The electrical business is growing at a steady rate grabbing the interest of worldwide investors. According to research that offers information on recent market trends, Europe is among the leading regions thriving in the electrical service market.
However, the UK’s shortage of qualified electrical contractors is reaching an alarming level that undoubtedly must be addressed. The scarcity creates high demand in the market, making it profitable for any qualified electrical contractor to venture into the industry and register a private limited company.
This comprehensive guide will help you understand the fundamental steps in establishing your electrical business.
Obtain necessary Qualifications
To start an electrical business, an electrical contractor needs to be qualified and licensed. You will require skills and education to be an electrical contractor. You can attain the necessary qualifications by either getting a degree or a high school diploma or investing in apprenticeships or vocational training.
Qualifications of an electrician are the Level 3(NVQ) Diploma in Electrotechnical Services (Electrical Maintenance) or the Level 3(NVQ) Diploma in Installing Electrotechnical Systems and Equipment (Buildings, Structures and the Environment).
Electrical contractors perform numerous roles, and in order to succeed, skills needed will include technical skills, problem-solving, business management, physical skills, interpersonal skills, etc.
Once you have completed either the NVQ or level 2 or 3 college courses and gained some work experience, you will be a qualified and licensed electrician.
Gain Practical Experience
To know how to manage an electrical firm, one needs to know how similar companies in the same field are operating.
You are most likely to work as an employee for about 1 or 2 years only to be able to have a better understanding of the challenges the industry is facing and the ways to overcome them. As an employee, you will get a chance to build a client base and contacts of people who might be investors or partners at your company.
The practical experience will give you the knowledge before registering your own private limited company and start thriving.
Conduct Market Research
Once you have gained the necessary skills and have obtained practical experience in the electrical field, you can do market research on your target market thoroughly.
Before registering a private limited company, you will need to understand your target market, dynamics of your potential customers, their needs and preferences. You will also need to know and analyse your competitors to know how they handle their business, what they are lacking and how they are able to stay ahead in the market.
Create a Solid Business Plan
A business plan is a detailed document that entails the company’s goals, products and services and how it plans to achieve them. A business plan is a blueprint for a business to achieve its long-term success.
Key components of a business plan are:
- Executive summary
- Company description
- Market analysis
- Competitive analysis
- Products and services
- Marketing plan
- Sales Strategy
- Request for funding
- Financial projections
Choose a Business Structure
A business structure describes a legal structure of a company that contributes to the company’s day to day operations. UK business structures include;
- Sole trader
- Limited company
- Limited Liability Partnership (LLP
- Unincorporated Partnership
The business structure you choose will have an impact on your company such as taxation, personal liability, and workforce needed to perform administrative work.
Registering a limited company in the UK is more complex than setting up a sole trader structure where your tax will be managed through corporate tax which will give you tax benefits.
Register your Business
Once you have figured out the right structure for your electrical business, you can register your company with the appropriate authorities.
You can either directly register your company with Companies House or company formation agencies so that you operate within the standard of the Companies Act 2006.
After the process of registration is approved you will be presented with a certificate of incorporation, memorandum of association, and articles of association.
Get Funding
Launching an electric engineering company requires a substantial investment. You will be able to generate needed funds that will be injected into your business through
- Personal savings
- Loans
- Partnerships
- Grants
Buy Necessary Equipment
Once you have raised sufficient funds to set up the business, you can purchase relevant machinery and equipment that are essential for the electrical business’ day-to-day operations.
The needed tools may contain personal protective equipment, electrical repairs and installations, office tools, and vehicles to run the work.
What you will require in particular in terms of equipment and supplies depends upon the type of services offered and the capacities of your business.
Building Your Brand
Start your brand identity-building process by designing a logo, website, and social media platforms.
A website is a marketing tool for your products and services which will help generate leads and sales. By putting through displays to support calls to action, companies can compel their site users to make direct calls to them or make a purchase. A site may also raise the levels of brand recognition and create reliability as a business.
Setting up operations
If needed, secure a physical space and set it up for the functioning of your business. Hire employees contingently or outsource professionals.
If you don’t have a budget for a physical office space, you can set up a virtual office that operates much like a physical office. The only difference is that you will be operating remotely.
Marketing
To run advertising campaigns orchestrated across different platforms, use digital marketing channels such as Google Ads, social media ads, and email campaigns.
Track Progress
Do an ongoing assessment of your business performance. Strategise to get feedback on existing strategies based on the data and feedback from the customers.
Starting an electrical business is not a walk in the park but with the right guidance, it will bring a genuine sense of achievement. The entrepreneurship journey is a long-term endeavor. Maintain your flexibility, take lessons away from your mistakes, and acknowledge your successes. All the very best in your entrepreneurial journey ahead!
