The Ultimate 2020 Business Checklist for Tradies
We have now well and truly reached 2020. The streamers are safely tucked away in the bin along with the empty champagne bottles from New Year’s Eve. So, will this be a big year for your trade business? With the proper diligence, there is no reason why it can’t be your most notable year yet.
Here is your ultimate checklist for running your trade business. From organising your finances, through to managing your tax, we’ve got you covered.
Pro tip: Look out for our little snippet on the upcoming Uber Tradies – something to keep your eyes peeled for.
Understand the changes to taxation that are coming at the EOFY
Every year, when the calendar flips over to July 1, a raft of legislation changes come into effect. This is partly because of the previous year’s Federal Budget.
Many of these changes will directly impact you and your business. Because of these amendments, it is important you are aware of what will be different in the second half of this year.
Here are some of the changes you can expect at the EOFY 2020:
- GST compliance program will get a four-year extension: It is important that your GST is documented correctly. The ATO’s increase in activities to check for compliance is set to continue until at least 2023. The ATO will be detecting and dealing with taxpayers who deliberately avoid their GST obligations, as well as providing education. This is why it’s crucial taxpayers know their GST responsibilities.
- The Serious Financial Crime Taskforce extension: This arm of the Federal Government was established to seek out and prosecute the worst of tax evaders. It will continue, after receiving an extension beyond July 1, 2020.
- There will also be changes made to working visas for migrants and deductions in income tax, which could impact tradespeople and their businesses. It is also worth investigating your state or territories laws and legislative changes that will come into effect in 2020.
- For example, Queensland has rolled out a set of new financial reporting laws. This includes a requirement for licensees to notify the Queensland Building and Construction Commission if their financial position changes.
Your top tips for tax time
EOFY can be a stressful time with all of the paperwork required and tax obligations that need to be met. But if done correctly, it can be a time that your business receives a healthy return that you can use to re-invest into your trade. Here are some tips to help you boost that return:
- Tools under $300: If a tool costs less than $300, you’ll be able to write-off 100% as a tax deduction;
- Transport: As long as your tools are in the car, you can claim running expenses on your personal vehicle;
- Sunglasses and sunscreen: These might seem like standard shopping list items, but you can claim them on your return, and you will be surprised how much you spend in a year. Ditch the servo sunnies and get something decent;
- Education: Anything you do to better yourself can be deducted as long as the course is under 12 months, paid in full before EOFY and is relevant to your job.
Talk to your customers
Let’s talk about millennials because they are going to take up a major portion of your business clients moving forward.
This generation does things differently to their predecessors. They are reliant on technology and live a fast-paced life. They also have a much shorter attention span, crafted by years of consuming bite-sized portions of information.
Millennials also lack trust
They are used to having advertising campaigns targeted at them on a regular basis. Because of this, it takes a lot to make them believe the hype. What millennials desire is authenticity. If you can be transparent in all of your dealings and provide unique stories, they will listen. Embrace their requests and personalise the communication, and you will break through the barrier.
The good news is that most millennials are likely to stick with a brand for the long-haul, once their trust is earned.
If you have not got social media accounts, do it now
One in six Australians use Facebook consistently. In actual fact, over 15 million Aussies log onto the social media platform every month. This is an enormous market, yet it is one that many tradies ignore in favour of traditional methods of advertising.
If you have not created a Facebook page yet, we recommended you jump on the bandwagon. It’s a highly effective advertising platform that allows you to access a directory of those seeking out your services.
Google AdWords is another digital advertising method to consider if you are not using it already. This will push your business up the rankings in Google searches, landing your brand smack-bang in front of those who matter most.
Attend industry events
Showing up to industry events and trade shows will help build your network. It will also allow you to learn about the new trends and innovations in your industry overall.
This can be a valuable opportunity to get on the ground level of new work opportunities before they take hold. Position yourself as an experienced expert when this new work stream becomes popular with the general population.
There are thousands of industry events across the country each year and many that will relate specifically to your trade or industry.
While seeking out local events is beneficial, and a great networking opportunity, consider seeking out some of the bigger events in the major cities as well to broaden your horizons.
Look for new markets and opportunities
Nothing stays the same forever. Many industries have been majorly disrupted in the digital age, and it could be your trade that is next to change dramatically.
What Australians want in the near future, according to a recent survey, is Uber-style tradies tracked by GPS, rated by reviews from past customers, and booked and paid for through a smartphone app.
