Start an Electric Fence Company

An electric fence is a barrier that uses electric shocks to deter people and animals from crossing a boundary. While traditionally it has been used to protect high-security assets such as military bases and prisons it is common in residential properties in South Africa. The electric fence business either supplies the equipment, does the installation or both.

Market Need
South Africa is one of the most dangerous countries in the world. Unlike in most countries where if you interrupt a burglar they run away, in South Africa you are far more likely to be attacked (and possibly killed) due to the unbridled violence we have in our country as a lot of burglars or either drugged up or have previous military experience with the various “liberation” movements in Africa and they are not afraid of a confrontation. Coupled with problematic self-defence laws property owners are better off taking whatever measures to prevent and deter unauthorized entry. In years gone by this used to be via barbed wire, razor wire, spikes, broken glass etc. But electric fences (once only used by businesses, farms and drug dealers in SA) are now common in residential areas, housing estates and even in the quiet suburbs and is usually used alongside high walls, burglar bars and safety gates, CCTV, armed response and firearms by the homeowner.

How electric fences work
Electric fences are designed to create an electrical circuit when touched by a person or animal. A component called a power energizer converts power into a brief high voltage pulse. One terminal of the power energizer releases an electrical pulse along a connected bare wire about once per second. Another terminal is connected to a metal rod implanted in the earth, called a ground or earth rod. A person or animal touching both the wire and the earth during a pulse will complete an electrical circuit and will conduct the pulse, causing an electric shock. The effects of the shock depend upon the voltage, the energy of the pulse, the degree of contact between the recipient and the fence and ground and the route of the current through the body; it can range from barely noticeable to uncomfortable, painful or even lethal.

There are two main types of businesses in this industry: the supply of equipment and the installation of the fence. The supply of equipment will involve the manufacture, import, distribution, wholesale and retail of the energiser, wire, stakes, warning signs and other components. The installation business is the installing of the electric fence around a perimeter.

Supply of equipment
The far more popular (and lucrative) business in South Africa with regards to the supply of equipment is the B2B business of selling to installers. There are B2C hardware’s that sell electric fence “starter kits” direct to consumer, but the problem is that different people have different needs and sizes, also this is a business suited to people who know what they are doing, and can cause harm to both themselves and family but also to the equipment. I do not think that the average homeowner will want to install their own electric fence, I’m not saying there is not a market but if I were to enter the electric fence equipment market it would be B2B.

Electric fence installation
The far more popular business for small businesses is the installation of electric fences. This is a business that both requires a deposit by the client and has good enough margins that a small business can gain traction quickly providing they can find enough clients. This business starts with an assessment of the area and a quotation is then generated accordingly. There are a few business models that the installer can use:
Supply of equipment and labour (installation) – Here the installer provides both the equipment and installation as a package (and can add some markup on the equipment if they want to along with their labour cost).
Labour only – Here the installer can tell the homeowner “look the hardware cost Rxxxx and my installation fee is Rxxxx”.
While the former may seem the most obvious do not write off the labour only in any industry. I speak often about monetizing a skill, and this can be beneficial to both the business owner and client. It is almost always the model I use when contracting work. The client pays for the equipment and materials and the business owner does the labour. In this model, all you need is a skill. Most unemployed people with skills can use this model but they think that they need capital. No, even the tools and transport can be provided by the client or rented if need be.

Target Markets
There are three main target markets in this industry:
Commercial, residential and agricultural
Agricultural followed by commercial is probably the oldest markets in South Africa. Residential is where most of the growth currently is (as well as the most competition). A lot of houses still do not have an electric fence and no matter how some people don’t like them cosmetically they will be forced to get them. When I’m in Cape Town, I personally prefer a combination of razor wire and electric fence perched on the highest wall allowed by law before I can sleep peacefully in my bed at night. So there is money to be made by offering a combination of both as well as fencing.

Legal aspects
There are some laws regarding electric fencing you need to be aware of, “legally” the installer needs to be registered as an installer and issue a certificate, whether this is enforced I have no idea.  There are also maximum voltages you need to be aware of especially if you are building custom solutions.