Templates Guides
Revisit Your Electrical Contracting Business Plan Every Year to Fuel New Growth
Electrical
As an electrician and owner of an electrical company providing residential and commercial services, you created a business plan when you initially launched your contracting business, but do you continue to review and refine it?
More likely than not, the plan sits in a dusty filing cabinet at your shop. It’s not a living, breathing document you constantly refine and review each year—but it should be.
As baseball legend Yogi Berra famously said, “You’ve got to be very careful if you don’t know where you’re going, because you might not get there.” The saying holds especially true for small businesses, startups, and commercial electrical shops. Without a plan, how can you achieve your goals?
“A lot of companies will just blindly say, ‘I want to grow. I want to do $10 million next year,’” says Chris Hunter, founder of Hunter Super Techs and co-founder of the Go Time Success Group. “Okay, that sounds really good. But if you're doing $2 million this year, you realize how many people that's going to take, how many vehicles, and all the support staff that it's going to take to grow.”
Today, Hunter refines his business plan each year to ensure he hits his revenue targets and fuels year-over-year growth. However, he says it wasn’t always the case, and his business stagnated from a lack of strategic direction.
“We didn't have a plan. We’d say, ‘Let's just keep doing what we're doing and hope we get better.’ It was just a bunch of hope,” says Hunter, now Principal Industry Advisor for ServiceTitan.
After consulting a fellow business owner and industry mentor about how to revise his business plan to supercharge strategic planning and growth, Hunter says the results speak for themselves.
“The results were amazing,” he says. “The first year after we did it, we went from single-digit profitability to double-digit profitability, just because we had a plan that first year.”
Ready to dust off your old business plan and grow your electrical business? Let’s explore the most important items to include in an electrical contracting business plan.
Table of Contents
Executive Summary
Electrical contractor business plans typically begin with the executive summary. However, we suggest you complete this step last, and for good reason.
The executive summary is a condensed version of your full business plan where you include everything you would cover in a 5-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. Again, do 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 does the market look like? What are your goals and objectives?
If you’re applying for funding, make sure to specify the amount and how you plan to use it, and more importantly how it will increase your profit margins.
The executive summary is often the first page someone sees in your business plan, so it needs to be professional, enthusiastic, and succinct.
"I like to keep it to one page that mentions, 'Here's our mission, vision, and core values. Here's our plan for this year and the key things we're going to execute first,’” Hunter says. “Make it very clear and concise, and summarize the plan so you don't just go through a lot of work and then it sits on the shelf.”
Company 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 Company 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. For example, a goal might be to become a leading electrical contractor in your area with a reputation for impeccable customer service. Objectives might be annual sales targets and a specific measure of customer satisfaction, such as 5-star online reviews. A KPI may involve generating a predetermined number of 5-star reviews per month.
Marketplace: Define your core customer base and explain how you will market your services, including the market channels you plan to use. You don’t need to go over the entire marketing strategy here. In fact, keep it brief. Save the key details for the Marketing Plan section of your business plan.
Industry outlook: All business plans need to examine the current state and expected forecast of the industry. Will you be competing in a high-growth industry, or are you filling a void where other competitors fall short? What changes do you foresee in the industry, both short and long term, and how will your company take advantage of them? With existing labor shortages expected to grow in the coming years, make sure to do your due diligence.
“A contractor can't have their blinders on and only look at what's going on in their company. They need to take time to look around and see what's happening elsewhere with other companies and in the industry in general,” Hunter says.
You can find statistics readily available online from the Bureau of Labor Statistics and other organizations and trade groups. Hunter says ServiceTitan customers can see real-time market insights as well as how their electrical shops stack up with other local businesses in the market by accessing their ServiceTitan Benchmark Report.
Strengths and core competencies: Use this section to expand on the specific factors that will help your company succeed. What strengths set you apart from the competition? Will you offer services currently not available in the market? How will you prepare your staff to succeed? What background experience, skills, and strengths do you personally bring to this new venture? Will you offer 100% customer satisfaction on every job?
Products and Services
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.
Make sure to 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:
On Time, Every Time Guarantee
Service Guarantee
Repair Guarantee
Replacement Guarantee
“You have to explain what makes you better than the other umpteen companies customers can call very easily,” Hunter says. “By identifying why you're better, whether that's your guarantees, your warranties, whatever it may be, it not only helps you with your marketing message, but it also helps your team. Because if they don't know why you're any better, how are they going to go out and serve that way?”
