commercial businesses, providing a reliable power source to maintain our jobs, health and general well-being.
Your company’s electricians show up when customers need them—to fix a simple fuse box issue or come to the rescue in a power outage, especially during times when normal power usage doubles or triples.
Give your electrical techs what they need to succeed by showing them how a good company leader stays focused on how to grow a small electrical business, while confidently weathering any setbacks.
In this guide for creating an electrical contracting business plan, ServiceTitan seeks to help you position your electrical company to survive any future disruptions, and be prepared to grow and adapt as the economy moves forward.
What does the service industry look like when the health crisis subsides? Will quality customer service ease homeowners’ fears about allowing electricians inside their homes? Will standard operating procedures need to change? How do you continue to grow your electrical business in a smart and thoughtful way?
Now, during these times of health and economic uncertainty, is the time to take lessons learned and better position your electrical company for growth in the short term and for the long haul. New innovations derived during times of need can also propel your business forward.
For instance, electrician Chris Walton, owner of CW Electrical Services in Pittsburgh, launched a virtual technician service on the company’s website to help customers address simple residential electrical safety concerns online during many states’ stay-at-home orders.
For the future, Walton hopes to use the virtual tech tool for estimating an electrical job without ever entering a customer’s home. It’s one way his company is adapting to the “new normal” of helping customers with their electrical needs—at whatever comfort level they decide.
“There’s going to be a lot of innovation that comes from this … a lot of really good ideas that just weren’t thought about before,” Walton says.
Learn from Walton and other highly successful home service industry experts as they share insider tips, tricks and tactics for growing an electrical business. It’s good advice to follow during normal or challenging times.
In this guide, we’ll cover how to:
Create an electrical business plan.
Train a qualified electrical workforce.
Invest in company culture.
Implement systems, checks and balances.
Apply focus before diversifying business.
Target branding to the right audience.
Expand your digital marketing skills.
Know your reason for growing your business.
Create an Electrical Business Plan by Modeling it After the Electrical Business You Want to Become
Find a mentor who’s doing what you want to do.
Shadow your mentor on the job; ask for electrical business ideas.
Go find 10 more mentors, and do it all over again.
Listen to electrician podcasts for tips and inspiration.
Read books on how to grow your electrical business.
Tommy Mello, The Home Service Expert, says he wished he’d found a mentor before starting his own garage-door business 15 years ago. He could have emulated their best business practices, instead of figuring things out on his own.
“You’ve got to act like the business you want to become, and I didn’t know that back then,” says Mello, owner of A1 Garage Door Service, which topped $30 million in revenue last year.
“If I would have listened to a mentor tell me, ‘This is why you shouldn’t do this,’ or ‘This is why you should,’ it would have definitely fast-forwarded the business.”
Find a role model who’s doing what you want to do. Shadow them on the job. Ask tons of questions. Then go find 10 more mentors, Mello advises, and do it all over again.
He also suggests reading or listening to books to grow your business, such as The E-Myth by Michael Gerber, The 7-Power Contractor by Al Levi, The Ultimate Sales Machine by Chet Holmes, Essentialism by Gary Keller, or even his own book, Home Service Millionaire.
“Reading has been a big part of my success, and hanging out with successful people,” Mello says.
Mario Campriano, owner of Express Electrical Services, gives thanks to Service Sales Coach Joe Crisara for pointing him in the right direction when he decided to switch from commercial electrical work to residential in the midst of the Great Recession.
“He took me under his wing and taught me how to not take no for an answer,” says Campriano, who now runs an $8-million electrical company in Los Angeles.
Lessons learned and with high ambitions, Campriano started knocking on homeowners’ doors. He says it even got to the point where he visited local home improvement stores to find potential customers.
“Now I didn't have a sign like, ‘Will work for food,’ but you have to get smart,” Campriano says. “You go into Home Depot and you start looking at the people buying an electrical item, you start hitting them up, ‘Hey, you've got an electrician to do that?’ And then you start just going, going, going.
