Running an Electrical Business — Margins, Crews, & Specialty Work
Most electricians plateau at $80K. The ones who break $300K+ operate businesses, not just jobs. This lesson covers margins, hiring, specialty work tiers, and the financial discipline that keeps the lights on in winter.
The lesson
Service vs install — different businesses
Service calls: high margin (50–60% gross), low ticket size ($300–800), high call volume, marketing-intensive, requires fast dispatch + good reviews. Install / new construction: medium margin (25–35% gross), high ticket size ($5K–$50K), low call volume, relationship-based with builders/GCs. Most shops choose one and excel. Trying to do both poorly = mediocre at everything.
Crew sizing and the math of hires
Two-tech crew: senior journeyman + apprentice. Senior at $40/hr + apprentice at $20/hr + employer burden 30% = $78/hr fully loaded cost. Charge $180/hr blended = $102/hr gross margin × ~1,400 billable hours/yr × 2 techs = ~$285K/yr crew gross profit. Three crews × 3 years of growth = real money. Hiring is the lever; managing them is the skill.
Specialty work pays more
Standard residential: $90–150/hr. Commercial / industrial: $150–225/hr with proper crew. EV charger / solar specialist: $200/hr + ticket margins of $1,500+ per install. Generator install (whole-home automatic transfer switch): $5K–15K tickets at 35–45% gross. Find a specialty in your market that's underserved — premium pricing follows. Don't try to be everything to everyone.
Cash flow management
Electrical shops fail not from lack of profit but from lack of cash. Pay your techs Friday. Buy materials before the job. Customer pays 30 days later. The gap = working capital required. A $1M shop needs ~$80–150K cash buffer. Use a line of credit at 8–10% interest as a backstop. Track receivables — 90+ days outstanding = chase weekly or hand to collections.
Marketing electrical work
Google Business Profile + Reviews = best ROI. 4.8+ stars, 200+ reviews, weekly updates = customers find you. Service area pages on your website (one per city/zip you serve) = local SEO. NextDoor recommendations = high-converting suburban traffic. Avoid: Yelp paid (low ROI for electrical), HomeAdvisor / Angi leads (low-quality, paying for shared leads with competitors).
Exit strategy & business value
Service-based electrical shops sell for 2–4x EBITDA (annual profit). A shop netting $300K/yr sells for $600K–$1.2M. Buyers look for: documented systems, retained customers, recurring contracts (MAs, generator service plans), 2 years of clean financials, NOT owner-dependent (techs and managers run the day-to-day). Build the business so it can sell — even if you never do.
Tool list
- Shop management software (Service Fusion, ServiceTitan — built for electrical)
- QuickBooks Online + a bookkeeper (the few hundred a month is the best money you spend)
- CRM with automated review requests after every closeout
- Recurring contract template (generator service, MA, commercial maintenance)
- Industry benchmarks subscription (BTI Solutions, IEC, NECA reports for sanity-checking your numbers)
- Business coach or peer group (ElectricianMastermind, BizGenius) — peers see what you can't
Safety — Read or get hurt
- !!Skipping bookkeeping for a year = tax-time nightmare + IRS exposure; pay for monthly books from day one.
- !!Hiring apprentices without state-required documentation = labor-law violation; follow your state's apprentice rules.
- !!Promising 'same-day service always' creates customer expectations you can't meet — under-promise, over-deliver.
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