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10 Top Business Tips for Starting Out As a Tradie in New Zealand

by | Aug 6, 2021 | best practices for tradies | 0 comments

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Starting a business in the trades for the first time and worried about failure? As a tradie starting out surely you want to improve your chance for success, right?
There are common reasons for the failure of a business in the trades industry that you must be aware of. Beyond that though, it is also to know what you must do to be a successful tradie business owner.
AND today that is exactly what we are going to discuss. How to achieve success in any trade business that you want to start up if what this article is all about.
Read it to give your new enterprise the best chance of success with these top business tips, the best advice I’ve collated from other entrepreneurs and developed from my own experience of more than 20 years of having “been there and done that” as a small business owner and business coach to and tradies, regardless of their specialty.

1) Show Customers How Passionate You Are About Your Trade

You don’t have to love whatever your business is about (and probably shouldn’t), but you do have to be fired up about it. You’re going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it’s really important that you truly deeply enjoy what you do, whether it be roughing in new construction, creating innovative buildings or laying unique tile designs. Ever heard the saying fake it till you make it. When it comes to passion, customers won’t know the difference. When you pull on that tool belt be sure you let the client know just how excited you are to be working on their project!

2) Start Your Business While You’re Still Working

How long can most people live without money? Not long. And it may be a long time before your new business actually makes any profits. Being employed while you’re starting a business means money in your pocket while you’re going through the start-up process. To do this properly you need to talk to your employer. Bosses that sincerely care about their employees will be excited to hear your plans. They may be disappointed they will lose the next big thing in the plumbing world and some other trade but don’t misconstrue their disappointment for anger. Do this right and you could be working with your soon-to-be ex-boss on a project in the future that is mutually beneficial for both of you. 

3) Don’t Do it Alone

You need a support system while you’re starting a new business as a tradie. A family member or friend that you can bounce ideas off and who will listen sympathetically to the latest business start-up crisis is invaluable. Even better, find a mentor or, if you qualify, apply for a business start-up program such as the ones provided through the New Zealand Government. I have found many opportunities and funding from various investors, government agencies, and lenders for new sparkies, chippies, or in fact a business in any of the trade industries. When you’re starting a business experienced guidance is the best support system of all. A business coach… just saying 😉

4) Get Clients or Customers Lined Up – But Don’t Steal Jobs From Your Current Employer

Don’t wait until you’ve officially started your business to line these up, because your business can’t survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can’t start marketing too soon. Some great ways I have seen a tradie grow awareness of their new business is online. If you do happen to take on a business coach then ask them if they understand search engine optimization, conversion rate optimization, and all other aspects of getting new business online. Gone are the days of advertising in the trade service available section of the New Zealand Herald. 
Now while you are working to build a book of business remember your current employer is still giving you a paycheck. Make sure you do not burn bridges or step on anyone’s toes. To ensure this you must:
1. Never reach out to any past clients or customers that you have fixed their plumbing issue, laid a new concrete drive for, or put a new roof on their home – that’s just poor form and quite frankly makes you an ass!
2. Don’t bad-mouth your previous employer once you have started out on your own, even if you were on the tools for the devil himself! In the past when I was asked about the last company I ever worked for (and they were horrible) my go-to response was along the lines of, “You know what, there are some really great people that work for that company.” While it’s not exactly a glowing review of the business, you’re also not slinging mud in their eye. 

5) Do Your Research

You’ll do a lot of research writing a business plan, but that’s just a start. When you’re starting a business in the trades, you need to become an expert on your industry, products, and services if you’re not already. Actually, if you’re starting a new plumbing company or embarking on your journey as an electrician, you probably should already be an expert, right? Well if you are coming into my house to replace a water heater or electrical panel you sure as hell better know what you are doing. I think you would agree, wouldn’t you?

6) Get Professional Help

On the other hand, just because you’re starting a business, doesn’t mean you have to be an expert on everything. Certainly, if you are a builder and want to be successful you must be an expert there. The same can be said for a tiler, flooring company, or concrete specialist. That’s just a given.
Be sure to know your limits. Stick to what you do best and hire out the rest. One strategy I have seen for tradies that have started successfully then expanded is staying on the tools and hiring a business manager. These days with people specialising in all aspects of the business you might be surprised how affordable that can be. Over the years, as a business coach that specialises in helping tradies, I have actually jumped into the business, in a limited capacity, a few hours a week, as the CFO (chief financial officer). Simply my role is to make sure you get paid for all the work you do. AND that you get paid enough for all the jobs you do.
Being paid enough, or on the flip side, not charging enough for trades services you provide, is a common trait of tradies that are less successful and end up back working for another company. You know the ones I am talking about. They work 60 hours a week or more. On the outside, they must be killing it. Last month their man in a van 2 person business roughed in 4 news builds, installed 28 water heaters, and unclogged 36 toilets (one of my best friends is a millionaire with just a few plungers and drain snakes). But the company we are talking about is a different story. Despite all the work they are performing they just can’t get ahead.
AND worse still they tell you all about it. You gotta feel for them.  Don’t let it become you.
So final words on this point, if you’re not an accountant or bookkeeper, hire one (or both). If you need to write up a contract, and you’re not a lawyer, hire one. You will waste more time and possibly money, in the long run, trying to do things yourself that you are not qualified to do.