“You’ve got to be hungry for it, at the end of the day. If you're not hungry for it, if you can't go knock on somebody's door, I don't know what to tell you, but that changed my life. That gave me a reality wake-up call.”
Grow Your Electrical Business by Investing Money and Time in Recruiting, Training a Qualified Workforce
Build a strong company foundation.
Outline a fully developed organizational chart.
Always be recruiting and establish a thorough interviewing process.
Provide extensive training for every employee.
Offer performance pay as an incentive to grow.
Remember that pesky trade worker shortage, before the Covid-19 outbreak? That problem didn’t disappear overnight.
Electrical contracting business owners, like others in the skilled trades, struggle to find qualified employees in a highly competitive climate. They also worry about investing time and money in training, only to see those electrical techs leave to go off on their own or work for another company.
Focus instead on building a strong company foundation with a fully developed organizational chart, Mello says. That means creating clear job descriptions and expectations for every position, providing extensive training to set up every employee for success, and using performance pay as an incentive to help employees grow.
“Some people say, ‘always be closing.’ I say, ‘always be recruiting,’” says Mello, who gives employees $1,500 for referring a new hire.
“I think a lot of us, we just don’t start the business right,” he adds. “Give it such a strong foundation, there’s nowhere to grow but up.”
Gold Shield Services, based northwest of Chicago in Des Plaines, Ill., built a strong company foundation using the ServiceTitan mobile software for electricians and HVAC techs. The company services about 70 percent commercial customers and 30 percent residential customers.
Director of Operations Derek Baer says the ServiceTitan software helped the business streamline and operate more efficiently. Six months after he joined Gold Shield in 2018, he says it helped him generate more revenue, manage money better, build a $40,000 home office, and still end the year with profit.
For 2020, Gold Shield offered health insurance to its employees for the first time. The move, Baer says, positions the company for growth, especially as Gold Shield opens its new headquarters in Algonquin, Ill.
Gold Shield also plans to focus its efforts in 2020 on growing the home services side of the business and training electrical techs to understand that business model.
“The commercial side is paying the bills and helping us grow,” he says. “The residential side is going to put us in a whole other department.”
Need Better Electrical Branding? Start by Building a Great Company Culture
Value your company’s No. 1 asset—your employees.
Invest as much time in recruiting and training as you do on electrical service sales.
Increase electrical branding and engage potential applicants by sharing insight into your company’s culture.
Share your team’s success stories regularly to motivate and inspire everyone. Happy employees typically mean more productive employees, no matter the industry. Give your electrical staff more than just a steady paycheck by building a company culture that really shows them how much you value their work. They can help spread the word to potential new applicants.
Trades consultant Ben Stark advises keeping techs and other employees involved in the process, and making sure they know what role they play in growing your electrical contracting business. Let them own a piece of it, and you’ll likely get complete buy-in.
“Employees are your No. 1 asset,” Stark says.
When crises or setbacks occur in the home services industry, don’t stop hiring for your company or marketing to new customers.
“Resist the reactionary,” Stark advises. “I’ve gone through a recession, a crisis...we put on the accelerator (for marketing and hiring), and we have always come out on the positive side.”
Despite worries about the coronavirus and rising unemployment numbers, Express Electric’s Campriano says he tries to keep his employees motivated by leading with a cup half-full mentality. Showing fear just leads to more of the same, he shared during a recent ServiceTitan webinar.
Instead, Campriano tells his employees they’re heroes in the Covid-19 fight. He pumps up his employees and makes them feel valued with a specific message: “Let's go out there and be humans. Let’s help other humans in need. We can do this together as a team.”
Employees who feel valued also work harder, says Tom Howard, ServiceTitan’s Vice President of Customer Experience and owner of multiple home service businesses. He thinks electrical companies need to spend as much time attracting and retaining employees as they do trying to sell electrical services to new or existing customers.
To market the company culture at Lee’s Air, a leading HVAC and plumbing service provider he owns in Fresno, Calif., Howard created a low-budget YouTube video using a cell phone camera to give a behind-the-scenes peek into their unique workplace environment. It ultimately brought new talent to his door and boosted the company’s bottom line.
