Guide to starting an electrical contracting business

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Guide to starting an electrical contracting business

Working for yourself is a big decision, but one that many electricians make at some point in their careers. Setting up an electrical business is relatively simple, especially if you’ve already completed your apprenticeship or any necessary qualifications and own your own tools. However, if you’re new to world of small business ownership, you may not know exactly how to start the process.

This guide will help you think about starting a small business and working for yourself in electrical contracts. We’ll look at licensing, how businesses are structured, building your brand, and protecting it.

Who can work as an electrical contractor?

Electricians in Australia must have a current electrician’s license to work as an electrical contractor. Each state and territory have their own unique requirements for licence holders, and sometimes a certificate isn’t sufficient to be given a licence. You should visit your state’s government licensing office website to check local requirements and contact them if anything is unclear.

Business licensing

Like any small enterprise, electrical contracting businesses need a business license to operate. As with obtaining an electrician’s license, business license and permit requirements vary by state and sometimes local council as well.

The Australian Business License and Information Service (ABLIS) can help you find correct licenses and permits you will need to do business in the electrical industry. But first you will need to decide how you want to structure your small business.

Business structure

It’s important to choose your business structure wisely. The options available are sole trader, partnership, company, or trust. While you can make changes to it later, you could suffer tax penalties if you do.  Many electricians choose the sole trader pathway. This is the most economical and simplest choice for most small business owners. However, there are pros and cons to each type of business structure. Asking other contractors about their business structure or speaking with a solicitor or accountant could help you understand which option is best for you.

Insurance

Electrician insurance can help protect your small business against expensive claims relating to your work. In some states it may be compulsory to have electrical contractor insurance before you are issued with a licence. In these cases, you must be able to show that you are covered for a minimum amount of Public Liability (or other type of insurance) to do business in the state. Clients may also require you to have minimum levels of cover, particularly if you are working on a large commercial project.

If you are applying for a license in Queensland, you are required to present a special certificate of currency; in every other state or territory a standard certificate is sufficient. Wherever you will be working, it is crucial that the name on the insurance certificate matches the name on your licences and permits. If you make a mistake on this, your insurance provider can change the name for you and provide you with a new certificate.

Branding and marketing

Once everything is in place you’ll want to get as much work coming your way as possible. This is where branding and marketing comes in.

How much attention you pay to branding and marketing when working as an electrical contractor is dependent on what you are planning to do with your business. If all you want to do is take on subcontracting work from people you already know within the building industry, then marketing may not be that important for you. However, if you are trying to get work from domestic or commercial clients (or both) you need to think about how you are going to sell yourself to potential customers.

Marketing includes everything from your logo and website to your social media and advertising. All of these things help to make you look more professional and show the client that you are serious about your business. There are marketing companies that specialise in helping tradies, and it could be well worth working with them for all or some of your marketing.

Starting your own electrical contracting business is a big step towards career independence. Getting everything set up correctly from the start can help you get off on the right foot. Obtaining the correct licenses, buying Public Liability and other forms of tradie insurance, and creating a solid marketing plan could help you succeed and grow.

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Disclaimer: The information provided is a general guide only and does not take into account your personal objectives, financial situation or needs. This information should not be construed as any form of advice. Terms, conditions, limits and exclusions apply. Before making a decision, please consider the relevant Product Disclosure Statement (PDS) and Supplementary PDS (where applicable) available from relevant insurers.
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