Toolbox Talk How Much Does It Cost Working As An Electrician?

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[00:00:00] Ben: Electricians. They earn this, they earn that. Everyone has an idea that electricians make a huge amount of money. And if you're a good electrician, well the air, you do earn quite good money, but not every single penny of that goes into our pockets. It's pretty expensive to run your own business. So in this podcast, I'm gonna break it down.

I'm gonna list every single expense and see how much it actually costs to run your own business as an electric. Toolbox talks for electricians, helping electricians reduce stress, gain back time, and earn more money cause it costs being this good. Welcome back once again and if you don't know me by now, I'm your host, Ben Bolter, and I'm gonna break down the outgoings that electricians have when running their own business.

And it's gonna be a proper breakdown too. I'm not gonna miss a thing. The calibration, the upgrades, the insurances, the Starbucks coffee, the lot. Okay. I'll probably scrap off the coffee cause that's a bit of a luxury. But one of the first things is a must have. You're gonna need public liability insurance.

Every self-employed person has it and you need it. You gotta have it to be able to work in these domestic premises or even industrial commercial premises. And if you make a mistake and it blows up a two grand computer in someone's house, or you drop in something, maybe on a 10 grand carpet, You want to be able to be covered.

You don't wanna have to let that come out your own pocket sometimes and go for the best cover you can do too. I know you can get this 98 pound a year cover. This is basically the, the bare minimum maybe. But you can also add on the five grand of tools insurance, which is probably a good idea these days with all the freaking vans getting robbed.

They're a bloody nightmare. So just cover yourself with the five grand's worth of tools insurance, cuz I. Well, I do think that there's five more than five grand of worth of tools in my van, and if they get robbed, it's gonna cost me more than that to replace them. So five grand is a little bit that's gonna help you out in the long run if you do get robbed.

But another little mistake I made from the beginning as well was you get up to, on the normal insurance, you get 2 million pounds worth of cover, a standard, but you need to have 5 million pounds worth of cover. Cover. And this is what's required by the Part P registration guys. So for public liability, I'm gonna put down around 150 pound a year.

And talking about being registered for Part P, you're gonna be needing to be registered to sign off this Part P certification for the building regulation. Nearly all electrical work is notable these days, and you need to notify to the council and for a certificate to be able to issue to the customer.

So if you're going to build a business in the electrical industry, you're gonna have to become a member of the N I C E I C, or nappi , one or the other. Sun. The N I C to be registered with them, that's gonna cost you around 594 pound a year and nap. It is a little bit cheaper, which is gonna cost you around 420 pound a year.

And then to be able to be a member of their little group where you can qualify to be partly registered and have all the right documentation, you're gonna need to have the books, the. And even show them the records of your test results, what you give the customers. So there's a few hoops that you need to jump through to be registered, and there is a download of a checklist in the toolbox talks for electricians group.

When it comes to you having your assessment. So if you go in there, download that and just to check off to make sure you've got everything, cuz obviously a revisit as well. If you don't pass, that'll also cost you money as well because I've found over the years being registered with NAPT that they'll always find something.

So find, they'll find something to pick you up on. I think it's their job to do that. So when you have an assessment, a little bit of something, well, something they can find. Maybe a mistake. You haven't got a book or you haven't got the right documentation. Just something that's an easy fix so you can fix it that day just so they can point it out and make, make that assessor feel special.

Make it feel like he's done his job, he's done his bit and his his. Pulled you down a little bit. They like to do that. I don't know why. I just feel like that is the sort of thing what they're try and do to every electrician when they're doing the assessment, they've gotta pull 'em up. They've gotta say, you are not good enough.

You need to do this. They've got to tell you what to do. It's like the young police officers, they want to, uh, establish their authority in a way. So just leave a little bit of something they can go through. They can always find something. It does sound silly. I know. And maybe some assessors are listening to this thinking, no, we don't.

