Seven Steps to Running a Successful Tradie Business
Tradies can be anything from plumbers, electricians, builders to pest control, cleaners, and property maintenance services. Because the industry is so broad, there’s a lot of competition and a real need to focus on the customer experience. This 7 step checklist will help ensure your tradie business is set up for success.
1. CHECK CUSTOMERS ARE HAPPY
Always collect customer feedback
Tradie businesses often rely on positive customer word of mouth to build new business, so it’s important to have a system that captures how your customers feel. Talk to your customers after a job’s completed; ask them ‘what did they like’ and ‘what could you improve’? Document their answers and review monthly. Is there anything to change in your business? It could be as simple as calling in advance before a job is started, or complicated such as needing to discipline staff.
Ways to generate feedback
There are many ways you can generate customer feedback, including monitoring social media (if you have a Facebook or LinkedIn presence) and surveys. You can also talk to suppliers or other tradies. Often the customer is more open to talking to someone else about you, rather than talking face to face.
Use feedback and research to find new opportunities
Is there anything you could provide that customers have requested? If you wanted to test the market before committing to new products and services, you could out-source to contractors to gauge demand too.
Keep a close eye on the industry and its latest developments. Attend industry events and trade shows, build your networks and join relevant networking associations. Continually look for ways you can improve your offering to remain current.
Review if you need to change focus
What is currently in demand? Consider if you should drop focus on new building projects, for example, heritage restorations, or home renovations. It’s worth checking your market to identify where the growth will be, and if you need to alter what you’re providing.
Check what’s happening in your industry
Research is a key factor to ensuring you’re offering the right services. Whether it’s checking out the competition or interacting with customers for feedback, keep your ear to the ground. This will allow you to learn the latest in what’s happening in your industry.
2. CHECK YOUR MARKETING
Review your current strategy – what is it and is it working?
Consider what options you’ve been using to market your business to retain current customers and gain new ones. Check what marketing is working by reviewing how your last 10 customers heard about you. Keep doing what works, adjust what isn’t.
Attend industry events
Consider attending industry events as a guest speaker. That way you’re positioning yourself as an expert in your field, and you’ll also meet new people and potential customers. Everyone has a story to tell, and most trade conventions or shows have guest speakers.
Know your competition
Review your competitors by looking at their advertising, their website, registering for their e-newsletters and asking suppliers. There may be things they do better than you. But you’re looking for things that could impact your business. For example, let’s say you’ve discovered that your competition is using a brand of paint that’s superior to the product you’ve got. It’s now time to look at whether you should change suppliers.
Target your customer
Advertising works best if it’s designed specifically for the customers you’re targeting, so determine who your ideal customer is, and what their needs are. Then adjust how you market to them, for example, through digital marketing, social media or direct mail. If the customer is a large corporate you may have to register for an RFP (Request For Proposals) and pitch for a contract. If it’s a home owner, it’s more likely to be word of mouth, local advertising or digital marketing. Develop specific tactics for each customer type so you’re prepared.
Develop a digital presence
It’s important to have a great digital presence, such as a responsive website to inform and educate customers about what you do. It will help raise the awareness of your business. Consider an SEO campaign, Google Adwords marketing, keeping an up to date Facebook page for your business, opens in new window or using Facebook call back request forms, opens in new window to generate leads. Without a digital presence it’s difficult to be found!
Have multiple ways for customers to contact you
Try and set up different ways for customers to contact you. Email, voicemail, mobile phone, and business cards are standard. But also consider a quote form on your website, apps where customers can provide job specifications. You might even consider a login area on your site for customers wishing to download guides or checklists you’ve created.
Always keep an eye out for new markets
If you spot opportunities opening up in another area, be flexible enough to move there for the duration of a project. If a project’s large enough you could consider moving your business to that location. Or opening a new office, or joint venture with a business that’s based locally.
Do market research
Successful businesses always review and update their marketing strategy. Staying in touch with your customers and keeping an eye on your competition are critical. This is where market research is essential.
Make sure you have created a Google My Business page
One of the first places people look when searching for a tradie is on Google. Setting up a Google My Business page (and obtaining regular customer reviews) is critical in terms of showcasing your business in search results and generating leads.
3. CHECK YOUR SYSTEMS
Document your work flow
A system will help ensure your business is efficient. Document the work flow from when a new job comes in, to doing the work and scheduling your staff. Also include ensuring equipment is available, liaising with other sub-contracting tradies, finishing the job and after-sales support.
If it’s complicated then documenting the flow will help you pinpoint roadblocks to clear. It could also be useful to engage an efficiency expert to have an outside look at your business.
Accepting payments easily
Customers are more likely to pay on the spot once you’ve completed a job if you can offer a mobile payment option. So make it easy for customers to pay you, and for you to pay suppliers.
- Stripe is a cost effective and very easy to use mobile payment solution that integrates with your accounting software and most job management systems such as ServiceM8 and NextMinute.
- Square is an alternative to Stripe and also allows you to easily collect payments on site whilst integrating with your accounting system.
Use accounting software to keep everything up to date and compliant
The last thing you want is to worry about invoicing, tax payments and payroll. Set up a cloud-based accounting such as Xero system so you know what’s happening to your money. This way you can get an overall picture of activity. Once you have accounting software you can integrate your accounting package with your bank account to make bank reconciliation fast and easy.
