Although it is the first section of your business plan, the executive summary is often written last because it is a summary of all the key points.
The reader should be immediately drawn into your executive summary. Tell them about your electrical contracting company and how it is doing. For instance, do you operate a new firm, an existing electrical contractor business that you wish to expand, or a network of electrical contractor businesses? Next, provide a summary of each section of your plan that follows this one. Give a brief description of, for instance, the electrical contractor company. Describe the type of electrical contractor firm you operate. specifics about your direct rivals
In your business analysis, you will explain what kind of electrical contractor business you run.
For example, you could run one of the following types of electrical contractor businesses:
- Commercial Electrical Contractor: This type of electrical contractor business will focus on building outdoor spaces like college campuses, parks, gardens, and more.
- Residential Electrical Contractor: This type of electrical contractor works with homeowners to design and/or install electrical and electronic systems.
- Industrial electricians work on big projects for factories or warehouses.
In the Company Analysis section of your business plan, you need to say what kind of electrical contractor business you will run and give some background on the business.
Be sure to answer questions like:
- When did you start the business, and why?
- What big steps have you taken so far? Milestones could be things like the number of customers you’ve helped, the number of good reviews you’ve gotten, etc.
- Your legal structure. Is your business set up as an S-Corp? An LLC? A one-person business? Tell us about how your legal system works.
A summary of the electrical contractor sector must be provided in your industry study.
Despite appearing to be useless, this has several applications.
First, gaining information about the electrical contractor industry empowers you. It improves your understanding of the market you’re in.
Second, market research may aid in better planning, particularly if it reveals market trends.
To prove to your readers that you are an expert in your field, you need to conduct market research, which is the third reason. By conducting the study and including it in your strategy, you accomplish this.
The following questions should be addressed in the industry analysis section of your business plan for an electrical contractor:
- How much money does the electrical contractor business make?
- Is the market getting smaller or bigger?
- Who are your biggest rivals in the market?
- Who are the most important market suppliers?
- What changes are happening in the business world?
- How do you think the industry will grow in the next 5–10 years?
- What is the right size of the market? That is, how big could the market be for your business as an electrician? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the people in your area.
In the customer analysis section of your electrical contractor business plan, you must describe the customers you serve or expect to serve.
Homeowners, businesses, general contractors, developers, and so on are all examples of different types of customers.
As you might expect, the type of electrical contractor business you run will depend a lot on the customer segment(s) you choose. Obviously, marketing campaigns for a homeowner would be different from those for a local government.
Based on their demographics and how they think and feel, try to identify who your ideal consumers are. Talk about the ages, genders, localities, and income levels of the clients you wish to serve while discussing demographics. This type of demographic information is simple to discover on government websites because the majority of electrical contractor firms primarily work with residents of their local city or municipality.
The demands and wants of your audience are revealed via psychographic profiles. Finding new consumers and retaining your current clientele will be made simpler the better you can comprehend and articulate their demands.
In your competitive analysis, you should find out who your direct competitors are and then focus on them.
There are other businesses that also do electrical work and are direct competitors.
Customers can also buy from indirect competitors instead of direct competitors. This includes both electricians who work for the company and people who do small electrical jobs in their own homes. You should also talk about competitions like this.
When it comes to direct competition, you should list the other electrical contractor businesses with which you compete directly. Most likely, the electricians who work in the same area as you will be your closest competitors.
Give an overview of each of their businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you have worked for one of them. But you should be able to learn important facts about them, like:
- What kinds of clients do they work with?
- Which kinds of projects do they do best?
- How much do they cost (high, low, etc.)?
- What do they do well?
- Where do they fall short?
Try to answer the last two questions from the point of view of your customers. Don’t be afraid to ask customers of your competitors what they like and dislike about them.
The last part of your competitive analysis is to list the ways you are better than your competitors. For example:
- Will you offer a larger selection of services?
- Will you give discounts or other perks to customers who come back?
- Will you give better service to your customers?
- Will your prices be better?
Think of ways you can do better than your competitors and write them down in this section of your plan.
Usually, a marketing plan has four parts: the product, its price, where it will be sold, and how it will be promoted. For an electrical contractor’s business plan, your marketing plan should have the following:
Product: In the product section, you should say again what kind of electrical contracting business you wrote about in your Company Analysis. Then, explain in detail what you will be selling. For example, along with traditional electrical systems, will you also install smart home control systems or fire and security systems?
Price: Write down your prices and how they compare to those of your competitors. In the “product” and “price” parts of your marketing plan, you mainly talk about the services you offer and how much they cost.
Place is where your electrical contractor company is located. Write down where you are and how your location will affect your success. For example, is your electrical contractor business in a growing area where the construction industry is booming? Talk about why your place might be the best place for your customers.
Promotions: The last part of your plan to market your electrical contractor is the section on promotions. Here, you’ll write down how you’ll get customers to your place of business (s). Here are some ideas for ways to promote your business:
- Putting ads in newspapers and magazines in the area
- Trying to get in touch with local sites
- Social media marketing
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In the operations plan, you talk about how you will reach those goals. Your plan for running your business should have two separate parts.
Everyday short-term processes include all the tasks you need to do to run your electrical contractor business, such as marketing your business, working on current projects, getting ready for upcoming projects, and keeping an eye on the whole project.
Long-term goals are the steps you want to take to get there. These could be dates like when you hope to have installed your 500th electrical system or made $X in sales. It could also be when you want to start doing business in a new city as an electrician.
Your electrical contractor business needs to show that it can be successful by having a strong management team. Show the backgrounds of your key players, with a focus on the skills and experiences that prove they can help a company grow.
You and/or the people on your team should have run businesses for electrical contractors before. If so, talk about what you’ve learned and what you’ve done. But you should also talk about any business experience you have that you think will help your business do well.
If you don’t have a strong enough team, you might want to put together an advisory board. A board of advisors could have anywhere from 2 to 8 members. These people would help you with your business as mentors. They would answer questions and give planning tips. If you need to, look for advisory board members who have managed construction projects or had successful electrical contractor businesses of their own.
Your 5-year financial plan should include your 5-year financial statement. For the first year, it should be broken down monthly or quarterly, and after that, it should be done annually. Your financial statements include your income statement, your balance sheet, and your cash flow statement.
Income Statement: Most people call an income statement a P&L, which stands for profit and loss. It shows how much money you made and how much it cost you, so you can see if you made a profit.
When making your income statement, you have to make some assumptions. For example, will you work on one project at a time, or will you be in charge of more than one project at the same time? How much will sales increase each year? 2% or 10%? As you might expect, the assumptions you make will have a big impact on your business’s financial projections. Do as much research as you can to try to find facts that support what you think.
Balance sheets: show you what you own and what you owe. Balance sheets may have a lot of information on them, but try to focus on the most important parts. For example, you won’t make money right away if you spend $50,000 building up your electrician business. Instead, it’s an asset that you hope will bring in money for years to come. Also, a check from a bank for $50,000 doesn’t have to be paid back right away. You’ll have to pay that back over time instead.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you don’t run out of money. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt if you run out of cash.
Make sure to include some of the most important costs of starting or growing an electrical contractor business on your Income Statement and Balance Sheet.
- The cost of tools and supplies
- Staff payroll or salaries paid
- Insurance for a business
- Fees and licensees
- Legal expenses