When you first transition from tradie to trade business owner, it can sometimes feel like you lack the direction you need to succeed. It’s easy to see why too when you’re stuck in a loop of day-to-day tasks like managing your team, wrangling technology, and drumming up new customer leads. With the responsibility falling solely on your weary shoulders, it’s hard to focus on the bigger picture of creating a profitable business and moving towards your dream lifestyle.
That’s why we say that the best thing to do when you’re stuck in a rut is to create a business plan and use it to smash your business goals. Don’t cringe at the thought of this, though, because you don’t need a lengthy document full of strategic milestones and frameworks to reap the benefits of good business management. A well-built business plan is a vital tool to help guide you through making complex decisions — but the document itself should always focus on the core principles of simplicity and specificity. This means nothing is holding you back from writing a great business plan and in less time than you think.
In this article, trade business owner and educator Andy Smith shares his tips on writing a business plan that ticks all the right boxes. But let’s start by delving a bit deeper into why every trade business owner should be making an effort to create a personalised business plan.
What is a business plan, and why does it matter to me?
“A goal without a plan is just a wish.” ― Antoine de Saint-Exupéry, writer and pioneering aviator.
Proper planning is the best way of controlling your future success. A business plan lets you create a documented strategy that highlights your goals and the steps required to achieve them. It puts you in the driver’s seat as a trade business owner, something that can empower even those with minimal management experience to reach extraordinary heights.
A cohesive business plan also captures your priorities and provides solid direction and intent that your employees can use to guide their work.
Let’s say, for example, you want to increase your customer base and reach a yearly turnover of $500,000. In your business plan, your priorities will focus specifically on your marketing and sales strategies.
But don’t make these priorities too broad for the sake of creating a business plan that never becomes outdated. In Andy’s experience, one of the biggest mistakes many trade business owners make is focusing too heavily on a set-and-forget approach while writing their business plan.
“Business plans should be reviewed annually, at a minimum,” he says. “If you have a rapidly growing business, you may need to review your business plan every quarter. Only when established should you step down to reviewing your business plan every 12 months.”
How will my trade business benefit from a business plan?
Writing a business plan will help you see the bigger picture, plan accordingly, and make essential decisions with improved confidence.
“As trade business owners, we get torn in every direction. By taking time to set goals and set out the steps to achieve them, we end up spending less time troubleshooting and more time focusing on profit-making activities,” says Andy.
Here are three additional reasons why you shouldn’t delay creating a business plan:
You hire better people with a business plan in place
A clear view of your business and financial goals lets you set out critical criteria to seek highly skilled people and hire them to join your team. The more detailed your business plan is, the more quickly you will be able to source applicants and even the specific skillsets you need to succeed. Your business plan also works both ways, giving prospective employees a reason to accept your employment offer because they can see the future intent and know they’re not signing on to a sinking ship!
You manage change better with a business plan
We live in a fast-paced and ever-changing world. When you plan your future business effectively, you will always be able to quickly adjust if circumstances change in your business (for example, services offered) or if things change outside your business (for example, customers’ expectations and technical advances).
A business plan forces you to be accountable
With a background on the tools, many trade business owners get stuck in an operations-based mindset. Being more of a doer than a planner isn’t bad, but it sometimes doesn’t mesh perfectly with a management role. With a business, plan you set expectations for yourself and then track your results, which allows you to constantly review your business plan regarding what you expect and what eventually happens.
Ready to write your business plan? Here’s how.
Now you know the “why” of writing a business plan for your trade business, you can finally make a start creating one. As we mentioned earlier in this article, a business plan can be long and complex if that’s what your business needs, but it doesn’t have to be. With this in mind, here’s a suggested structure for a simple business plan to get you started.
Step 1. Summary
Write a paragraph and summarise your trade business, your current situation, and your unique selling proposition (USP), which differentiates your business from your competitors in the trade business marketplace.
Step 2. Vision, mission, goals
Ask yourself; where do you want your business to go? What is the fundamental purpose of your trade business? What are you aiming to achieve? Apply SMART goals: Specific, Measurable, Attainable, Relevant, Time-based.
Step 3. Market analysis
Who is your target audience, and why should they buy from you? Be specific. Consider their age, interests, what keeps them up at night, and consider how your business can better solve their problems than your competitors.
Step 4. Competitive analysis
Which services (and products) are your most competitive? Where are the most significant opportunities for your services? Where will you face the most severe threat? Remember to keep your answers short and to the point.
Step 5. Services (and products)
What are you bringing to market that nobody else is? Ask yourself: “Why should anyone care about my trade business?” Focus on differentiation through a competitive evaluation of the services you provide in your trade business.
Step 6. Marketing and sales
Which marketing or sales method is going to drive the most revenue? Steer clear of a scattergun approach. Be deliberate in your marketing strategy or sales tactic to get the best results for your trade business.
Step 7. Operations
What are one or two things about your trade business that gives you a competitive advantage? Great employees? Exceptional customer service? Be sure to only include genuine differentiators in your business plan.
Step 8. Financials
Highlights here should include a profit and loss (P&L) forecast, a cash-flow projection, and your break-even point. Keep this section simple, with more detailed information available to support your plan, if necessary.
Now all that’s left to do is to get started. But if you need some help determining which points to hit, why not BOOK A STRATEGY CALL with Andy and take your business plan to the next level?
Andy Smith is a former trade business owner and co-founder of Lifestyle Tradie, a membership and community for tradies in business.
Written by Lifestyle Tradie
Lifestyle Tradie is an award-winning membership and community for trade business owners who want to make more profit and fast-track financial freedom.