After years of running a trade business on your own, you might feel ready to make the jump to something bigger. The shift from being a self-employed tradesperson to becoming a business owner is no walk in the park, but it’s entirely doable.
With a bit of planning, the right mindset, and some changes to your approach, you can scale up and move beyond the day-to-day grind.
Changing business structures
The first step in making the leap is deciding if you want (or need) to change the structure of your business. If you’ve been working as a sole trader, setting up a limited company could be a worthwhile step, although it’s not mandatory.
A private limited company separates your personal and company finances, so if something goes wrong, you won’t be directly liable for debts – although you may have to provide a personal guarantee. This might be important if your venture grows and takes on bigger contracts. Additionally, paying yourself through dividends rather than salary may lead to more tax-efficient earnings in some situations.
To make the transition, you’ll need to register your company with Companies House and set up a business bank account. It’s a good idea to consult an accountant who can help you navigate the finer details and decide on the right legal structure.
Understanding new legal and financial responsibilities
You’re probably used to dealing with everything on your own as a self-employed tradesperson. But as a business owner, you’ll need to be more diligent with paperwork, tax filings and even contracts. The financial side becomes more complex, and ensuring you’re compliant with tax laws and regulations is crucial.
You’ll need to keep track of your income and expenses more meticulously, file annual accounts, and submit VAT returns if you meet the threshold. This means investing in proper accounting software, hiring an accountant, or both. Neglecting this side of the business could lead to fines or even worse – a tax audit down the line.
On top of that, you’ll be responsible for making sure you’re complying with health and safety regulations, especially if you’re employing staff. You’ll have a duty of care the moment you start hiring employees.
Defining your services and pricing
It might have been enough to just take on any job that came your way in the past. But a more established business focuses its efforts on areas that will bring in steady work and higher-paying contracts. Specializing in certain services, such as installing and servicing boilers or offering emergency repairs, can make your offering stand out in a crowded market.
Setting the right prices is key to profitability, particularly if you’re going to have more overheads to cover. Factor in the costs of running your business, including insurance, marketing and any employee wages, when determining your pricing structure.
Fixed hourly rates for specific jobs can also make it easier for clients to understand your pricing and for you to manage cash flow.
Managing scale in operations and marketing
Growth often means an increased workload, and this means you might want to invest in systems to streamline operations. Whether it’s scheduling software, customer relationship management (CRM) tools, hiring staff, or a combination of different things, be intentional with your plans and strategy.
When it comes to marketing, you might need to shift your focus. Word-of-mouth and repeat business were likely enough to keep you busy when you were self-employed. But you’ll probably need a solid marketing plan to grow and compete with competitors.
As your team grows, so too will your ability to take on larger projects and diversify your services. Don’t hesitate to delegate tasks that are outside your core skills – this should give you more time to focus on the bigger picture rather than the daily details.
Looking for guidance from the best business coach? Let’s connect and grow your business with confidence.
