Congratulations! You’ve brought your trades business this far. You’ve got a growing customer base and a steady stream of income. Maybe you’ve made a pretty profit too.
But let’s face it. You won’t be around all the time as your business grows. If you’ve done things right, your business will continue to grow for decades – maybe centuries – after your time. But on the flip side, your business can also undergo a massive change once you retire and start to perform poorly.
The first step towards preventing a business breakdown once you’re not around is to ensure your business is equipped with the skills it needs to thrive under all circumstances. Here, we’ll consider the five key things you need to do to get your trades business ready to succeed even in your absence.
Instil a future-focused mindset in your potential leaders
As an entrepreneur, you should start planning your company’s future – after you’re retired – right from the start. It’s best to keep an eye on promising employees to whom you may want to give the reins of your business. Or, you may want to start involving family members to who you plan to leave the company, in your will. Either way, prospective leaders must be trained in future-focused thinking.
When we refer to leaders, we’re not just talking about the next owner of your trades business. You may have different roles which are essential for the company’s success. For example, the function of a safety inspector is crucial in multiple trades. Knowing what type of people you’d like to hire for such pivotal roles can help future company owners make informed decisions. Similarly, your trades business might need legal counsel in the future as your business grows.
Training your prospective successors to make decisions for roles that haven’t been created yet, is also essential.
Ideally, it would be best if you started moulding your prospective successors’ mindset to become more dynamic. They should be able to anticipate the market’s needs before customers demand them. Additionally, they should be able to identify any gaps in your company’s processes and initiate the necessary helpful modifications.
All of this can be achieved only when you follow these five steps:
Get people to buy into the business’s vision
Every country undergoes cyclical changes in the labour market. What jobs were popular five years ago may not be popular today. The same is true of Australia’s trade business industry.
People who pick up a trade as their career may choose to depend on the popular and lucrative employment in the market. This may mean that businesses involved in currently not-so-popular & not-so-profitable trades would find it challenging to access top-quality talent.
A business’s success is hugely dependent on how much support it receives from its employees. As long as you have the permission of a loyal employee base, they may not find it too hard to survive the changing market conditions. This is why it’s essential to gain your community’s buy-in and trust in your business vision.
- Organise talks in schools & colleges to explain the importance of your trade.
- Set up a trade training program for your locality and invite locals to apply. You can even have a workplace contract where they may need to work a few years with you in exchange for free/subsidised trade training.
- Give back to the community through donations and volunteering.
- Invest in developing your neighbourhood by offering free services to the poor and needy.
- Hire children of deceased employees and help them become economically independent.
- Doing this can show that you care, and it can help you create a positive impact on your community. It can also encourage people to support you by applying for a job with you, even if the trade isn’t as profitable as others.
Be careful how you handle your money.
Did you know that 95% of loans to small businesses in Australia are secured, compared to just 70% for more giant corporations? This means that your small trades business may be expected to give personal collateral every time you apply for a loan. Research by the RBA shows that financing is one of the biggest challenges that small businesses face in Australia.
While you may have been able to secure finances, there is no guarantee that your successors will be able to do the same. You can’t jeopardise the growth of your trades business due to lack of finances; or, worse, financial mismanagement. This is why you need to be doubly careful when you handle company finances right now.
Starting a separate fund for your trade business’s future use can ensure your successors have something to fall back upon if your company gets in trouble. Keep adding a percentage of your profit to it regularly to ensure the funds build.
To save money:
- Use a budget management app with set budgets for each tradesperson in your company. They need to account for every spending, and anything left over goes into the company savings fund.
- Offer to pay your vendors in advance in exchange for discounted rates.
- Buy in large quantities so you can get economies of scale. You can also ask for better terms from suppliers you intend to do future business with.
- Rent out the tools & equipment you use in your trade instead of buying them. You won’t have to deal with maintenance and depreciation expenses then.
- Track the completion of goals carefully so you can eliminate wasteful spending.
- Consider getting business insurance, so you don’t lose money in unanticipated risks.
Create a culture that centres on performance, quality & customer service
Focusing on creating a service culture that is dedicated to performance management, premium-quality product supply, and responsive customer support is essential. When you do so, you reduce the chances of your existing customers feeling leaving you for competitors. Additionally, you can encourage prospects to learn more about you and try your service.
Some of the ways to create a culture of excellence that focuses on performance, quality & customer service are:
- Create products that customers want. Understand their motivation for purchase and provide accurate services.
- Give your employees the autonomy to employ their creativity and knowledge on the job.
- Track industry best practices and train your tradespeople in these best practices regularly.
- Use non-financial incentives as rewards for good performance. Praise can sometimes be more powerful than a bonus.
- Make it easy for your employees to handle change. Please include them in any decisions you take regarding company process/technology/product changes.
- Help employees improve their performance by offering timely training & support.
- Use customer service automation tools to help create a dynamic response.
- Actively work with suppliers to make premium-quality parts/products for your trade.
Forecast risks/challenges and manage them responsibly
The final and most important thing you need to do to ensure your business succeeds even without you is to insulate it from risk.
Trade business risk can come in many forms. From problems in materials supply to on-site accidents, numerous things can go wrong. While some risks such as natural disasters and political & economic risks are outside your control, you can still exercise caution over internal risks. So, the first step is to forecast the potential risks you may face.
These could include:
- Technology obsolescence
- Unsafe trade practices
- Service/product redundancy
- Increased competition
- Changed trade regulations & compliance challenges
- Loss of goodwill and brand reputation
- Cybersecurity issues
- These are all risks you can manage and rectify. Some great ways to do this are:
- Actively focus on digital transformation – you can rent new technology & tools for a fraction of the cost it takes to buy them.
- Encourage your tradespeople to upskill themselves and get certifications in current safety practices.
- Prioritise which business areas are your money-spinners and specialise in those.
- Undergo risk assessment from an external specialist so you can make the necessary changes.
- Consider getting business insurance (To learn more about business insurance, visit this website).
The future success of your trades business can be assured if you make smart decisions today. Implement our tips, and you’ll find that your trades business in Australia is just as successful years after you retire from it.
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