Electrical Business Start Up Cost in 2023

How much does it cost to start an electrical business?

George Leon | Updated February 15, 2023

Whether you’ve spent the past few years as an electrician and looking to branch out on your own or want to transition into the electrical industry, you might consider starting your own electrical business.

While running your own company can be extremely rewarding, you want to ensure all the proper steps are taken to set you up for success. We’ve put together a guide to explain how to start an electrical business.

How Much Does it Cost to Start an Electrical Business?

You need approximately $5,500 to get your electrician business up and running. Start-up expenses include insurance, state fees, equipment, bank account fees, and employee payroll.

Optional costs include brand development, accounting retainers, tax prep, marketing budgets, and office space.

You will also need to factor in any additional schooling or training needed to be an authoritative figure in the industry.

Once your electrical business is up and running, ongoing expenses are relatively minimal. You will need to cover the rent for your office space, license renewals, and insurance. You should budget $2,500 for your license renewal and annual insurance costs.

An easy way to cut costs is to ensure your office space is the right size for your team — there’s no reason to spend extra money on square footage that you and your team don’t need.

Why Starting an Electrical Business is a Good Idea

Market Size

Electrical services are primarily need-based, which means that your customers will need your services now and in the future.

As a business owner, you can choose your target marketing — do you want to work on residential homes or commercial properties? Will you specialize in new build construction or work retrofitting existing electrical systems?

The options are endless, from retail stores and apartment buildings to new residential developments! Plus, you’ll be paving your way in a recurring market — your customers can become customers for life.


No one goes into starting a new business without hoping that they will turn a profit. Luckily for you, an electrical business makes good money.

  • While it will differ from job to job, most electrical services offer high-profit margins allowing you to bring in revenue to cushion your bottom line.
  • Working solely in a residential or commercial can impact the profitability of the electrical company.

How to Start an Electrical Business

Although starting an electrical business is exciting, many details need to be organized behind the scenes before bringing in your first customer.

Before opening your doors, set aside time to work through all the paperwork and licensing required to start an electrical business. To get started on the right foot, get the following business elements sorted:

1. Select a Business Name

Every business needs a name. While this name needs to be recorded with the Internal Revenue Service, it’ll also be the name you go by without the community.

  • Before choosing your name, make sure you analyze the competitors in the area so you don’t accidentally choose a name that can be mistaken for another company.
  • You want to choose something easy to remember so you’re always top of mind with your customers.

Pro tip: Whatever name you choose for your electrical company, make sure you use it consistently across the Internet — this includes your website, Google Business Profile (GBP) listing, online directory listings, etc.

2. Get incorporated

One of the most critical steps in the process is registering your electrical business as an LLC so that the government recognizes it. This is a mandatory step for you to work legally with customers.

It’s essential to get started on this step as soon as you’ve narrowed down what your company name is because this part of the process can take anywhere from a few weeks to a few months.

3. Select a Location

You might not need office space if you’re running a one-man electrical company. But if you have a team working for you, renting out an office space can be beneficial.

Most importantly, you need a business address to promote on your company website and Google Business Profile. However, you don’t want to choose any location — even if it’s the cheapest option on the market.

  • For your electrical business to appear in the local park, Google factors in your company’s proximity to the prospective customer. This means you should choose an office location in or near your desired service area.
  • Even if you’re a one-man show, you should consider renting a P.O. box in this area if you can’t justify the cost of office space.

4. Develop Your Website

Where do you go when looking for a local service business in your area? Most prospective customers turn to a trusted search engine like Google to find a reputable company to work with.

But if your company doesn’t have a website, prospective customers won’t be able to find you — they’ll only find your competition!

  • Creating a website increases your visibility on search engine results pages and allows customers to learn about your business no matter the time of day.
  • Take the time to build a professional-looking website that outlines your company information and details on the various electrical services you provide.

Once you have these four business elements organized, you can start addressing some fun aspects of running a business — prepping for your customers!

Preparing for Your Customers

There are few things more gratifying than seeing a satisfied customer’s smile. Now’s the time to plan how to provide unparalleled services to your customers.

