6 reasons why trades businesses fail and how to avoid them
No goal, no direction
Poor grasp of money and no awareness of cash flow
No time management
No focus on customer service
Lack of marketing
How do you stand out?
No goal, no direction
Any business needs to set an overall goal. Set your goal and then produce a step by step plan to move to the direction of that goal.
Most trades businesses miss this right off that bat. Running a business means taking care of marketing, your online presence, the feel and look of your business, accounting, financing. All these sectors should be aimed at your overall goal for your business.
Everything in your business should be aimed achieving your goal, this will make sure you are focused, have a direction in your work and that you are getting the right customers who will help you reach your goal.
Poor grasp of money and no awareness of cash flow
Poor financial management is one of the biggest reasons for closures. unfortunately for trade businesses this is particularly the case. Alot of trade businesses will not even be sending out invoices on times meaning money will be coming in later and later while bills pile up. In some cases, business owners do not even know who owes them money. Some invoices get left so long they are simply forgotten. Paying high taxes is another problem. trade businesses almost never think about tax and end up paying thousands in extra tax simply because they did not pay attention to their tax liability. There is no reason to work so hard just to give it away in taxes...
Getting an active accountant will help you throughout the year is the best move you can make in your business. At 93 Accounting we can actively manage your tax liability, prepare budgets, cash flows, take care of your IRD reporting (income/GST) and give you unlimited tax advice for little as $20 per week. We can also manage the day to day running of your business for little is $50 per week.
No time management
As a business owner your time is the life blood of the business, if you are too busy to look after all aspects of the business then you will be doomed to fail. We suggest using technology. There are countless programs and high-powered mobile phone application which make time management a non-issue. takes advantage of technology.
No focus on customer service
Trades businesses are notorious for having poor customer service. Countless times we have heard of a bad story from friends and family. This is where you can take advantage while others do not focus on customer service, you can and put yourself head a shoulder above the competition. There is a golden opportunity available for anyone in this area to take customer service seriously.
Lack of marketing
Even if you have enough work right now there will come a time where you do not, this is a normal life cycle of any business. If you do not have any marketing, you and your business will suffer. You must prepare for downturns. Good marketing will help prevent this. You can start of in a free and simple manner. Go on social media and create social media accounts. Showcase your work for free. Social media paid advertising is incredibly under-priced and can produce great results. If you cannot manage to do this on your own. Look at sites like Fiverr and Upwork to hire cheap professionals to handle your social media.
How do you stand out?
People will stick with a business that they already know even if they are a little unhappy with rather than moving to a business that they have not used before.
To many trade businesses look and feel the same right down to the colours of their companies. Look around and do not follow the general trend. Cut out your own identity.
Find something unique about yourself that your competition does not poses and use it in your advertising. Most people will already be happy with their current situation your job is to convince them that they can get something better with you.
Written by Manan Sajjad