First steps
Until 2013, I worked for hire: I went from an electrician who lays cables and assembles cabinets with his own hands, to a production manager. At the latter company, I had to attract and fulfill orders for assembly, but constantly faced barriers - long paperwork and slow decisions on transactions, despite the fact that customers were willing to pay and order equipment.
I worked for a large company, well-known in Bashkortostan, and its internal procedures took a lot of time. Particular problems with registration began when I received new checks. When a client came who was ready to pay 2.5 million rubles. forward, and the company was going to complete the documents for another month, I just left and didn’t even pick up my work book, I opened the first company in the name of my father-in-law. There was no conflict of interest, I didn’t poach clients, I just left there and started working for myself.
I had an open legal entity, I had my own laptop and a printer, which I borrowed from my parents to print out the invoice and agreement.
I started the business without starting capital, I just paid 10,000 rubles. for registration of a legal entity. There were no employees, investments, premises.
Within a couple of days, I found performers from among my former colleagues and invited them to assemble equipment for the electrical installation of the cafe. It was a handicraft production: someone assembled the cabinets at home after work, but the assembly was done by professionals and I did not have to worry about the quality of the work. We completed the entire order in three weeks.
I understood how the transaction cycle works and began looking for premises among my friends. I knew that renting production space was expensive, especially if there was already equipment there. I only had a small reserve of money from the first order and a great desire to continue.
I rented my first small office in the basement of an electrical store. There were 15 sq. m of space and two tables, I paid 5,000 rubles. per month. I installed my computer and printer there, connected the Internet and started looking for clients.
This room did not last long. When I got my first employees in 2014, we found a room with an area of 50 square meters. m. It was very cold and dirty, there were no normal doors. Inside this room, we made a structure from wooden boards and covered it with polyethylene, placed a heat gun inside, laid wooden boards on the floor and covered them with linoleum. The result was a greenhouse inside a large garage.
At first, I had a partner, but as soon as I confronted him with a choice - to leave work and completely switch to business or to leave the share - our paths diverged.
On the eve of 2014, I found my first sales manager who called clients, sent out commercial offers and visited construction sites. He didn't have his own car, so I included him in the insurance of my Opel Corsa. I was involved in calculations, preparing technical and commercial proposals, and administrative work, so I could work in the office.
At first, it was difficult for me to work with suppliers: most of the clients did not know us and were not ready to make an advance payment, there were problems with the manager, the conditions were not entirely satisfactory. While there was little experience and there was no one to consult with, searching for suppliers took a lot of time. We try to work with large suppliers - General Electric, Eaton, ABB, Schneider Electric, Siemens.
Electrical installation work: features of supply and demand
The operation of buildings of any purpose cannot do without electrical installation work, so electrical installation enterprises are always in great demand.
On video: Where to find clients for electrical installations
Electrical installation work mainly includes the following:
- laying electrical lines;
- electrical connections from power sources to sockets, switches and other points;
- replacement, complete or partial, of electrical wiring;
- installation of a cable channel; dismantling faulty wiring;
- fastening of lighting devices, electrical equipment, including air conditioners and other systems;
- laying cables for telephone, television and Internet.
On video: Where to get orders for finishing and electrical work
There are two main areas of activity of an organization specializing in electrical installation work. The first includes simpler steps for connecting, installing and repairing household electrical appliances. This direction is good because it is in great demand, brings profit and at the same time is relatively inexpensive in financial aspects, without being difficult to implement. The second type of work is more complex and involves organizing the development of electrification systems for various construction projects and their further maintenance. The second option will be more interesting and profitable, but for the development of a start-up enterprise the first type of activity will be much easier and more economical.
On video: Useful tips from Business Youth
https://youtu.be/WmJ7ABLnMuc
The greater the range of activities the enterprise covers, the greater demand it will be. But in order to understand what services the company will be able to provide immediately after opening and what financial investments will be required for this, it is necessary to draw up a detailed business plan. This document includes all the expenses that the founder of the company will have to bear on the way to its founding and development. Taking this into account, they formulate a list of works that the company will offer to potential clients, calculate possible profits and formulate a pricing policy. With proper planning, the payback period for a company created from scratch can be from 1 to 2 years.
On video: Assembling the distribution board
When drawing up a business plan, it is imperative to study the existing market for electrical installation services. First of all, this is necessary to understand which services are not enough at this stage, and which are already in excess. Thus, it is advisable to select those industries in which potential clients are most in need, and therefore will be in demand.
