10 big mistakes for tradespeople

by | Aug 20, 2021 | Business, Business Basics

From tiling the roof to fixing a broken shower, everyone needs the help of a tradesperson at some point in their lives.

And with home improvement still popular following lockdowns and working-from-home arrangements, the chances are your skills will be in demand. 

But to take your trade business to the next level and turn it into a thriving enterprise, there are a few common mistakes to avoid.

1. Costing and quoting jobs poorly

It’s easy to sell yourself short, especially when you’re eager to get some work booked in.

But quoting at too low a price point, or offering too many discounts, will only make it harder to charge a fair price and grow your business in the long term.

Consistency is key to good pricing, and for that you need a system. Pricing tools make this quick and easy, with the added bonus of transparency if your customer wants to see a breakdown of the price.

2. Waiting to take payment

This is another common problem – you agree on a price, get the work done, but weeks later you’re still waiting to be paid. 

To avoid wasting hours of time chasing bad debtors, it’s generally a good idea to take some payment up front. 

Most people will be wary of handing over the full price before the work is done, so asking for a deposit is often the best compromise – and make sure your payment terms are clear from the outset.

3. Over-promising and under-delivering

It’s easy to promise a lot when you’re scoping work, but that can be frustrating for customers if you fall short.

To avoid disappointment, it’s important to be realistic about what you can do and how long it will take you, taking into account the other work you’ll need to do at the same time, as well as any risk of delays.

4. Neglecting your taxes

Annual returns, VAT, construction industry scheme (CIS)… understanding all your tax obligations can seem overwhelming, but if you’re not on top of it, it’s likely to come back to bite you.

A late self-assessment tax return, for instance, incurs an immediate charge of £100 with increasing fines if you leave it later or if there are errors on the return.

The CIS must be followed if you’re subcontracting work, and if you’re operating as a limited company you’ll need to report and pay corporation tax.

If your taxable turnover exceeds £85,000 over any 12-month period, you’ll also need to register for VAT. 

5. Working in the business, not on it

It’s easy to get caught up in day-to-day, practical tasks as a tradesperson, especially if the business is essentially based around your name and your image.

But to grow, you need to shift more of your focus to some of the higher-level work – things like refining your sales and marketing processes, planning your growth strategy, and improving efficiency.

This might require you to take on staff, delegate more responsibility to existing staff, or look at ways of freeing up your time.

6. Not systemising

On a similar note, it’s hard to take a step back from your business when you don’t have repeatable, reliable systems in place.

Determining a process that can be applied to every job means you don’t have to stop and think about it, and every employee will be working in the same way. It makes things more efficient, and gives your customers a consistent experience.

Where possible, look for ways of automating repetitive tasks. Accounting software, for example, can link up to time-tracking and quoting tools, seeing each project all the way through to invoicing and payment.

7. Letting presentation slip

Presentation doesn’t sound like it should be your biggest problem – after all, does it matter what you look like if you get the job done to a high standard? 

But showing up late in a scruffy van isn’t going to create a great first impression. To bolster your reputation and inspire trust, it’s important to be presentable and punctual at all times.

8. Relying on referrals

Word-of-mouth is a tried and tested method for getting new customers as a tradesperson, but it’s not the only way to bring in new business. 

The problem is it doesn’t give you much control over when and how new customers reach you. That makes it very difficult to plan your work, and leaves you with few options when you want to attract customers faster or focus on higher-value projects.

Marketing through a wider range of channels means you can reach people outside of your networks, and focus on the types of work you want to pick up.

9. No review system

That brings us to customer reviews. These are a simple but effective way of giving prospective clients confidence in your work, and reaching more people online.

There are various platforms to choose from, which in most cases will also allow you to respond to any negative reviews and rectify the issue.

10. Failing to plan

Finally, one of the most common mistakes we see is the tendency to forget about financial planning.

If you’re not keeping an eye on your financial position and what it might look like in the future, you run the risk of cashflow problems creeping up on you. 

Monitoring your finances and making a plan means you can prepare for any challenges, inform your decisions, and take practical steps towards your business goals.

Get in touch for specialist advice on your trade business.

Ready to start the journey?

To get help with your accounts and start freeing up your time to focus on growth, talk to the Mayflower team today.

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