Marketing & Sales

The Ultimate Small Business Survival Guide for Tradies

Written by Mick Donohoe

Being your own boss is one of those quintessential Aussie dreams. And most tradies are no different. But with a high failure rate in the first 18 months, it’s not for the faint-hearted. There’s no doubt running a small business can be a tough gig, especially when you’re first starting out. Check out our top 7 tips to help you run the most efficient and profitable business possible.

Tip #1 – Establish a good reputation

It is important to ensure you have a good reputation by maintaining high quality work and value for money quoting (and that paperwork!). Providing high-quality services on time and within budget is crucial to stay competitive.

Most tradies, regardless of the sector they work in, rely heavily on generating business through referrals or ‘word-of-mouth’ (on or offline) from satisfied clients. People trust businesses that can prove what they say is true especially if that proof comes from another customer.

Here are two tactics you can use to build your reputation and generate more leads:

  1. Ask customers to share the experience they’ve had with your business on social media
  2. Share screenshots of positive reviews across all your social sites

Tip #2 – Access niche markets

Every product can be defined by its market niche. Establishing a leading position in a specialised or regional market segment can lead to profitable and rapid growth for your business.

If you’re struggling to decide on your focus area, or you need more data to work with, use the following steps to find your niche.

  • Step 1: Identify problems you can solve. Where are the ‘pain points’ in your potential target market? Look for a market with high market demand.
  • Step 2: Research your competition. Look for areas of where there are no or few competitors.
  • Step 3: Determine the profitability of your niche. Look for a niche with high potential income and is large enough to warrant your attention.

Tip#3 – Establish good contacts within key markets

Establishing and maintaining close associations with other major, non-competing companies in your target market will strengthen your capacity to secure ongoing contracts.

For example, if you are an electrical services provider, establish and maintain close relationships with builders, developers and building owners. To remain competitive, you must generate referral work from your contacts in key markets.

Tip#4 – Compete on tender

Much of the work generated by tradies is obtained through tendering for contracts or quoting jobs to property owners. You must be able to win tenders in all market conditions while maintaining an adequate profit margin.Providing all relevant information in the requested format is an important part of writing a successful tender response.

It is equally important to work out your business’s unique selling points (USPs). Your USPs will help distinguish your tender response from your competitors’ responses. It will also help to research your competitors and try to understand how they market themselves.Your uniqueness will be benchmarked against them.

Apart from your product, service and price, think about the wow factor or ‘certain something’ your business brings to the opportunity – through your specialisation, expertise or ability to innovate.

Tip#5 – Business expertise of operators

The most successful tradies and subcontractors demonstrate a sound knowledge of business management and the capacity to manage cash flow during periods of wide cyclical fluctuations in demand.

Understanding your industries trends allows you to better manage your cost structure, cash flow and marketing effort to meet the projected changes in demand. For example, you may decide to expand your business through subcontracting during periods of high demand, rather than expanding your permanent workforce..

Tip#6 – Ability to change which market you operate in

Sustained success often requires firms to have the flexibility to refocus activity away from slower markets towards stronger markets. This helps contain revenue volatility and allows you to optimise the allocation of your resources.

For example, if you are an electrician you may find the commercial building sector more profitable than household markets or vice versa depending on local market conditions. Alternatively, a fast-growing regional market (with fewer competitors) may be more appealing than a capital city.

Moving between markets and services depends largely on your access to a workforce with technical expertise across multiple fields. This enhances your capacity to refocus activity on expanding markets.

Tip#7 – Ability to quickly adopt new technology

To successfully compete in most markets these days, contractors must be able to adopt new technology in terms of capital equipment and training for advanced techniques.

For example, plumbing contractors are increasingly required to adopt new technology in equipment and training to successfully compete in some segments of the industry. This includes using water jetters, rodder machines and drum machines to clear drains. ITC cabling and equipment installation is another sector where technology is changing industry structure.

Finally, running your own business is challenging and will stretch the best of us, but it is important to keep a good work/life balance and enjoy the journey.

If you need help with your marketing visit Capstone Marketing.

“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."

About the author

Mick Donohoe

Mick is the founding principal of Capstone Marketing Wollongong, helping new and established businesses grows by strategically aligning marketing strategy and tactics with business goals to improve sales revenue, profit and return on investment. A results-oriented business professional with over 20 years’ experience in marketing, communication, business development and relationship management in public, not-for-profit and private sectors. Whether it’s traditional or digital marketing, Mick is equally adept operating at either a strategic or tactical level.Known for his market facing approach and exceptional communication skills Mick also helps his clients forge strong relationships with key decision makers, managers and channel partners.