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Essentials for Launching Your Trade Business

No one likes being told what to do. That’s probably why when we ask tradies what their goal is, they often reply it’s to become their own boss. Being a tradie is becoming more and more of a popular career choice, and the idea of running your own business sounds more exciting than ever. But it’s important to understand that being the big cheese does come with many extra responsibilities and pressures. If going out on your own was easy after all, every tradie would do it.

Thankfully, we’ve canvased our tradie mates and had a chat to business owners, Nick and Sharon of Edgecity Builders, to compile all of their top tips and nuggets of information on the topic. That way, you can weigh up the pros and cons before taking the leap of faith! Here are the points we’re going to explore:

It’s good to make a business plan

A flexible work-life balance goes both ways

Insurance can bring your peace of mind

Yes, you need to market your business

It can be cost-effective to hire equipment

You’ll need to register your business

Do you have the right qualifications?

There’s no avoiding bookwork

Let’s unpack everything!

1. It’s good to make a business plan

If you do decide to go out and start your own business, one of the first cabs off the rank should be making a business plan. Setting yourself up with a solid plan is one of the best ways to ensure you’re on the right track to a profitable business from the start. Here are the main aspects of a business plan to consider. 

Working out your goal

Unfortunately, this step is more than just writing on a piece of paper that you want to make a healthy profit. Instead, your business goal should be more of a timeframe showing where you’d like to see your business in the next five to ten years. Setting yourself short and long term goals will keep you motivated.

Top tip: Your targets should be ambitious yet achievable. 

Carrying a market analysis

You may have heard the phrase market analysis before. If you skip this part of your business plan, you’re practically going into business blind. A market analysis is a deep dive into your competitors to see what makes them tick. There are helpful online resources available to help your carry out a market analysis, but the main things to research include:

  • Your target market size

  • Any opportunities in the market 

  • The behaviour of your customers

Doing a SWOT 

Once you’ve gotten the lay of the land with a market analysis, it’s on to doing a SWOT. The acronym SWOT stands for:

  • Strengths

  • Weaknesses

  • Opportunities

  • Threats

Essentially, a SWOT builds upon your work with a market analysis to uncover internal factors and external influences to see where your new business would sit in the scheme of things. 

Top tip from Edgecity Builders: Monthly toolboxes (meetings) with their crew allow them to get feedback from the 'top down, bottom up' and have others present to them on build-related topics. Nick and Sharon are often surveying their clients and sub-trades to continually improve. 

Taking a look at a financial plan

If you’re looking to start a profitable business, which we’re sure you are, you’ve got to think dollars and cents early on. Creating a budget on a budget spreadsheet is helpful for forecasting when it comes to costs, revenue, general cash flow and any trade business loan payments. Managing your money is vital to turning a healthy profit. Check out our guide for advice on savings for trade businesses. 

Looking at the legal side of things

As part of making a business plan, it’s essential to go over the legal side of things to cross your t’s and dot your i’s. Start by having a good think about any retention, engagement or recruitment policies you’d like to implement going forward. Then, look into a business continuity plan. It may seem odd to explore a business continuity plan so early on, but you never know what life may throw at you. 

Top tip from Edgecity Builders: Through NZCB, A ‘legal toolbox' keeps them up to date with any act, law or contractual changes relevant to their industry.

These are just some of the considerations for making a business plan. There are loads of helpful online resources and templates available to make the process easy.

2. A flexible work-life balance goes both ways

Sure, when you become your own boss, you don’t need to answer to a manager or apologise for taking an extra-long lunch break, but this flexibility works both ways. The reality is, if you don’t work, money doesn’t come in the door. For those new to running their own trade business, this pressure can lead to overextending themselves and carrying out work admin in their downtime.

To mitigate this, it’s good practice to set boundaries from the off, so you have a healthy work-life balance. Read our insightful guide for more tips to do with mental health on the work site. 

3. Insurance can bring your peace of mind

No matter how cautious you are, sometimes things can go awry in business. To help you be better prepared for the unexpected, it can be a good idea to consider some form of business insurance. This kind of cover can help guard yourself against risks associated with running a business. Many different business insurance providers offer varying policy options, so it’s important to take the time to find the right one. The areas you may want to be covered include: 

  • Natural disasters

  • Theft

  • Damage of stock

  • IT crime or hacking

  • Damage to your property

  • Product recall

  • Employment dispute

  • Health and safety breaches 

  • Losing a key staff member

  • Sudden drop in revenue 

  • Being sued

Once you have your business insurance ducks in a row, it can help you to focus on what’s important; the work!

