Electrical Contractor Business Plan [& Free Template]
Whether you’re a new electrical contractor launching your startup business or a veteran electrician looking to expand, define business goals, or obtain funding, you need a business plan. And if you created a business plan when you first started in the industry, but haven’t updated it since, it’s time for a revamp.
Ready to write or improve your electrical business plan? Read on for information on what to include in an electrician business plan and a free electrical contractor business plan template to get started.
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What Is a Business Plan for Electrical Contractors?
A business plan is a comprehensive document that outlines the company’s operations, goals, strategies, and financial projections. It serves as a roadmap for the business owner and potential stakeholders by detailing how the business will be structured, managed, and grown.
A business plan is a fluid document that should be reviewed and refined annually to reflect goals that have been met or have changed. If an established business decides to move in a new direction, perhaps adding services or acquiring a smaller electrical outfit and expanding their service areas, they may create a new business plan.
Why Do Electrical Contractors Need a Business Plan?
In addition to serving as a roadmap for the company, electrical contractors need a business plan for the following reasons.
Reason #1: Raise Funding
New or expanding businesses often need to raise capital from lenders or investors. Before investing or providing a loan, lenders and investors want to see a detailed plan that demonstrates the company’s potential for success and how it intends to use the funds. Lenders want to know the company will be solvent enough to make regular debt payments.
The main sources of funding for an electrical business include personal funds, credit cards, bank loans, and investors. Personal savings and bank loans are the most common funding paths for electrical companies.
Reason #2: Define Business Goals and Reduce Risks
A business plan serves as your company’s blueprint. By setting up goals and ways to measure success, you’ll know if your business is on track. Your business plan should also outline risks, including competitors and market changes. By knowing business threats ahead of time, you can prepare plans for reducing or addressing them.
When it comes to measuring goals, a field management software with reporting capabilities provides the data electrical companies need to make informed business decisions. For example, ServiceTitan’s field reporting software offers a dynamic dashboard that allows business owners to customize the fields to display KPIs that matter most to them, including revenue, missed opportunities, and conversion rates.
The technician scorecard gives managers a report on overall technician performance, as well as the opportunity to drill down into metrics for each individual tech, including generated revenue, memberships sold, customer satisfaction, and billing efficiency. With this information in hand, managers can reward outstanding technician performance and find coaching opportunities.
Similarly, a CSR scorecard allows users to review incoming calls, conversions, and other CSR metrics as clients and potential customers call your business. The recorded calls can be used for CSR training or to re-engage with missed opportunities.
How to Write an Electrical Contractor Business Plan [with Template]
An electrical contractor business plan should be tailored to the specific goals of your business and provide a realistic and achievable roadmap for its success. To help electricians know exactly what information to include in a business plan, ServiceTitan created an electrical company business plan template for you to download and fill in.
>> Download our free electrical business plan template. Save the PDF to your desktop as a new file. From there, you can customize it for your business.
Ready to get started? Include the following sections in your electrical business plan.
1. Industry Analysis
First, provide an overview of the electrical contracting industry. This market research should inform your business strategy. It also shows investors and lenders you did your due diligence. When preparing this section, consider:
2. Executive Summary
The executive summary is a condensed version of your full business plan where you include everything you would cover in a five-minute sales pitch about your business. Put simply, all the hard work and research you put into your business plan should inform the critical information you include in the executive summary. Even though this is in the front of the business plan, it’s best to complete this section last.
Use the executive summary to concisely explain the fundamentals of the business. For example, what is your product or service? Who are your customers? Who are the business owners and financial investors? What are your goals and objectives?
If you’re applying for funding, make sure to specify the amount, how you plan to use it, and more importantly, how it will increase your profit margins. The executive summary needs to be professional, enthusiastic, and succinct.
3. Business Overview
The company overview is where you start to dig into the details of your electrical contracting business. In short, it explains what your electrical business will do, and how you will achieve your objectives. The section often begins with a mission statement—typically 30 words or less—where you explain your company’s guiding principles and business philosophy.
Make sure to cover the following components in the business overview:
Goals and objectives: All successful businesses need to establish goals, objectives, and key performance indicators (KPIs). Make sure to elaborate on how you’ll set up your electrical shop for success.
Marketplace: Define your core customer base and explain how you’ll market your services, including the marketing channels you plan to use. Keep it brief. You’ll elaborate in the marketing plan section of your business plan.
Strengths and core competencies: Use this section to expand on the specific factors that will help your company succeed. Include what strengths set you apart from the competition and how you’ll prepare staff to succeed.
4. Services Analysis
Use this section to provide more detail about your specific products and electrical services.
For example, (Electrical contractor name) offers residential and commercial electrical installation, service, and repair, including new installations, safety inspections, whole-home rewires, troubleshooting and servicing electrical issues, and more.
Include any factors that give you a competitive advantage over other electrical contractors in your service area. For example, do your technicians possess advanced skills that enable them to work on high-tech electrical systems? Other examples of key service differentiators include:
Next, mention the pricing, fee, or leasing structures of your products or services. Will you price electrical jobs by the hour, or offer flat-rate pricing? You’ll want to examine the wage rate in your area to ensure you pay your employees a competitive salary. Also include the hourly rate, how you’ll account for drive time, and the billable amount for every job or service you offer.