“It made such a big difference in our company,” Howard says.
Create an Electrical Contracting Business Plan with Systems, Checks and Balances
Gain efficiency with a well-defined organizational chart and operating manuals.
Include checks and balances for each department to ensure accountability.
Automate with field-service software to improve your electrical business.
Control and track inventory with custom reporting in real time.
Most successful electrical contracting businesses run effortlessly with a well-defined operating system. This includes checks and balances for every department, such as comparing your CSR booking rates to actual jobs completed by your techs, or comparing inventory controls to parts used on each job.
Mel Carr Electric in Albany, N.Y., switched from another mobile software provider to ServiceTitan in January 2019 to give its techs better options for sales presentations in the field. The move helped to improve the customer experience and increase close rates, according to company president Rob Carr.
Carr says the ServiceTitan software also provides:
Accurate, real-time business performance data.
Better display of sales options for the customer.
More capabilities without hiring more people.
The ability to record customer service phone calls.
Real-time updates from the field.
Text updates sent to the customer from the app.
An intuitive pricebook that can be updated remotely.
“It’s so user-friendly. So intuitive. (The software) just knows your next step,” Carr says. “It took care of things we never even realized we needed.”
Mello says Art Levi, The 7-Power Contractor author and home services expert, taught him the importance of establishing a good system for running his garage-door business.
An in-depth organization chart clearly defines each employee’s role, the management hierarchy allows only five direct reports to any one manager, and various operating manuals outline proper procedures for just about everything.
It’s a recipe for success, Mello says, and one used by big players in other industries.
“Look at McDonald’s or KFC, they open a new store every four to six hours. It’s this master plan to go in and everything’s the same, there’s a system, and checks and balances around every single aspect. That’s how they create success,” Mello says.
Looking for Electrical Business Opportunities? Apply Focus Before You Expand
Master your own electrical business before buying another.
Build your business to succeed without you.
Narrow your focus to what you do best, and shed the rest.
Are you an electrical contracting business owner who thinks they can do it all? Do you want to expand into other home services as soon as possible? Be careful not to spread yourself too thin.
Mello tried doing it all, from operating his warehouse and controlling inventory to buying all of his own trucks and fixing them on-site when they broke down. When his expenses exceeded revenue, he decided it was time to rein in some of his entrepreneurial activities.
“I just realized focus is everything,” Mello says. “Instead of being a jack-of-all-trades, you want to be a master of one. … Focus on one, get so big at one, then you can take on a new branch.”
Sometimes life throws a few twists and turns, causing you to refocus on what’s best for the business.
Campriano decided commercial electrical work just wasn’t in the cards for him, especially after a fellow contractor filed bankruptcy and left him on the hook for nearly $300,000 in electrical supplies.
To get out of the mess, he negotiated a new payment schedule with his supply houses, dropped most of his commercial work, and began offering residential electrical services instead.
“Before 2008, I was working for a service company and I was a good technician,” Campriano says “Between that and me becoming a contractor and getting into this big construction industry because it was booming, I lost my road. I lost my roadmap of actually being a service technician.
“But I got back in it. … I learned some systems and I killed it, man.”
When focusing or refocusing, think in terms of building your business as a commodity with shareholder value—and one that’s able to operate efficiently, even when you’re not around.
“A business that depends on you to work is not a business I want to buy,” says Mello, who is an owner, partner or investor in 14 other businesses.
How to Market an Electrical Contracting Business to Reach the Right Audience
Identify your target audience with specific demographics.
Develop electrical business ideas to reach your specific audience.
Don’t put all of your electrical branding eggs in one marketing basket.
Automate marketing campaigns for better efficiency.
Save cost per lead with targeted email marketing.
Before deploying any type of marketing strategy, an electrical business needs to know how to target the right audience.
“The first thing I’m going to ask you is, ‘Who is your customer?’ If you say, ‘Anybody with an electrical system,’ I’m going to say you’re full of crap!” Mello exclaims.
