5 things that stop companies from growing and how to tackle them
Being in the trade can support a great lifestyle business. However, many people would still like to see their business grow.
This article examines 5 things that prevent growth and how to remove these roadblocks.
There are nearly a million trade businesses in the UK, but 87% are sole traders. That means that most trade businesses don’t grow. For some, that’s a choice. This article is aimed at people who are ambitious and would like to see their businesses expand.
Make your quotes really count
To grow your business, the first thing to do is not to neglect the opportunities that you already have. Here are some ideas for making all quotes really count:
Make them look professional using a well-designed logo and nice layout
Do them quickly. My company Powered Now’s research found that homeowners are really frustrated trying to get quotes from trade companies. As a result, if you respond quickly to quotes you will win more jobs
Make sure you don’t take unreasonable risks. Gas engineer John McLaughlan always adds to his quotes: “Subject to no significant discoveries that could not have reasonably been anticipated“.
Avoid pricing blunders
Failing to charge properly for work is the single biggest mistake tradesmen make. This also prevents growth. You shouldn’t overcharge for bad work, but when you do a good job, you should get the reward.
If nobody ever tells you that you are too expensive and you don’t occasionally lose on price, you are too cheap. The Dacia Sanderos is the cheapest new car in the UK but has a small market share. That’s because most people buy on value not just on price.
Delight your customers
Since 70% of work for homeowners comes from word-of-mouth and previous experience, you will never grow your business if you don’t do great work. This is why you mustn’t cut price to the bone. You need enough time to do the job properly and delight your customers.
Get rid of system phobia
Marcelle Stoughton does all of the administration for fast-growing Fencing Services on a system and says bluntly: "To be profitable, you must be as efficient as possible".
As the CEO of an app provider, I’m hardly impartial but I am convinced that the savings far outweigh the costs of using a system. Running your business on a system can lay the foundation for rapid growth.
Modern apps are much easier to use than old PC programs and can be used on-site. The advantages include faster and better quotes, improved cashflow, getting rid of paperwork and saving loads of time. In the trade more than anywhere else, time is money.
Get the most from staff
Staff management is difficult. To get the most from your staff, here are a few key points:
Be careful who you recruit. Examine their record. Bad employees don’t last long in previous jobs. A record of promotions, pay rises and long service in one or more jobs indicates a higher probability of a great employee.
Keep talking to your staff. “Nobody told me” and “Nobody asked me” are the biggest complaints in business.
Maximise motivation. This comes when people believe they are treated fairly and are allowed to take pride in their work. Praise in public, only ever criticise in private. Say “yes” to any special requests whenever you can, provided people aren’t taking the mick. It all builds loyalty.
Many of the ideas here are far from rocket science. The problem isn’t thinking of them, it’s more in getting round to them. Good luck in that!