Why do so many tradespeople grow their business then decide they’d rather be small?

A very common story you hear from trades people goes something like this “I tried going big once. It’s shit. Too stressful. I hated it. Gave it away”.

Or “I went big once for a while but it’s not worth it. Managing staff is impossible. It’s impossible to get people to work properly for you and make any money on them.” 

Or even “I tried going big but then you can’t charge enough to cover all those extra overheads, it’s impossible.” 

I could go on but there’s a theme – people tried it, it didn’t work out and they then decided it’s impossible. 

They sort of let themselves off the hook, didn’t they? 

I say that not because I want to be mean but because there are examples everywhere you look of successful trade businesses who grew big and made lovely big profits for their happy owners. 

So I want to debunk the idea that going big (or bigger) is impossible or even too difficult to be worth the effort. 

It isn’t. It’s very possible. It involves changing some things up (of course) and it involves some effort and work or even some risk.

Just so we’re clear, staying small is a valid choice and if that’s your bag and you like it like that, fair enough.

But it is possible to grow a bigger business without it being a terrible experience.

Before I talk about how you can do that, let’s talk about how it usually goes wrong.

There’s a journey a trade business (or a building business) goes through as it grows and it’s similar for all of them. 

You start small – it’s just you and your vehicle and some tools. Insurance. You mostly get work via word of mouth – people you know, relationships with builders or real estate agents maybe; same work subcontracting for busier trades perhaps. Life’s kind of simple – you find some work, do it, get paid; rinse and repeat.

As things progress you might do some advertising- fliers, ads in the local paper, a Google My Business listing and a Facebook page and/or Instagram account. 

You’re a bit more active, busier, there’s more going on. Maybe you’re hiring now, an apprentice; a tradesman (or woman) or two. Maybe you’ve built a website. 

There’s a lot of admin work to do now-quoting invoicing, ordering materials (and subcontractors maybe), organising everything, dealing with all the crap. You’re starting to take on costs now, too – someone to help with the admin, a bookkeeper, an accountant, that marketing isn’t free, is it and you need to keep it up to keep everyone busy. 

As you get busier, the pressure’s on you and the money grows both at the same time. 

It can start to go wrong when you realise that you’re starting to drop the ball – mostly because there’s so much to do and you can’t do it all. It’s difficult to delegate properly to your admin person – they don’t know how to quote or raise invoices or what to order or who to send where or when – how would they?

So you get busy, things get hard, things go wrong more often.

Some people push through this and some decide it’s no fun and not what they want – the hours or the stress and they shrink their businesses again. 

It can also start to go wrong because of the money. 

As you take on the extra costs and people, a few things happen. When you’re paying someone else to do the work, it matters very much that they take as long as you allowed in your quote – if they take longer, and you quoted a fixed amount, your margins get dropped. (When you were doing the work yourself, it didn’t matter so much – you don’t get paid by the hour). Even if you 

charge cost plus, there are hours you pay people for and don’t forget to charge for.

The old rules about how much you can charge no longer apply – you need to be charging more than you used to when it was just you. If you’re not on this, not making enough margins to pay everyone (including those growing overheads), cash starts to dry up. You can start finding it hard to pay your BAS or some of your supplies, you start needing an overdraft or accumulating credit card debt or not paying yourself much.

Some businesses accumulate debt so much they go broke, others shrink back down and pay the money back and consider it a lesson learned.

Both of these scenarios are common and both of them are preventable and even manageable once you’re in them.

The answer, of course, is systems.

Systems so you do your marketing properly, and maximise the return on your dollar and don’t have quiet periods. 

Systems for your sales, for quoting, for how you price so you charge enough to cover all those costs and so every quote doesn’t need your eyes on it.

Systems for the work, to manage quotes, scheduling, invoicing, ordering, timesheets and variations. 

Systems for the money – you need to measure profitability every job, every tradie, 

every week and every month so you know what’s going on and so you can fix it when

you’re not making money.

You need to focus on your money now, including making sure you charge enough to cover those costs.

There’s an ecosystem of people and businesses who can help you build your systems. 

There’s me and my business, of course. I’ll help you build your systems and decide which ones to build first. I’ll focus hard on the money because it’s so important – if you’re on top of your money you can buy systems instead of trying to do everything yourself. 

Option 1

You should have a job management system – there are different ones for different types of trade business. Read my article on choosing the right job management system for your business here. 

Option 2

For Geo Next you should have a job management system.

Geo Next is a great option for a small and growing maintenance trade. It will help you manage quotes and scheduling, invoicing and ordering; it will help you manage timesheets and track your staff. It’s an electronic system you can use to reduce paperwork, reduce mistakes, take work and hassle off your hands (and also to help you delegate work to someone else). 

You can write systems for how you want your people to do things and you can build systems to manage money and cash flow.

If you do this work and you push through the difficult part, a bigger business, with systems and people in their jobs (following the systems) – and you making profits and working a normal week  – is very achievable.

Why don’t you start putting systems into your business? 

One way to do that is to explore coaching with Jon and with Small Fish. And your options with them are:

  • You can join their Facebook Group and watch and listen for a bit (here)
  • You can join their email list and watch Jon’s Toolbox Tip videos every week until you’re ready to engage with them
  • Or you can jump in with both feet and book a Money Maker call with Jon here. (He calls it a Money Maker call because his job is to help you make money and this call is to see if that’s realistic)
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.

Click here to book a money maker call with Jon.