The 10 Commandments for Trade Business Owners
1. Tradie Commandment #1 – Though shalt not make fair margins
The biggest killer of a business is not having enough money and the only way your business gets money is the margins you charge on top of labours, materials and subcontractors.
Too many people don’t have margins big enough (fat enough?) to cover everything.
If they’re not big enough to cover everything you’ll go backwards and that gets painful very quickly.
By everything, I mean all the overheads of your business including you and all the things that can go wrong (like bad weather and mistakes and bad debts and slow payers and project overrun – all that stuff).
And some profit because that’s important too.
Builder should make at least 20 – 30% gross margin and other trades 30 – 60% gross margin.
If you’re not making that much you should fix that up. If you don’t know, you should fix that up. We have a Labour Cost Calculator so you can understand how much your tradespeople cost. It’s a good place.
If you want help, get in touch – book a call and we’ll talk about whether our program is what you need.
2. Tradie Commandment #2 – Thou shalt make a salary + 10% profit
This is a good benchmark for you. You should be getting paid a fair market wage for the work you do (as should everybody in your business) and the business should make a net profit of 10% of its revenue.
If you claim stuff on your business that’s legal but not strictly a business cost, correct for that stuff before you worry too much – many of us make a bit more than it seems at first.
Equally, if you work 80 hours a week, you’re doing 2 people’s jobs and you should be getting 2 wages.
If you’re off the benchmark you have an opportunity to improve and if you want to see if you can help you, book a call.
3. Tradie Commandment #3 – Thou shalt work 40 hours a week or less
This is related to the benchmark – you should make the profits with a 40-hour work week. It’s reasonable to run your business on a 40-hour week and you should be aiming to do that. You need rest. You need time with your family and time for yourself.
It’s not true that you have to work long hours as a business owner. That’s a lie people tell themselves when they slide into working more. It’s habit and obligation and guilt that make us do that and it shouldn’t be necessary.
If you work long hours, you should be able to adjust your business so it’s sustainable and profitable with a 40-hour week.
You have an opportunity to make it better. Book a call to see if we can help.
4. Tradie Commandment #4 – Thou shalt have holidays
Normal employment is 4 weeks paid holiday a year plus paid public holidays. If you’re finding it hard to take at least this time off, your working more than you should and you have an opportunity to change that and to have holidays (and maybe even a life).
There will be work to do, of course, before your business can live without you.
Do the work, get the holidays.
Book a call and we’ll show you how.
5. Tradie Commandment #5 – Thou shalt build a business you’re proud of
You should be proud of the work your business does and you should be proud of the business itself that you’ve created – the separate thing that is a business, not just you, that does work, looks after its customers and its people, that operates smoothly and has a brand and a reputation.
A business, not just a job. Book a call and we’ll talk about our program .
6. Commandment #6 – Thou shalt do good honest work and get paid well for it
This is a mindset point I’m making you and your business and your team should be doing good, honest work (if you’re not, WTF mate) and you should be getting paid well for it.
Your tradie should be getting paid properly and your apprentices and admin staff. And you.
You deserve this. Good work deserves good pay. This is about knowing your worth and the worth of the work your business is doing for your customers. Don’t believe their b******* about how poor they are or whatever. Do good work and charge appropriately.
Want help? Book a call.
7. Tradie Commandment #7 – Don’t be pushed around, stand your ground
If you don’t know and someone tells you something like ‘you’re too expensive’, for example, it’s a difficult place to find yourself.
The answer of course is to inform yourself, know your numbers, your costs, your margins, how your prices compare and how long it takes to do a job and how that compares.
The more you know and understand the better equipped you are when someone (usually a customer trying to get a deal but this applies in many situations) tries to push you around, to stand your ground.
Knowledge is power. Get the knowledge.
That’s what business coaching is for – to help you get the knowledge and the power. Book a call.
8. Tradie Commandment #8 – Look after your team and (they’ll look after you)
You run a people business – your business succeeds when real people go out into the real world and do real work. And it grows when more people join your team (doesn’t matter if they are employees or subcontractors).
People need looking after. They’ll be happier (you do care) and they’ll perform better if they feel looked after by the business and they’ll care more about the business in return.
Pay them properly, keep them safe, make their work enjoyable and the working environment enjoyable. Communicate and care about them.
There’s a framework for this in our program – why don’t you book a call to learn more about it?
9. Tradie Commandment #9 – Build and implement systems
A system is a written down procedure for how a job is down accompanied by a checklist so your people don’t forget any part of it.
Systems make life easier for everybody and they make things work better and go wrong less. Systems make it possible for the business to run without you there, they empower your people.
Systems shift your business from on your head to on paper, they reduce your stress and they make your business.
A systemised business is great to have. Guess what a business coaching program is for? You got it – systems. Why don’t you book a call?
10. Tradie Commandment #10 – Don’t be an arsehole
I wanted to use a different word here but my team persuaded me the algorithms wouldn’t like it, so arsehole it is. successful
The point is the same though. Don’t be one. Be a good person to your family and friends and customer and stuff.
We see successful arseholes out there, don’t we? Business, especially big ones being dishonest or exploiting. But you don’t need to do that to succeed.
Fuck that. Don’t be that guy. Be proud of who you are.
Stick to your values – decide what your values are (and write them down) and operate your business that way.
We’ve a values-based business. It feels good, actually.
Book a call and we’ll talk about it.
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.