Implement workflow or project management software
If systems and processes aren’t helping manage your workflow, don’t be afraid to look at new options. Talk to your staff and get their view on how to improve the process. Consider implementing workflow or job management software such as ServiceM8 that’s designed for businesses in the trades and services industry.
Automate time consuming administrative tasks
This is an area that many business fall short. Letting go of the small things that have become habit can be difficult but can save you a considerable amount of time, allowing you to get on with value-added activities that increase leads and revenue. Look at how you can automate accounting tasks, job management, reporting and client communications to start with. You won’t be sorry!
4. CHECK YOUR CAPACITY
Are you getting more work than you can handle?
Are you saying “yes” to everyone because you’re a new business? It’s important to understand the dangers of overtrading. Of course it’s great if you’re getting lots of work, however if you’re stretched to the point that you can’t handle it, your reputation is going to take a nosedive. Look at ways you can increase your capacity, by hiring more staff, or have agreements with other businesses to help with the overflow.
Check staff capability
If you’re growing fast, make sure staff have the ability to manage larger projects or more employees. For example you may need qualified project managers for large contracts, and people with HR experience managing layers of employees. Be aware you may need to hire staff with a different skill set than when you started.
Have the right vehicles and equipment
It’s important to check your vehicles and equipment are aligned to your business needs. Consider options such as buying new, second hand, or leasing. You can even hire if the need is short term, but make sure you factor these costs in.
Increase your cash flow
Options to increase your cash flow:
- Business Overdraft: linked to your business operating account to help manage cash flow. Generally there’s no set repayment schedule, so you can make repayments when it best suits your cash flow situation.
- Equipment Finance: A great option for tradies that need to increase their cash flow with the ability to personalise it for your equipment needs. Consider automating your payments and setting up direct debits to reduce hassle, and administrative burden.
5. CHECK YOUR KPIs
Compare your actual revenue against your revenue forecast
Regularly review if your revenue is tracking to target. If you’re not getting as many jobs or quotes as you’d hoped, consider adjusting your forecasts so you can manage your cash flow more effectively. Ideally you’re using accounting software to give you real time data.
Check your costs aren’t exceeding your budgets
Watch your costs carefully, especially when you have multiple jobs on the go. Crucial costs to keep a close eye on are the largest, including labour and materials. Sometimes you can justify going over-budget if you know a large payment is due.
Make sure you’re achieving the margins you need to see a profit
Do you have a set margin you work to for each job type? If you’re not achieving these margins then you’re either lowering your price to win work, or your costs are increasing.
Check your staff costs
Try and benchmark what you pay staff with other businesses in the same industry, or ask your local industry association if they have data you can use.
Focus on your customers
Your regular customers are most likely to provide referrals from word of mouth. Increase this possibility by matching and exceeding expectations. Be on time, deliver within budget, ensure the job is completed properly, be easy to do business with and offer flexibility and outstanding customer service.
Keep track of your Key Performance Indicators so you can make informed decisions about future growth.
6. UNDERSTAND THE INDUSTRY DYNAMICS
Understand contracting and pitching
If you’re considering pitching for contracts for the first time, it’s best to get help from professional advisers. You’ll learn the different ways of pitching and how to tailor them for various customers. You’ll also learn the finer points of contracting and what to look out for. You can spend a huge amount of time and energy pitching, so you want to make sure you have a great chance of winning.
Become a member of your trade association
If you’re not already a member of your trade association, it’s a good idea to join. There are benefits to belonging to a group of like-minded business owners.
Identify construction areas or industries that are growing
Keep an eye on where things are growing in the construction industry. For example, if you’re a builder and a city is developing new subdivisions, be in there early with your pitch. Or it could be that an area has been hit by a natural disaster, and urgent rebuilding is needed.
Identify new opportunities, such as sub-contracting with other businesses
Business alliances are a great way to gain work. Keep up to date with industry developments and stay in touch with what other businesses in your industry are doing. Sub-contracting also means that you’re forming alliances that can be very successful on an on-going basis. If you have a positive experience with another contractor, it’s a relationship that can benefit you both for future projects.
Tap into expert knowledge
You can never be too well informed. It pays to attend as many industry events as you can. If experts in your industry are offering seminars, tap into their knowledge as often as you can.
7. CHECK YOUR COMPLIANCE
Make sure you have the right licence or registration
To work as a tradie in New Zealand you should have a licence, registered, or have the appropriate certification to prove competence. What you need depends on the service or trade industry you are operating within.
Understand and be compliant with health and safety regulations
Like licencing and registration, work health and safety in the trades and services industry is regulated by the Health & Safety at Work Act. It’s important to ensure you understanding this act and are aware of your responsibilities as both an employer and employee. Work Safe NZ is a really good place to start for knowledge and education.
Ensure you’re up to date with codes of practice
It’s important that you understand the standards to which you need to operate in the trades and services industrty. Not complying with these standards can result in facing an expensive and stressful disciplinary process.
Coffee & Cloud offer quality business support to small businesses in New Zealand. Whether it’s 1 hour per week or 40 hours per week, we are on hand and ready to help. Contact the team at email@example.com for a chat about your support requirements.