Although every trade is different, the career trajectory for most tradies is more or less the same.
You start off with an apprenticeship and gather experience by being employed with someone or working as a subby. The next step, after mastering your craft, is to start your own business, which has its own set of challenges but the rewards can be amazing.
The question is, “Are you cut out to be a trades business owner”?
Passion is only the tip of the iceberg. Your technical skills and business acumen are what will determine your success.
However, when it comes to business advice, it looks like everyone is an expert. Most of these “experts” have never even operated a trades business. To really understand what it takes to run a trades business, we turned to our network of Aussie trades professionals from the Tradie Life Facebook Group. Here is what they had to say:
Working with builders as a sub-contractor helps you engage with more businesses, and lets you learn the do’s and don’ts of running a successful business. This will certainly help you when you are ready to start on your own. Just keep your eyes and ears open and be extremely observant.
When starting a business, many tradies are so busy getting the job done that they don’t feel the need for a business plan. However, setting your business up for success requires thorough planning to achieve the goals you have in mind. Having a business plan gives you a vision and lays out a step by step process to achieve that.
Businesses don’t grow overnight. The goal should be to get a few things right rather than going all in and not being able to cope.
There are so many aspects to running your own business including salaries, overheads, materials, marketing and so on, that its best that you start small.
Pick a few good people. Don’t over-capitalise on equipment. Accept small but quality jobs. As the word gets out, growth will eventually find its way.
Getting the right accreditation, qualifications and permits not only lets you build trust with your customers but also helps you protect your business from having a run with the law.
Once you get the accreditation, make sure your prospects know about it.
Yes, you have just started your business and it might make sense to accept every job that comes your way, including ones that don’t pay well. Remember, you have spent years getting qualified and gaining experience learning things the hard way. If you have worked out your costs correctly, be confident that your first price is your best price.
Firmly stand your ground to ensure profitability right from the start.
The reason you left your employer is because you know you can do better. So take time to understand your costs and work out your hourly rate, so you can pay yourself a good wage.
When you start a new business and work starts pouring in, you can feel the excitement build up. However, you have only so many hours in a day and a handful of employees to handle the work, so it’s better to only accept the work you know you can handle. Taking orders and not delivering will tarnish your reputation. Not a good start if you are in it for the long run!
Not all jobs are great jobs and not all customers are great customers. When starting off, you already have too many things to sort out and cannot afford to take on fussy customers or ones that will not pay.
It’s time you trust your instincts. If something feels wrong, turn away and don’t look back.
A key to your successful trades business is prioritising opportunities that come your way. Saying “Yes” to every job and ending up disappointing customers or exhausting yourself is not going to get you anywhere.
Slow down, realise your capacity, set your priorities straight and make sure you say ‘No’ to anything that compromises those.
Technology might not be your best friend (right now), but streamlined processes mean fewer errors and delays. It also means improved customer satisfaction and your own peace of mind. Consider using a business management app that speeds up workflow and cuts down admin work such as scheduling, tracking, invoicing, costing and reporting, so you have more time to focus on growing the business rather than being stuck in the daily chaos.
While it may be tempting to dip your toes into everything so you don’t have days when the phone just doesn’t ring, it’s best to get recognised for what you do best. Focus on your forte and stick to it.
Record everything as and when it happens. Don’t leave it until later when you’ll get time, because you’ll never get time. Better yet, outsource bookkeeping and tax to a professional so you have more time to spend on getting the business side of things done.
Make sure you are cashflow positive, so you don’t just have some reserve cash for unforeseen circumstances but can also invest in new assets, take care of debts on time and pay yourself a reasonable wage.
A great way to improve your cashflows is to have a system in place to send instant invoices as soon as the job is done and also to allow your customers to pay via online credit cards, so you are not wasting time and energy chasing late payments.
While it’s best to keep it small at the start, focus on getting connected to good clients rather than too many fussy ones. A few good clients are worth much more in the long run than a whole bevy of fussy ones.
Rate your clients/jobs as part of your regular customer evaluation and weed out the ones you would rather not work with.
You don’t have to learn everything the hard way. Ask for advice from peers in the industry or hire a business coach to get training on how to run your own trades business. Also consider acquiring membership of a relevant trade association to connect with like-minded people.
There are several volunteer organisations and online communities that have current or former trades business owners and who have walked miles in the shoes you have just slipped into.
The COVID 19 pandemic showed us how uncertainty can cripple entire industries. Your trades business is no exception.
While it’s hard to estimate the exact damage a crisis may cause, taking a long-term view and doing some planning for unexpected events can keep your business afloat until the crisis passes.
From holding onto good employees and saving cash for unexpected expenses to reassessing your supply chain, reviewing your insurance cover and planning for IT failures, make sure your business is well prepared when the going gets tough.
Is your partner your bookkeeper, marketing manager, admin and what not? Spare the poor soul and get professional help for the things you don’t know.
While these tasks might not be on top of your mind when you begin your business, they are nevertheless equally important and can soon begin to pile up as you get stuck with running the business.
Starting your own trades business can be immensely rewarding in terms of better salary and work-life balance. Set it up correctly by making sure you have a checklist you can tick things off.
With a well-defined approach, dedicated team and the right technology, you can make it happen!