It is imperative to carefully study the solvency of the residents of the locality and area where the enterprise will be opened, and determine what services are more rational to offer to clients. A mandatory item will be the preparation of a business plan if the entrepreneur is counting on receiving a bank loan or the help of investors to create and develop a business.
New round
In 2014, we began to expand our client base. Some came based on recommendations, others came after our mailings and calls. Gradually, we began to receive regular orders, but things went best when the active phase of preparations for the 2020 SCO and BRICS summits began in Ufa. At that time, many facilities were being built in the city - hotels and administrative sites, for example, the main event site, Congress Hall.
The summit became a challenge for me: I actively visited all the sites, offered our services and equipment, and in May received consent to the deal from the Sheraton Hotel. This was our first large project worth 15 million rubles.
At the time, I had a manager, two cabinet assemblers and an accountant working with me on a remote job. The volume we took could not be handled with such a composition, so I began to actively build up the team, look for assemblers and an engineer for calculations and consultations. It was no longer possible to work in the old greenhouse, so we found two new premises: a production area of 200 square meters. m and an office area of 100 sq. m within walking distance of each other in a residential area.
It is very difficult for small and medium-sized businesses in the equipment sector to work directly with companies of Gazprom’s level, because large customers prefer to receive equipment in installments and make purchases only through a tender system, where competition is very high.
We work with clients through partners - electrical installation organizations, system integrators, specialized companies that need equipment to carry out their work. For example, if a hotel is being built, power is connected to it, light is installed, sockets and air conditioners are installed. For everything to work, you need a company that will install the electrical equipment and connect it inside the building.
I hope that in the future we will reach a wider range of clients. Those companies with which we have been working lately want us to deal not only with supplies, but also with installation of electrical equipment, and to be able to accompany them in all matters.
Sheraton was a rare project where the clients asked us to do everything very strictly according to the design. For example, we brought grounding wires from Germany. One such wire cost 1000 rubles, although it is easy to make it yourself from two tips and 30 cm of wire, which will cost 10 rubles. The customer firmly insisted on such conditions.
The duration of the project depends on the amount of equipment. It took us about a month and a half to assemble more than a hundred cabinets for the Sheraton Hotel. An automation cabinet with a large number of components can be assembled within three months.
Features of registering a company for electrical installation work
Every entrepreneur who opens his own business is faced with a choice: which organizational form to choose: individual entrepreneur or LLC. Each of them has its own advantages and difficulties. For this type of business, the LLC form is considered more preferable. This is explained by the fact that, firstly, electrical installation work is characterized by a certain complexity and customers choose potentially more reliable companies. The second important point is that many large enterprises, including industrial enterprises, shopping and entertainment centers, choose an electrical installation organization based on a tender. As a rule, enterprises that have the status of a legal entity win it.
The main requirements for candidates for registration as an LLC are as follows:
- each of the future founders has citizenship of the country and is over 18 years of age;
- provision of authorized capital, which is at least 10 thousand rubles;
- payment of the state duty, which is confirmed by providing a copy of the relevant receipt;
- availability of a prepared package of documents, the contents of which are determined by the norms of the Federal Tax Service.
In addition to copies of the passport and identification number of each owner of the future enterprise, you will need to draw up the charter of the LLC, a decision on its establishment and, if there are several owners, an agreement and minutes of the meeting of all founders.
Another important organizational condition for starting the activity of a company engaged in electrical installation work in large organizations is membership in self-regulatory organizations. If the company plans to exclusively service small, predominantly residential properties, this condition is not necessary. However, counting on the development of the enterprise, it is recommended to join an SRO. The main feature of joining an SRO can be considered the presence of certain costs. Thus, registration of membership in this organization will cost 300 thousand rubles, in addition, regular payments in the amount of 30 thousand rubles are required annually. Since such costs can become prohibitive for a new entrepreneur, many companies register with an SRO a little later, having achieved some success.
Business environment
The high demand for electrical work indicates a favorable economic situation in the region, since new wiring is required not only in newly constructed buildings, but also in those where renovations are being carried out. The opening of restaurants and cafes, production workshops and shops requires repairs and, as a result, replacement of wiring. Currently, the region is developing dynamically due to the influx of investments, as a result, demand is high.