That would change the way trades industries operated entirely, and those savvy with how it would operate would succeed before those who were late to the party.
While Uber Tradies might not be a real thing yet, it is an obvious need and could very likely become a reality. So, keeping abreast of surveys and information streams like this will prove beneficial, as they can give you a window into the future.
By preparing for these changes, gaining early experience and marketing before the rest of the pack, you can assert yourself as an industry leader.
Adopt mobile payment platforms
Most tradies can attest to the pain point of their job that is invoicing.
Paperwork soaks up valuable time that could be better spent on the job and can result in delayed payments and constant calculations to determine your revenue stream.
Luckily, these days, there are many ways you can accept payments on-the-go, with mobile platforms built right into your phone or tablet. Combined with invoicing software, you can invoice and receive payment on the spot at each job site, to simplify the paperwork side of your business. Who doesn’t want to watch their cash flow speed up?
Speak to your financial provider about the applications that your bank offers and how you can install them into your device. Turning your smartphone or tablet into a mobile POS machine allows you to power up your process across the board.
Manage your workload
It can be easy to say “yes” to every job that comes your way.
When times are good, and business is booming, accepting jobs from all angles seems like a great way to build revenue and grow your brand.
But there are some inherent dangers in doing this. If you are accepting more work than you can handle, you are opening the door to burnout, mistakes and errors, and costly oversights that can damage your reputation.
If you are growing rapidly and getting lots of work, make sure you scale your workforce accordingly, so that you have enough employees to handle the volume.
Also, make sure you have the vehicles and equipment to handle the workload – many tax incentives can assist here, including the $20,000 instant asset write-off which has been extended until at least June 30, 2020.
Speak with your accountant and financial institutions to see if a business loan is the right option in this scenario to accommodate for all of the extra work.
And finally, remember to save for a rainy day – because every mountain has a valley.
Look after your body
Many tradies think that the physical nature of the job is enough exercise and they don’t need to do anything extra.
While the physical side of the job is good for the body, it does open the door to injuries. What would your financial situation look like if you were injured and could not work for several weeks or even months?
Several exercise routines will only take a few minutes each day that can build your body to withstand the rigours of your job and help prevent these injuries. Try to focus on programs that are based on your body’s core, endurance exercises and cardio.
Watch out for the warning signs
Watch out for any alarm bells on the job as well. If you feel any of these symptoms, it is time to put down tools and seek medical attention.
Pain: This is your body sending you a signal that it is time to stop. Being a hero and pushing through the pain barrier is only going to increase the likelihood that you will suffer an injury.
Head spins or dizziness: Otherwise known as positional vertigo, this is what happens when you put too much strain on your heart through exertion and lifting heavy objects. If you start to feel light-headed, stop and take a break immediately.
Numbness: If you feel nothing at all when lifting and parts of your body go numb, it is time to stop and seek out medical advice. This sensation is likely to be caused by compression of a nerve or decreased blood flow.
Chest pains: Never muck around with this. Get straight to a medical professional. You do not want to risk a heart attack under any circumstances.
Remember, this is not additional work, this is just servicing for your body. You wouldn’t flog your work ute for 12 months straight without giving it a service, so treat your body the same way.
Improve your cash flow situation
Do you know what your precise financial situation is? It can be hard to get a read on that when you are dealing with the actual job itself. From quoting, invoicing and buying supplies, through to taking care of your accounting and your advertising and marketing – there’s plenty to keep you busy.
Tools to help your financial management
There are some simple ways you can streamline your cash flow without having to increase your workload dramatically. Here are some tips to help keep the money rolling in:
- Set a budget: It sounds simple, like a basic fundamental. That’s because it is, but so many people don’t set budgets, and it hurts your cash flow situation.
- Outline all of your annual costs in this budget, your tools, advertising, staff, vehicles and put them in black and white. Then when you need to purchase more in these areas, you can see if you have the extra money available to do so.
- Track your money and payments: Late payments from clients, late payment on bills resulting in fees, trying to save money – keeping track of your funds can be difficult. There are many free apps available that can help automate much of this process. Set up automated bill paying to avoid these fees, automated notifications to clients delinquent on payment and set up automatic options into a savings account for a safety net.
- Get customers paying quicker: Invoicing and waiting for payment can be a huge problem for tradies, especially when clients are slow to hit the button. Offer them a wide range of payment methods including direct deposits, BPAY, credit card and PayPal – the more options you give them, the less excuses they have. Better yet, make sure your invoice templates are up-to-scratch, so they can find your payment details without any hassle.