The happier your customers are, the more repeat business you’ll bring in and referrals you’ll receive. Ensure you have efficient processes in place for:

Appointment Scheduling

What is your desired process for customers to be able to schedule appointments? Do they need to speak with a customer service representative so you can suss out exactly what services they need? Will your website have an online scheduler that allows customers to book a date and time that works for them directly from the website?

You need to determine what method allows you to bring in the most leads and will be the most efficient for you to manage. Choosing one method now doesn’t mean you’re stuck with that option forever.

Feel what your customers respond well to and see which methods drive more qualified leads and bring in the most profitable jobs.


There’s nothing more frustrating than trying to contact a business only to find out that the number on their Google Business Profile is outdated or the contact form on their website is broken.

  • Routinely check your online directory listings to confirm that your contact information is up to date — you don’t want to lose leads simply before a digit of your phone number was input incorrectly!
  • You will also want to consider the desired action you’d like your customers to take once they arrive on your website. If you want them to call to schedule an appointment, consider adding a call to action with your phone number to the website header.
  • If you would prefer they fill out a contact more, embed one within all pages of your website to make it easy for your customers.


You can’t run a successful electrical business without the inflow of money. How do you plan on invoicing your customers and keeping track of who has and hasn’t paid?

Organizing the quoting and invoicing process is much easier in the early stages as you ramp up the number of electrical jobs you take.

  • Find an invoicing tool that makes it easy to bill your customers and keep financial records of all transactions.
  • These processes will demonstrate to your customers that their satisfaction is your top priority and that you are a professional electrical company.

How to Market Your Electrical Business

electrician working on a panel

You’ll want to get your marketing sorted out before the opening day. Will you focus primarily on traditional marketing methods like direct mailers, cold calls, and referrals? Or will you invest in digital marketing efforts to increase your online presence?

Here are four ways to create a successful marketing campaign that drives electrical leads from day one.

Engage with the Community

As a new business, you must get your name out there. In the beginning, no one will know who you are or what your electrical business can do for them. Find ways to dive into the local community so you can begin interacting with them face-to-face.

While this is critical in the early stages of your business, it’s a great way to stay relevant and stand out from competitors even after you’re more established. Here are a few ways to increase brand recognition in your target market:

  • Participate in local community events by hosting a booth
  • Create a scholarship that is awarded to a student within the community
  • Host a charity event around the holidays, such as a toy or clothing drive
  • Sponsor a recreational sports team in the town where you’re located
  • Donate to local charities and causes

Claim and Optimize Your Google Business Profile

When a prospective customer searches “electrical services,” you want your company to appear on the search results pages. There are three places where your electrical business can be found: paid advertisements, local packs, or organic listings.

  • To have your electrical company appear in the local pack, known as the maps listings, you need to have your Google Business Profile claimed and optimized.
  • This means it should be filled out with critical business information, including your address, phone number, hours of operation, services, photos, and more. The more you fill this out, the better!

Ask Your Customers for Reviews

Most prospective customers read reviews before deciding to work with an electrical company. No one wants to hire an electrician only to realize that they do shoddy work. Your electrical company must have quality reviews on your Google Business Profile.

If it comes down to you and a competitor, the customer will likely go with whichever electrical company has a better track record — and customer reviews will probably determine this!

  • To ask your customers for reviews, you can have your electricians ask face-to-face while completing a job, ask in a follow-up email, or have a call to action on your website asking for reviews.
  • There are various ways you can ask, but remember, the quality of the reviews is more important than the quantity. It is better to have nine 5-star reviews than 76 3.5-star reviews.

By following these tactics, you’ll be able to get your new electrical business off the ground with a strong marketing campaign in place.

Frequently Asked Questions

What are the most important expenses when starting an electrical business?

The most important expenses when starting an electrical business include a business license, insurance, equipment, and marketing costs. You will also need to factor in the cost of materials and supplies, as well as any fees associated with hiring employees.

What are the key skills needed to launch an electrical business?

To successfully launch an electrical business, it is essential that you have a thorough knowledge of electricity and safety protocols. You must possess strong customer service skills, sound financial management abilities, and problem-solving capabilities. You’ll need to be able to manage employees too.

Written by George Leon

George Leon

George Leon is a Managing Partner at Scalebloom. He used to be a partner at a painting company in Charlotte NC. George loves to help business owners scale their business with modern marketing strategies and branding.