Starting a trade business is an exciting opportunity to work for yourself and take complete control of the trade work you complete every day.
If you’re thinking about how to start a trade business and what you should do first, our guide will lead you through every step of the process and help you understand what you need to do and why.
Let’s get the basics out of the way first:
What is a trade business?
The fact is that a modern trade business can be whatever you want it to be. It could be a one-person show, a small business with multiple types of tradesmen who work under you, or a specialist operation that bids on government contracts and uses highly skilled tradespeople to get the job done.
If you are starting a trade business and want to know what form one commonly takes, you’ll find that many trade businesses follow four main structures:
- Sole trader
- Family Trust
Types of tradesmen
To get a decent idea of what type of tradesman you could be, think about who you’d need to build a house:
Construction is a constant part of our lives, and so is the need for builders. Builders perform a vast range of tasks in their day-to-day work, and it’s a lot easier to research specific roles in the industry rather than read a list of them here. But for a brief synopsis, you’ll most likely see builders fall into either one or multiple of three industries:
Perhaps one of the most common types of tradies in business and for a good reason. Everything in our daily lives runs on electricity, and making sure that power goes where it needs to is the everyday life of an electrician. Skills in danger management and electrical engineering can make you one of the highest-paid types of tradesmen around, so definitely explore your options.
Plumbers specialise in everything related to pipes, fittings and water supply. Many consider plumbing a dirty job, but constant advances in the field of digital plumbing installation, maintenance and repair have moved plumbers away from the pipes and closer to a diagnostic computer in recent years.
Doors, floors, furniture and walls, if it involves cutting, shaping or installing, you’ll find a skilled carpenter at work. Take note of the fact that many carpenters work with various materials other than just wood.
Don’t let anyone tell you that bricklaying is an easy job. Building something made of hundreds of different pieces and making it run straight and true is an art, and the best bricklayers make it look easy.
Painting and decorating is a trade that’s always in demand. Homeowners look at the paint on the walls every day, and if they want those walls looking their best, they call a tradesman who can paint top to bottom with no mistakes.
If you aren’t afraid of heights, you’ll be at home as a roofer, the job which gives you more fresh air than any other type of tradesman. Laying roofing materials and waterproofing buildings is a roofing professional’s bread and butter work.
A good plasterer has an eye for detail and can create a perfectly finished wall with no blemishes. Painters rely on plasterers’ work to give them a smooth surface to paint over, and great plasterers can always demand top dollar for their work.
You can’t have a house without a great garden and outdoor living space to compliment it. Landscapers design and install just about everything related to outdoor activities infrastructure. Working as a landscaper could see you in an urban environment or the middle of nowhere; it’s just a matter of how you choose to specialise.
What makes a trades business successful?
Setting big goals
Success comes in many ways and at many different times in the trade industry, so let’s talk about big goals. When you ask a tradesman what helped them measure their ongoing success, they’ll often list off the large milestones they set for themselves as they grew their business.
Common goals include:
- Creating a profitable business structure
- Quality of life
- Continuous growth
- Getting off the tools
Measuring your success in between
Sometimes it can be hard to know if your trades business is a success at a glance, but there are lots of ways to dig deeper and check.
See how you’re doing by:
- Generating feedback and reviews
- Getting to know your financials better
- Seeing how you compare with industry developments and trade business profit averages
- Having a good night’s sleep – Seriously, if your trade business is running like clockwork, you should be resting easy, and if you aren’t, maybe there’s something you’ve been meaning to do but put off until now?
Two examples of successful trades business in Australia
New Plumbing Solutions (NPS)
With a 70 strong team and a great business model, New Plumbing Solutions is a fantastic example of a successful Australian trades business. Read more about them in this case study.
Online Air & Solar
No strangers to hard work, the 20+ team at Online Air & Solar have carved a niche as a successful Australian trades business working in domestic and commercial environments. Read more about them in this case study.
Creating an effective trade business plan
You can always get to know your industry a little bit better, and there’s no better time than when you are just starting a trade business. Each trade business sector is unique, and you will need to thoroughly research the specifics of the one you want to get a start in.
