Is an electrical contracting business profitable? Owners keep about 22% on paper, and the margin halves as the shop grows

The short answer

Three questions drive this search. A licensed electrician asks owners in r/electricians whether going out alone pays. A buyer looks at a listing and asks whether its revenue per employee can be real. A career changer wants to know if $100,000 or $200,000 a year is a normal outcome. Nobody in those threads has a sample. The Main Street Index is BigIdeasDB’s census of 84,900+ businesses-for-sale listings across 29 marketplace sources, de-duplicated so each business counts once. We pulled every US listing in dollars on an SDE basis that our classifier files under electrical contracting: 293 listings. After setting aside 33 lighting, low-voltage and generator businesses and 10 repeated listings, 250 electrical contractors remain. Every figure is an asking price or a stated number, not a closed deal.

SDE means seller’s discretionary earnings: profit plus the owner’s own pay and perks, before debt. Most of the disagreement about electrical margins comes from mixing SDE with net profit. The next sections keep them apart.

Read the table as a mid-sized, well-aged trade business: seven-figure revenue, six-figure owner earnings, a crew of six and a founder who has been at it for two decades. The BigIdeasDB benchmark for the industry (293 listings, not screened for lookalikes) shows the same picture at 22.1% and 2.93x, so the screen changes little here. In some trades it changes a lot: in fencing, nearly half the listings were copies.

Why the answer is 22%, and why contractor guides say 2% to 6%

Three different margins circulate. Gross margin is revenue minus materials and direct labour. Net profit is what is left after every cost, including a salary for the owner. SDE is what is left before the owner is paid. Listings report SDE, so the median electrical contractor’s 21.6% (n=190, middle half 12.5% to 32.6%) sits above a net figure by the owner’s wage.

The contractor accounting and software guides on the first page of Google put average net profit for electrical contractors at roughly 2% to 6%, with a target of 10% to 20%. Those are net numbers for operating companies, usually after the owner is paid or the owner is a salaried manager. Our 21.6% is not in conflict with them. It is a different measure, and it describes businesses that someone is trying to sell, which are the better ones.

To bridge the two, we deducted a $100,000 replacement wage, our assumption for the foreman or estimator who would do the owner’s work. Of the 190 listings, 82 then keep under 10% of revenue and 108 keep 10% or more, with a median of 12.1%. That is inside the 10% to 20% target the guides name. It is also why owners talk about thin margins while sellers advertise fat ones. One r/electricians owner described the arithmetic of an hourly rate:

“Our business has an average employee pay of $40 an hour. On top of that our over head expenses cost $60 an hour. So we charge $125 an hour. That gives a 25% profit.”r/electricians

The same commenter, answering a licensed employee who wanted to go out alone, wrote that the boss is not pocketing the gap between the hourly rate and the wage: “He’s probably making 10-25% on you. And the rest goes to overhead.” Those two lines match what the listings show once the owner’s wage is taken out. Our guide to valuing a small business explains why buyers price SDE and lenders look at what remains after a salary.

Margin halves as an electrical shop grows

Among 190 electrical contractors that state revenue and earnings, the median margin is 39.1% under $1M of revenue (n=52), 18.0% from $1M to $2M (n=63) and 14.7% above $2M (n=75; Main Street Index, October 2026). Median owner earnings rise with size, from $167,500 to $253,500 to $763,000. The owner earns more in total and keeps less of each dollar.

A small electrical business is an owner, a van and a helper, so most of its revenue is the owner’s own pay. To pass $1M, the owner adds journeymen, apprentices, a second and third van, an estimator and someone on the phone. Revenue grows, and each added dollar carries wages, fuel, insurance, supply-house materials and payroll tax with it. The thread that ranks first for this query describes the shape in one line, from an owner who left an hourly job to run a one-person shop:

“It made me realize that profit has to come from volume.”r/electricians

For a buyer, a $500,000 company at 40% is not more efficient than a $5M company at 15%. It is a job with most of the cost sitting in the owner’s hands. For a starter, the table explains why year one can feel good on paper and stop feeling good the day the second crew starts. The same pattern showed up in pressure washing and lawn care. What is specific to electrical is how fast the premium shows up in price: shops above $2M of revenue ask 3.76x, against about 2.4x below that.

What electrical contracting owners take home

Of 190 electrical contractors that state earnings and revenue, 25 state under $150K of SDE, 68 state $150K to $300K, 97 state $300K or more and 62 state $500K or more (Main Street Index, October 2026). The median is $300K of SDE, including the owner’s pay.

