Building a Service Division from Scratch: A Guide for Commercial Electrical Contractors

You’re Already Doing It—Now Make It Work for You

Fred laid it out simply: Most contractors are already handling small jobs, special projects, and warranty work. That’s service work. The challenge is recognizing the opportunity and structuring it so that it becomes a growth driver instead of a one-off task.

Here’s what makes service work different from construction:

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  It’s customer-direct—you’re not dealing with general contractors.
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  It has better profit margins—no bidding wars or bond requirements.
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  It’s lower risk—projects are smaller and more predictable.

And most importantly? It builds long-term customer relationships. Instead of chasing the next big project, you’re creating a revenue stream that doesn’t depend on the ups and downs of the construction cycle.

The 3-Part Blueprint for Structuring Service Work

If you’re serious about making service work a core part of your business, Fred outlined an ideal (if not always easy) path forward: Structure → Systems → Staff.

1. Structure: Treat It Like Its Own Business

Service work isn’t just a side hustle for your construction team—it’s a separate business within your business. That means:

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  Giving it dedicated leadership (not splitting duties with an estimator).
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  Physically separating service operations if possible.
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  Setting clear goals and processes specific to service work.

“The way you structure your business determines your culture,” Fred pointed out. If service work is treated like an afterthought, that’s exactly what it will be.

2. Systems: Build the Right Infrastructure

Most contractors who struggle with service work cite the same issue: they don’t have the right systems in place. That includes:

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  Clear operating procedures so every job runs smoothly.
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  Software built for service work, not a bolt-on to construction workflows.
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  Defined workflows for everything from dispatching to invoicing.

Toby shared his experience: “When we signed with BuildOps, they actually asked about my processes. And I realized—I didn’t really have them mapped out. That exercise alone made a huge difference.”

3. Staff: Make It a Place People Want to Work

Once the structure and systems are in place, recruiting and retaining good people gets easier. A well-run service division isn’t just about putting bodies in trucks—it’s about creating an environment where technicians want to stay and grow.

Fred summed it up: “Imagine the difference in recruiting when you can explain a clear structure, a growth plan, and a strong support system—versus just saying, ‘Hey, we need another guy in a van.’”

Turning One-Off Jobs into Recurring Revenue

One of the biggest shifts in mindset is seeing service work as more than just fixing a problem—it’s an entry point to a long-term customer relationship. The easiest way to do that? Train your team to identify opportunities for pull-through work.

Toby put it simply: “If a tech notices the lights are getting old, they should mention it. ‘Hey, we should probably upgrade these to LEDs. It'll save you money in the long run.’ It’s not selling—it’s helping.”

And for those who worry about being too pushy? Fred suggested one simple shift: offer a five-year warranty instead of one year. Why?

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  Most failures happen in the first year anyway (the “bathtub curve” effect).
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  It gives you an annual reason to check in—not as a sales call, but as a warranty visit.
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  It builds trust—customers see you as a long-term partner, not just a one-time vendor.

Growing & Sustaining a Service Division

So, you’ve structured it, set up systems, and staffed it—now how do you keep it growing? A few key strategies:

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  Annual business plans—just like you plan a construction project, plan your service growth.
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  Cross-selling between service and construction—introduce service at the end of a project, and let service teams flag future construction work.
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  Joining peer groups—learning from other contractors (even outside your trade) can provide invaluable insights.

The Bottom Line: Does Your Company Have More Value Than It Did a Year Ago?

Fred closed with a powerful question: On December 31st, did your company have a higher valuation than it did on January 1st?

One of the clearest ways to answer “yes” is by growing your customer base and securing recurring revenue. Service work gives you that opportunity—if you structure it the right way.

For contractors looking to build a stronger, more stable business, the path is clear: Stop treating service work as an afterthought. Start treating it as the asset it really is.