7) Successful Tradies Plan Ahead And Make Sure the Money Is Lined Up

Save up if you have to. Approach potential investors and lenders. Figure out your financial fall-back plan. Don’t expect to start a business as a tradie and then walk into a bank and get money. Traditional lenders don’t like new ideas and don’t like businesses without proven track records. I know that all trades are not new ideas. But you trade business specifically is. Don’t be afraid to ask for money. But be prepared for a lot of rejection from various banks, if that’s the tree your sparking up, sorry I meant barking up. Hah funny guy, right?
Don’t let finances scare you too much. Tradies can make really good money if they work hard, bill customers the right amount, and collect on all services rendered. In fact, the cash flow in a successful business that is run by an organised tradesperson is right up there.

9) Be Professional in all aspects of running a business as a tradie. 

Everything about you and the way you do business as a tradesperson needs to let people know that you are a professional running a serious business. That means getting all the accouterments such as professional business cards, a business phone, and a business email address, and treating people in a professional, courteous manner. If you are trying to work out how to be a professional tradie. AND right or wrong there is still a stigma about tradesmen, trades woman, and tradespeople and their ability to be professional. Don’t give your customers any reason to question just how good you are. In fact, you show them you are a real deal legitimate tradie and those customers will tell others how professional you are. When it comes to being a successful tradie, getting referrals from a previous customer is gold!

9) Get the Legal and Tax Issues Correct the First Time. Don’t Mess With The IRD

When it comes to paying taxes you are 100% guilty until proven innocent. This is definitely one area you want to be 100% above board. It’s much more difficult and expensive to unsnarl a mess afterward. As a tradie, you may be paid cash sometimes. Just be real careful. On the one hand, it might be nice to just…
But think about this. If you have ambitions to buy a house, then a boat, then a bach to take the boat to, and then you want to take on another tradie or a part-time business manager to free up some time and spend some of that hard-earned cash, there’s a good chance you will need financing. The only way to get financing is to show income. And unfortunately, if you make money you have to pay taxes. 
But understand and trust this. You know how people say the more money you make the more taxes you pay. Well, it’s not that accurate. Not when you look at how many successful tradies pay relatively. Companies I and my associates have worked with over the years have tax rates significantly lower than the average self-employed person. AND HOW IS THAT LEGAL?
Well first let me say you can never avoid paying the taxes to the government that you are legally obligated to. There is no way to avoid paying taxes and tax evasion is a serious crime. However, there are many legal ways to lower your effective tax rate.
AND how do I know this? Way back when before I started out as an entrepreneur, I worked a 9 til 5 as an accountant. Yip, a bean counter. Now while some of you might grimace at me being an accountant in my past life, please think on it like this. If you do happen to work with a business coach, a business consultant, or take on a part-time business manager, shouldn’t you get one that understands money, can track it and can help you keep more of it? Don’t you think one that understands how to keep your effective tax rate down is better? What is the alternative?
I know speaking for myself I like to pay less money to the New Zealand government, not more. More cash in the pocket for the same amount of work – I see that as an admirable pursuit. 
When it comes to legal considerations for tradies, think about if your trade business needs to be registered? Will you have to charge GST? Let me answer that in one word that cannot be confused. YES. To be sure, yes you will have to charge and pay GST as a trades service business. Now if that a legal issue for a tradie, or are we back on the money. I’ll let you decide.
If you ever get into a pickle in and around a trades dispute, a non-compete your old boss is trying to enforce, or maybe a building you worked on is now having issues now we are thinking about a lawyer that understands the trades industry and tradie legal requirements. At what point should you employ the services of a lawyer? That would be a great question for you business coach, right? 
Let me say this. Never ignore a potential legal issue. Getting ahead of it never makes it worse. Paying for a great lawyer more often than not is an investment that pays back many times over. Hopefully, as a tradesperson, you will never require one, except for setting up that trust because you are rolling in cash, right?

10. Final words to starting a business as a tradie and what you must do to be successful in the trades

There are common traits to all successful tradies. The tips I have provided encompass most of them and to summarize these best tips for tradies starting a new business are:
  1. Show Customers How Passionate You Are About Your Trade
  2. Start Your Business While You’re Still Working
  3. Don’t Do it Alone
  4. Get Clients or Customers Lined Up – But Don’t Steal Jobs From Your Current
  5. Do Your Research
  6. Get Professional Help
  7. Successful Tradies Plan Ahead And Make Sure the Money Is Lined Up
  8. Be professional in all aspects of running a business as a tradie. 
  9. Get the Legal and Tax Issues Correct the First Time. Don’t Mess With The IRD
Following the business tips above will make starting your new business both a smoother, less stressful process and go a long way towards ensuring the business you start lasts and thrives. 

Do you want to talk to a business coach that specializes in helping the trades industry?

Growth isn’t always about making more money. Growth in the trades can be as simple as collecting more invoices in an easy and automated way. Or maybe it is about getting off the tools and moving into a management role. Want more time to spend with the family on the weekends? That is another example of how you can grow your business. Growth Matters for all tradies regardless of their specialty. If you would like to talk to a business coach that specialises in helping tradies achieve more success can contact us in several different ways. 

You may call on 0210 270 2307

You may email Growth Matters at karl@growthmatters.co.nz

Or for your convenience simply fill out the form below and we will be in touch to discuss the needs of you and your business.

You have worked so hard to master your skills as a tradesperson. Don’t leave the success of your business to chance. We can make sure that you grow your business in all the right ways! Check this out for more tips for running a successful business in the trade industry

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Growth can be measured in many ways. As a tradie Growth Matters and we can help make it happen

 As your business coach, I will listen to what you are trying to do. We will create measurable goals. I will give you the right tools to get the job done right. After that, you will go to sleep each night knowing everything is just right. Growth Matters for all trades but it must be done right. Fill out the form below to get your grow on!

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Karl Martin (7)

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