So you want to know how to start an electrical business? Well, that’s great because this is a business that is both challenging and lucrative.
The need for power is growing every day and as an electrical business owner, you are in the middle of the industry. People need electricity to make their lives comfortable as almost every area of their lives is touched by it.
From cooking to pressing of clothes, to illumination and entertainment, electrical appliances are becoming more important than ever.
The electrical technician or engineer makes the necessary connections and installations of these appliances. But their tools and work materials are acquired from an electrical shop.
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An electrical business brings these different aspects together; the technicians and electrical materials used for electrical works.
Although one can start an electrical business without being an electrician or electrical engineer, it is very important that an operator in the industry should be very knowledgeable in electrical matters and even well-trained in electrical operations.
The business is very technical and being well-grounded will give you an advantage especially when it comes to beating the competition and winning high-level clients.
How Profitable or Lucrative is the Electrical Business?
There is no point going into a business if it is not profitable. The only exception here is for essential services that are needed but the beneficiaries cannot afford them.
Fortunately, the government is well positioned to provide such or partner with private organizations to provide them.
But any business that provides a need shared by many is usually profitable. The electrical business is very lucrative as the need for power is very huge.
Making profits in the business, however, does not come on a platter of gold. It is the way you position your business and operate that determines whether you remain profitable or run at a loss.
Suffice to say that when run well, an electrical business can be very profitable. We will go into the details as we proceed.
Notable Key Players in the Business
In Nigeria, you can hardly go through any street, particularly in urban areas without spotting one electrical shop or more.
The reason for this is simple: people need electrical products almost on a daily basis. Either someone needs a light bulb, a socket, or an extension.
But there are big players in the industry who enjoy a large share of the market. Some of them have grown from small businesses to become big operators. These include Dayson Nigeria, Dee Light Electrical Installation, and Spincone Limited.
Dayson Nigeria Ltd is an electrical and Mechanical Engineering Company with over twenty (20) years experience in the industry.
The company specializes in the supply, installation, and maintenance of system components as well as well as air conditioning systems.
Incorporated in 1983, the company has grown from an unknown indigenous business to become an industry heavyweight.
Spincone Limited is another Nigerian electrical company that provides electrical engineering services such as load analysis, power systems estimation and design, electrical power generator supply, installation and maintenance as well as switchgear design, installation, and commissioning.
The company provides a 24-hour, 7-day on-call service to customers. The company has grown from an unknown quantity to owning a fully equipped fleet of mobile service vehicles alongside a team of technicians experienced in all aspects of electrical and mechanical services.
Opportunities in the Market for the Business
As the already established companies show, the potential for growth is always there for any start-up. The industry is one that continues to grow as it provides products and services needed in any modern society.
The opportunities in the market are therefore enormous. Growing population means an ever-increasing demand and expanding market.
This means anyone going into this line of business can look forward to a rewarding future. As the business grows, you can go from being a small business to a big player in the industry.
Target Market, Competition and Profit Forecast
The target market for an electrical business depends on the scale of operation. If you are a small business, your average customer is every household in the neighborhood.
But as the business grows, the scope of its operations will increase. So will the level of customers. Some businesses are also started at a high level based on financial strength, technical know-how and the experience of the owners.
These big-time players target business and industrial customers who provide them an opportunity to work on large projects such as building and maintenance of power systems, electrical wiring of company buildings, estates and industrial plants.
Spincone ltd for example designs, sells, installs and services solar power systems for homes and businesses. The need for solar systems as an alternative power source makes the business very lucrative as the demand is growing by the day.
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As for competition, there is no business without one in today’s world. If you want to start a small shop and grow, you will notice several other small electrical shops around you.
But that does not stop you from opening yours. You only need to study the market and know how to approach it to give your business a unique advantage.
Ultimately, it is what you bring to the table that matters. Find an itch that is not being scratched in the market yet and position your business to scratch it.
Profitability is a given in this business provided you know what you are doing and you bring value to your customers.
How to Start the Business
As earlier stated, an electrical business is technically demanding. This means it is not a business for everyone. It is a business for those who are ready to acquire the necessary skills and the technical requirements to render the services professionally.
The fact that you can replace your light bulb or connect your wires to the speaker does not mean you are an electrical engineer.
Be that as it may, if you are passionate about the business, you can partner with someone who has the technical skills necessary to operate the business.
You can also run it as a business with employees or consultants who bring technical skills on board. But you will need to be a fast learner in order to understand the industry and grow your business.
To start this business you will need to put in place the necessary ingredients for building a business from scratch.
1. Do the necessary homework and feasibility study
2. Come up with a business name that suits your business
3. Register your business with the Corporate Affairs Commission and any other agencies necessary
4. Raise the required capital
The average capital required to start the business is #500,000 and above. You can raise capital through personal savings, borrowing from family members or through a bank loan.
This will go into rent, preparing the space for stocking your goods and purchasing the initial consignment. You can source your goods from Alaba International market in Lagos or any wholesale market near your location.
There is Ariria Market in Aba as well. You can source items such as bulbs, wires, sockets, switches, extensions, step-downs, etc for a start.
Management and Sustainability
Statistics show that over 30% of new businesses fail during the first two years, 50% during the first 5 years and 66% in the first 10 years. With this in mind, you need to position your business to last.
That is where management comes in. it’s important to start your business on a sound footing by putting in place the right company structure.
You may start out as a sole proprietor, but as the business grows, you will need to delineate roles and duties for the different sections of the business.
Understand that staffing should be geared towards providing the skills your business needs to survive long-term.
Promotion and Marketing
You need to put in place a good marketing plan to grow your brand. Top-notch service delivery is important, but you must also promote your business both online and through mainstream media.
Starting an electrical business can be very lucrative, but it requires the right plan and knowledge to execute. Study your competition and put in place the necessary ingredients like capital, management, and marketing to last.Click here to see the latest Study Abroad Scholarships and Guides
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