Another large segment of the market is new buildings with rough finishing. This niche is occupied by individual entrepreneurs and small firms. Entrepreneurs always find work. The number of orders and level of income differ noticeably, but the activity pays off and brings in relatively stable income even without a serious advertising campaign. The company’s activities already need to be promoted, since the company incurs additional costs associated with a higher level of service. However, 9 out of 10 newcomers survive. Not everyone manages to earn a lot, but it is possible to recoup the costs.
On average, an electrical installation organization earns 300-350 thousand rubles per month. or 3,600 thousand rubles. per year if the work is performed by 2 teams. This will allow you to recoup costs in 8-10 months.
Before word of mouth begins to work, when clients recommend the company to each other, the investor will have to make efforts to attract attention, i.e. we need to run an advertising campaign. Moreover, it must be active enough to attract a sufficient number of clients for 2 teams. Of course, you need to place ads on the Internet and local newspapers. It is highly advisable to put advertising information on the car. You can also promote the company through your own website, where, in addition to contacts and other information about the company, there should be articles that help clients navigate the quality of work and other issues that concern clients.
Special premises for work are not needed, since all of them are carried out at the client, and the necessary materials are purchased for a specific order and stored in the customer’s premises in which the wiring will be installed. But you will still need a small room. Firstly, the company will need a car to purchase materials. Secondly, you need to store the tool somewhere. We decided to buy a used car and rent a garage for it, where we will also store tools. A small-capacity machine will not be suitable, since in addition to cables and tools you will have to carry ladders. In addition, renovations in apartments with rough finishing usually begin before the developer landscaping the area. Therefore, the vehicle must have good cross-country ability. You don't have to buy an SUV, but a low-slung foreign car will make the job impossible. We chose the GAZelle of the Gorky Automobile Plant.
Next, you should purchase tools and enter into an agreement with a materials supplier or with several suppliers. A stable contract will allow you to make purchases at lower prices and thereby attract customers. This completes the organization of electrical installation work - you can advertise and begin servicing clients.
Choice of legal form
This action is very important. As a rule, this choice is simple - register as an individual entrepreneur or a limited liability company (LLC). There is no special work here. Registration as an LLC will be preferable.
After all, according to some unspoken rules, if you have to participate in tenders, then preference is given to limited liability companies. You will most likely have to take part in such elections for the purchase of electrical installation work more than once, and this will provide you with a good amount of work and a decent income.
Production facilities and transport
Electrical installation work requires a warehouse to store cable spools, ladders, light boxes and much more. Any garage will do for this. If you or your closest assistant have such a premises, you will not have to pay rent.
An office is not needed at first. It is always better to talk to customers and future clients on their territory. An accountant can work from his home. This is a huge cost savings.
But the choice of vehicle should be approached with all seriousness. It should be not only a roomy, but also a reliable car. You will have to transport building materials and workers on it. Electrical installation work often takes place at construction sites, outside the city, in nearby villages and small towns. Therefore, a passenger car is unlikely to suit you; you need a car that is reliable and passable.
The electrical installation business attracts investors during the construction boom. Almost every month new companies appear and start up. However, profitability remains at 30%. This figure is even higher for individual entrepreneurs who do not have an administrative apparatus. But what are the chances of finding your place in a market where dozens and hundreds of companies operate!?
Let's look at the business plan of an electrical installation company.
Constituent documents
To find out how to open an electrical installation LLC and create constituent documents, you need to study the legislation on registration of legal entities. You can get complete information on social networking sites:
- How to organize an electrical installation company with a single participant or a group of founders.
- What is included in the constituent forms?
- How are the minutes of the meetings of the founders or the decisions of the sole participant drawn up?
- What needs to be documented when opening (participants, shares, management, etc.)?
- How to draw up a charter for an electrical installation organization?
- Other questions regarding registration.
You can also obtain information about opening an individual entrepreneur for electrical installations on the Internet, but it is necessary to take into account that the actions of an individual entrepreneur are largely regulated by the Civil Code of the Russian Federation, since a businessman carries out most legal relations as an individual.
In the event that you do not have the necessary knowledge and experience regarding registration of an LLC or individual entrepreneur, the best option would be to contact specialized companies for registering companies
. Otherwise, the registration process may drag on for months, since the Federal Tax Service is very careful in checking documents when registering companies; any discrepancy leads to the return of documents for revision.
A review of startups that appear annually in America revealed an interesting pattern: when people start a new business, they increasingly rely on an idea rather than on equipment or ready-made technologies. This is due to the fact that the full cost of many types of finished production is calculated in such a way that their payback will have to wait for years.