Do not read that as an electrical contractor owner salary. It is a salary plus profit for a business with a median of 6 employees (n=155) and about $236,600 of revenue per employee. It is also a survivor figure. An electrical company that earned $50,000 and closed never appears in a for-sale index, and the ones that do appear skew toward companies large enough to be worth selling. Of the 61 listings that state owner involvement, 48 are run by an owner-operator, 3 by a semi-absentee owner, 2 by an absentee owner and 8 by a manager. Most buyers are buying a job, and a well-paid one.

Owners in r/electricians give a range that fits. One described the target at scale:

“Once you have 6 guys you are a full time owner not using tools, so you need to get to 10 guys to be at the right scale.”r/electricians

The same owner wrote that a shop at that scale “should make at least 200,000 a year between payroll and profit distributions.” That is the middle of our $150K to $300K band. A sole operator with 15 years in the trade answered the same question with a lower number, and a less cheerful one:

“I would guesstimate around 120-150k. Which sounds glamorous but I'd rather go back to a regular job most days. I'm never home.”r/electricians

Both can be true. The owner earns more with crews and has to run a company to get it. The first $100,000 a year, for a licensed electrician working alone and billing steadily, is realistic in the threads. The owner of a shop that hits $200,000 or more is running payroll, estimating, collections and a pipeline of work. A commenter put the start of that discipline in daily terms: “You need to be billing $1000/day revenue to even have a chance at not drowning long term.”

Is $350,000 of revenue per employee realistic?

It is realistic for a small crew and unusual for a large one. 45 of 146 electrical contractors for sale (30.8%) show $350K or more of revenue per employee, and 33 of those 45 have five or fewer employees. Among the 48 with 10 or more employees, the median is $207,200, and among the 27 with 10 to 20 employees it is $200,000, with only 5 reaching $350K (Main Street Index, October 2026).

A buyer on a blue-collar group recently asked whether a $350K-per-employee figure was believable on a shop of 14. The data says look closer. At that headcount, about one listing in five reaches that level. When revenue per head is far above the median, one of four things is usually behind it: the headcount leaves out subcontractors or part-time help, the owner works on the tools and is not counted, revenue includes large pass-through materials on a few big jobs, or the numbers are not accurate. Ask for payroll records and a list of everyone who worked on the books last year.

The inverse pattern is a trap for hiring plans. An owner who watches a one- or two-person shop book $340,000 per head may assume each new hire adds the same. On the listings, revenue per head settles near $200,000 once the shop reaches 10 employees. An r/electricians owner who sets headcount by backlog described the practical method: “The limiting factor for us is securing work, so we base everything on contract backlog.” The owner who is unsure how many people to hire should start from signed work, not from a revenue target.

Electrical against five other trades

Electrical contractors keep a margin close to the neighbouring trades and ask more for it. The BigIdeasDB benchmark table puts electrical at 22.1% and 2.93x (n=293), roofing at 18.2% and 2.93x, painting at 23.0% and 2.26x, HVAC at 22.3% and 2.42x, plumbing at 23.2% and 2.36x and general contracting at 21.0% and 2.85x (Main Street Index, October 2026).

The margins are within five points of each other, so margin does not separate these trades. Price does. A painting company asks 2.26x and an electrical shop 2.93x for about the same share of revenue, because electrical businesses are larger, licensed and harder to replicate. For the two closest neighbours, read buying an HVAC business and buying a plumbing business, which cover multiples, service-contract revenue and licence rules in those trades. One r/electricians owner explained why electrical is the cheaper trade to enter and the harder one to price:

“It's because electricians have more competition from unlicensed scammers.”r/electricians

Another replied, in a thread on low prices, that “All the overhead you mentioned is figured into every bid.” Competing with unlicensed labour is a real margin pressure in small residential work, and it is a reason the larger, commercial and contract shops in our data keep what they keep.

What electrical contracting shops ask

Electrical contractors for sale ask a median $725,000 (n=214) and 2.92x owner earnings, with the middle half between 1.63x and 3.75x (n=185; Main Street Index, October 2026). Of the 185 with price and earnings, 89 ask 3x or more and 57 ask under 2x. On the 185, the median asking price is $749,000 against $277,000 of earnings.

Price rises with size. The median multiple is 2.45x for revenue under $1M (n=50), 2.37x for $1M to $2M (n=61) and 3.76x above $2M (n=56). Median asking prices in the same bands are $385,000 (n=58), $600,000 (n=65) and $3.05M (n=58). The jump above $2M is the size premium: bigger shops carry crews and managers, so a buyer pays more per dollar of earnings for earnings that depend less on one person.

A $170,000 shop at 2.45x costs about $415,000 and still needs you on a ladder. A $760,000 shop at 3.76x costs close to $2.9M, and it has the foreman, the estimator and the receivables. Our guide to valuing a small business explains how to weigh a multiple against that risk, and the price checker tests a single listing against its peers. The asking price is the seller’s number. The closing price is set by the buyer, the lender and due diligence.

