After years of training, and more working as a licensed electrician you are looking to start your own electrical contracting business and be your own boss.

But where do you start? Founding your own business can be daunting, here is what you need to know.

Get your licences in order

If you’ve been working as a sparky you will already have your electrical license. But to run an electrical contracting business you will need to get your contracting license.

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Licences are needed to ensure only people who are trained and qualified carry out what can be very dangerous work. What you will need to do for a contracting licence varies depending on what state you are applying in.

How to apply for an electrical contracting licence:

• NSW
• Victoria
• Queensland
• Western Australia
• South Australia
• Tasmania
• Northern Territory
• ACT

Business structure

Understanding how you are structuring your business might not seem that exciting, but it is important.

Are you setting yourself up as a sole trader? Will you set up as a company? Or are you planning on going into business with a trusted colleague in a partnership? These three options are the most common among trade businesses.

Sole trader

Sole traders operate the business they own. It is a simple structure as you and the business operate as one entity. You have full control over the business, and profits go straight into your pocked.

But this has some potential downsides including that all earnings are taxed as personal income; and that you are personally liable for the business.

The sole trader is legally responsible for all aspects of their business.

Partnership

In a partnership, the business decisions, income and losses are distributed between the two or more individual partners. Partnerships are less expensive or complicated than companies and simple to administer with profits, losses, and debts shared between the partners.

Partnerships are taxed at the personal tax rate like sole traders are.

The relationship between the partners can become an issue in the

Company

Unlike a sole trader a company is a separate legal entity from the person running the business. This means if the business gets in trouble, it is not necessarily the person getting in trouble.

Tax rates for company’s are lower than the highest personal tax rates.

It is a more complicated structure, and more expensive to set up. Company directors have specific legal duties and may be liable for beaching them.

There are also a range of other business structure types. Make sure you get legal advice around how you should best set up your business.

Insurance

Electrical work can be dangerous. The risks involved in our trade can lead to expensive claims against your business.

Public & Products Liability Insurance can help protect your business against claims resulting from third party property damage or injury. For example, if a client, a supplier, or member of the public is injured, or their property is damaged, as a result of your deemed negligence, your liability insurance may respond to third party demands and allegations.

Other common insurances electrical contractors take out include:

• motor vehicle
• professional indemnity
• portable tools
• contract works
• cyber event protection

Master Electricians can access comprehensive and competitive insurance cover tailored to the electrical industry through MEA partner Austbrokers Comsure. Their tailored Public & Products Liability Insurance product offers a suite of bespoke endorsements, exclusively available to Master Electrician Australia members insured through Austbrokers Comsure.

Registering your business and IP

Registering your business ensures you are being taxed correctly. This can help avoid penalties and protect your brand. You can apply to register a business name as well as an ABN with the Business Registration Service.

You will need to register for

• ABN
• Business name (unless you are trading under your own name)
• Tax registrations
• Company legal entity (if operating as a company)

Master Electricians can access expert advice, exclusive tools, savings and benefits that can help electrical contractors no matter how new or old your business is. Become a Master Electrician today.