This article appears in the November/December 2013 issue of Business Franchise Australia & New Zealand
Since 1997, I have been working with people fortunate enough to combine the good business sense of franchising with the health and lifestyle benefits of ‘hands-on’ services like construction, trades and home services.
I even spent an eye-opening year as a Dog Wash operator, running a business and selling franchises, as well as days here and there with antenna technicians, fencers, glaziers, painters and builders – so it would be fair to say that I have an ingrained respect for any franchisee who spends their time in weather-braving, customer-juggling, bladder-busting days ‘on the road’. Present day and I have donated my time to speak to over 1,200 builders and tradies in the last five years with the Housing Industry Association (HIA). These businesses are close to my heart as they are almost always family businesses, affecting and involving every member of the family.
Over the years I have come to recognise some key things about a successful trades or building business. Some are the same for all businesses, and some are exclusive to the trades. They all fall into that category of ‘simple, probably not easy, and definitely easy to put off if a customer is breathing down your neck’.
Just remember that the more of these pointers you can follow, especially from the start, the more personally and financially rewarding your new lifestyle business will be.
1. Join a Franchise
Joining a franchise gives you an enormous head-start in business and I cannot recommend it highly enough. This is especially true in trades and home services where the backing of a household name can make a massive difference to the amount of work you receive and how well you are paid for it. There are lots of ‘cowboys’ out there and belonging to a known brand immediately separates you from these in the customer’s eyes. You will also have the support of a team of peers as well as plenty of time-saving cheats to learn from the ones that have gone before (if you make use of them!).
2. Perfect Quiet Confidence
Think about the best tradesman you ever used. Were they a flashy sales type or did they tell you about the job by swamping you with technical jargon? No? Most likely they were a down to earth person who for some reason you just knew would do a great job and do right by you. The best salespeople by far in service industries are those that show their knowledge by asking clever questions (not talking the client’s ear off), who seem genuinely interested in the customer and in achieving what they want, and who project an air of ‘fairness’ so the client knows they will be treated well and for a fair price. This manner comes with experience, definitely, but try approaching every job with the thought ‘let’s find out exactly what they need and how I can help’, as opposed to trying to be a salesman, and you will be almost there.
3. Aim for Consistently Great, not Perfect
All tradies, but builders especially, are prone to chronic perfectionism. I have met so many tradespeople who know that they are amongst the top in their industry workmanship-wise but who aren’t running a successful business (come to think of it I haven’t met many who wouldn’t say they are one of the best workmanship-wise!). Remember this one piece of perhaps hard-to-hear but nonetheless true advice: It is more important that the client believes that you are a perfect craftsperson than that
you are, in fact, a perfect craftsperson.
Perfectionism means you will have trouble delegating, taking holidays and having anyone fully appreciate your work. Instead aim for consistently great workmanship, and perfection in customer service.
4. Understand Your Margins
A franchise business model is not a free ticket to financial success and not understanding the costs ‘to keep the doors open’ is where most ‘tradies’ trip up. You did not buy a job – but without planning you may end up simply earning a wage. You are entitled to get a return on your investment (profit). The simplest way to fix this is to work out your ‘cost per day/week’ (tradies) or ‘cost per month’ (builders) which is all of your expenses, taxes, desired wages and a fair profit added together. The profit from all of your jobs for that period then needs to at least cover this. For example, a landscaper might need to ensure they have $300 per day after materials, or a builder might need to clear at least $15,000 per month from projects to cover profit and expenses.
5. Start a Tax Account
Start a tax account and several other accounts. As a minimum, have separate bank accounts (actual online accounts, you can get ones with zero fees) for all the GST you collect and for any PAYG and superannuation. That way, when these bills come in you will have more than enough to pay them – and likely some left over to take the edge of your income tax bill. My business partner holds a total of nine different bank accounts for our business and it has never been better financially. They include a maintenance account for premises fixes, staff incentives account, a profit account where we syphon off ‘business savings’ and a marketing fund account, amongst others.
6. Manage and Value Your Time
Time management is always the single biggest topic that builders and tradespeople ask me to tell them about. To sum everything up in one paragraph would be impossible (it’s an article all on its own) but what you need to know the most is:
• Set up a default diary with times each week for quoting and paperwork already set aside, so they don’t end up in the graveyard shift.
• Have a minimum of 3 – 4 hours per week which is your sacred ‘on the business’ time – if someone wants to book an appointment for that time, simply tell them “Sorry I am with my #1 client.”
• Focus on the high dollar-per-hour tasks and lose the ones you hate or aren’t worth doing. Hire a bookkeeper and spend more time selling.
7. Always be Marketing
In an upturn, there is plenty of money to be made in service industries and it is easy to get complacent. Unfortunately, by the time the pendulum swings into a downturn it is practically too late to get marketing to ensure you don’t run out of work. Always have a local area marketing plan in place and simply turn the ‘tap’ on and off as you need to – that way you are always in control. You should always strive to have more enquiries than you need, because this allows you to be picky and therefore enjoy your business with well-paying, easy to deal with customers.
8. Become a Specialist
An easy way to ensure you always get the best referrals is to become a specialist in one area of your industry. While you may not be able, or willing to give away the other services you offer, it is a good idea to become known as the ‘go-to-person’ for a particular service or customer type, (Tip: pick a high value one!). For example, a builder might become known as being the best at heritage renovations, or contemporary projects, or working with empty-nesters. Be guided by what you enjoy as this will be what you are good at too. Once you establish a reputation for being a specialist, people will know how to refer to you and the word-of-mouth work will start rolling in.
9. Learn to Say No
People outside of franchising are amazed to hear how many operators I have spoken to who have far more work than they can handle. One franchise system that I have worked with is a great example, with one guy booked up for more than 8 weeks just after starting. While others will tell you this is a ‘great problem to have’, the truth is that if you don’t learn to say no, this situation can end with you under great amounts of stress, the wheels falling off, service levels dropping, and in the end a dent in your reputation. It is far better to choose the best work and service it well, than to say yes to everything. Choose the income you want to achieve in balance with the lifestyle, and if you find yourself overwhelmed, consciously choose to say ‘no’ to some of the work, or put your prices up.
10. Never Forget Why You Started
Before you hit the road on day one, write down your top five reasons for starting the business and put it somewhere prominent in your office or work area. Two of the first ones will likely be more time with the family, and a better lifestyle. It is very easy to achieve this (with some planning) but it is also very easy to forget it and create a monster than runs you instead of the other way around. Plan often (at least quarterly) and always include at least one strategy to reach your goals in each area – health, lifestyle, family, financial growth, or an increase in the business value. Time spent on the business instead of in it will actually take you forward faster, and will ensure you enjoy that fantastic outdoors lifestyle along the way.
Katherine is a former General Manager for the Jim’s Group, with over 17 years’ experience in franchising and trades. She has also been a successful ActionCOACH (#14 in the world) and runner-up Franchise Woman of the Year in 2010.
Graceful Solutions is a marketing company specialising in no-cost, lowcost and local area marketing. Their team of eight consultants offer services including websites, database marketing and low-cost strategies to engage existing customers and find new ones.
For further information contact Katherine at:
Phone: 0400 865 277