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HPM-08-AUG-2016

24 B U S I N E S S F E ATURE Scale up! How to grow your business Trying to get the business growing at the same time as dealing with all of the paperwork and tax returns is sometimes a bridge too far. Benjamin Dyer, CEO of Powered Now*, examines the essentials for moving your business forward once it’s become established There are plenty of sole trader heating and gas engineers, as well as plumbers, who are not particularly ambitious. After all, you can make a decent living with none of the hassle of employees, pensions, PAYE and everything else. However, if you are bothering to read this magazine it may well be that you would like to take your business to the next level. My hope is that there are some thoughts here that may prove useful. Quality and focus Some things are fundamental to allowing growth to happen. The most important of these is quality of work. Without good work, it’s very difficult to grow a business, particularly in the field trade world. Bad work means that you won’t get recommendations, which are the biggest and best source of potential new jobs. It’s worse though. If you do poor quality work you are more likely to have rows with customers, problems with payment and even attract the interest of trading standards. What a waste of time that can cause. There are very few people who are good at everything that they do and no one can know about every aspect of heating and plumbing. That’s why deciding what you will do and playing to your strengths is so important. For instance, should you specialise in certain equipment? Do you want to do the heating and plumbing for swimming pools? Should you be very flexible with call outs? Deciding what you won’t do is just as important as deciding what you will. A person who has been determined to be focused is Mark Goodchild of electric-call.net. His thinking is: “We don’t cover everything electrical as it’s impossible to be good at everything. For instance, we don’t do solar." When you have lots of satisfied customers, you will grow as word gets around. Unfortunately this tends to happen very slowly. If you have more ambition then you will need to market your business. The problem is that this will consume cash. That is why you need to ensure that you already have a well-run business making regular profits before you try to expand. Finding those new jobs Treating every lead like gold dust is the number one rule to find growth. Last year Powered Now interviewed more than 1,000 homeowners and their number one complaint against tradesmen was that they couldn’t get quotes out of them fast enough. That’s why you are kicking into an open goal if you can turn quotes around super-fast. To be successful you must try to avoid harsh price competition. The best way to do this is to generate enough leads so that you can make sure you never have to put in low ball bids. New services that claim to be able to generate extra work are Rated People, My Builder and Checkatrade. We’ve looked into these services quite carefully and the truth is that each has people who have found that they work for them. We have also come across people who have tried them, who are very cynical about them. It takes effort to work with these new services and to get the best out of them. I would only recommend you try them if you’re going to give them a good try. An alternative is to advertise directly on Google, for example against the search term: “Gas Engineer Warrington,” but this involves an even bigger learning curve. Expanding the team When you grow your sales, you also need to grow your capability of delivering. There’s nothing worse than having your sales operation working brilliantly only for customers to cancel because they can’t be bothered to wait for you to start. Going from a sole trader business to a two man team is actually the single biggest step. There’s more administration but you also need to double the work coming in. That’s why building up the business using one or more sub-contractors may make sense as a first step. That way you will be able to get things moving before taking the risk of a hire. Whichever route you take, you must look into PAYE and the Construction Industry Scheme rules first. Finance One of the pains of growing is that you are likely to need more working capital for the projects that are in progress but not yet complete. The problem is that getting finance generally means more risk. If your business is still small and manageable then using credit cards might fill a hole, but this is very expensive if not paid off quickly. Loans or investment from family or friends comes with a risk to relationships if things turn sour, and bank loans put your whole business at risk. Also, if you haven’t set up a limited liability company, your personal assets could be lost too. Although a bank loan may be an obvious source of money, look up “Invoice factoring” if your company is starting to become a reasonable size, as this can be a lower risk and lower cost source of funds. Never take out finance to cover losses, unless they are one off or exceptional. That’s the road to ruin. In conclusion It’s much easier to talk than do things, and I was very aware of that as I wrote this article. Having a clear view of what you do best, keeping your feet on the ground and doing great work for clients while keeping risk under control are all important. I hope you can pull it off – there are good rewards for those who do. *Powered Now’s mobile app aims to take the pain out of paperwork for plumbers, gas engineers and other trade businesses. www.hpmmag.com August 2016 enquiry number 117 “Bad work means that you won’t get recommendations, which are the biggest and best source of potential new jobs” “Treating every lead like gold dust is the number one rule to find growth” “Never take out finance to cover losses, unless they are one off or exceptional”


HPM-08-AUG-2016
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