4. Yes, you need to market your business

A large portion of your future customers will come from referrals. As a residential tradie, if you do a good to a great job on a project the news will spread. Yes, word of mouth is a thing, but it’s important not to rely on word of mouth alone to get your name out there, especially if you are in the commercial and civil side of things.

 There are so many ways you can go about marketing your business. Despite what an advertising sales rep may say to you, each marketing platform or strategy has its pros and cons. More often than not, it’s optimal to use several marketing platforms in tandem. Options to consider include: 

  • Loyalty benefits

  • Introductory offers

  • Social media

  • Paid digital marketing

  • Radio

  • Print

Top tip from Edgecity Builders: When you are in business, it's important to network. They themselves are regularly doing this and annually attend the NZ Certified Builders Conference and getting along to trade-related expos.

Social media is often a good place to start when marketing your business. Read our handy guide, which goes over the best social media channels to grow a trade business. For marketing advice in general, read our guide with top tips for marketing your trade business. 

5. It can be cost-effective to hire equipment

It’s smart to invest in equipment you’ll be using a lot going forward, but buying all of this gear right from the off can be a large upfront cost. Hiring gear from Hirepool can be a helpful way to minimise a potentially huge initial expense. In a general sense, it can also be cost-effective to hire gear that you don’t frequently use. For more information on hiring equipment, read our guide that explores whether you should hire or buy gear for your trade business. 

Source

6. You’ll need to register your business

When starting a tradie business, you must register with several government agencies to help you meet your legal and tax obligations. Although these may seem a bit difficult to get your head around at first, it’s easy when you break them down one by one. 

RealMe®

A good place to start is a secure RealMe® login. Once you’re set up, you can use your RealMe® login for various government sites and services, including filing for your annual return. 

New Zealand Business Number

Sometimes known as an NZBN, a New Zealand Business Number is an identifier unique to your business. You can use your New Zealand Business Number to streamline how you interact with other businesses, suppliers and even the government. An NZBN is also handy when it comes to invoicing. 

MyIR

You may be familiar with MyIR all ready for your personal tax dealings. Similarly, you also need a MyIR account for your business. MyIR makes it easy for you to sort out your income tax, file business returns, and work out your tax payment options. 

MyACC

Every trade business needs to pay ACC levies every year. This money is then put towards ACC claims resulting from injuries while on the tools. How much you need to pay will depend on your business description, whether and how much you’ve claimed in the past, and how much you pay your employers if you have any. You’ll need to set up MyACC for Business for all of your ACC dealings.  

These are just some registrations and commitments to consider. There are handy online resources available that offer a more extensive overview. 

7. Do you have the right qualifications?

We all know a cowboy in our given industry, you don’t want to become another one. Depending on your industry or trade, there are a variety of qualifications available. Whereas some lines of work legally require you to have specific qualifications or certifications, being qualified also impacts general credibility. The best place to learn more about your requirements and qualifications is on the NZQA website. The NZQA, or New Zealand Qualifications Authority, makes it easy to understand qualifications and certifications for your given field.

8. There’s no avoiding bookwork

We know you didn’t become a tradie to do bookwork, but it's unavoidable when you become your own boss. Whether it’s income tax, ACC levies or ensuring your workers are paid on time, bookwork can seem a little daunting. Luckily, there are helpful accounting services available, or even handy apps like Hnry if you want to have a go yourself. However you choose to manage the books, don’t put it off.

Our top tip: I’ve you’d like advice when it comes to quoting jobs, read our top tips for quoting a job correctly. 

Ready to be your own boss?

Going out on your own is exciting and comes with a fantastic feeling of freedom. In saying that, becoming your own boss also comes with many extra pressures and responsibilities. Getting your ducks in a row from the off can mean you’re set up to run a profitable business going forward. If you’re still on the fence about going out on your own, it can be a good idea to talk to other tradies to hear their experience. 

Hirepool is here to help you become your own. Talk to the team about the benefits of a Hirepool trade partnership. For more advice, read our guide with 22 tips for tradies. Think we missed something important? Got a word of advice about those looking to go out on their own? Jump over to our facebook page to let us know your thoughts. 



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