Ever heard of the saying, “You need to spend money to make money?” Well, it’s true. In your trade business, you need to spend money to make money. You need to spend your business’s profits in order to make more profits in the future. It might be tempting to use the extra money for celebration and bonuses. Instead, you should reinvest it back into the business.
1. Streamline your business
This is applicable to any type of trade business, especially those who are just starting out. The best method of reinvestment is to streamline your business!
- Purchasing new equipment (tools, trucks, or office materials)
- Purchasing new/implementing technology (iPad, iPhones etc)
- Refurbishing your current equipment and infrastructure
- Purchasing a job management system to improve customer and staff experience.
These are just a few examples of how you can wisely invest your money. Firstly, conduct an analysis of what parts of your business actually need the cash injection so you don’t burn through your cash upgrading random parts of your business. There’s no point purchasing new equipment when the old stuff does the job just as effectively!
2. Outsource menial tasks
We always tell tradies we talk to that they need to outsource the most boring and time-consuming tasks they have, wherever possible. This is because a business owner is better off focusing their time on developing their business rather than balancing the books or answering customer inquiries.
Gone are the days where you’re stuck doing tasks you hate for hours at a time! Outsourcing or offshoring mundane tasks will benefit your business. This becomes even more important as your business grows, and those ‘small tasks’ now take longer than ever.
3. Invest in your marketing
While it’s true you don’t need to spend a lot of cash to market your trade business (think low-cost or free strategies such as Facebook, vehicle signage, website, and other), there are still massive benefits to investing in your marketing.
Start off with developing a marketing plan to ensure you’re spending your marketing funds wisely. As we mentioned before, there’s no point spending your money on things that might not even work for your business! Some campaigns you may consider implementing include a membership program, a quarterly or monthly e-newsletter, a flyer with magnets sent to your local area, new branding, or other.
Make sure as you’re implementing these that you’re also tracking them! Without performing test and measure to determine how many jobs and the average dollar sale of these jobs among other statistics, you’ll never know if your money (and time) is well spent!
4. Improve your team
Investing your money into your employees is one of the best things you can do as a boss and a leader. By doing this, you will be improving their skills and talents, which in turn will benefit your business! On top of that, your employees will value your willingness to develop their skills and career and will become more loyal!
Do this by offering training (through online or offline courses) of either your choice or their choice to be completed during and out of work hours.
5. Don’t forget to leave some cash for emergency purposes
Using the extra profit to improve your business is a smart move but you shouldn’t use it all up. Be sure to leave some money for emergency situations. You’ll never know when you won’t reach breakeven or require additional money during dire business scenarios.
Investing in your business is one of the smartest moves you can make with your profits. The growth, and the increased efficiency you gain from doing this may see your investment doubled in the future when your profits increase!
- Join our Kick-Ass Tradies Facebook Group, for access to trade business specific conversations, tips and resources, plus a like-minded community of tradies.
- Book a 15-minute Game Plan Call with Andy, owner of Dr. DRiP plumbing and co-founder of Lifestyle Tradie, to clarify your priorities and get clear action steps.