- Negotiate: Don’t take it as gospel that the prices your suppliers give you is final. Ask for longer payment options, discounts for regular purchases and the ability to return materials you don’t use to help bring your costs down.
- Use handy tools to quote accurately: If you often get bogged down in providing quotes efficiently and effectively, use pre-existing resources – like our free export quote checklist – to get them out the door quicker.
Check your KPIs
It is important to set revenue goals and to track your earnings to make sure you are tracking along well to achieve these objectives.
If you reach a valley in your business where the jobs begin to dry up, you can adjust your revenue goals and reduce spending accordingly. Set a profit margin expectation for every job, that way if these margins are not being met, you know that you are either accepting low-paying jobs or your costs have risen.
Compare your staff costs using a comparison tool against other businesses in your industry to ensure they are being paid fairly, but that you are not over-paying as well.
Setting these benchmarks and adjusting them so that you stay within the boundaries will keep your business stable and reduce the risk of financial hardship.
Stand out from the crowd
Having a point of difference is vital for you to differentiate yourself from the ocean of other trades businesses in your sector. To do this, identify what it is that you do better, or differently, or the additional services you provide – then shout them from the rooftop.
It could be simple things that you haven’t thought of, like removing rubbish from the site when you are done or near instant replies to queries.
Turn these points of differences into slogans, and include them in all of your marketing efforts; post it on your website and social media and include it on your cards, quotes and invoices. Assert yourself as an authoritative leader in your industry.
Assess your licences and insurances
It is important to check annually whether your licences and insurances are up-to-date. Additionally, there have been changes in your industry within your state or territory.
For example, NSW is currently considering licensing requirements for a range of trades including painting, glazing, and shower screen and kitchen benchtop installation.
Beyond this, the refrigeration industry is facing licensing changes in 2020. Within this, the Australian Refrigeration Council (ARC) is set to announce the establishment of a new advisory body. The body will provide industry-specific advice to businesses in this sector on what these changes will mean.
And public liability insurance, which is essential, could face changes, too. It’s set to undergo changes regarding the distribution of liability in the future, under Federal legislation. Speak to your insurance broker about the cover that you need for your industry. Make sure you ask them to be specific about what is mandatory. Have them fill you in on what you don’t need so you can prevent signing up for unnecessary coverage.
Check for changes and updates in the building and construction industry
The building and construction industry is highly regulated and involves businesses from many different areas of trade.
The Federal Government has a database where you check for changes to regulations that relate to you. This includes codes and practices to make sure you are compliant.
Here are some of the essential pages to check regularly:
- National Construction Code: Incorporates all on-site building and plumbing requirements into a single code which you will find here.
- Australasian Procurement and Construction Council: Responsible for the procurement, construction and asset management policy for the Australian, state and territory governments.
- Australian Building Codes Board: Home of the National Construction Code (NCC) Series and all the codes and regulations you will need to know about.
- Australian Paint Approval Scheme (APAS) and Painting Contractor Certification Program: Provides listings and accreditation schemes for the coating industry. APAS also tests and certifies paints and coatings and PCCP accredits painting contractors.
- Commercial Building Disclosure: Are you a part of a building project that needs to report energy efficiency information to the CBD? Find out through this portal.
- Nationwide House Energy Rating Scheme: Information on the NatHERS scheme which estimates and ranks the potential thermal performance of residential buildings in Australia.
Be realistic about the new homes market for 2020
The housing market is a gold mine for tradies. People from all industries are coming together to build these homes and estates and keep the cash flow coming in.
The last two decades have been great for tradies. There are plenty of new houses being built and the housing industry is undergoing significant growth.
That may not be the case in 2020.
Sydney and Melbourne have been warned to brace for further falls in property values. It’s expected that some housing prices will fall as high as 11 per cent this calendar year.
This will impact the housing markets across the country. It also has the potential to ease the demand for new housing, apartments and residential towers.
Fortunately, the previous boom means that most contractors are booked up well into the new year already. The result? A temporary sense of security.
For trades businesses who have not booked ahead, 2020 could be more a competitive landscape than previous years.
Embrace the future
Use this as an opportunity to take all of the tips in this guide and put them into practice to grow your business in 2020. Head to our resources page to find more helpful advice towards improving your operations and revenue.