Eight Ways for Tradespeople to Grow their Business
See your business grow.
Growing a business is more than just taking on more work and more staff.
A business grows through increased turnover or profits. Both of these things can happen without (or before) taking on additional staff or more work.
In this article we look at ways to increase profit and turnover and only then at increasing the amount of work.
1) Convert more quotes to jobs.
Lost quotes cost money:
See “The Cost of Lost Quotes” to calculate how much lost quotes cost you
Profits will increase by converting a higher proportion of quotes to jobs
Converting a higher proportion of quotes to jobs also means spending more time doing the things that make money
2) Become more efficient
- Time spent doing administration is work that does not earn money
- Reduce the time spent doing administration to increase the time available to do things that earn money.
- “administration” includes
- Marketing and advertising for work
- Taking customer calls and getting job details
- Surveying for, researching, producing, sending and following up quotes
- Ordering materials
- Scheduling jobs & planning routes
- Communicating with customers
- Managing jobs on site
- Sending invoices
- Chasing Payment
- Preparing accounts
- Doing Tax (VAT, PAYE, Tax Returns)
- Keeping insurance and qualifications up to date
- See “How to reduce your administration time by up to 90%”
- See “How to spend less time doing quotes ”
3) Charge more
- When demand for services out strips supply (i.e. the availability of your service to fulfill the demand) then consider increasing prices. Retail businesses do this to manage their stock (i.e. their supply) – consider how the price of items change when doing regular shopping – why should a trades service be different?
- Yes, charging more may reduce demand (not a bad thing if there is just too much work) but it will also increase profit and grow a business. Prices can be dropped again later if demand falls too far.
- Remember that “Lowest cost is NOT what wins jobs”
4) Manage cash flow
- Always ensure there is money in the bank to pay suppliers AND wages.
- Unpaid suppliers won’t provide the goods or services needed for the next job.
- Send invoices for work completed as soon as the work is completed
- Follow up overdue invoices
- Remember it’s just as important to bill for the little jobs as the big jobs
- See “How to manage Cash Flow” for more
5) Fill down time
- Every tradesperson will have down time
- Waiting for other tradespeople on larger projects
- When customers cancel at the last minute
- When work is completed faster than anticipated
- Down time kills profits for any business
- Contact HomeForce to find out we can help fill your down time
If the above are in place then it’s time to work on getting more work and increasing staff.
6) Employ administrative staff
- Employ administrative staff before employing staff to execute work.
- Administrative staff are paid less per hour than a tradesperson so having administrative staff frees up time to do things that earn more money than the staff are paid.
- If processes are in place for administrative staff to follow (see steps 1 – 4 above) then they are more easily monitored than tradespeople on jobs and so take less of your time.
- Part time administrative staff are more obtainable than part time tradespeople so the financial commitment to a business is less.
7) Team up with other trades people
- This provides more resource without a financial commitment
- It can also provide a source of job leads for a growing business
- There can be downsides
- Availability may not match your requirements
- Their customer service and work quality may not be as high as yours
- Even friends fall out over business.
- If adding staff to a business the requirement for more work is ultimately inevitable.
- Ensuring there is a constant supply of quality job leads is a concern that holds back many trades people from employing new staff.
- See “Job Leads for Edinburgh Tradespeople” for suggested ways to maintain a steady stream of work.