Advice for self-employed tradespeople
Spend more time with your family when you become self-employed
It’s not easy being a self-employed tradesperson, but HomeForce is here to help.
As a starter here’s eight tips to help self-employed tradespeople grow a profitable business, provide great customer service AND spend more time with their family.
Whether you’re thinking of going it alone, have just started out or even if you are already established we hope there’s something in here that’s useful.
If you have your own tips for self-employed tradespeople post them on our Facebook page
1) Speak to a good accountant
Why? In a word, TAX:
- National Insurance and PAYE.
- Corporation tax and / or personal tax returns
- VAT – how do you know when to become VAT registered
- Construction Industry Scheme (CIS).
A good accountant will help you:
- Avoid fines from HMRC
- Ensure you pay yourself in the most tax efficient way
- Understand what are legitimate business expenses
- Get set up on software that manages your accounts & does your VAT returns without having to pay an accountant to do it for you.
- Navigate CIS
- Prepare your annual self-assessment tax return or company accounts
- Work out the best company structure for you (Limited Company, Partnership, LLP, Sole Trader)
- Quickly & easily register for obligatory employee pension contributions.
HomeForce offers advice on any of the above, provides certified support on Xero accounting software and can set up CIS paper work on ServiceM8. We can also put you in touch with an excellent accountant. It’s FREE to accredited tradespeople and charged at £50 / hr to non-accredited.
2) Get Insured
- Public Liability Insurance – because, if you accidentally cause damage in a customer’s property without suitable insurance the consequences could be ruinous for any self-employed tradesperson.
- Employers Liability Insurance – a legal requirement as soon as you become an employer. You can be fined £2,500 every day you are not properly insured to the value of £5m.
- Self-Assurance Insurance – to secure an income in case accident or injury keeps you off work.
- Tools insurance – you can’t work if your tools get stolen and thieves are known to target expensive tools used by tradespeople.
3) Secure a steady stream of work
How can you be certain of a steady stream of work? It’s a question that worries most self-employed tradespeople when starting out alone.
The reality is there is huge demand for good tradespeople, and no true tradesperson sets out to be a bad tradesperson. A reliable tradesperson will never be short of work. It’s managing that work flow to stay reliable that becomes the issue, and where HomeForce can help.
HomeForce gives first refusal on job leads to accredited tradespeople, helps to convert them into jobs and helps to manage jobs to ensure you spend the maximum time doing things that make money and the minimum time doing things that don’t.
We also sell job leads to associate tradespeople on a first come first served basis – price on application.
Of course, there are plenty of other sources of job leads for self-employed tradespeople CLICK HERE to read more.
4) Set your terms
When Self-employed tradespeople provide a service to customers that’s a contract. In Scotland that is even if nothing is in writting.
But there are two sides to any contract. There can (and should) be obligations on the customer’s side and these should be made clear from the start.
Payment terms don’t need to be 30 (or even 60) days. Why shouldn’t a customer pay within 7 days, or for materials up front?
What if there’s a dispute? Terms should say how it will be dealt. Should a customer be allowed to withhold full payment over a tiny defect? We don’t think so.
Without terms you leave yourself open to customer whims of how they perceive tradespeople should be treated. Terms will define the path to a solution without it having to be reinvented on every occasion.
HomeForce provides accredited tradespeople with terms tailored to their business, hosts them on the internet and ensures they are sent to any customer. We can even set it up that a customer signs them to show their acceptance before any job.
Terms of business are FREE to accredited tradespeople or £200 for template terms to non-accredited tradespeople.
5) Don’t be the cheapest
Of course, you want work, but it needs to be work you make money from.
There are some customers for whom price is always going to be the one and only factor when choosing a tradesperson. However, for the vast majority of customer’s that is not the case. READ MORE HERE.
HomeForce will help you win work by providing a great service. Not by making you the cheapest. We’ll even help you reduce costs so you stand a chance of being the cheapest – if you really want to be.
6) Concentrate on cash flow
82% of businesses fail because they run out of money. Read our article on managing cash flow.
Become accredited with HomeForce and we’ll help you do all the things that help cash flow but still spend less time on administration.
7) Do the things that earn money
As a sole trader you could spend only 30% to 40% of your time actually doing work that earns money. The rest of the time is spent traveling to and from jobs, doing quotes, managing finance, arranging & buying materials, paying bills, answering customer enquiries & questions, turning up to jobs when customers aren’t there!
HomeForce can help you reduce the time you spend on non-money-making activities by up to 90% (READ MORE HERE). That frees up a huge amount of time to do the things that do make money…or spend time with your family.
8) Leave time for family and friends
Having flexibility to spend time with family is often a reason why tradespeople choose to become self-employed. But then they become slaves to their business.
Let HomeForce help you fulfil your goal of both providing for and being there for your family.