Here are five simple steps to write an industry overview:
- Step 1: Give a brief overview of the industry
- Step 2: Review trends and growth patterns within the industry.
- Step 3: Identify factors that influence the industry.
- Step 4: Use data gathered through research to refine your overview.
- Step 5: Describe what your business will do within the industry.
A vision statement is a document that states a businesses' current and future objectives. The idea behind a vision statement is to provide business structure through a set of underlying rules that its day-to-day and short-term running will follow. These goals and objectives should be achievable in the permitted time and regularly checked.
List services and prices
Creating a list of your services and prices for a trade business is about as straightforward as it sounds. Here’s a quick 5-point guide:
- List all the products or services you have to offer.
- Ensure your list is one-to-one with your inventory list
- Decide on a price for each product or service and enter it into the list
- Group products and services into categories for ease of use.
- Check your list for any mistakes, additions or subtractions before using it.
You can easily create a service and price listing in Microsoft Excel; here’s a nice clean template you can download to make formatting your list easier.
We’ll start with what a financial projection is.
Simply put, a financial projection is an outline of what your business expects to happen in future. Having one helps you apply for bank loans and manage your money to get your new trade business off the ground.
Now how to write one
It’s quite a long process, and believe us when we say that paperwork like this is what will keep you up at night as a tradesman (literally). We promised you a ‘how to start a trade business’ guide, not a ‘how to write a financial projection’ guide, so here’s a link to a fantastic guide on how to create a financial projection.
Sustainability and expansion strategy
Having a plan to break even and grow your business right out of the gates is very helpful, but it’s a formula you’ll likely develop along the way. A business sustainability plan helps you align your business to current financial, societal, and environmental best practices and the benefits of all three to help grow and expand your organisation.
Sales and marketing strategy
How you sell your products and services while marketing your tradie business will be unique depending on your business and your customer market. If you want to go the route of selling and marketing through your website, we have a comprehensive article you can use to get your site looking and working its best.
To create a marketing and sales plan, we recommend following these nine steps:
- Budget everything out
- Confirm your target audience
- Tailor your product and service descriptions to your audience
- Leverage what makes you different and better from competitors
- Organise your marketing campaigns
- Research online marketing and create a plan
- Document your sales process
- Document your marketing process
- Create ways to track your progress
Get your licences and permits
Licences let government bodies and customers in the market know you’re the real deal and that they can trust the quality of service you provide. You’ll need to be fully qualified as a tradesman to operate a trade business if you intend to work alongside your employees or by yourself.
You’ll also need to register your trade business, get an ABN, and sort out all the relevant tax and financial documents before you can throw open the doors and start doing business.
When you get that sorted, you’ll also need to get any industry permits or licenses required for safety or to comply with industry-specific laws.
How to promote & market your trade business
Know your competition
Understanding your competition is crucial to finding success as a trade business owner.
Here’s what you need to know about your trade industry competitors as a group:
- Who are the major successful trade businesses in your area?
- How much of the customer pool do they take up?
- Are customers loyal to existing trade businesses, or would starting a new trade business give them a much-needed alternative?
- How are competitors bringing in new customers, and how are they keeping existing ones?
- How are they competing with each other?
Next, you need to understand four things about individual competing tradesmen in your area.
- What they’re doing better than you (and how you can improve).
- What business strategies and tactics work for them (and whether they might work for you).
- What mistakes they’ve made (so you can avoid them).
- What you’re doing better than them (so you can make the most of your strengths).
Gather this data, and you’ll have a clear view of your competitors’ strengths and weaknesses that you can use to ensure you start a trade business that can compete in its market.
Execute a marketing plan based on your target market
With your sales and marketing plan in hand, it’s time to get a campaign off the ground. You can hire outside help or manage it yourself, but make sure to do your research and know what you’re spending and where it’s going before you begin. You may think marketing and advertising come after you start a trade business, but you can have a website ready to launch and a marketing campaign in the works months before you open the doors of your new business.
Design logo, business cards and ads
Anything with your trade business name printed on it is marketing collateral. Come up with a design or hire an agency to create one for you, then get it stuck on everything from work uniforms to vehicles.
