Some Common Challenges of Owning Electrical Business and How to Overcome Them
Many electrical contractors who are business owners aspire to thrive and prosper in their business. Yet, only a small amount achieve the growth they desire. Running your own electrical contracting business sure has many benefits. You’re free to choose what type of jobs you want, where and when you work and even decide your own payment rates.
However, are you even aware of the most common challenges and frustrations entails when running your own business? In this blog, we look at some of the common frustrations and issues most electrical contractors face whenever operating their businesses, including helpful tips to overcome them.
1. Lack of Goal Setting and Detailed Planning
Planning and goal setting is all about deciding where you wanted to take your electrical contracting business and connecting the dots to get there. Without clear goals and strategies for how you’re going to accomplish them, the business will undoubtedly flounder.
Make sure to spend time figuring out where you wanted your business to be in one year or five years. And then, start working out on the steps you need to take today and the following years to get there.
2. Business Management Skills
Owning a successful electrical business requires business management skills. And it means being able to handle and manage tons of moving parts, from contractors, employees, tax compliance, support staff, inventory, and invoicing. In addition, you have to learn to manage people, delegate tasks, and communicate with bookkeepers, accountants, and outsourced administrative staff.
Advanced software tools designed for project management for construction provide a central hub where everyone can converse internal matters concerning the projects. It is also best used for communicating to your other external stakeholders.
3. Set up and Compliance
Having the proper business structure can impact your taxes and even other compliance obligations. Whether you are operating as a company, a sole trader, or any business vehicle, you must be fully aware of your tax obligations, regulatory framework, eligible tax breaks to operate successfully.
Getting professional advice from a lawyer, accountant, or consultant may be essential, especially when starting your electrical contracting business.
4. Limited customer base
When you have a limited customer base, you directly expose your business to many risks, reducing its ability to grow. In fact, the temptation can be vital when you are working on expanding your electrical business and a particular builder will give you a huge opportunity where the job seems to keep coming. However, it may all come down whenever the relationship changes and that builder provide you with the flick. Next thing you know, you are back to square one, having to re-establish your business.
Don’t become reliant and content on just one big-time client. Make sure to have effective marketing. Also, keeping your customer base diverse contributes to your growth, reducing the many risks involved in having just one customer.
5. Dropping the price when the Business is slow
When your business isn’t going well, a short-term fix can drop the price. This can lead your electrical business towards a downward spiral. Oftentimes, when electrical contractors drop the price, it has not been calculated correctly or taken into account all involved in delivering the electrical service. As a result, you may end up working for negative, leading to significant cash flow issues.
You can avoid the price drop pitfall altogether by retaining excellent quality customers. But make sure your electrical contracting business constantly offers value and excellent customer service so that you can effectively keep quality and repeat clients.
6. Systems and Processes
Not having the right processes and systems can make it extremely difficult for your business to grow. Processes and systems allow you and your employees to perform repetitive tasks in an effortless, strategic, and automated way. It is what enables your electrical business to run smoothly, enhancing productivity and providing solid foundations for growth.
Electrical contractors can implement advanced system software and processes for various business activities, including managing leads, quoting, inventory, marketing, project management, etc. Without documented processes and task management programs, a business will most likely fail to grow and thrive independently.
7. Not accounting for risks
As you plan to expand your business, you have to recognize the hurdles that you might encounter along the way and make sure to account for them. For example, electrical contractors may carry the risks of other trades, so they need to implement preventative measures to protect their business.
Ensure to have the proper sturdy contracts, insurances, modern technologies for scheduling management, warranties, and safety systems, in place. If you’re not sure where to begin, there’s always help available. Growing your business doesn’t come without any form of risk. However, it is how you plan to overcome them that matters the most, for it can save your business.
8. Getting expert support and advice
Another crucial element and a potential source of frustration for business owners like you is determining when to get expert advice. In fact, setting up your own business can mean legal and compliance issues that commonly include record-keeping responsibilities that you need to fulfill. As stated above, you need to possess business skills and existing technical skills as an electrician to work together with other experts like business consultants, accounts, and even marketing companies.
This is not the only time-consuming since you will need to look for trusted advisors, but it may be expensive to pay for these partners’ advice.
9. Finding Business Partners
Finding reliable business partners is considered a critical task for a business owner like you. A wrong business partner will only give you a negative reputation. And while your reputation is connected to your partner, you will be risking the success of your business goals.
It is hard to find the right business partner and it’s harder to judge him at the first time. However, if your business partner has the wrong intentions and motives, it is bound to be revealed gradually. And the only way out is to stop the relationship between you and that person quickly.
How Can Technology Help Electrical Contractors?
As an electrical contractor, what solutions are you considering in keeping up with your business’s day in and day outflow? And just like any other contractors, many of you are facing the same issues — slowing business, shrinking profits, lack of management skills, and all of the frustrations previously stated above.
But what’s the point of pursuing technology innovation, especially when you are occupied with such issues? So let’s start first by seeing these advanced innovations to solve your problems instead of seeing it as another challenge. Because, in fact, accelerations in technology introduce an extensive digital transformation in the industry.
Technologies such as Construction Scheduling Software, the Internet of Things (IoT) and Artificial Intelligence (AI) are drastically reshaping the industry by driving away low productivity and long-standing inefficiencies. Moreover, both the industry and these technologies have several complementary facets such as the following:
· Supportive legal frameworks
With digitization, there’s an incredible opportunity to reduce the environmental impact of electrical projects, which is in line with the governments increasing their CO2 and energy regulations. You will mostly find heightened requirements for cybersecurity and data usage. So as a business owner in this sector, you’ll will find the right time to create opportunities for augmented experiences to innovation labs to a new wave of possibilities, ensuring success in your business.
· Powerful capacities
New possibilities are cropped up during work, with sensors, software and hardware costs dropping on one hand while efficiencies rise. With innovations in technology, electrical professionals will expect more valuable and novel transformations, backed by VR/AR, robotics, drones, and additive printing.
· Client expectations
Your clients are aware of the quickly changing markets. They have growing expectations for more innovatively tailored worksites, commercial buildings, homes, and more. The demands of your customers are quickly rising. Hence, you can expect your services to be more modularized, optimized, and very specific on energy with more and more improved security and health parameters.
· Emerging techs and software solutions
As electrical professionals, you should be aware that the industry is tense with resistance to change. But what is new and fresh is how tech-savvy the professionals are as they adopt modern design trends and digital tools. The younger generation has a thrilling decade ahead to apply creativity to business processes, leading to more quality performance.
One of the essential software solutions is subcontractor scheduling software. It creates a central platform for all of your crews to collaborate effectively on various projects. This advanced software tool allows seamless and transparent communication between team members.
Key Takeaways
Preparing for growth starting from day one will ultimately place you on the path to accomplishing your business goals. But what really drives your business forward is being prepared for the challenges and barriers that you will expectedly hit along the way. So always ensure your business are set up to be sustainable, profitable, and safe.
