In many ways, there’s never been a better time to start a trade business. Demand for most trades, particularly builders, plumbers, carpenters and electricians, is huge right now, and many independent businesses are seeing their calendars booked out months and months in advance.
Sure, rising fuel and materials costs have put a bit of a spanner in the works (pun intended), but overall the industry is going strong.
So if you’ve been dreaming of telling your grumpy boss where to stick it and going out alone, free to set your own hours and choose the jobs you want to do, now might just be the time to do it.
If you are striking out on your own, here are a few tips to get you started with a successful trade business.
Review the regulations
Do you need particular qualifications or to be registered with certain regulatory bodies to operate in your sector? What health and safety requirements do you need to adhere to?
You’ll need different types of insurance depending on the work that you do, and you may need permits and licences.
If you’re not sure, it’s worth speaking to someone who’s already done it to make sure you’ve got everything you need. You can also check with the professional body for your particular field as they’ll be able to advise you.
Register your business
You’ll need to register with HMRC as either a sole trader (if it’s just you on your own) or a limited company. For most trade businesses, a limited company is usually the best option as it reduces your personal liability and financial responsibility, but take a look at the HMRC website for more detail on the difference between the two. If you expect to make more than £85,000 in a 12-month period, you’ll also need to register for VAT, although you can do that after you hit the threshold as long as you do it within two months.
If you’re registering a limited company, you’ll need a name. It will need to be original and not too similar to anything that’s already out there. Try to make it simple, easy to remember, and clear about what you do. Before you register it, you might want to make sure you can get the website domain and social media handles to go with it.
Have a plan
Before you start, put together a business plan. This should cover:
- What services you’ll offer
- The types of people you’ll offer them to (who they are, what properties/premises they have, what sorts of budgets they have, their location, etc.)
- How much you’ll charge
- What your costs will be (e.g. materials, staff, fuel, and so on)
- Your cashflow projections
- How you’ll market yourself
- An overview of your competitors and what they’re doing
It’s worth reviewing this plan regularly – at least every 12 months – to see where you need to adapt or develop. You’ll want to keep a monthly eye on those cashflow projections to see if things are going according to plan and where you can save money or make more profit.
Consider your costs
As part of your business plan, you’ll need to look at where you’ll source your materials. Buying in bulk is often cheaper, but then you’ll need to consider storage options. Talk to other people to get their recommendations, and talk to different suppliers to see who can offer the best deals.
You can set up trade accounts at places like Screwfix, Toolstation and Wickes, which give you a 10% discount. Some places even offer benefits like breakfast mornings when you register an account with them – who doesn’t like a free bacon butty?!
Look at fuel cards, as well, which will give you discounts on the prices shown at the pump.
When you first start out, it’s easy to get caught up in chasing new clients and let everything else just happen around you. What use is a bookkeeping system when you only have two invoices to send? Why would you need to worry about filing and storage when the only bits you need to keep track of are four receipts from Screwfix? But the work will pile up before you know it – that’s the plan anyway! – and it’s much harder to get organised once you’re already in a mess. Get your systems in place now, while it’s quiet and you have the headspace available. From accounting software, such as QuickBooks or Xero, to tool storage like a Get Stowed unit for your van, it pays to start with good organisation, otherwise before you know it you won’t know where you are with your invoicing, your drill bits, or your sanity!
Build your reputation
Word of mouth is incredibly important for building your business, and recommendations from existing customers help to increase trust and confidence from prospective new ones. Every time you do a job, ask for a review on Google, Facebook, Trustpilot, or your platform of choice. Share some of the feedback you get on your website and social media to show people that you really are as good as you say.
It’s also worth getting to know other local businesses in your community, particularly other trade businesses, as they can recommend you to their customers if you offer services that they don’t, or if they’re too busy to take on a job. Go to networking events and other community events, get a stall at local business fairs, and make sure you are wherever your target audience is hanging out so they can get to know you.
You will also want to visit all the greasy spoons in your area – not just because it’s imperative to know which cafe does the best full English, but also because you’ll meet lots of other tradespeople there and it’s a great way to build your network.
Good luck! If you need your van kitting out with a storage unit designed around the specific requirements of your business, get in touch and we can help you work out what you need. Head over to our Instagram and Facebook pages, tell us about your new business, and we’ll give you a shout-out to help get you noticed!