COMPARING YOURSELF TO OTHER TRADES BUSINESS OWNERS (BENCHMARKING IS GOOD)
I just wrote a video about Comparison being the Thief of Joy (watch it here) which was about the unreliability of looking at someone else’s success and comparing it to your own – you don’t know what advantages they may or may not have had, don’t let yourself feel less because they seem to be doing better.
But the second part of the title was “So how do you compare?” which I left alone except to say,
“If you’re not doing as well as you’d like, maybe there’s stuff you could be doing better and maybe you should look at my coaching program”.
Great segue, eh?
What I want to say today is that despite the changes in comparing yourself (making you feel bad unnecessarily, ruining your motivation) it can also be useful. I’m sure you spend a bit of time thinking about what you’re doing right and wrong – I certainly do.
Comparing what you’re doing to what other successful people are doing is very useful in this regard.
Do you notice the difference between how well they’re doing compared to you which makes you feel bad and what they’re doing that maybe you should be doing?
You should look at what successful tradies are doing that’s making them successful. And you should think about whether you should be doing it.
We do it in my coaching program – we call it benchmarking. (Everyone calls it benchmarking, that’s not my word.)
You can benchmark against industry benchmarks for things like gross margin and net margin.
My clients do that.
Ask for the benchmarks guide and we’ll send it to you.
The benchmarks are different for builders and other trades.
And you can benchmark (not really, but sort of) for how much revenue you should have per tradesperson and how much you should be paying and charging out.
I’ll share the benchmarks for margins in the guide and a capacity calculation tool. This tool denotes how much you’re paying people and charging but it’s too broad and complex to make sense of in an ebook. The range is pretty broad – people are paying apprentices $22 ph between, $40 ph & $60 ph on wages and more not on wages.
So, better to download our Tradie Cost Calculator, calculate your actual labour costs and then add your gross margin (the one on the benchmark).
My clients compare pay rates and charge-out rates in our workshops but you need to compare to a similar trade and that won’t translate to a worksheet either.
I’ll say this. Trades who work all day on-site need to be charging more than $80 ph and maybe $100 and trades who travel between jobs all day need to be up at $120 ph and more.
If you’re below, rethink how much you charge.
The last thing you can benchmark:
- After you check your margins
- Your revenue per tradesperson
- Your prices and pay rates
Is what you’re doing compared to what they’re doing.
(I’m wrong of course, you can benchmark anything if you can get enough data and crunch it but let’s focus on what’s practical for you right now).
You can look at what successful trades businesses are doing to be successful.
What are they doing for marketing and sales, how are they managing jobs, their money, and people themselves?
You can talk to other tradies you know or you can talk to other tradies building their business in my program.
There are four ways you can engage with me:
1. Subscribe to these emails and get them once a week in your inbox so you never miss a video from me.
2. Join the Trades Business Toolshed Facebook Group where you can watch these videos, ask me questions or talk to your peers.
3. Attend my next Tradie Profit Webinar.
4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.