“Of course, manufacturers of machine tools and machinery lay down a certain level of profitability that makes the use of the equipment they sell profitable, but the risks associated with lending and external factors often negate production initiatives,” explains renowned Chicago economist John Wasser. “Another thing is an idea or professionalism that can be sold well, while investing a minimum of money in starting a business.” Among such startups, Vasser named electrical installation companies
. Let's figure out why.
Electricity transmission and distribution
The process of transmission and distribution of electrical energy is responsible for several main types of systems operating in conjunction, which form the electrical power network:
- substation;
- Switchgear;
- Power lines or transmission lines.
An electrical power network is a complex of electrical installations designed to transmit and distribute received energy. It consists of a conductor, a distributor, cable and overhead power lines operating in a certain location.
The substation serves for the transformation and distribution of electrical energy. It consists of transformers (or other energy converters) and distribution equipment, a powerful battery, and other additional devices and structures.
Distribution equipment is an installation that serves to receive and distribute energy. It consists of the following switching devices:
- Busbars/connection bars.
- Compressors.
- Batteries.
- Protective devices.
- Automation tools.
- Measuring instruments.
Power lines or power lines of overhead and cable voltage types. They are an electrical installation that serves to transport electricity over long distances, with the same voltage, without additional conversion.
For all types of electricity, there are individual methods of installation, connection, operation and calculation, depending on the characteristics and sources of energy.
Marketing plan and company promotion
Marketing and advertising are equally important components of the success of any company. The organization of an electrical installation company also cannot do without a detailed elaboration of a plan to attract new clients. Let's look at the two components of this process separately.
Marketing plan for the project
The situation in the construction and renovation industry can change dramatically in a matter of days, so before opening a new company, it is better to carefully study the market. If the city is currently being actively developed, new retail spaces and residential buildings are appearing, then the services of electricians will be in demand when carrying out large projects. In this case, it is necessary to direct efforts to attract the attention of developers to your company.
If at the moment the construction of new buildings is sluggish, then it is better to draw up a marketing plan to attract clients from among individuals. In this case, the emphasis should be placed on the fact that the company provides services for replacing electricians during repairs, installs electrical panels and wiring, connects new electrical appliances, and so on. Orders of this kind will cost much less, but they will arrive regularly and be completed faster; accordingly, payment will also be received regularly.
Another marketing strategy that can be implemented when opening an electrical installation company is working at tender auctions and government orders. To do this you will have to obtain SRO approval. But with a pass, you can provide yourself with stable large orders over the next 3 years without the risk of losing a large amount of money on unscrupulous customers. Even before starting business, it is better to decide for yourself what marketing plan the company will adhere to and select the appropriate type of advertising to attract customers.
Remember that the most fruitful and reliable cooperation is long-term
Advertising company
The selection of advertising should be carried out based on the company’s marketing strategy. If you plan to implement cooperation with construction organizations, you can take part in professional exhibitions, order from a special agency or order advertising in the media. Large formats of outdoor advertising are also suitable. The main goal is to make as many people as possible aware of the company.
Otherwise, advertising on social networks and the Internet will be the most effective. It will also be the cheapest. If you spend money once on creating a colorful website and promoting your own group on a social network, then all subsequent months you will only need to pay for administration, and this is not too expensive.
To participate in tender auctions, a company must have good connections. Therefore, it is important to monitor your reputation and collect positive reviews. Remember that it is in a professional environment that an opinion about a company should be formed.
The budget of an advertising project is different in all cases. If creating a website and promoting a group requires an average of 50 thousand rubles, then outdoor advertising or a media campaign will require investments of 150 thousand rubles. Remember that the site will have to be administered constantly in the future, while large companies attracted by advertising may enter into an agreement for several years in advance.
In any case, the issue of advertising should not be left to chance. It is better to invite experienced specialists to cooperate, who will develop a clear plan at the lowest possible cost. Competent advertising begins to attract customers within the first month after its appearance, so the results will be visible immediately.
Requirements for the location and equipment of the organization
An electrical installation company does not necessarily have to have its own spacious office. As a rule, meetings with clients ordering electrician services, installation of electrical wiring and other types of work take place on the customer’s premises. A small company can easily operate without an office, but in this case, finding clients will be difficult.
To find customers, but not spend a lot of money on setting up an office, you can rent a small room to receive visitors. It is also necessary to organize a warehouse in which equipment, materials, etc. will be located. A room measuring 10 meters will be enough for a small company, so it will not require serious expenses.