We don't do that. But my experience with you guys, yeah, you do. It does. It does sound silly, but it does work every time. And it makes you become friends with them as well. Cause it gives them the upper hand maybe to say, yes, I'm here to assess you and pass you off. And I've just dictated to you. Yeah. F. I did need to go and find my insulated screwdriver set or my torque setting screwdriver that was in , the van that I didn't have out ready to show you.

I had to do what you told me to do. It just gives them a little bit of the upper hand. But as a previous podcast as well, electricians, they test all the time. You can't test any electrical installation, obviously, without test kit. And a good one is gonna cost you around a grand, so I'll put that down as tall.

So we're not gonna include that. You need that to be able to be an electrician, but it will cost you every year to. Test kit calibrated and for a multi tester it costs me around 93 pound a year to get that calibrated. But as a bonus, you get a good person that will calibrate it. They'll replace all the batteries included in that 93 quid that you want.

Duracell batteries. You want decent batteries in there. You don't wanna get these pound land batteries cuz they don't work. But I used to have a backup test kit for when the other one was away for calibration. It was a brand new fluke tester. It was beautiful. It's the only one that I ever bought brand new.

You know when you buy something brand new, you think, well, yeah, this is fantastic. You buy all the, the special fixtures and fittings for it. They've gotta be fluke as well cause you want to match. It's just one of them O C D things that I do, I think. But it got pinched out the back of my van and they pinched the new one and left the bleed An old one.

And thinking about now, I wish I wasn't so OCD and I wish I'd put the old one in the new box cuz then they would've pinched the old one. An old. Yeah, I've been able to keep the new flute tester, but I haven't replaced that flute tester yet, so I just think I don't need to, I can just maybe take a couple of days off or just not test things for a week.

Obviously not testing things and leave them, I've got back and test them, but, um, yeah, just not test things for the week. Don't get any jobs where it needs testing for the week, so I can be without two flute testers or two multi testers. So calibration. That's probably one of the small costs for one of the biggest costs to any electrician running his own business.

It's gonna be the van. The van is what you need to get about to get to jobs, what you need to get your kit in. And you can't get to any jobs with any kit if you haven't got some sort of transportation or some sort of van yet. You can maybe do it out of a car. But you can't get three meter lengths of conduit.

You can't get a decent drum in the back of a car. It's gonna ruin your motor. So a van is ideal for what electricians need. They need the van to be reliable too. So the more you spend on the van, the more you're gonna save in the long run, in my experience. So I'll calculate maybe at least higher on the van.

Because I do know that Mini's Park is, that's what they do. They lease hire their van, but if you can't afford to buy a van outright, Then you budget your cost within a lease higher, unless lease higher of a after diesel van will probably cost you around 299 pound a year. That's maybe for a little van.

That's something to get you by. I'd like to have a big van. I've always experienced having a big van. You can get more in it and you can. Find your crap easier. Basically, it's not all piled in, so depending on what van you get, it's gonna cost you 140 pound a year to tax it. The insurance, my insurance is around 390 pound a year.

The fuel you put in the van, you've obviously gotta get from job to job and most electricians I know will personally myself as whether Phillip, at least once a week, and that's 120 quid in today's fuel prices quite expensive. But if you do do the lease hire, I think that everything's covered with your servicing and any problems you get, you can always just ring 'em up and go, well, this is broke, so they can sort it out for you.

But to be sure, I'm gonna budget around 250 pound a year for maintenance on the van as well. So this is gonna be quite generous I think, depending what van you got. Cause you could be. And that five, that's your five grand worth of all's gone, or you gotta a claim in your insurance may be. So you don't know what's gonna happen in the years.

I'm not gonna budget for maybe if you get broken into cuz fingers crossed that doesn't happen. But because they can with these people that rob your van and stuff, they create not just your five grounds worth of tools go missing, they create two grounds worth of damage to the bleeding door as well. You need to sort of have a decent van, I think, and of obviously, I've upgraded the locks on my van, so you've got special locks because four transit customs, never renowned four.

