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Expanding a Small Electrical Business - 3 Points to Keep in Mind


The electricals business is a huge industry with multiple sectors, intricately connected with the construction, remodelling and renovation industry. There are manufacturers, wholesalers, retailers, electrical contractors and electricians connected to the business, but for the most part, smaller electrical companies usually belong to retail, or electrical contracting and service sectors. The following pointers for business expansion have been prepared while keeping those smaller ventures in mind.

Find a Wholesaler That Offers Better Rates

Growth does not immediately mean improved profits, as breaking even may take some time, even for small companies. However, handling more business is an essential part of any sustainable busines expansion plan. What that means is, the company will now need more electrical goods than before, and preferably at a better rate as well.

For example, if you have recently landed a lucrative contract for supplying and/or installing all the switches, lights, wires, etc. on behalf of a construction company, chances are that your company’s bid was pretty low. While expanding and making a name for themselves, smaller businesses will often lower their profits to a bare minimum, provided that the project is big enough. Now, this may cut down on the project’s potential profit margin significantly if you cannot find a wholesale lighting products and accessories supplier that is capable of providing the electricals needed at better rates than what you are used to getting.

Understanding Why Wholesalers Are Able to Provide Products at Such Low Prices

When businesses buy in bulk from a wholesaler, they get heavy discounts. However, there is no fixed rate to which a wholesaler must abide. They must keep the business profitable of course, but it is common practice for wholesalers to make smaller profits per shipment, if the customer is:

A big company with huge orders in tow
b)      A small company that has remained a loyal customer for many years
c)       A company with big orders in tow, irrespective of its size

They can afford to take such low cuts on these transactions because they buy directly from manufacturers in huge quantities, allowing them a much greater leeway for adjusting quotes per shipment. Also, long term business from loyal customers, or big orders from new ones ultimately turn out to be quite profitable for them as well.

Consider Training as a Licensed Electrician

To get involved with the commercial electrical industry, you do not need to be an electrician. Having experience and training as an electrician can certainly help, but it’s not a necessity. You can be an investment partner in the business if it provides electrotechnical services, or start your own retail outlet for electrical goods. It is true that by having professional experience as a trained electrician, you are more likely to avoid mistakes and cut down on the expenses significantly. Level 3 certifications in fields such as electrical installation or electrotechnical services would be necessary to get the required certifications and licenses. The earlier you start, the better, since it might take anywhere between 2 to 4 years for someone to complete all qualifications necessary.

None of your employees would be able to pull one over you, but above all else, you will also be adding an extra employee (yourself) to the team; someone who won’t charge the company anything extra. As we are discussing small businesses with small teams, added work capacity without added expense should not only expand the business automatically by default, but the extra funds should help fund future expansion plans as well.


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