Customers prefer tradesmen in branded trucks and uniforms as it makes them feel confident in the professionalism of your business. Your branding also has a big impact on your marketing and can help you create a business identity all your own, so take the time to create something that makes your business unique.
Claim your Google Business listing
All you need is a google account, and you can claim the single most powerful piece of free online advertising for your tradie business. Google is a part of all our lives and having your business listed on the world’s biggest search engine makes it a lot easier for people to find you.
We have a very comprehensive guide on how to claim, set up and reap the financial benefits of Google My Business, and we recommend you read it step by step as you set up your listing.
Create an optimised website that draws in buyers.
We linked our comprehensive guide to using your website to attract customers earlier in this article, but we’ll link it again if you need it. We won’t waste time covering what is already in the article, but the main takeaway is this; If you set up a trade business, your website will eventually become one of your most powerful tools for bringing in and retaining customers.
Five trade business ideas and tips to help keep the ball rolling after you start a trade business
Use feedback and research to find new opportunities
Your customers are more than just people who buy from you; they are precious sources of insight into how well your business meets their needs and where you should be aiming next.
Use online reviews and in-person feedback to research your customer needs whenever you can, and you’ll find new opportunities to retain customers and bring in new ones before you know it.
Implement workflow/project management software
If there’s one thing we know about how to start a trade business, it’s that you need a proper digital system in your corner of the ring to compete in today’s market.
Job management software solutions like AroFlo help eliminate unnecessary paperwork and job handling, freeing you to focus on running a successful trade business rather than worrying about invoices and compliance forms.
You can still get a lot of mileage from simple job management software, so we recommend browsing your options if you find that AroFlo isn’t for you. The value in having software working behind the scenes in your business is that it eliminates a lot of employee busywork. This allows you to run a tighter ship and only have your teamwork on the business’s important parts.
Understand contracting and pitching
Contracts are the domain of tradesmen who have moved out of the initial phase of starting a trade business and are looking to lock in some serious long term financial stability. Government tenders are always on the go across a huge range of different trade skills. To get started, we recommend you check out the tenders and contracts page on the Australian Government Business website.
Pitching was once a crucial component of the contract tendering process, but as digital tendering took over from older methods, it has become less important in recent years. However, you should always know how to pitch, as it’s something you might have to do to get a deal inked if your trade business is one of two equally viable choices on paper.
You need to explain why your business can do whatever needs to be done better and convince potential stakeholders that they can trust you to get the job done on time and within budget.
A small tip for digital pitching that many trade businesses miss is never sending generic correspondence to a tendering agency or government body. Always send documents and files that have been custom made for the tender in question. It makes all the difference when yours stands out amongst dozens of cookie-cutter tenders.
Identify new opportunities and growing industries
We’ll spare you the long answer about marketing plans and industry analysis as you’ve already read about finding and conquering new opportunities throughout this ‘how to start a trade business’ guide.
We will say this: never stop looking for chances to upskill or jump into adjacent industries.
Some of the highest-paid tradies in Australia's trade industry are the ones who specialise heavily in their field or offer a comprehensive multi-trade service. Think of building and plumbing provided as a package deal. Or plastering and painting offered by the same tradesman. Customers will often pay more for the opportunity to roll two or more of the types of tradesmen they need to complete a job into one.
Specialised tradesmen can make a great living by staying in their lane and becoming the best in the business at it. If your chosen field of expertise is a bit too niche, you may need to move to a location with more work or less competition. But if you can get over that, then there’s a whole world of specialist trade areas to explore when you’re done starting a trade business.
Get help when you need it
It doesn’t matter whether your trade business is a success or you’re still waiting for work to pick up; a little bit of help at the right time can make a huge difference to your future. There are numerous coaching, planning and financial streamlining services out there, and many of them are specialists in helping trade businesses thrive.
If you want to hear advice from other tradies rather than accountants, you can find lots of ex-tradies sharing their experience in the form of business mentoring. Our friends over at Lifestyle Tradie are a great example. They found success, and now they are sharing their knowledge with other trade business owners and helping them build stronger organisations and better professional skills.
That’s all there is to it. You’ve completed the how to start a trade business guide! Now it’s time to get out there and start a trade business that’s destined for success.