I think there's videos on YouTube on how to break into them. I watched them myself where they do a hacksaw blade down the back of the door and it pops, the locks open, so my locks now don't open up automatically. You've gotta get a key, which is a bit of a nightmare, but in my head, it keeps the van safer for when I.

Working in dodgy areas basically. Another thing that you're gonna need as an electrician is a waste carrier's license. I didn't have one for years, and if you put the waste from your job in your van, like the old fan or the old wiring, anything, you need a waste carrier's license. I didn't realize this until I was pulled over by the environmental agency.

They just pulled me over one day a car pulled up and it said, follow me. I was like, what the hell have I done here? Like it is a bit of a, a bit of a sting, a bit like a terrorist attack thing, like where they pulled over it. It was all a bit, I was thinking, hang about what's going on here. But I pulled over and they were lovely and nice to me and they obviously checked out the insurance on my van and they had a good look in the back of my van as well.

At that time, I didn't have any waste in there. They did spot a bucket. And they saw a bucket of offcuts of cable in the back of the van and they said, excuse me, mate, is that waste? I said, , it's not waste at all. I'm gonna scrap that in, so I'm not gonna throw be throwing that in the skip. That's me taking it to a scrapyard to get, I don't know, 20 quid for a bucket of scrap.

So luckily that I didn't have any scrap in the van or get done for it that time. But ever since then I've got a, a waste carrier's license, which that'll cost you around 154 pound a. Which will also, let you visit the local skips cuz you go to the government website, you buy your waste carriers license and if you've got any old wardrobes or any crap that you need to get rid of, you can shove it in your van and it lets you go into the skip and get rid of that, which I found was a bit of a bonus.

But don't tell friends and family that you've got a waste carrie's license. Because everybody needs a man with a van to go to the skip. It's a nightmare. Hopefully my friends and family aren't listening to this where they say, Hey Ben, you can get rid of my stuff down the skip. Just please don't ask me, man.

He's always full of stuff. I don't want to go down the skip. It's boring. Get your husband to do it. And now the initial cost of becoming an electrician, it is, it is expensive enough, the full training and qualifications for electrician. Maybe if you're starting later on in life, when you're not doing apprenticeship, it's gonna cost you around seven grand upwards, not to mention the special tools you need too.

So every now and again, there's a new upgrade to the electrical installations regulations in the uk. So in 2004, when I was qualified, it was a 17th. And today in 2023, you need to be 18 edition qualified to be able to sign off electrical work in customer's properties, and that upgrade cost around 180 pounds.

And it took maybe a couple of days to sit in a classroom and to learn basically what was included in the upgrade for the initial test at the. And there are other courses out there of ways of becoming 18 physician qualified, but the majority of electricians, well, were in the room with me doing the same test.

They did it through the upgrade themselves, and they do a couple of days course, and they do the test at the end. And the 18th edition upgrade is not the only one you have to do as well. When I first started out my own, you didn't have to be 2391 qualified as tested an inspection to be Part P registered.

You didn't have to have that. Now you do. You need to have that qualification and that course will cost you around 800 quid, and it's a one time course, so we can leave that out of the yearly cost. Once you're qualified and you've done your inspection and testing, which is sort of an upgrade, you can be a fully qualified electrician, but then there's another course.

That'll take you to 2391. That does you for qualification, for inspection and testing. There's always an upgrade of what you can do. There's ev charging, um, courses now where you can obviously be registered to install EV charges as well. There's also, there's a lot of different avenues you can do as an electrician where you can be , an extra qualification.

So if you want to advance further, maybe look into. But another cost that you may not have thought about, cuz what, if you think about, if an electrician turned up to your house wearing an old super dry hoodie and a pair of jeans and trainers, what would your first impressions be? Not fantastic, would they?

