One Man Electrical Contractor: Advantages of a One-Man Shop

Advantages and drawbacks to starting a solo shop

George Leon | Updated January 29, 2023

As a business owner, you’re used to making tough decisions. The toughest decisions tend to be those that directly impact the profitability of your electrical company.

If you’re looking for ways to increase profits, you might be wondering if you can start an electrical contractor business and be the sole employee or if you need a team of electrical contractors to be successful in the market.

Deciding whether you should be a one-man show can be a difficult decision. To help you navigate your options, we’ve compiled a list of the advantages and disadvantages of being the only employee of your electrical company.

The Advantages of Running a One-Man Electrical Contractor Business

As an entrepreneur, you have the drive to run a successful electrical company independently. But along with being your own boss, it can be a huge relief not to have a team to micro-manage.

A One-Man Electrical Contractor is a sole proprietor that manages every aspect of his electrical business on his own.

Everything that goes on at the business is under your watch, enabling you to have complete visibility into every facet of your company. Here are four advantages that you will experience when running a one-man electrical business:

  • Higher Profit Margin – When it comes to running a business, profitability is key. Without a steady cash inflow, you won’t be able to operate your business. But the larger your team, the more overhead you’ll have that will eat into your revenue. As a one-man electrical contractor, you won’t have to dig into your profits to pay employee wages.
  • Competitive Prices – If you are in a competitive market, you’re probably looking for ways to stand out from the crowd. When you expand your business, grow into a larger office space, or add more team members, your electrical business costs increase. As a result, you might need to increase your prices to keep your profit margins the same. When your team consists of just you, you can price your electrical services more competitively — helping you become a top choice amongst the competitors in your local market.
  • Management – Managing a team can be tough. From ensuring their work meets or exceeds your standards to monitoring that they’re clocking in and out on time, there’s a lot of babysitting that goes on. The larger the team, the more difficult it can be — and uses up your valuable time where you could be bringing in new customers. Without a team to manage, you will spend more time in the field where it counts instead of being cooped up in an office doing admin.
  • Business Health – As your team grows and you become more removed from the day-to-day operations, it can be easy to lose touch with the business operations. But as the owner, you must know how your company is doing at all times! If you’re the only employee of your electrical company, you know the ins and outs of every aspect of the business, which allows you to make sound decisions.

Key-Takeaway: Starting an electrical company can be extremely rewarding, and when you’re the only employee, you’ll get a hands-on experience that offers you many benefits.

The Drawback of a One-Man Electrical Contractor

Now that we’ve covered the advantages of a one-man electrical business, it’s important to cover the drawbacks as well. Seeing both sides will allow you to make better business decisions that are right for you and your goals. 

The biggest drawback of a one-man electrical company is how it impacts the growth of your business venture.

Where do you envision your electrical company in five years? Ten years? Will you still be a one-man show or do you plan to grow your team over time?

While being the only employee on your team does wonders for your profitability, it can stifle your growth opportunities if you don’t have enough time or capacity to take on the number of jobs coming in.

With your marketing efforts and outreach in the local community, you will see the leads start to pile in. After a while, there might be more leads than you can handle on your own.

If you’re scheduling appointments weeks in advance, you are likely losing out on business from customers who can’t wait for you to fulfill their needs. If they’re dealing with a faulty electrical panel or a burning smell in their home, they’ll hang up and call a competitor who can fit them into the schedule immediately.

You don’t want to lose out on jobs that can become recurring businesses simply because you don’t have the manpower to do them.

When your electrical business is bringing in a steady number of leads that you aren’t able to handle on time, it’s time to start considering hiring subcontractors or employees to assist.

While this will eat into your profits a bit, you’ll also be able to handle double the amount of jobs — so as long as you don’t grow your team too fast, it will all even out over time.

Keep in mind that if you aren’t trying to grow your business and only want to take on the number of jobs that you can physically handle, then this not be a drawback after all.

Should You Hire a Team of Electrical Contractors?

Once you get to a point where you have more leads coming in than you can physically manage on your own, you need to decide if you want to expand your team. You can add to your team in a variety of ways.

One option is to hire an administrative assistant to help you manage all the backend operations, including appointment scheduling, quoting, invoicing, payroll, and more. This will allow you to take these items off of your to-do list and spend more time in the field with the extra time that you freed up.

Another option is to hire an electrical contractor to help you handle the number of jobs on your plate.

Determine where you spend the most time — and where you should be or would prefer to spend your time. Do you like the backend side of things? Would you prefer to spend the entire day in the field?

Evaluating your situation will enable you to make the right decision for your specific goals.

Remember that as you expand your team, you become their boss. This means that you would be responsible for:

  • Hiring (and firing) team members that will allow you to meet growth goals
  • Supplying your team with the necessary tools and supplies for jobs
  • Providing employees with health benefits, paid time off, family leave, and other benefits, if eligible
  • Pay your employees hourly wages or annual salary
  • Dealing with business taxes and processing payroll

If you don’t want to take on these responsibilities, it might not be the right time to hire employees for your electrical company. However, if you do decide to hire a few members for your team, it’s important for you to accurately forecast when an individual should be added.

Key-Takeaway: Blindly adding employees can negatively affect your profits if you add too many people too quickly.

Is There a Benefit to Hiring Electrical Subcontractors?

Sometimes you might need the extra hands but don’t want the responsibility of hiring your own team of employed electrical contractors.

An alternative option is to work with an electrical subcontractor that can take on a few jobs during a busy patch — giving you the help you need without the commitment of an employee.

With subcontractors, you won’t be responsible for their equipment, health benefits, or paid time off because they’ll be working for multiple companies at once.

They can be a great option if you notice an uptick in leads during a particular season, but it doesn’t last throughout the entire year. Electricians can make good money when subcontracting their jobs by allowing them to take on more work.

However, it’s important to remember that your business reputation is on the line anytime you or an employee or subtractor steps into a customer’s home.

Key-Takeaway: If you go the subcontractor route, you need to make sure you hire someone you can trust and rely on to act appropriately and provide satisfactory service.

The Verdict: You Can Run a One-Man Electrical Company

Yes, you can run a one-man electrical company successfully. However, it’s important to ensure that a one-man company aligns with your growth goals.

While this setup might work in the early stages of the business, as your reputation and authority in the market grow, you might need more manpower to meet the demand of the leads coming in.

Consider both the pros and cons of being the sole employee to determine if this is the right plan for your electrical company.

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.