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September 28, 2021

5 Ways for Electrical Contractors to Reliably Increase Profit Margins in 2021

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1. Embrace electrification and green energy

Fossil fuels are becoming less and less desirable for progressive companies and consumers. Indeed, environmental concerns like pollution and climate change have made renewable energy or “green energy” a hot topic. Thus, businesses have launched full steam into this industry.

In 2021, electrical contractors have greater access to renewable energy opportunities. Even those who have resisted green energy now realize that they cannot ignore the real possibilities that it presents.

With more electric vehicles entering society, new markets are emerging for electrical contractors to take advantage of. Your services are already and will continue to be in high demand for EV charging station installations, Panel upgrades, battery storage and recurring revenue opportunities (like maintenance). In other words, this market will only get bigger.

2. Get better contracts and deals with suppliers

The recent issues with the supply chain have shown how important supplier relationships are. When supplies are restricted and difficult to obtain, it pays to have trusted partnerships with various suppliers. That way, even in tough times, you may be able to get access when others cannot.

Today, access to the right tools can open you up to a network of top suppliers around the world. Connecting with these suppliers is a smart step so you can save money on the specialized supplies that you need for your business. Qmerit’s software partner Raiven aggregates supplies at the best pricing, which will increase profit margins for contractors. More profits open up more opportunities to expand and grow your workforce.

3. Develop your workforce

The new economy doesn’t just require more skills – your employees need cross-domain competency. So, electricians also have to understand digital technology, know how to communicate with customers, and even learn the basics of related fields like HVAC to properly link systems and devices.

In other words, there is no time to rest on your laurels because technology is moving fast. Therefore, it is imperative to stay current with new changes in electrification. Investing in the growth of your workforce will pay dividends down the line, as more business comes your way. Be prepared to guide and develop your employees so they can be leaders in your local market.

4. Manage your subcontractors efficiently

Managing subcontractors is onerous in fast-paced environments, especially when you deal with several different projects that can swallow up your valuable time and attention. However, there are a few things you can do to streamline this process:

  • Minimize micro-management– Rely on customer feedback and performance reviews for controls.
  • Leverage bidding – Ratings and online reputations can help you make educated decisions.
  • Automate compliance – You can’t personally check every single practice, but you can rely on a third-party evaluation and licensing solution.
  • Use clear-cut contracts – Establishing the precise division of labor in every agreement will save you from operational conflicts or worse.

Software like Raiven can help manage all of your subcontractors to keep them on track, on time and under budget. Collecting bids and making educated decisions will ensure that you save more money and improve your profit margins.

5. Prioritize long-term clients with recurring revenue

One of the beautiful things about the electrification space is that it opens doors for new business. Charging stations, panel upgrades, battery storage and other specialized services are in high demand, so hungry electrical contractors can transition into this new arena and reap more profits. Indeed, this new flock of customers presents a unique opportunity to acquire new andrepeat business.

Lucrative maintenance agreements allow electrical contractors to tap into a recurring revenue source. Making partnerships with dealerships, manufacturers of renewable energy hardware/software and other trusted networks will unlock new sources of clients and revitalize your business.

Industry leadership in emerging spaces tends to be built on small nodes. So, consider making valuable connections in your local market and expanding from there.

6. Bonus profit margins tip – Electrical contractors can join the Qmerit Certified Solutions Partner program

Qmerit is the industry leader in electrification services. We have a vast network that expands across the United States and Canada. Qmerit’s Certified Solutions Partner (CSP) program offers electrical contractors the opportunity to learn new skills and train employees to gain new business. The CSP program offers a host of benefits:

  • Access to pre-approved customers – Tap into a long list of customers who are looking to install EV charging stations.
  • Coaching and workforce development – Learn new technologies and get continuing education from experts.
  • Deals on charging station supplies and the purchasing program – Get plugged into supply deals via Raiven Marketplace to save big on the supplies that you need to conduct business.

Electrical contractors have an opportunity to partner up with industry leaders to learn new skills, find more business and become leaders themselves in their local marketplace. To find out more about how you can increase your profit margins, reach out to Qmerit today.

Lowry Stoops President, Qmerit Network