We’ve been through an unprecedented couple of years, and as we find our rhythm again, it’s clear that the tides are changing across the trade industry as we rapidly approach 2022.
As business owners, we can’t afford to lull ourselves into a false sense of security now that restrictions are lifting and a new year is around the corner. Instead, we need to examine our current standing and use our time during the calm before the storm to prepare.
With that in mind, now is the optimal time to take stock and focus on building a better, more resilient trade business as the new year approaches.
Here are some recommendations to make your 2022 a year of success:
Consider whether it’s necessary to restructure your business model foundations
Ensuring the foundational aspects of your business model are consolidated is a must for continued success. Often, we get caught up in a “push through” mindset and blame environmental factors for our lack of success. Commonly, however, it’s our internal missteps that are holding us back.
For instance, organisational structure charts may seem redundant, but ensuring every employee has a clearly outlined role and responsibilities, plus achievable KPI’s and a direction, will help with team unification. Setting concise guidelines allows your team members to flourish within their role and to understand the boundaries and constraints that define their work.
Once your team is aligned, consider the workflow behind each job. You may find it beneficial to map out which aspects of a job operate smoothly and which require improvements.
As business owners, we often hoard the responsibility of finding solutions… “my business, my problem to fix”. But in truth, your business can benefit hugely from something as simple as a different perspective. By opening the floor to employee feedback, you can cast a much wider net and catch more solutions as a result.
Explore the possibility of realigning your pricing structure and overhead expenditure
Now that your operational structures are resolved, the next questions you should be asking yourself are: “What are my numbers telling me? Am I making a consistent, sustainable profit? Can I cut or reduce overhead costs?”
Start by reviewing your Profit and Loss statement* and identifying which jobs are making you money and which are not. It’s essential to KNOW YOUR NUMBERS and regularly check for inconsistencies or outlying expenditure.
Another area to consider realigning is your hourly rate, which may no longer hold up with the times. With increased supplier costs and petrol at an all-time high, your previous hourly rate may be under-performing, which is highly detrimental to your business and therefore needs to be addressed as a matter of urgency.
Stay ahead of the “Great resignation”. It isn’t just going to affect big businesses
This final recommendation is underpinned by a prediction that the trade industry will not be immune to the “great resignation.” We are already facing challenges in finding great tradies, and there is a lack of emphasis on keeping good tradies in Australia and New Zealand. If you’ve got a high-quality team, now is the time to lock them in.
Having a well-established team is the crux to finding success in trade business. Review your company culture, look after your team, invite feedback, create approachable communication avenues, and you’ll quickly see a reduction in turnover.
At the halfway point of the financial year, we are at a fork in the road— we can either write another year off or realign and restructure to cultivate success and build resilient businesses for 2022. As business owners, we must shoulder this responsibility and immediately action a review process that will lead to real change for each of us as the new year arrives.
*To better understand how to review your Profit & Loss statement, scan the QR code or click on the link below and listen to “Andy’s Tips To Cut 50K Out Of Your Business” on The Tradie Show — Together In Trade Business Podcast. Link: https://kite.link//cut50k
Written by Andy Smith
Andy Smith is owner of award-winning Dr.DRiP Plumbing, co-author of Start Up, Scale Up, Sell Up, co-host of The Tradie Show- Together in Tradie Business podcast, and co-founder of Lifestyle Tradie — an education hub and community for tradies and their partners in business, where he generously shares his knowledge and lived experience to help others.