5. Market Analysis
Include a market, or competitor, analysis. Identify and evaluate key competitors to define your company’s unique value proposition and capitalize on market opportunities. The analysis should include information on competitors’ strengths, weaknesses, market share, pricing strategies, and technological advancements.
Look for gaps in the market, whether there are services not being offered or service areas not being sufficiently served. These gaps create business opportunities.
6. Customer Analysis
The customer analysis section of a business plan is where you focus on understanding your target customers. This includes describing your target market’s characteristics, needs, and behaviors to tailor your offerings effectively. Start by identifying your primary and secondary customer groups, considering factors like demographics (age, gender, location), psychographics (interests, values), and buying behaviors (how they make purchasing decisions).
This analysis equips you to tailor your business strategies to meet customer demands effectively. By knowing your customers’ wants and pain points and leveraging customer experience software, you can create a strong foundation for building lasting customer relationships and achieving sustainable growth.
ServiceTitan enables electrical contractors to provide their customers with a modern sales and service experience, which includes:
Scheduling options: Give leads the ability to schedule jobs whatever way works best for them, whether through web chats, texts, calls, or booking directly online.
Detailed customer history: A robust CRM allows service techs to view complete customer information before arriving on the job site. Knowing the customer's name and job history helps techs and CSRs personalize the customer experience and provide better customer service.
Text messaging communication: Text appointment reminders and technician bios so customers know who and what to expect when your service truck arrives. Allow for two-way SMS communication, so customers can confirm appointments, reschedule appointments, or ask questions right from their phone.
Live tracking: Allow customers to track your techs on a map, so they can better predict arrival times.
On-site estimates: Today’s customers don’t want to wait for estimates. With ServiceTitan Mobile, techs can build and display branded, digital estimates with good, better, and best options in just a few taps.
Financing options: Working with your clients on payment options helps build loyal, repeat customers. With ServiceTitan customer financing, customers can apply for financing right from your tech’s phone or iPad, choose from different plans, and receive instant approval.
7. Marketing Plan
All businesses depend on marketing to promote their companies, generate new business, and grow repeat customers. If your electrical shop’s promotions or sales feel stagnant, it’s probably a good time to look at your marketing metrics and reevaluate your promotions and marketing channels.
When it comes to marketing strategies, electricians typically utilize an omnichannel approach. If your target audience leans younger, you may want to invest heavily in digital marketing such as search engine optimization (SEO), Google ads, and social media marketing, while home mailers and direct mail may be more effective with older homeowners. Bottom line: You want to reach as many potential customers as possible, so don’t be afraid to try different marketing strategies.
Break down how you plan to spend marketing dollars by promotion channel, such as:
Direct mail (%)
Search engine marketing (SEM) (%)
Social media marketing (%)
Your strategy should also include the average cost to acquire a new customer, and take into account other marketing drivers, such as club memberships and word-of-mouth referral programs.
Consider how your business will execute and track ROI of marketing strategies. For example, ServiceTitan offers data-driven marketing solutions to help you attract, convert, and retain customers, in addition to providing valuable insights into the performance of your campaigns.
8. Operations Plan
Expand on and explain the daily operation of your electrical contracting business, its location, equipment, people, processes, and surrounding environment.
Production: How and where are your products or services produced? Make sure to include production techniques and costs, quality control, customer service, inventory control, and product development.
Location: What requirements do you need in a physical location? Mention the amount of space, type of building, zoning, and utilities.
Legal: Include information related to licensing and bonding requirements, permits, environmental regulations, industry-specific regulations, zoning or building code requirements, liability insurance, and any trademarks, copyrights, or patents.
Personnel: List the number of employees, type of labor (skilled, unskilled, and professional), recruiting efforts, pay structure, training programs, and job descriptions.
Inventory and suppliers: Include the kind of inventory (raw materials, supplies, finished goods), the estimated value, and your top suppliers.
Credit policies: Will you sell your services on credit? If so, how will you approve customers or determine creditworthiness?
9. Management Summary
Mention the key roles that will manage the business on a day-to-day basis, including the general manager, operations manager, and other management team roles. What experience do they bring to the business? Do they hold special or distinctive competencies? Is there a plan for continuation of the business if leadership is lost or incapacitated?
If you employ more than 10 employees in your business structure, create an organizational chart showing the management hierarchy and who is responsible for key functions. Include descriptions for each position or employee.
You should also list professional and advisory support, including:
Board of directors
Management advisory board
Mentors and key advisors
10. Financial Plan
The financial plan typically includes a 12-month profit-and-loss projection, a cash-flow projection, a projected balance sheet, and a break-even calculation. Together, they present a reasonable estimate of your electrical contracting business's financial projections and business value. More importantly, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.
Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well.
Over to You
ServiceTitan’s cloud-based, all-in-one electrical software gives business owners the technology they need to do the work efficiently, the data and reporting they need to do it smartly, and a wide array of resources to guide them as they grow toward achieving the goals outlined in their electrical contracting business plan.
>> Want to start your own electrical business or revitalize and grow an established business? Download this electrical business plan template to get started.