Starting a tradie business is very different from working as an employee. It becomes not only a matter of delivering the work, but also of running the business itself.
If you’re thinking of branching out on your own, either as a contractor or by setting up a company, there is plenty to consider.
But if you’re willing to learn and ready to give it a go, starting a tradie business can be very rewarding.
Why start your own tradie business?
Running your own business puts you in charge. You get to be your own boss, set your own goals and grow the business in the way you want.
Your own business gives you the opportunity to increase your earning potential, and to create jobs for others.
But running a business also comes with a lot of responsibility. You need to be a self-starter, willing to put in the time and resources, and resilient enough to take the rough with the smooth.
Starting a tradie business: the initial stages
When it comes to setting up a new business there is plenty to consider! This includes:
- Finances – the capital to start your business and enough money to keep it running during lean times.
- Market demand – market research (e.g. surveys and interviews) allows you to determine the level of demand for your trade in the areas you plan on servicing.
- Choosing a business structure – i.e. whether to set up as a sole trader, company, or in partnership with someone else.
- Legal matters – such as registering a business name, obtaining an ABN, and registering for GST if applicable.
- Licenses, registrations and compliance obligations – these will vary depending on the type of business and the state or territory.
- Work premises – e.g. whether to work out of home or to rent a workshop.
- Tools and equipment – while you need quality tools you don’t always have to buy your own as there is always the option of equipment hiring, which can greatly reduce capital costs. Examples of hire equipment include plumbing tools, lifting equipment, traffic management and earthmoving equipment.
- Insurance – insurance provides financial protection in case things go wrong and should never be overlooked. You will be obliged to get public liability cover, and workers’ compensation insurance if you will have employees. Other insurances to consider include income protection to cover loss of income, tools insurance for purchased tools, and motor vehicle cover for any business vehicles.
- Promotion – such as creating promotional materials, setting up a website and social media pages, and paid advertising.
- Documented business plan – a business plan guides your business and should contain details about your goods and services, potential customers and competitors, as well as sales and expense forecasts, action plans and your value proposition.
Running a tradie business
Once you have established your business, there are plenty of business-focused tasks you will need to do on an ongoing basis. While you might handle many of these yourself in the early stages, as your business grows, you may need to hand some of them over to a professional.
Here are some examples:
- Administration and bookkeeping – such as handling queries, emailing clients, sending invoices, tracking income and expenses, job costing, budgeting, and doing payroll and BAS if relevant.
- Marketing, promotion and networking – e.g. website content, search engine optimisation, email marketing, advertisements, signage or message boards, attending trade events and network groups.
- Employee management – considerations here include training and development, health and safety, supervision, and leave provisions.
- Workflow management – as a business owner you need good organisational skills to manage the level of work you take on.
- Risk management – crucial for reducing the risk of harm to yourself and others.
- Customer feedback – getting feedback from your customers is important for improving your services and advancing your business.
Setting up your own business will take time and it's a good idea to get legal and financial advice as you go through the process. But running your own business can be well worth it - giving you the freedom to do the thing you love, to the degree that you decide!