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 hourly rate, how you’ll account for drive time, and billable amount for every job or service you offer.
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Marketing Plan
All businesses depend on marketing to promote their companies, generate new business, and turn them into 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. Make sure to include the following components in your marketing business plan.
Economics
Understanding the economics of your target market proves key to a successful marketing campaign. You’ll want to include important information in your market analysis, such as the current size and demand in the market, median household income, employment rate, as well as growth potential and opportunity for a business of your size.
Also consider potential barriers to your success, such as:
Capital costs
Production costs
Marketing costs
Consumer acceptance and brand recognition
Training and skills
Technology and equipment costs
Products and Features
Describe in detail all of your products, features, and electrical work. For features, explain what sets your business apart from the competition. For the benefits, you need to articulate the value you’ll bring to the customer.
Make sure to include any after-sale services you will offer, such as delivery, warranty, service contracts, support, follow-up, and refund policy.
Customers
Reaching your ideal customer profile (ICP) and understanding customer needs prove critical for successful marketing efforts. This includes identifying your target customers, including their characteristics, demographics, income, geographic location, age, home type, and more.
Depending on your electrical business, you may market to consumers, known as B2C marketing, or to other businesses, referred to as B2B marketing. It’s likely a combination of both, and you’ll need to create separate ICPs for B2B and B2C.
The description will be completely different depending on whether you plan to sell to other businesses or directly to consumers. If you sell a consumer product, but sell it through a channel of distributors, wholesalers, and retailers, you must carefully analyze both the end consumer and the middleman businesses to which you sell.
Niche
After systematically analyzing your industry, product, customers, and the competition, you’ll have a clear picture of where your company uniquely fits into the market, a.k.a. your niche. In a single paragraph, describe your unique position in the industry and how you plan to use it to promote your electrical contracting business.
Strategy
When it comes to marketing strategies, electricians typically utilize a mix of marketing channels. These will vary depending on your customer profiles. 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:
Yellow Pages (%)
Direct Mail (%)
Newspaper (%)
Radio (%)
Television (%)
Online (%)
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-mouthreferral programs.
Tracking
Electrical contractors need to understand the importance of tracking marketing dollars to measure ROI. If your business feels like it’s in a slump, it’s likely a result of ineffective marketing campaigns. Maybe your messaging fails to resonate with your customers, or it could be the result of not advertising your own business on Google local services ads.
Bottom line: You should always use data to fuel marketing initiatives, so you can focus your budget on campaigns that generate the most revenue for optimal growth. In today’s digital-first world, electrical contractors increasingly use field management software to run their marketing initiatives and track ROI.
“If you're using ServiceTitan, pull up your marketing dashboard and look at the data,” Hunter says. “What's the data telling you about your marketing? What's working, what's not? What should you double-down on? The data tells a pretty compelling story, and sometimes we get caught up in what we think is working.”
For instance, ServiceTitan’s Marketing Scorecard ranks all of your campaigns by revenue so you can see the campaigns that generate the most revenue in real time. With ServiceTitan Marketing Pro, you can build direct mail campaigns, create and send hyper-targeted email campaigns, track your online presence across multiple reviews sites, and easily monitor and identify wasted marketing spend or new opportunities through full-funnel digital ads dashboards that show true ROI.
Operational 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?
Management and Organization
Mention the key roles that will manage the business on a day-to-day basis, including the general manager, operations manager, and other leadership 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. Make sure to include descriptions for each position or employee.
You should also list professional and advisory support, including:
Board of directors
Management advisory board
Attorney
Accountant
Insurance agent
Banker
Consultant or consultants
Mentors and key advisors
Personal and Company Financial Statement
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.
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. More importantly, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.
Appendices
Include details and studies used in your business plan, such as:
Brochures and advertising materials
Industry studies
Maps and photos of location
Magazine or other articles
Detailed lists of equipment owned or to be purchased
Copies of leases and contracts
Letters of support from customers
Any other materials needed to support the assumptions in this plan
Market research studies
List of assets available as collateral for a loan
>> Ready to dust off the old business plan and set your shop up for growth and success? Download our free business plan template for electrician businesses.