“I’m going to say, ‘This is the age, this is the gender, this is the average household income, this is their credit score.’ You should know more and more about who your real customers are, and then you focus on direct response … and branding.”
Campriano improved his company’s electrical branding by getting to know his neighbors—and potential customers. He simply knocked on doors and offered to install free Ring doorbells to protect against porch thieves when he moved his family to Downey, Calif.
He also took an unconventional approach to electrical services during the Covid-19 global pandemic. Realizing people may be trying to store food in a second refrigerator or freezer—a problem he experienced himself—Campriano changed his advertising strategy to meet those customers’ needs.
“We started getting calls like crazy,” he says.
Targeted email marketing is the most cost-effective strategy for keeping your brand front and center in the minds of customers, says Megan Bedford, who runs Mugyver Consulting to help small companies in the trades.
Not only is the cost cheaper for targeted email marketing—$12 or less per lead—it’s the type of communication customers prefer, as opposed to direct mail or a promotional text. The key, Bedford says, is to find the right tool to automate the process, then target the right audience with the right message.
After receiving a free trial of ServiceTitan’s Marketing Pro last summer, Jupiter-Tequesta Air Conditioning, Plumbing & Electric ran its first email marketing campaign, targeting previous A/C customers with a one-time “We Miss You” message.
“After one week, the revenue on that one email brought in about $4,000,” says Bill Highsmith, the company’s Process & Procedure Manager.
Focus Your Online Electrical Branding Strategies
Post helpful electrical safety content to boost Search Engine Optimization (SEO) on Google.
Invest in Pay-Per-Click advertising to increase brand awareness.
Incentivize techs to get more reviews.
Expand your service area in conjunction with Google Local Services.
“Just understand Google is God when it comes to home service,” Mello says, explaining how consumers find 70 percent of all services online through Google searches.
“Half of your marketing dollars should be spent on SEO, PPC, Google My Business, getting reviews, and Google Local Services.”
Billboards and TV or radio ads can still work, but with one caveat.
“You better be good at Google and you better have mailers going out, because that’s going to increase the conversion rate on the direct response stuff,” Mello advises.
Marketing via Facebook also works for some electrical companies, he says, but it’s hard to make a ton of money on the social media platform.
“Facebook is more of an upside-down pyramid,” Mello explains. “The way I do Facebook is you’ve got a lot of customers at the top who really don’t know about your service or they don’t need it today, but you’re building a funnel. It's at the top of the pyramid, but it’s an upside-down pyramid.”
Some customers will find you because they need your services today, whereas others might find you through brand awareness.
“They call it ‘top-of-mind awareness.’ You’re starting to get that online reputation of ‘Hey, I’ve seen that company before, now I need them.’ Now, they’re going to think of you,” Mello says.
Still Wondering How to Improve Your Electrical Business? Know Your Why
Identify your personal strengths.
Don’t become an electrical business owner just because you want to be your own boss.
Keep work-life balance in focus.
Understand the financial aspect of running an electrical business, or find someone who does.
Work-life balance is a buzzword that gets thrown around a lot, but Mello thinks it’s something to keep in mind when pondering whether to start your own electrical contracting business or grow the current one.
He recommends reading the book, Off Balance on Purpose: Embrace Uncertainty and Create a Life You Love, by Dan Thurmon to gain better perspective, especially in this time of great uncertainty.
“The reason you should own a business is NOT because you don’t want to work for someone else,” Mello says. You may exhibit excellent electrician skills in the field, but lack the financial knowledge or expertise in managing an electrical contracting business.
“I feel bad for a lot of people, they have no business owning a business,” he says. “They better start to learn and get some mentors, or maybe it’s not for them.”
Some companies hit $3 million in revenue and decide that’s as far as they want to go, because their life is a mess and they’re under stress.
“I feel like I’m just getting started...I literally feel like it’s there to build, it’s ours for the taking,” Mello says. “For me, success just means if I want to go do something, I do it.
“You’ve got to choose what’s important to you and decide what’s your ‘Why?’”
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