How to start an electrical contractor business in Australia

Working for yourself is a big decision, but one that many electricians make at some point in their careers. Setting up your own electrical company electrical business is relatively simple, especially if you’ve already completed your apprenticeship or any necessary qualifications and own your own tools.

You may be bursting with great electrical business ideas, but if you’re new to the 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 as an electrical contractor. We’ll look at licensing, how businesses are structured, building your brand, and protecting it

Four great benefits for becoming an electrical contractor

1. There is plenty of work

As our society develops, our dependence on energy increases. Electricians will continue to be in demand and there is already a lot of work. You can make a safer investment by starting an electrical business.

2. Electrical experts are well paid

Because electrical expertise is in high demand, electricians can often make more money than other common trades such as plumbers, bricklayers, and carpenters.

3. You work with your hands

You don’t have to stay in the office all day. Rather, you can work in the field until your business reaches a certain size. As an electrical contractor, you will enjoy much more control over your future. You decide what you want to do with your company – its size, shape, and management, as well as when and how you work.

4. Have total control over your future

You decide what you want to do with your company – its size, shape, and management, as well as when and how you work.

The challenges of starting an electrical contracting business

Electrical work isn’t something that you can just jump into on a wing and a prayer. There are specific industry requirements that need to be met, including certification, qualification, and ongoing industry training.

As an electrician with oodles of great electrical business ideas, you are likely to face plenty of competition, so it’s worth checking out what the market is like in your area before you set up shop.

Running your own electrical company means that you have all the responsibility of finding and dealing with clients. You’ll also be working long hours with the potential for being called out in the late evenings, or even the middle of the night – because being an electrician isn’t a 9 to 5 job. 

Financing your electrical business

Starting an electrical business can be pricey and will almost always require an initial outlay of cash. As an independent electrician, your major costs will likely be a company vehicle and electrical tools and equipment. These costs may vary depending on what tier of the market you intend to service.

Essentially, you can fund your business off your own back – perhaps with inheritance money or your personal savings – or secure funds from a third party such as a small business loan or by opening a business account with your bank.

Invest in electrical tools and equipment

Unless you already have your own equipment, an initial investment in tools is going to be your biggest upfront cost. Essential electrical tools of your trade include:

  • approved voltage indicator;
  • insulated screwdrivers;
  • wire cutters;
  • wire strippers;
  • multifunction tester;
  • battery drill;
  • electrical wall chaser; and
  • fish tape.

You will also benefit from being stocked up with the following electrical supplies:

  • electrical tape;
  • solder wire;
  • solder flux;
  • solder wick;
  • flux cleaner;
  • cotton buds;
  • freezing spray;
  • kapton tape; and
  • wire wrapping wire

Who can work as an electrical contractor?

 Electricians in Australia must have a current electrician’s licence to work as an electrical contractor. Each state and territory has its own unique requirements for electrical contractor 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.

Business insurance

As is the case with many trade businesses, electrical contracting comes with no small amount of risk and when things go wrong, they can go wrong in a very big way. When you own an electrical company it’s for this reason that some certain types of business insurance, such as Public Liability, are mandatory licensing requirements in most states and territories of Australia (usually requiring a minimum cover level of $5 million).

Get good at pricing your electrical services

The electrical contracting industry is competitive and dynamic. When bidding on electrical jobs, consider adopting a standardised estimation process for all of your electrical projects. It’ll make things easier.

Create an electrical business plan

You will benefit from having a clear business plan when you decide to start your own electrical contractor trade business. Your business plan will include all of your electrician business ideas, such as the name of your business, your ideal clients, your initial and ongoing costs, and how much money you need to earn to break even.

It can also include sections around ongoing training, your finance strategy.

It’s not easy to become an electrician and make money as an electrical contractor, but you can improve your chances with the right preparation.

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 licence in Queensland, you are required to present a special certificate of currency; in every other state or territory a standard certificate is sufficient.

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. While some

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 if you are looking to make money as an electrical contractor.

Choose BizCover for electrician insurance and get covered in minutes

Once you have electrical certification, 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.

Is electrical contracting a good business?

With public and private investment in infrastructure development booming in capital cities and regional areas, qualified and competent electrical contractors will have access to work.
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.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

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