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As an electrician, the trades industry offers you many opportunities to expand your career. But have you been considering self-employment instead of working for an existing company? If so, consider many benefits and disadvantages before transitioning into being your own boss.
This article covers the challenges and advantages of being a self-employed electrician to make a better-informed decision about starting up your own company or remaining at your current job as an employee.
Self-Employed Electricians Have Advantages Over Regular Employees
Before we dive into the difficulties you might face as a self-employed electrician, let's first look at the advantages that might make it worthwhile for your career.
Pro: You're Your Own Boss
One of the primary benefits you'll enjoy working for yourself is that you control your success (and failures). Having the ability to only answer to clients and not an overbearing boss or supervisor is something that many of us dream about, and electricians make this a reality every day.
You control what hours you're working. This means you can adjust your schedule so you aren't overloaded with more work than you can handle. You'll also be able to take time off as needed without having to get a doctor's note or some other excuse. For many electricians, their ability to adjust their shifts to make more time for their families is reason enough to say goodbye to punching a time clock for good.
Pro: Your Earnings Are Mostly Yours
While it would be great to say you get to keep 100% of your income as a self-employed electrician, you'll still have to pay taxes, payroll, and healthcare. But, you are still receiving significantly more revenue by being more than an employee of a company. You determine how much you get paid out of your earnings and can set your own pricing.
Even better? You have more control over how much gets put aside for your retirement. This is a significant financial advantage since employers rarely match contributions fairly or adequately. Having total control of your finances means you can get that nest egg built quicker and more efficiently.
Pro: You Control Your Scope of Work
Working as an independent electrical contractor allows you the discretion to determine what is or is not in your scope of work. Have you always hated how your boss would make you do tasks that really should have been left to someone with a different skill set? Now you don't have to put up with that risk any longer. Instead, do what you do best and make a great career out of it!
Pro: You Control the Direction Your Business Will Go
Another important aspect of being your own boss is that you can set your own business goals and grow your company in the direction you feel is best. Instead of working for an employer that regularly frustrates its team with conflicting standards or practices, you can shape your venture that addresses the issues within the industry to make a better service experience for consumers.
Self-Employed Electricians Face Unique Challenges
Every self-made business has challenges it will face, but this doesn't mean one should abandon the idea of operating independently. In fact, self-employed electricians have several options to help deal with issues that arise throughout their careers.
So, what are some of the cons to being your own boss as an electrician?
Con: Work Isn't Consistent
One of the nice things about working for a larger company as an electrician is that work is steady. Working self-employed can mean periods where you don't make the same amount of revenue. It's hard to incentivize clients to return for more work when you're a smaller company. You will need to have a strategy for surviving the slow periods.
Con: Start-up Costs
As a self-employed electrician, you will need to provide supplies, tools, and management solutions. In addition, you'll need at least one company vehicle and a place to store everything when not out on the job. This requires significant capital upfront to get started and could be a barrier to your start-up taking off.
Con: What Work-Life Balance?
Earlier, we mentioned the advantage of choosing your own work schedule as a self-employed electrician; however, this takes practicing mindfulness. It's easy to get consumed by more than just the electrical projects you'll complete. You also need to handle bookkeeping, advertising, customer service, quotes, payroll, and more. These responsibilities can easily dominate your entire day.
Con: Electrical Work Can Be Dangerous
Another challenge of being self-employed is the risks that come with your industry. For electricians, there are physical risks of shock, falls, property damage, and more. When you think about the potential threats to your facilities, team, and customers, you need to consider how your company can withstand financial losses from these events.
Business insurance for electricians can shield your company from a wide range of claims and protect your assets when things go wrong beyond your control. For example, how would you recover your tools and equipment if your workspace goes up in flames? Or if an employee is at fault for an accident while driving your work truck?
There are several policies that you should consider to fully indemnify your electrical business against lawsuits and damage claims, including:
- General Liability
- Commercial Auto
- Business Interruption
- Workers' Compensation
- Commercial Property
You might also consider picking up a Business Owner's Policy (BOP) that bundles several of these coverages together in a single policy for a lower rate. When researching electrician insurance cost, keep in mind the potential savings you'll gain should you ever need to use it versus paying for a claim on your own.
Is Working as a Self-Employed Electrician for You?
At the end of the day, electricians have promising careers, whether working as employees or operating their own businesses. But, if you want to have more control over your career and potentially make a better living, being self-employed is a great option to achieve those goals. When taking this step, you must plan accordingly and protect your new company's best interests with a comprehensive business insurance policy.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Larry Buckley