Because that's another cost you have, as an electrician running your own business, you've gotta have some sort of branded clothing and not just, not in just the clothing to make you look. Obviously you need the PPE too. The goggles or the the steel toe cap boots on site sometimes, cuz when crawling around loft spaces, they also get caught on nails and they get wrecked cuz you're not exactly just sitting in an office.

These are sort of materials that you're gonna have to replace yearly, so it's gonna cost you around 250 pound a year. To keep that kit looking fresh and to keep it looking good. I always get a couple of jumpers or a couple of t-shirts and well, these trousers these days, a scruff trousers, a cost 85 quid and the amount of trousers you go through, you, you gotta get a pair of trousers with them.

Knee guards in being an older guy now you wanna save your knees a little bit. So you want to get a trousers where you put the cushions in your knees because you're on your knees all the time as a spark fixing sockets, or, I dunno, lifting floorboards. It saves your knees. Just that little. So I think around 250 pound a year for your clothing is quite, yeah, that's not too bad.

That's quite a, a fair figure I think. But this next one, it can of cost your fortune or it can cost you nothing at all. Maybe when you first start up on your own, you want to go out there and put some time and energy into getting it all set up. But after that it should really run on auto. Like years ago it was a good idea to maybe print leaflets out and post them around your local neighborhood or get an ad in the local newspaper.

Like where I am, there's a little, I think it's Trade Finder, some little magazine. I don't understand how it's still going because I don't read it, but I dunno who does, maybe the older generation people, they're look in there and find a a, a trade, a tradesman to do the work for them. It's a good idea. So maybe if you are looking for work when you're first starting, Yeah, it's possibly a good idea to get yourself in the newspaper.

It's something that everyone used to do back in the day, but to this day and age, you can just do it by doing a simple Google website or get yourself on Google, basically. How do people find electrician? If they want the garden or builder or electrician or a plumber? They go into Google and write electricians near me, and you want your name to come up there.

Because these people that do, maybe you still read the newspapers are, I don't know, maybe an argument here somewhere, but are probably a bit old fashioned because in my experience, the people that read newspapers or even look at a leaflet that you posted through the door, they're not ideally the type of customers that you want to help your business.

They're usually maybe a little old lady that can't reach to change a light bulb. So you go round and you change a light bulb for her, but you, you're not an asshole. So you say, right, I'll just give a cup of tea. I'll change a light bulb for you. It's, it's a, the niceness in you maybe, but you don't wanna rip an old lady off or anything like that.

You don't wanna charge your 50 quid. Initial charge, what you do just to change your light bulb, you end up giving her the light bulb anyway because you've had such a l a lovely chat and a nice cup of tea and she lived on her own or anything anyway. So yeah, you, that's the sort of customers you attract them that pick up your leaflets or maybe find you in the newspaper, in my experience.

So scrap off the old ways of maybe leafleting or getting yourself in the newspaper, the new ways of market. Is getting your business on social media with a Facebook page, with a, with a Google business. You can go down the paid route if you want, through that with social media, where you can use ads on Facebook, you can use ads on Google, but you're gonna need to spend around a grand sort of thing to test that before it'll really work for you.

So don't think you're gonna put 200 pound in and you're gonna get shed load of work. It doesn't sort of work like that. You've gotta make it test to get your, you got, you gotta make sure you get the right audience. It's a bit of a. A testing game. I think with ads, if you're gonna build a business, and I don't think for a sole trader as an electrician or a sole trader as a businessman, that ads on Google or ads on Facebook are a fantastic idea.

So I would say that the cost of marketing is basically your time and your effort. You don't really wanna be paying for customers. Cause if you have that ad set up and you'll getting a shed load of work, as soon as you turn that ad off, then you're not gonna get any more work. So you want it to grow sort of naturally.

You wanna. Naturally recommended through word of mouth. Once again, I've said in a previous podcast that word of mouth is the best way you can grow your business. But running your own business, you're not really entitle to holiday pay. You don't get a certain pay. I'm having a week off and you still get paid.

