Over the course of the pandemic, the trades has been welcomed as a haven for job growth. With hundreds of thousands employed in the construction and trade sectors respectively, the popularity of these careers has grown exponentially, with 18% of Brits considering the trades as a career due to the pandemic. Therefore, with the commencement of the new tax year, it is essential that for the influx of new tradespeople in the UK, they are up to speed with how to best prepare their business to run as smoothly as possible. Ben Dyer, CEO of Powered Now, leading field service management software of the trades, has compiled his beginners guide for starting a business in the trades, providing the essential insights to ensure sole traders and small businesses thrive.
- Do you do the job well?
One of the attractions of the trade is that, with 70% of work coming from recommendations or existing relationships, doing the job well is usually enough to be successful. You don’t need to know much about sales and marketing or lots of other stuff for your business to be a hit.
Of course, where your particular trade has legal requirements, like Gas Safe qualifications or Electrical Part P expertise, you must already have these before you go it alone. That’s the starter for ten.
But the question you also have to ask yourself before launching out is, can you do the job well? The clue to this is the amount of experience that you have and the sort of feedback that you have been getting from your customers and your boss. That’s both the positive and the negative.
- Ensuring your finances and book keeping is transparent
Making Tax Digital (MTD) is HMRC’s initiative to bring all record keeping relating to tax onto digital platforms. Becoming compulsory from April 2023, many businesses need to start giving some thought to MTD, but may not have done so. As a result, they are probably in for a bumpy ride and this could be a painful time for trade businesses like plumbers, gas engineers, electricians and builders.
Every trade business should be considering their plans for MTD. If they do things themselves, they can turn to a specialist trade-based software company, such as Powered Now. Most such systems nowadays can also automate the feeds to accounting systems. If they already have an external accountant to submit their HMRC returns, they should be talking to them as soon as possible. My strongest advice would simply be this – don’t get caught out at the last minute, and plan early so that your finances are in check throughout the year.
Before you start up, it’s important to understand your own mind. What are you trying to achieve? If it’s purely an easy life, you probably won’t make it work.
The fact is that while there are many benefits, there is more pressure when you run your own business. You have to satisfy your customers, you have to make enough money, you need to find work. HMRC needs to be fed. Cowboy Customers will try to scam you. Some people can’t cope with all of that.
You also need to understand whether you want a better lifestyle or whether you want to build a larger business. This article is about being a sole trader. It’s very different if you are looking to be a larger, more successful business. However, the good news is you can always adopt a more ambitious approach at any time. Starting out as a sole trader can be a good stepping-stone.
- Be transparent with pricing and delivery charges
Post-COVID-19, customer loyalty will be very important to gain new projects and to increase sales. To gain the trust of your clients, you will need to be transparent with your price and charges for the services you offer. Everyone is feeling the pinch.
Avoid concealing extra fees at the time of the final stages of finalising a service. Be transparent from the starting to keep customers pleased and loyal.
- Satisfying customers
It’s critical that you satisfy your customers but there are two sides to doing this.
The first is doing a good job – their problem needs to be solved, the new item installed or some maintenance done. Then it all needs to still be working six months later! You would think that would be enough, but it isn’t.
The second part is hard to understand, but still true. You must meet your customer’s expectations. Unfortunately, if you do a good job but fail to meet expectations you can still leave a dissatisfied customer. This can be very frustrating. That’s why it’s important to understand expectations.
There are three things that customers will typically have expectations about:
- The cost
- The timescale
- Quality and what’s included
In each case you need to deliver, or come very close to delivering, what your customer expects. The key to this is for you to set your customer’s expectations ahead of time based on what is realistically possible.