Most electrical installation companies that work only with individuals do not have an office at all. This is a good way to save money, but such a company looks undignified
If you plan to open a large electrical installation company capable of receiving orders from large construction projects, its owner better take care of renting a good office. This should be a spacious room with space for a manager to work, a room for electricians, a warehouse and other needs. Keep in mind that the minimum area of such an office should be 40 m2, since this point is extremely important for tax officials even at the stage of LLC registration. The cost of renting a room of this size will average 30 thousand rubles per month.
You can save money on hosting your organization. There is no need for high traffic or proximity to main transport lines. Large clients in the construction business are always representatives of private or public companies, and cooperation with them often begins with tenders and auctions. Therefore, customer representatives can come to any part of the city. As for clients ordering electrical work for their apartment or private house, it is easier for them to call and invite specialists to their territory, so that at best they will come to the office twice: to conclude an agreement and final payments.
As for purchasing furniture for the premises and carrying out renovations in it, there is no need to go glamorous here. You can get by with a modest set: a workplace for a manager, a computer with design capabilities, a place for installers to rest, and a warehouse. It is unlikely that the amount of costs will exceed 100-150 thousand rubles.
One of the advantages of an electrical installation company is that there is no need to set up an office
Choosing a car for a company
In addition to the premises, for productive work the employees of an electrical installation company will need a good, roomy car. You will not find a single example of a business plan for such a company that does not include this expense item. This is due to the fact that work is always carried out with a large amount of equipment and materials, some of which are large. They can only be delivered to the electrical installation site using your own transport. For these purposes, at a minimum, you will have to purchase a minivan or station wagon. Some entrepreneurs prefer to rent a car at first, but sooner or later they will have to get their own.
When choosing a model and brand, you should pay attention to the possibility of simultaneously transporting a folding ladder, a box of consumables and tools, as well as the installers themselves. In addition, the car must freely drive to construction sites, many of which are not prepared for the passage of passenger cars. It is not economically feasible to purchase a completely new car, just like an old one that requires frequent repairs. In the first case, the payback on the acquisition will occur after a very long time. In the second, the need for frequent repairs will bring additional losses and delays in the delivery of objects.
The average cost of a used car that meets all the requirements is 400 thousand rubles. If this amount exceeds the available budget, you can lease the car. This will allow you to evenly distribute costs over several months. Please note that the leasing company must be chosen very carefully.
A presentable car is a step towards the success of the company
Eventually
Try to do your work efficiently, quickly and at an affordable price. This will bring results, and within 2-3 months the business idea will begin to generate good income. If electrical installation work is in demand, the company’s profitability will be 20-24%. You can earn from 1 million rubles in net revenue per year. You will have to invest from 1.5 million rubles, but the business pays off in 1-2 years. And with high-quality services, the company acquires regular customers during this time, and the opportunity to expand appears.
Documents required to open an LLC
For this action, you must submit the following materials:
- charter of the enterprise;
- minutes of the founders' meeting;
- agreement on approval of a limited liability company;
- document confirming the presence of a legal address;
- application for registration of an enterprise (form P11001);
- order on the appointment of the general director;
- receipt of payment of state duty.
A mandatory condition will be the presence of an authorized capital in the amount of $350. Samples of all necessary documents are available on the Internet and are available to everyone. Electrical installation work is registered under OKVED code – 45.31.
Registering your own business is a responsible task, and, of course, you will have to work hard. However, you can significantly save your energy and precious time by contacting special organizations that provide services of this kind.
What is OKVED
The All-Russian Classifier of Types of Economic Activities (OKVED) is a special document with a complete list of types of economic activities that domestic entrepreneurs can engage in. Each type of work has its own code, which must be designated when registering a company or individual entrepreneur.
Since January 2020, a new edition of the classifier called OKVED-2 (OKVED-2014 or OK 029-2014) has been in force in Russia. The previous version of OKVED-1 (other names - OKVED-2001, OK 029-2001, NACE rev. 1, OKVED-2007, OK 029-2007, NACE rev. 1.1) has become invalid, so entrepreneurs should be very careful when choosing the right code from the current classification.
Also, when choosing codes, it is worth considering that some types of economic activities require a license, and without going through the licensing procedure, the entity is prohibited from engaging in such work. In addition, some types of activities are suitable exclusively for a certain organizational and legal form.