How Can I Grow My Trade Business?
Starting a trade business is hard but growing from that point can be even more challenging.
Not everyone who is in business is ambitious for growth although if you are reading this you are likely to be someone who wants to build your business. The problem is that a lot of online advice is written by office-based marketing experts who don't have the experience of the street-fighting that running a small trade business involves.
So this piece is written to address the challenges of small trade businesses that want to grow; that said, many of these tips will apply to other small firms as well.
Sort out the basics first
The quality of the job you do is the single most important thing in running your trade business. You will not grow if you don't do a good job.
This isn't just because you won't get any word-of-mouth business, which is the best and cheapest source of leads. It's also because you will end up in disputes with customers, get bad debts and maybe even have a battle with trading standards.
It's also important to be realistic about your own strengths and weaknesses. If you run the business, you are the biggest factor in its likelihood of success. Before you make a plan for growth, ask colleagues and customers to tell you honestly what you do well and where you may be able to improve.
The other question to ask is what your company stands for. If you are an electrician, you may wish to become the best at doing automatic gates. You may be the most willing to answer call-outs at any time of day and night. Have a specific focus can improve your prospects.
The twin challenges of sales and delivery
Word of mouth will grow your business, but slowly. So if you are ambitious, you need to market yourself. One of the problems with this is that it will cost money, so you have to make sure that your business is making decent money first.
Assuming you can grow your business, you need to make sure you have the capacity to deliver. There's nothing more frustrating than having generated great leads, finding that you can't then fulfil them and the money is wasted.
Finding new business
The first thing is to ensure that you turn quotes around fast – treat every lead as a pot of gold. I have found it personally amazing how hard it is to get quotes out of trade businesses in a decent timeframe. However, don't charge too little; in fact if you don't lose some deals you probably aren't charging enough.
We have done quite a lot of research on websites including Rated People, My Builder and Checkatrade that all focus on generating leads for trade businesses. They all have their fans as well as those that don't rate them so choosing a site will take some investigation and possibly trial and error.
Staff - the most difficult step
Getting your first employee is the biggest single step in growing your business. One way to ease your way into this is to use one or more sub-contractor until the business grows enough to justify a permanent hire. Just remember that using sub-contractors means complying with HMRC's Construction Industry Scheme (CIS) and hiring permanent staff means operating PAYE.
The faster you want to grow your business, the more working capital you will need. It is heart-breaking if your company goes bust simply because it grew too fast and ran out of working capital. When you are small you may be able to fund this gap from credit cards and loans from your family. The next most likely source is a bank overdraft. Always remember that debt significantly increases risk too.
Knowing your strengths and weaknesses, being clear on what your company stands for, keeping quality high and balancing ambition versus risk are all key. Good luck with your efforts.