How to start an electrical contractor business in Australia

Setting up your own electrical business is relatively simple, especially if you’ve already completed your apprenticeship and have your own tools. This guide covers how to start a small business: licensing, common business structure options, building your brand, and protecting it.

The benefits of starting a small electrical business

If you love working with your hands, this is the job for you. Electricians are tasked with completing detailed, hands-on work that takes great skill and dexterity.

Electricians are in demand and will likely continue to be for a long time. As a result, electricians are often well paid. According to Australian government statistics, electricians earn a median weekly wage of $2,204 as of May 2023.

And as your own boss, you decide what you want to do – including when and how you work. This allows you to create a work-life balance that suits your lifestyle.

The challenges of starting an electrician business

On the other hand, running your own company means that you have the responsibility of finding and dealing with clients. There may be times when you have more work than you can handle, but also slow periods where you may struggle to fill your days.

In addition, starting an electrical business can be pricey. There are specific industry requirements that need to be met, including certification, qualification, and ongoing industry training. You may need to pay many upfront costs just to launch your business.

Who can work as an electrical contractor in Australia?

Electricians in Australia must have a current electrician’s licence to work as an electrical contractor. Each state and territory has its own unique requirements. You should visit your state government website to check your local guidelines.

How to start an electrical business

1. Create a business plan

Your business plan will have details such as your ideal clients, your initial and ongoing costs, and how much money you need to earn to break even. It can also include sections around how you will market your business. Marketing includes everything from your logo and website to your social media and advertising

2. Obtain a business licence

Like any small enterprise, electrical contracting businesses need a business licence to operate. The Australian Business License and Information Service (ABLIS) can help you find which permits you need to do business in the electrical industry.

3. Choose your business structure

There are several business structure options in Australia, including sole trader, partnership, company, and trust. Many electricians choose the sole trader pathway as it is the most economical option. However, there are pros and cons to each type of business structure. Speaking with a solicitor or accountant could help you understand which option is best for you.

4. Get electrician insurance

Electrical contracting comes with risk, like mistakes in your work, accidentally injuring a customer, or damaging your tools. Electrician insurance could help you manage the financial fallout if things go wrong. Certain types of business insurance, such as Public Liability, are mandatory licensing requirements in most states and territories of Australia (usually requiring a minimum cover level of $5 million).

5. Decide how to price your electrical services

The electrical contracting industry is competitive and dynamic. When bidding on electrical jobs, consider adopting a standardised estimation process for all of your electrical projects.

Choose BizCover for your electrician insurance

Starting an electrical contracting business is a big step towards career independence. Getting everything set up correctly from the start—from drafting a business plan to pricing your services—can help set you up for success.

With BizCover, you can compare electrician insurance quotes from multiple insurers, select the cover that’s right for you and purchase in about 10 minutes online!