States

Only Florida has enough electrical listings to publish a state median: 44 in the benchmark table, 34 with a multiple, at a median ask of $750,000, SDE of $401,000, a 23.5% margin and a 3.32x multiple (Main Street Index, October 2026). That is above the 2.93x for the whole country. In the screened set the next states by listing count are Texas (27), New York (17), North Carolina (14) and California (11), and 11 listings state no state. None of them reaches 30 listings with a multiple, so we show no medians for them.

Florida’s premium is a mix effect as much as a price effect: its listings are larger than the national median. Compare like for like before you call a state expensive. If you are weighing a move into a specific state, our guides to starting a business in Florida and starting a business in Texas cover the formation side.

The licence and the owner

65 of 250 electrical contractor listings state that a licence is required to operate, and 131 state that the seller will train the buyer (Main Street Index, October 2026). Because listings state licence terms only sometimes, treat these as the share that says so, not the share that applies. In practice every electrical contractor needs a licensed person on the permits, and the question for a buyer is whether that person is you, the seller or an employee.

Owner involvement shows how personal the licence is. Of the 61 listings that state it, 48 are owner-operated. Only 12 of the 250 state that a manager is in place. A buyer without a licence who wants an absentee business has few options in this trade; the usual route is to keep the licensed qualifier on staff, with a written agreement, or to hold the licence yourself. One r/electricians poster described a small shop whose owner pays someone else for the use of a master licence so he can pull permits, which is a recurring cost and a dependency.

Several other stated flags matter for planning. 38 listings say the business is home-based, 19 include real estate and only 3 are franchise resales. Equipment is stated by 107 listings at a median of $150,000, so most of what a buyer pays for beyond that is customers, the licence relationship and a crew. One r/electricians commenter summed up where the value sits when an electrical company is sold:

“It's possible the sale price won't be as high as you wish. You could be a major factor in the profitability of the business. The real value may be your client list.”r/electricians

That answers the question in the thread that started this search, which wondered whether an electrical company can be sold at all. The Main Street Index holds 293 US listings, so it can. The commenters who warned that the price depends on the owner are describing the 48 of 61 listings run by an owner on the tools.

How to pay for an electrical contracting business

48 of 250 electrical contractor listings state that seller financing is offered, and 2 state that it is not; 16 carry an SBA-eligible label (Main Street Index, October 2026). Because most listings do not state terms, treat these as the share that says so, not the share that would agree.

Test the payment against what is left after your own wage. Illustration on the medians of the 185 with price and earnings ($749,000 ask, $276,973 SDE): borrow 90% over 10 years at 10.5% and the payment is about $109,200 a year. That covers the debt about 2.5 times; after a $100,000 salary for your own work, about 1.6 times. These are our assumptions (10% down, 10.5% fixed, 10-year term, base = the ask), not a loan quote. Late-paying commercial receivables make cash tighter than the ratio suggests. See SBA loans to buy a business and seller financing.

Why electrical contracting owners sell

165 of the 250 listings give a stated reason. 108 say retirement or age (65.5% of those stating), 18 say other business interests, 18 give another reason and 11 say relocation. Burnout or workload is stated by only 3, health by 2 (Main Street Index, October 2026). Retirement dominates, which fits a trade with a median company age of 21 years.

A retiring owner often holds the estimator, the supplier relationships, the inspector relationships and the commercial accounts in one head. Ask for a transition period in writing, and read add-backs when buying a business before you accept stated earnings. Whether the owner stays for six weeks or six months is the first thing to negotiate.

Start an electrical business or buy one?

The data covers the buy side. Start-up costs are not in it, so we quote none; owners in r/electricians describe start-up as a licence, insurance, a van, tools and months of income saved. The threads are clear that a good electrician is not automatically a good owner:

“being a good electrician does not automatically makes you a good businessman”r/electricians

Owners describe the early years bluntly. One put it this way: “I’d say 95% give up within first 1-2 years, and 5% somehow make it gloriously.” That is one voice and not a measured failure rate; the index sees only businesses that reached the point of sale. Another owner, two years in, wrote that expenses seemed out of control. The replies were nearly all the same: charge more, and track every cost. A third warned that “To make money, you need to get bigger and have a few employees,” and that the risk is a customer who does not pay while materials and payroll are due.

Buying removes the first two years of finding customers and puts a price on it. At a median ask of $725,000 and 2.92x, you pay for earnings that exist today, with a crew that already knows the work. Starting costs far less and takes longer to reach $200,000. The right answer depends on whether you hold the licence, how much cash you have and how fast you want the income. Our buying vs starting a business guide compares the paths across industries, and starting a business with no money and starting a business while working full time cover the lean versions. For the buyer’s side of this trade in detail, read buying an electrical contracting business, and for the cost of getting going in any trade, how much it costs to start a business.

