Calling all tradies! Your guide to starting your own business
So you’re thinking about starting your own business, and being your own boss? Good for you. There are loads of perks when working for yourself, but taking the plunge to kickstart your own business can feel a little overwhelming, and there will be obstacles to overcome. With some careful forward planning you can step out on your own in confidence and rule at boss life.
The good news for tradies is that throughout New Zealand and the world, skilled tradespeople are in hot demand, so if you work hard and smart, you’re sure to be inundated with work!
In fact, the average job growth rate for all industries from 2016 to 2026 is 7%! This is even higher for carpenters at 8%, electricians 9%, masonry 12% and plumbing 16%. Put those work boots on, it’s your time to shine!
The benefits of working for yourself are endless!
- You’ll be your own boss, no more working for the man, you will be the man! (and/or woman). Over time, you will enjoy the cream on top which certainly beats working for wages while someone else gets the perks!
- You can take time off and enjoy holidays whenever you like! The flexible hours are a major benefit giving you the flexibility to take time off when needed. Just remember there’s no paid annual leave or sick leave, so you’ll need to plan ahead carefully.
- You’ll have legit business expenses – like your vehicle, tools/equipment and accounting fees. You can usually claim back the GST/tax on these, get discounts with a fuel card and don’t forget trade prices with your suppliers! Don’t have an accountant? Take a minute to read How to Choose the Right Accountant so you get set up right, from the start.
Keen to roll up your sleeves and get things underway?
If The Jungle Book showed us anything, it’s to start with the Bear Necessities. Here’s a few things to consider.
MYOB’s 4 must-haves for starting a trade business:
- Experience: Use your sweet skills to contract or subcontract with a few businesses first, and learn some business 101’s like paying your own tax and liability cover.
- Get licensed: Depending on your trade, you’ll need to make sure you have (and continue to have) qualifications and accreditation in whatever you practice, as well as permits for the jobs you’re doing.
- Partner-in-crime or Han Solo? Do you want to start out on your own or bring someone else in? Having a business partner will bring more $$ (capital), expertise and dedication. Plus, it gives you someone to share the load with – literally!
- As Biggie said “Mo Money, Mo Problems”: Striking out on your own means having enough money to cover the costs while you drum up business. Employees, tools, machinery and software are all going to need to be included, so you’ll need to build a list of all possible costs before you get started.
Create a business plan. Ah, what now?
Straight up, a business plan is key. While this may sound like a lot of work (we have to be frank, it kind of is), it’s important to do a lot of the thinking upfront. But it will save you time and money in the long run.
What exactly is a business plan?
It’s the blueprint for your business. You wouldn’t walk over to an empty lot and just start nailing boards together if you wanted to build a house. You would always start with a house plan. Writing a business plan is the best way to test whether your ideas are solid. You may also need it if you’re going to apply for a bank loan, for example.
Here are some of the things you’ll need to think about to get your business plan solid:
- Location: Where are you going to be based? How far are you willing to travel for jobs? Where will you store your tools?
- Clients: Do you have any clients at the moment? You can’t have a successful shop without customers coming in. Who’s your ideal client? How can you reach them?
- Suppliers: What are the key suppliers and contacts you need? Do you already have them and are your relationships tight?
- Competitors: Know who your main competitors are and what your point of difference is. How will you stand out from the crowd?
- Equipment: What tools or gear are you going to need? Do you have a computer and software for emails, writing quotes and invoicing, for example?
- Promote yourself: How will people find out about you? Not everyone needs a website when there’s Facebook and Instagram, but future clients need to know how to reach you. Think about what your customer looks like and where they would most easily find out about you. Check out sites like Wedo, where you can register your business to get qualified leads. And don’t forget, word of mouth is always the #1 way to get your business out there!
- Insurances: Do you already have a work vehicle? It will need to be insured as a business vehicle, rather than personal. Have you got tool insurance? What other types of insurance will you need? Take a look at this guide here.
- Support: Who can you talk to about your business? We all need people to bounce ideas off and starting your own business is no different. It’s also really useful to get a business mentor – this could be someone you may or may not already know who has business know-how.
- To work or not to work? Are you going to quit your current job or start out as a side hustle first? It can be easier to still have money coming in, while you work on your business plan and start building your business up, before throwing in the towel at your current job.
Business plan templates
The Ministry of Business, Innovation and Employment offers a great Guide to starting a business online resource available covering these key ideas:
- Make sure your idea is concrete – this is where a business plan comes in.
- Choose a business name and make sure it’s available.
- Choose a business structure – will you be a sole trader, have a partnership or a company? Read more on business structure overview.
- Get a NZ Business Number (think of it as a barcode for your business). If you’re a company, you’ll automatically get one. Otherwise you can register for free online here.
- Secure your business name. Read more here.
- Register your company and for GST. You can do this at the same time or go to IRD just to register for GST. NB You’ll only need to register for GST if you’re earning more than $60k each year.
Deep breaths, you can do this!
If this all feels like a lot of work, well, it is. The onus is on you to make it succeed, which is exciting but its also a lot of pressure. Make sure you take some time out just for you to switch off and reward yourself along the way. Use what motivates you – it doesn’t always have to be big things like a tropical holiday (although that would be nice!). And when things get overwhelming or stressful, never forget how much value a good nights’ sleep can give. Things are always better in the morning.
Ready to get started?
Going out on your own as a tradie is hard yakka, but if you put in the hours on the front end, it’ll be worth it later on. Don’t be too hard on yourself, just set yourself practical and realistic goals and start chipping away at them. Hard work and persistency always pay off. Good luck!