written by Sourish | March 26, 2021

All You Need To Know About Starting An Electrical Shop

A business can make you your own boss. You can work at your timings and strike the perfect work-life balance. From the moment you wake up till the moment you sleep in the night you make use of appliances that run on electricity. As the demand for electrical appliances is only growing day by day, the business will always have a ready market. 

Running a  business, specifically, a business of running an electrical shop can be very profitable if you analyse the market, identify the demand areas and problem areas. You should be willing to work hard and learn on the job. You just have to make sure to obtain all the permits and run the business legally. 

Irrespective of the sort of demands other products and services may have in the market the need for electrical supplies can never really cease. It is always going to exist in the market. With such a huge booming demand for electrical goods, setting up an electrical shop may just be the right business for you. If you already know the ways of the business or if you have the right contacts who can turn into potential customers, you’re already on your way! 

How to set up an electrical shop?

Setting up your own business needs you to take risks. As you plan and start your business, think about everything from a business point of view. Whatever the natural skills you may have for managing your own business, you do need lots of planning and have a solid plan to ensure smooth functioning. Even though a business is full of ups and downs we would like to minimise the downs right?

We have put together a step-by-step guide of how you can start your very own electrical goods business in 9 simple steps!

  • Step 1: Choose Your Ideal Location
  • Step 2: Name Your Business
  • Step 3: Get Your Licenses And Permits In Order
  • Step 4: Obtain Your Insurance
  • Step 5: Decide On The Services To Be Provided
  • Step 6: Build A Team (Or Not)
  • Step 7: Buy The Required Tools
  • Step 8: Go Digital
  • Step 9: Marketing

Also Read: Best Business Ideas to Start with Less Money 2021


Once you have the capital to kickstart your business, it is now time to decide the location of your dream business. The right place of business could make it or break it. Weigh-in and check if any of the following factors apply to the location of your choice:

  • There are absolutely no electrical shops in the entire area or the neighbouring area.
  • There is in fact an electrical shop but the customers are unhappy with the products and services it offers. The quality of such products and services and the prices at which they are offered do not match.
  • There used to be an electrical shop in the neighbourhood but it has now stopped providing services.
  • There are not one, not two but several electrical shops in the same area but the one that was the most well known has been shut down or moved to another locality. This is an entry ticket for your shop to get started.
  • It’s an electric shop market, or the area of the market is popular for having electrical shops

If any of these circumstances exist in the neighbourhood you chose, then get on it.


 The name needs to be simple and effective, nothing complicated. You may want to remember the following factors while choosing a name:

  • Your name must be memorable in a way that people can recall it easily. 
  • Choosing such a name makes sure that you remain the go-to shop for people.
  • Your name must have a certain sense of trust attached to it. 
  • A trustworthy name attracts people to come forward and try your electrical services.

It is suggested that you do not attach your religion, beliefs or philosophy to the name you choose. Keep it neutral so that the general public can relate to the name more instead of just a particular section of society. The general idea is to pick a name that is easily understood and can push the business into the hearts of the customers and potential customers.


Getting the right licenses and permits is the main requirement for any business and your electrical shop is no different. he requirements vary from state to state. You can apply for various licenses online like the Shops and Establishments License, Trade Licenses, Labour licenses. Some websites also offer consultants who can help you register for all your licenses required for an electrical business. 


The next step to open up your own electrical business is to get your shop insured. Reach out to a few insurance companies and learn about the policies they offer. Compare them to choose the one that suits you best. 

Get help from someone who can help you understand the terms and conditions. The sooner this is done the better. Even conducting a single business activity without insurance coverage is highly risky. Make sure your policy never lapses. Be rightly informed and pay your premiums on time.


It’s important at this point that you decide on the kind of services you would like to offer to your customers. You have three options:

  • Cater to homes (residential)
  • Cater to businesses ( commercial)
  • Cater to both

Now, choose which way to go. You must then decide whether you would want to specialize in a few services and offer the best quality of service. Or offer them all and spread your business. You could add services such as home delivery, after-sales services etc., to your list of services besides, the nature of services you choose to provide. 

If you choose to go the commercial way, you may also look for an opening to a long-term contract with some sort of construction company. It will help you to get an opportunity to regularly supply your electrical goods and services. Offer your products at a slightly discounted price in turn for a long term agreement to supply your goods and services. 

After initially choosing a particular line of services you can slowly expand as you gather the means, resources and customer base for it. 


Now you can decide if you want a team to help you in running your business or whether you want to manage it on your own. You could hire someone to look into customer handling, home delivery and after-sale services. Make sure that the employees you hire have the qualification and skills. 

It is best to hire people who possess the skills you are looking for. It would be important to spend some amount of time and money to train the employees. You may even bring on board a family member who is well versed in business.

Of course, it would also depend on the size of your business. You may not need a big team when your business is still small. You may choose to hire more and more people as your shop grows.


You would need various tools for the services you provide. These tools include multimeter, voltage tester, wire strippers, circuit finders, screwdrivers and nut drivers, pliers, hammer and a level tool.

Unless you possess your own tools and equipment, buying tools and equipment is a significant investment. You can’t run an electrical business without the right tools, equipment.

Initially, you may buy them second hand or even rent them to go easy on the funds. You can always buy your own and keep upgrading as your business increases and the cash starts flowing in.


The number of smartphone users has increased significantly. There’s no denying that it is the era of all things digital right now. People will look for “electrical shops near me” on Google before they step onto the road in search of one. You might as well give them that information.  

You can put up the location of your shop in Google Maps. Display your shop name, mobile number and timings. If you don’t know how to do it, get someone to help you . It’s easy and leads customers to you.


Imagine doing everything right, every step but people are still not coming towards your business. That's why, after all the above steps, it all comes down to marketing. Whether or not you can push your shop as a place that people can count on and are happy with. 

You may get in touch with local electricians and create a tie-up with them to promote your electrical supplies better. You can consider providing them with some discounts in return.

You can also run newspaper ads, pamphlets, radio advertisements etc. Make your advertisement’s catchy and provide information. Good marketing can be a game-changer.

Also Read: Benefits of Digital Khata for Small Business

You’re Now Ready To Start Your Electric Shop

Now the Important decisions like the size of the business, type of services provided, etc are finalised. It is important to remember, that the market can fluctuate, and the needs of the customers may change. 

A business is certainly uncertain and there will be a fair share of low times. You can never fully predict the future course of your business. It also requires you to pay attention to even the smallest details. However, with proper research, planning and a business mindset, you will be just fine! We wish you good luck and success in setting up your electric shop.

Frequently asked questions

How much does it cost to start an electrical shop in India?

The capital requirement can range from anywhere between Rs. 3 lakhs to Rs. 20 lakhs depending upon where your shop is located.

Are electrical businesses profitable? 

With the constant rise of technology and demand for electrical goods, this business is a profitable one.

What are the initial investments required? 

The primary investments for an electrical shop are the tools and a vehicle which can even be leased, at first.

How can I advertise my electric shop?

There are various means to advertise the business such as online marketing, pamphlets, billboards and of course, word of mouth publicity.

How can I get clients for my electric shop? 

Customers can be found by maintaining good relationships with vendors, maintaining a database of potential customers and creating contracts with construction companies etc. 

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