As a master electrician, you’ve built your business with your electrical skills. You scaled up and became a savvy business owner in the process. Now, you want to ensure that your company has a high selling value - the amount of money that someone will pay to buy your business - just in case you want to retire early.
While taking steps to increase your electrician company's selling value might sound intimidating, make sure to take a breather. You don’t need the financial skills of an investment banker to get your company a higher selling valuation.
Ensuring that your company has a high selling value requires taking a few steps. In this article, we’ll walk you through four strategies to increase the selling value of your electrician business.
Your Company’s Most Valuable Asset: Your Team
Everyone on your team - the apprentices fresh out of trade school, your most experienced electricians and managers, your front office team, and your marketing team - all contribute to the value of your company. The selling value of your company is only as good as your team’s work quality.
You want your entire team to constantly perform at the highest levels, adding value to your company and your work. The level of training your staff have, which is reflected in how well they perform their jobs, can make up the majority of your electrician business’s selling value. For instance, your staff’s expertise and performance abilities determine whether you sell your company at 2x earnings before interest, taxes, depreciation, and amortization (EBITDA) or 5x EBITDA.
Electricians in the Trenches
The proficiency and competency of your team’s work will directly determine your electrician company’s selling value. You need to ensure that your team always completes their jobs well. Follow these pointers to keep your electricians at the top of their game:
- Make your expectations for onboarding apprentices clear. Create a one-year plan for each apprentice, and communicate what you want them to learn and where you want them to be career-wise after three, six, nine, and twelve months.
- Ensure that the experienced electricians who are training the apprentices understand your expectations and will help the apprentices hit their goals. Conduct regular meetings with your apprentice and their mentor to praise their efforts and hash out how to overcome difficulties.
- Pair apprentices with knowledgeable, patient, and experienced electricians. Experienced electricians will play a crucial role in determining their apprentices' early career trajectory. They’ll know what type of work apprentices should do on each job and how to learn the trade.
Training like this will help prevent apprentices from making big mistakes, which can cost your clients money and damage your reputation.
- Ensure that each electrician on your team holds a valid license. If any electricians on your team are practicing with expired licenses, you’ll face legal repercussions. To avoid this, always know when each electrician’s license is up for renewal, and invest in your teams’ ongoing licensure and education.
- New products and techniques are always being developed. The more your team knows how to work with this tech, the more value your team will bring to your company and your clients. Discover new tech by contacting industry experts, consultants, and professors. Hold periodic and paid training sessions to keep your team up to date. Once your team masters the newest tech in the electrician field, you will be the local pros of a new, exciting, and game-changing technology.
- Ensure your team can interact with clients well. Clients are the ones paying, and if everyone on your team exhibits a good attitude, clients will appreciate your services and want to work with you in the future. They might even refer you to their friends.
Following these pointers will maximize your team’s value and set expectations for high-quality work. If your team works up to these standards, your electrician business selling value should continually increase.
Your Front Desk and Marketing Team
While your electrician team reflects the level of work, expertise, and competence that you bring to your trade, your front desk and marketing team are incredibly important in maintaining and growing your business.
Your front desk team will communicate with clients before jobs begin. Make their job easier with a good client relationship management (CRM) program. A good CRM will show how organized your operations are, how much business you’re doing, and how much potential business you can do. Having a good CRM will make it easier for you to add value to your company.
Looking to upgrade your CRM program? Build your own CRM app with Adalo. Adalo is an app builder that requires no coding skills or computer knowledge to use. With Adalo, you build your own app using a seamless drag-and-drop interface. You don't need any coding or tech knowledge to use Adalo - the user interface is super simple and intuitive.
Use Adalo to create a database of client profiles. Then, build a booking and communication app that your clients can download for free on the Apple App Store and Google Play Store. Use this app for booking appointments and communication. Your clients can use this app to directly message electricians on the job and your front desk staff.
Creating your own CRM and client communication system will add value to your company. You’ll be able to quickly and easily communicate with all clients. Having a centralized database of client profiles will also serve as an indicator of how many clients are willing to pay for your services. This is a major factor in evaluating your business’s worth.
Build a Positive Work Culture for All
Having a healthy work culture that creates satisfied and happy employees will positively contribute to your company’s selling value. Keeping everyone on your team happy will result in lower turnover rates. This means you’ll have more electricians to complete work, bringing in revenue for your company and boosting your selling value.