It's not like you can add an extra day to a job and say, well, that's for the summer holidays when I'm gonna have a week off. So you need to factor in maybe the days when you are not working and you are on holiday, and I'm not saying factor in a holiday to Mexico with the goal played yacht. Just factor in the bills that you need to cover cuz you still need to pay for that.

Insurance. You still need to pay for your van to be insured and stuff. You can, you don't get a, a break from your insurance or your tax. You've still gotta be taxed to be on the road. You need to pay for it all still when you're not working. This is the thing, and you've gotta cover that just because you take a break.

The bank doesn't say, ah, yeah, I tell you what, your analogy, we can skip a payment on that mortgage. It doesn't matter. So the money you charge as an electrician is gonna be able to cover that time for when you do have holidays off. Everyone has holidays and this is how it works. So maybe save a bit of money down the in on the back, sort of in the backend.

I've done it before. When you start out as an electrician, you're earning a great amount of money, but I was quite young and I was spending a good amount of money. But when it come to having time off and maybe having a couple of weeks off gone holiday, you come back and you think, damn, I'm skin. Have a bit of a savings in the back burner, cuz you're gonna need to do that as a self-employed electrician, just in case if happens, sometimes you might get bit, bit of a quiet week and rather than thinking, damn, I'm not gonna be able to pay my mortgage, I'm gonna live on the breadline, start saving and running your own business.

That's sort of a trait that you've gotta get inside your mind as well, that you need to save a little bit of money just in. But this leads me on to another cost for electricians running their own business. We are electricians, we're not accountants, and with all the figures of tax and V I T V A T even, sorry, and the income tax and the outgoings, like you need accountants to sort of knows what they're doing.

I did my own accounts for a year once, and yeah, I did them completely wrong. I ended up having to him find a couple of grand for that mistake. So stick to doing what you are. Be an electrician. Let an accountant or a bookkeeper do their bit, and that's gonna cost you around 350 quid a year, depending on your business of what you earn and what you are putting through.

Whether your VA VAT registered, I'm gonna budget for our 350 quid a year. So that's towards coming to the end of my analysis of what it costs to be an electrician. And you may be thinking, hang about Ben, there's a lot more to it yet. There probably is. But if you start to mention how much it costs to maintain the happiness of the misses.

Yeah, we're gonna be here forever. So let's see what we've been through. Public liability June 50 part. Four 20 calibration. 93 Van Tax, 140 . Van Insurance, three 90 Fuel around four grand a year. Van maintenance, 250 quid. Waste license. 154 kit for P P E, that's gonna cost you 250 a year. And the bookkeeping 350, so that's a total of 6,197 pound.

Just to be able to get out the front door every morning and be legal to be able to carry work, workout as an electrician. And if you like me, you didn't realize that. That's quite a lot, man. I tell you, that's a lot of money that I'm spending on running my business. So the next time a customer says, uh, that's too expensive, I can get materials from Screw Fix and do it for cheap.

It's only an easy job. Then get the hell out of there. Run. If they don't understand what it costs to run a business, I'll report them towards this podcast. Or just cut your losses and go from there because it costs you more sometimes to do a job for someone than you're actually getting paid. And to be honest, if that customer doesn't see the value in what you are doing for them as an electrician, it's probably not the right sort of customer.

You want to be a part of your business. You want don't, it's not gonna help your business. So this probably leads to a question in your head that you think, well, well, how much should I be charging as an electrician then? So there's another podcast for that. How much should I be paid as an electrician in the uk?

Listen to this and it'll give you a good idea of what you should be charging to run your business, and it should be bloody loads. 6,000 odd pound a year. It costs you just to start, just to run. That's without actually doing any work. That's without your lunch and your Starbucks, and there's, there's so much other things that you should include in that.

So don't be cheap, just be brilliant. You're electrician after all. So until next time, I'll see you again.