Business ideas

Best Recurring Income Business Ideas for Electricians

February 4, 2022 – We’ve all heard the saying, “Money doesn’t grow on trees.” Unfortunately, there’s no way to plant dollar bills for your electrical company that will grow into the hundreds overnight (wouldn’t that be nice?).

While I can’t offer you a money tree, after speaking to dozens of our electrical customers, I can tell you that one of the best ways to grow your business is to generate recurring revenue.

What is recurring income and why have it?

Recurring revenue is predictable and stable revenue that comes into your business at regular intervals. It helps you better maintain cash flow, reduce reliance on one-time sales, and most importantly, allows you to forecast revenue so you can make better decisions for the future of your business.

Even though recurring revenue is valuable to electricians, many electricians, especially in the residential sector, often don’t think about building recurring revenue into their business model.

Homeowners assume they have a static electrical system that requires no regular maintenance, and business owners I’ve spoken with over time say the average homeowner typically only calls an electrician for maintenance. once every 7 years.

As a result, some residential electricians do not see enough demand for recurring services to justify integrating them into their business model. But imagine if you checked on your residential customers every year or so. There is definitely an opportunity here to create recurring revenue.

For electrical companies in commercial space, recurring maintenance work is more common. This includes contract maintenance (eg, moves, adds and changes, aka MAC), energy consumption assessments, and on-site maintenance.

However, there is often strong competition for these contracts, so it takes more time and resources to stand out.

Writing in Electrical Contractor, Marilyn Michelson explains:

Maintenance contracts for industrial, commercial and institutional facilities are growing in popularity. More and more contractors are performing on-site maintenance work for industrial facilities. It is clear that these industrial facilities can reduce the cost of having to employ electricians on staff, by outsourcing the maintenance of their electrical systems to outside contractors.

To stand out from the competition and create recurring revenue, some electricians create maintenance packages that include an inspection and/or service on a monthly, quarterly or annual basis. Others create bundles of their services and offer them at a discounted rate.

However you decide to sell recurring services in your business, these are the best practices suggested by simPRO electricians.

1. Build a loyal customer base

It is cheaper to retain customers than to convert new ones.

So every time you work with a client who’s a perfect fit for your business, it’s worth the extra effort to increase the chances that they’ll want to hire you again.

Go beyond simply completing their initial work; instead, find ways to build genuine relationships with existing clients who may need or have recurring work.

You can also search for regular customers among your contacts and segment them into a list. Then, offer those specific customers certain discounts when they purchase recurring services, such as a monthly, quarterly, or annual inspection plan.

Incentivize new customers to become repeat customers by offering special discounts or referral bonuses on top of any bundled services.

2. Teach technicians to sell recurring services

Make sure your technicians fully understand how to sell recurring maintenance or service packages.

Train them on the packages you offer. Make sure they know all the details of how the contract works and what services are covered.

This allows them to easily answer customer questions on the spot and help explain how the package helps solve their unique challenges.

For example, teach them to lead with cost savings as the primary benefit and encourage them to use the client’s actual numbers as an example.

Even when a customer isn’t ready to purchase a recurring plan at that time, make sure technicians indicate that they could be ready or could be sold later.

You can also send service reminder emails to specific customers, giving them insight into the value of not having to remember when they need service.

This helps you build trust with your customers as it shows that you are dedicated to them whether they decide to purchase a recurring service plan now or in the future.

The more your clients trust you, the more they will be willing to hire you again and again.

3. Boots in the field to earn contract recurring revenue

Send someone out to find apartment buildings, commercial spaces, or facility maintenance companies that could outsource electrical installation and service (eg, malls or other commercial areas).

Then ask to speak to the building manager and offer them a list of the repair and maintenance services you provide.

The building manager often has the authority to hire you, or they may work with a facility maintenance company that contracts out the electrical work. If so, they can often put you in touch with the facility maintenance company instead.

You can also look for non-electrical installation companies that need electrical preliminary work, basically anywhere there is a need for electricity, and there isn’t.

Although not very profitable, these are easy jobs to fill and can fill slow days, help you network and build relationships with other businesses in the trades who might want to work with you on projects. later.

Let’s listen

Do you have any tips you would like to share? I would love to hear from you.

Ben Hedenberg is the Director of Sales for simPRO North America. He has over 20 years of experience in the trades and is passionate about using technology to help improve their businesses and their lives. When he’s not meeting the business owners, you’ll find him spending time with his wife and four children and working on new projects for his 110-year-old home.