This one is for all the tradespeople out there who love a plan. Some people love taking some time to refresh at the end of the year, sitting down and reflecting on the previous 12 months and where they wish to be in the next year.
This post has tips for tradesmen and women on how best to create a business plan for the new year. It doesn't matter if you are starting up or are long into your career as a business owner. This guide has something for everybody.
As a busy tradesperson, writing down your business thoughts and ideas will help you stay on track and provide direction. The procedure we refer to as writing a business plan. It doesn't have to be a masterpiece, but it will assist you in formulating a business strategy to help you grow your trade business! On top of this, if you ever require finance to grow or a loan to buy another work van, you will need one when applying for capital!
When you start and grow a trade business, there will probably be some setbacks along the way. Learning to adapt to change is a major positive in this situation. When writing a plan, consider any opportunities and threats that may affect your company and how you will respond. Thinking like this will help develop your plan so that you become bulletproof in any scenario. Careful attention to detail itself is often more important than the final written business plan.
Things to think about include the following:
If you (as a fair few tradespeople do) have already started your business without a plan, you may have noticed that as you get more customers and grow, things become unmanageable. A business plan will help with this, and as we said, it will also help with getting finance if you ever ask banks or lenders for money to expand your trade business.
What exactly does your company do? We get into the specifics of your business plan here. In this section, you want to define what your business does and how you intend to accomplish your goals and objectives.
Your business plan should be interesting to read and simple to understand. It must plainly state what your company does and why you should be doing it. Presenting your plan needs to pique the listener's interest for you to get what you're asking for.
Consider including:
The company's background:
A brief description of your business:
In this section, you could also show off your market research on any local competition, such as other tradespeople or businesses in your line of work. Knowing who your rivals are. You will need to evaluate the competition, look for themes, and determine:
A tradesperson or contractor typically charges per hour or day in addition to the cost of materials or will quote a price for the overall project. Because they vary from project to project and are frequently passed on to the paying customer, these are referred to as 'variable costs'.
That's why it's imperative to work out what to charge for your work. You are a skilled professional, after all. Before taking out a loan, investing your savings and quitting your day job, it is essential to determine whether or not you will be able to make money from starting your own business.
When building a business plan, there are generally three sections to detail income and expenses. As a tradesman, you are best served to determine how much you aim to earn in a year and divide it by the number of hours you work to get a basic hourly rate. Putting this into a plan will consist of:
Profit and Loss statement: This demonstrates how your company will generate profit. Cost of materials, gross profit margin, running costs, net profit before taxes, and total expenses are all included in this figure. The formula used is: Pay - Costs = Profit/loss.
Cash flow forecast: A report on anticipated cash sales, which include money due to the company (receivables) and money paid to you for work done, as well as expenses for materials, overheads, marketing, sales, and employee pay. It illustrates how much money will be required to fulfil your business responsibilities when it is required and from which source. Before entering numbers into your income statement or balance sheet, this statement is a great way to forecast and plan.
Balance sheet: This gives a preview of what a trade business claims and owes at a particular date (as opposed to throughout some undefined time frame like the other two reports). It outlines all of the primary financial data. Assets (what the company owns), liabilities (what it owes), and equity (Capital) make up the balance sheet. Assets are equal to liabilities minus equity.
For tasks like the above, you may pay for a bookkeeper/ accountant or utilise a modern tool like Xero or Quickbooks.
In this new-fangled world of online media and technology, it's worth stating how you will use marketing techniques to reach new customers and build your trade business. Banks and lenders want to see how your strategy intends to increase sales.
When writing your trade business plan, consider including these ideas:
On top of this, you could show ideas for how to build an online presence to get your business 'out there'. To begin, consider the following:
Lastly, it's 2023, and being eco-friendly as a tradesman or woman is imperative to financial access and growing your business. You need to be aware and stay within the rule set of government guidelines and regulations. It may be tedious, but it needs to be done.
This section helps tick the legal boxes of your trade business and shows potential customers that you follow important frameworks. Therefore your business plan should include the following:
Concerns regarding the environment: Will your actions affect the environment? If so, you need to devise a strategy for managing these issues.
Restrictions imposed by law: investigate the local laws governing business ownership. There will be employment laws to follow when hiring employees - for example, holding Employers' Liability Insurance if you employ staff. You may also be limited in the jobs you can do at certain times.
Health and safety considerations: These are important for all contractors. You and any hired employees must adhere to the health and safety regulations set. Figure out what they are and show proof of your adherence.
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Call us at 0116 243 7904 or request a quote online to be covered.
Confused about Public Liability Insurance? We’ve got you covered. Learn how this essential policy protects your business from accidental damage and injuries, why it’s important, and how you can get affordable cover tailored to your trade with Rhino Trade Insurance.
In this guide, we'll delve into the risks shopfitters face, explore the types of insurance that can offer protection and explain why many shopfitters trust Rhino Trade Insurance with their business needs.
Are you a carpet fitter? Do you work for yourself? If the answer to both those questions is yes, put down whatever you’re doing and keep reading. Your business will thank you for it.
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