All businesses have cycles such as the familiar ‘bell curve’ starting as sunrise businesses; with these changing environmental conditions over-time become sunset businesses.
To keep your electrical business as a sustainable sunrise business you must have several market niches in your portfolio to counter these changing environmental conditions and need to keep looking for additional market niches with emerging technologies that keep coming at a rapid rate.
According to the Australian research company IBISWorld, the electrical services industry had faced challenging market conditions for the last few years, but improved investment into housing market & ongoing maintenance activity in commercial and industrial premises is envisioned to spur growth in the industry.
The electrical services industry in Australia is anticipated to grow at two percent rate every year for over the next three years to 2020, recording a revenue of about $21.4 billion, as predicted by IBISWorld. A detailed survey was conducted by the research company on the electrical services industry, prioritising the macro industry trends in overall sector & micro trends faced by firms which do business in the electrical industry.
It is essential to let people know what your business is, and what type of service you provide. And at the same time find and target your specialized market niches.
Electrical Industry’s present condition
Although a few medium electrical businesses are specialising in renewable energy such as solar with battery storage and IT cabling, a lot of small-scale contracting companies are struggling to shape their regular flow of work. A few electrical contractors have already emphasized on delivering home automation services, which includes electronic control of security systems, lighting and appliances.
Electrical Contractors performing housing renovation & maintenance work in markets are facing strained trading conditions. The reports provided by Master Electricians point out that it’s the tough economic conditions that are causing distress for most of its members. The contractors for this reason are quoting on very low profit margins and are mostly wanting to subcontract the jobs to the larger electrical firms.
To be successful as an Electrical Business You must be known in your market area for the services You perform. By subcontracting your services out to larger electrical firms, more likely your costs and overheads will not be covered, and you get no recognition from the customer for all your hard work as a result, over-time your business growth will decline and become a sunset business eventually go out of business.
As Small to Medium Electrical Business Owners or Managers you need to be more entrepreneurial and innovative such as starting with a Strategic Business Plan with the flexibility to place at any-time your own creative and innovative entrepreneurial money making stamp into your business to avoid collapse.
Electrical Industry Market trends
The electrotechnology or electrical industry impacts on almost every aspect of daily life. The technology ranges from traditional light and power, hardware platforms and networking automation to virtual enterprise, the internet and fiber optics. The spread of new information processing and communication technologies means that the industry is developing rapidly.
The industry includes the installation, servicing, repair and maintenance of electrical and electronic equipment for domestic, commercial and industrial purposes. It comprises communications, distribution and transmission, electrical generation and computer data and communications cabling systems and Sustainable/Renewable Energies. The telecommunications and information technology aspects of the industry are becoming increasingly important as the knowledge economy alters the way businesses operate, as is Sustainable Energy Practices and Renewable Energies are on our environment.
The Electrical industry in Australia generates most of its revenue for about 70% from repair works, new installation & maintenance activities in non-residential and residential property markets and the remaining from work in industrial & engineering market. Electrical Contractors usually work in a wide variety of markets and use their varied multidisciplinary skills and abilities.
Residential & Multi-Residential Market demand
The electrical jobs in this sector mainly include installation works done for newly constructed buildings, installations for renovation works, installation activity in housing market, electrical repairs and maintenance activities on the existing premises. Installations in housing market is boosted by widespread acceptance of the emerging communications technology like broadband cable, home automation, NBN and pay TV connections, and the demand for installation of solar PV with battery storage.
1/3rd of the electrical industry’s yearly revenue comes from jobs done in residential sector.
Commercial & Light Industrial Market demand
Installation, rewiring, repair and maintenance work on commercial buildings like offices, schools, and shopping complexes generate about thirty-seven percent of work’s total value done by electrical services industry. The market segment for over past few decades have been able to maintain its significance and this has been possible mainly because of the demand in usage of data processing & communications equipment. Growth in commercial & light industrial building market is going to stimulate the demand for electrical installation and repair services. It is however expected that commercial property markets will expand gradually over the years and that businesses will look to install energy-efficient options into their premises.
Heavy Industrial & Engineering Construction demand
From heavy industrial & engineering construction industry, the demand may decline over the years but the activity in the market is going to remain at high levels & provide an essential platform for contractors who are servicing energy, resources & telecommunications infrastructure markets. The services like installation & maintenance of heavy industrial, transport, manufacturing and electrical machinery is not going to be out of demand. In fact, demand for electricians and electrical services has increased a lot nowadays with more high-tech electronics being fitted into the mines, gas plants & related heavy industry operations.
Strategic Business Plan for a profitable sustainable sunrise business
To keep your business as a sustainable profitable sunrise business you need a Strategic Business Plan that is process you can simply follow and you need to change the way you are doing things to ensure the full benefit…
The three most important steps to find your market niches and using your tender process capitalizing on each market niche…
- A. Generate Your Own List And Conversions
- A1. Create Your Own Lead Generation Process In Your Market Niche
- A2. Develop Your Relationships With Several Communications Methods
- A3. Converting Your Prospects Into Customers
- A4. Use Your Tender Submission As A Marketing Tool
- B. Analyse Inside Your Business Not Outside Your Business
- B5. Determine What Your True Costs Are
- B6. Calculate Your Staff And Operating Costs To Determine Your Business Minimum Labour Sell Rate
- B7. Determining And Adjusting Your Field Staff Efficiency Levels
- C. Strategize Your Business Process In Determining Your Market Level In Your Market Niche
- C8. Estimate Your Gross Margin For Each Tender To Be Competitive And Maximizing Your Profits
- C9. Alter Your Gross Margin With Each Consecutive Tender To Determine What Your Niche Market Level Is
- C10. Adjust Your Materials Mark-Up And Labour Sell Rate
- C11. Submit Your Tender With An Alternative And Capability Statement
To give your business every chance of success, diversification is the key by developing your expertise in becoming an accredited authorized installer for some of the following areas such as automation, lighting design, PV solar with battery systems, hazardous areas, security, access control, data and communications through specialized training with Master Electricians Training.
Do you have strategies in place to keep your business as a sustainable profitable sunrise business?
For more information click the link below:
Your Strategic Business Plan
