Recently, I was asked what the biggest mistake was I made when we started our plastering business.
My first thought was “what, just one? There are so many to choose from!”
Just about every mistake you could make in setting up and growing a business, my husband and I made.
Some big, some small.
To be honest, looking back it is actually a little surprising we got through those first few years and are still in business some 8 years later.
This isn’t a pity party as we did a lot of things well, but it is important to be able to learn from the mistakes of others rather than feel the need to blindly make them yourself.
If I had a time machine, these are just some of the areas I would have paid more attention to.
1. What financials?
Our financial reporting consisted of a shoebox full of receipts which we entered into an Excel spreadsheet once a year to complete our tax returns.
We ran the business completely blindfolded when it came to the numbers. If we had money to buy food at the end of the week we thought we were doing alright.
It wasn’t till years later that we actually had proper, monthly financial statements like a balance sheet and profit and loss.
2. We tracked nothing.
I mean nothing.
We had no idea of whether we were making any profit on jobs. Where our leads came from or even what return on our marketing investment we were getting (what little there was of that!).
My husband would get a call, scribble the address in a diary and that was about the extent of our reporting.
We didn’t test our advertising, analyse our time sheets or assess our materials costs.
3. Quoting woes.
In the early days my husband simply quoted an hourly rate + materials cost.
He had no self confidence to quote jobs as a fixed, total price. He was too worried he would lose the job to a cheaper operator. He would advise the client of his hourly rate and be a little vague as to how long he thought the job would take. Problem is, he is a fast and hard worker so clients always got good value.
This meant he was essentially pricing himself as an employee rather than a business owner.
4. Cheap and nasty website
We got a basic website designed in a hurry and always said we would add to it later with more pictures, articles and helpful information.
Of course we never did.
Instead of investing in our ‘online showroom’ it stayed in its original form, dying a slow death and taking numerous potential leads with it.
5. Wasted marketing
Most of the marketing we did when starting out was completely the wrong type of marketing to do.
We had no idea who our target market or ideal audience was. We just assumed we had to be where everybody else was so we didn’t miss out – Yellow Pages, local newspapers, online directories etc.
One of the worst?
Somehow we decided $400 to advertise on some scoring cards for a local bowls club was a good idea. That was despite the fact they only had around 30 members in a town with a population of roughly 200 people.
See what happens when the hubby makes a marketing decision without me?
6. Not putting GST aside each week.
Every quarter we would end up with a massive GST bill to pay that created a completely unnecessary cashflow nightmare and many sleepless nights.
We always said, “Ok. Next quarter we’re going to put GST away each and every week into a separate bank account and not touch it.”
Unfortunately, we made this mistake over and over again.
You’ve heard the definition of insanity haven’t you? Doing the same thing repeatedly and expecting a different result?
I think we went around that bend quite a few times!
7. Never followed up quotes.
Like a lot of tradies we hated following up quotes, incorrectly assuming prospects would call us if they wanted to proceed with the work.
It is estimated that you lose around 20-30% of quotes by not following up.
Worse than that though is not receiving the feedback as to why you didn’t win that job. This means a missed opportunity to improve or refine your sales and pricing approach going forward.
Seriously, how hard would it have been to just make a couple of phone calls each day.
8. Didn’t invest in a good accountant.
If only we had thought of an accountant as a financial investment rather than a massively overpriced expense we couldn’t afford.
Oh the tax we could have saved!
This lack of good judgement still keeps me up at night. Especially when I think about what else we could have used those tax savings for.
9. Fear around employing staff.
Both my husband and I really had big self limiting beliefs about attracting and leading a team. For a long time we just thought it was too hard to find and keep good staff. So we didn’t even try.
Of course working 60 hours a week and getting burnt out wasn’t ideal either but our fear of staff taking advantage of us, not producing quality work, or not having enough work to keep them busy outweighed the stress of the long hours.
10. Regular, consistent marketing.
“Oh, the phone has stopped ringing. We had better do some of that thing they call
A little consistency here would have gone a long way toward a steadier stream of work
and the ability to predict further growth and cashflow fluctuations.
11. No mentor or guidance.
This would probably be the mistake I most regret.
We really had no idea what we were doing and invested nothing in getting the help we desperately needed.
We simply thought we couldn’t afford it or were naive enough to think we knew better.
This really was the motivation behind creating the Tradies Business Toolkit. I wished we had access to a cost effective way when starting our business to get on the right path from the beginning.
12. Surrounding ourselves with the wrong people.
We spent way too much time listening to, and taking advice from, other tradies making the same mistakes as us.
Ideally we should have been seeking out more successful business owners, learning from them and then adapting their information to our industry.
Of course hindsight is always a wonderful thing.
Don’t get me wrong.
I would rather have made these mistakes than never started and I’m grateful for the lessons they taught us (eventually!).
I hope that other business owners can learn from these mistakes and not go down the same bumpy path we did. Instead, it’s my wish that they all have the opportunity to build the business and life of their dreams.