Vendor Relationships
Electricians rely on suppliers to provide crucial materials like tools, wiring, and digital components. Having strong relationships with vendors is crucial to your business’s selling value. These relationships directly influence how quickly you’ll complete jobs. If you can’t get materials in time, completing jobs will get pretty complicated.
You’ll need to work with several vendors because one vendor might not have the material that you need to install for next week’s job. Having a good working relationship with more than one vendor decreases the risk of having a project stall out because you'll have more material sources.
Just like building strong relationships with clients, you’ll need to build strong relationships with vendors. Follow these three tips to create strong business bonds with your suppliers:
- Form a strong relationship with the sales agents from each supply company who sell to you directly. They’ll want to keep you on as their client, and if you purchase from them, they’ll want to keep your recurring business.
- Sales agents from supply companies can also fill you in on the latest tech advancements in the industry. Most likely, they’ll enthusiastically introduce you to the newest DC converters for commercial buildings.
- After you’ve purchased from a few suppliers, show your gratitude for their services and take them out to lunch or grab them a coffee. This will be a great opportunity to have face-to-face conversations about what’s going on in the industry.
Over time, you’ll be able to secure discounts and other favors with your suppliers. When you prove to be a reliable customer by continually paying on time, ask for favorable payment terms. These will help you keep some projects cash-flow positive when certain clients can’t pay for your services straight away.
Having a consistent supply of materials to get jobs done quickly and correctly will boost your reputation. Maintain a good relationship with your suppliers to increase your electrician company’s selling value.
Relationships With Clients
Arguably, the most crucial factor that determines your business’s selling value is the number of clients you have. This is because the revenue comes from them.
Your team’s work quality will play a major role in keeping relationships with clients. Ensure that the lead electrician on each job site meticulously checks all work and communicates the job’s progress to your client. Satisfied clients will most likely pay on time and give you referrals.
Client Types
Some clients are amazing. The amazing clients we’re talking about are the ones that provide constant work for every month of the year.
Here’s a list of these clients and the type of recurring work they’ll need:
- Commercial Businesses: Offices, retail stores, and restaurants need regular electrical maintenance and upgrades. They’ll also need to comply with government electrical regulations, meaning you can do their compliance tests.
- Construction Companies and Contractors: Collaborating with construction firms on new builds can lead to large, lucrative contracts that last for years. If you’re the electrician for the biggest contractor in town, you can all but guarantee a solid flow of jobs - and revenue.
- Local Government and Public Sector Entities: Schools, hospitals, and other public buildings will also need routine maintenance and compliance inspections.
- When public works projects such as new schools or government buildings are proposed, work hard to get the job and form a relationship with the officials proposing the job. Working on the new public school this year can also lead to a contract for the county courthouse next year.
- Real Estate Agencies: Partnerships with real estate firms can provide a steady flow of work in refurbishing or upgrading properties. Many realtors, commercial and residential, will have clients wanting to upgrade their electrical systems before they put their properties on the market. Having relationships with a few realtors can create plenty of job opportunities for your business.
- Property Management Companies: Managing the electrical needs of apartment complexes and commercial properties will ensure consistent work, as these companies will need periodic compliance checks and routine maintenance.
- Industrial Clients: Factories and industrial sites require complex, high-value electrical services. Not all electrician companies can work on industrial projects. Dedicating a team to industrial clients will open up a niche revenue stream for your business.
Reach out to some of these businesses with a dedicated marketing professional. Having a marketing professional on your team to build relationships with potential clients will make your company known throughout your community.
Niche Down Your Team
When assigning your team to different jobs, create teams that specialize in different aspects of electrical work. Having teams with diverse skill sets opens the possibility for you to take almost any electrician job, like maintenance, repair, industrial installation, etc.
Being a company that’s not limited to one certain avenue of the electrician industry will open many doors for increased revenue, which can increase your company’s selling value.
Next Steps
It might take you several months to put our suggestions into action. After you’ve taken the steps necessary to increase your electrician company’s selling value, actually putting your business up for sale is a different ball game. You’ll want to contact your attorney and accountant, two professionals who are most likely versed in this area, to get the ball rolling.
Selling your electrician business could be a lengthy process. If you follow our guide, you’ll find that people looking to buy your company will most likely see it as a valuable investment, which might make them willing to pay hand-over-fist for it.