Before you buy an electrical contractor: eight checks

Margins swing with size and the owner usually carries the licence (Main Street Index, October 2026), so verify both before you talk price:

1. Find out who holds the licence. Ask which person is the licensed master or qualifier, whether that person is staying, and what your state requires for a new owner to keep pulling permits. Do not assume the licence transfers with the company.
2. Split revenue by work type. Separate service and repair, new residential, commercial tenant work, government and maintenance contracts. Ask which customers repeat. Recurring maintenance revenue is worth more than a one-off build.
3. Read the backlog and the jobs in progress. Get the signed backlog for the next 6 to 12 months, the margin expected on each job and the work in progress report. A backlog is what an owner on r/electricians called the limiting factor.
4. Subtract a replacement wage. Take stated SDE and deduct what you would pay a foreman or estimator to do the owner's work. In our data a $100,000 replacement wage cuts the median margin from 21.6% to about 12%.
5. Test revenue per employee against a real headcount. Count every person who works for the company, including subcontractors, and divide revenue by that number. A figure far above $236,600 per head means the headcount is incomplete or the owner is on the tools.
6. Check receivables, retainage and bonding. Commercial and government work can pay late and hold back retainage. Ask for the aged receivables report, the retainage owed and any bond the company carries.
7. Price the vans, tools and inventory. List each vehicle with age and mileage, the lifts and test equipment, and the stock on the shelves. Budget replacements for anything near the end of its life.
8. Ask for callbacks, claims and customer concentration. Request the last three years of insurance loss runs, the callback log and the share of revenue from the top three customers. One customer above 25% of revenue is a risk to price in.

For the full process, use the due diligence checklist for buying a business and how to buy a business. Other trades with vans and crews are compared in business ideas with a truck and home service business ideas, and the question of a franchise route is in franchise vs independent business.

What this data cannot tell you

• Asking, not closing. Every price is a listing’s ask.
• Stated, not verified. Revenue, earnings and headcount are what the listing says, and headcount may leave out subcontractors.
• SDE, not net profit. SDE includes the owner’s pay. The 12% figure after a $100,000 wage is our assumption, not a stated number.
• Survivors only. We see companies offered for sale, not those that closed, so we cannot measure failure rates or what a first-year starter earns.
• No start-up costs. The index measures businesses for sale. Start-up comments come from owners’ own words and are single voices.
• Industry mix. The classifier filed 293 listings under electrical contracting. We kept the 260 whose headline says electric and removed 10 repeating another listing’s revenue and SDE, so a few borderline cases may sit on either side of the line.
• Small groups. Splits by employee count of 10 to 20 use 27 listings, so we label them indicative. State medians are withheld except Florida.
• US only. Canadian and UK electrical listings use different earnings bases and are not mixed in.

Methodology

All queries ran read-only against the Main Street Index on October 23, 2026. We took de-duplicated US listings priced in USD on an SDE basis that the industry classifier files under electrical contracting (293), and kept those whose headline says electric (260). Lighting, low-voltage cabling and generator businesses (33) were set aside because their economics differ. Within the 260 we removed 10 listings that repeated another listing’s exact revenue and SDE, leaving 250.

Margins are SDE divided by revenue where both are stated and positive. Revenue per employee is revenue divided by the stated employee count. Medians are withheld below 30 listings, and groups of 27 are labelled indicative. The trade comparison and the Florida row come from the pre-computed benchmark table (scoring version 1.2.0, USD, SDE basis), which is not screened for lookalikes. Owner involvement, licence, seller-financing and SBA flags are true-or-empty fields, so we report the share of listings that state them. Reasons for selling come from the normalised motivation field; we excluded “not an owner exit” and give the disclosure rate.

Data sources and limitations

How BigIdeasDB helps you check an electrical contractor

Ranked by how much they help a buyer:

1. BigIdeasDB Main Street Index: every listing beside its peers, with its multiple, margin, revenue per employee, owner involvement, seller terms and stated reason, across 120+ industries. Browse the live listings, the industry benchmarks and the buyer view, or query it from an AI assistant with the Main Street Index MCP tools.
2. A general-purpose AI assistant: useful for turning a seller’s job list into revenue by work type and month, as long as you check it against bank deposits.
3. A spreadsheet: one row per job with materials, labour hours, bid margin and final margin, which is the data no listing can show you.

Need a cut we did not publish? Request custom data. Compare plans on pricing, or start a search on Discover.

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