13 tips to stop your electrical business failing in the first year

Kathryn Whitfield BeltonBusiness & Management, EmployersLeave a Comment

  • Know the true costs of running your business (car, loans, insurance, rent, profit margin, internet, phone, etc.)
  • Know how many chargeable hours you have (there is a difference between working 50 hours and only being able to charge for 30)
  • Ensure you include your fixed cost in your chargeable hours
  • Make time on a regular basis to complete your invoicing (daily, weekly, monthly)
  • Make time to review and pay your incoming invoices on a regular basis
  • Don’t hesitate to ask and chase for money owed as per your trading terms – ‘A sale is not a sale until the cash is in the bank’
  • Have the right insurances (Public Liability, Business and for some, Professional Indemnity) Speak to NECA or an insurance broker for further information
  • Know the dates your BAS is due – click here for more information
  • Ensure you include an allocation of funds for you and your staff entitlements/on-costs. Speak to NECA or Fair Work Australia for Industrial Relations advice
  • Seek out courses to improve your skills in estimating, marketing and business management
  • Welcome and listen to customer feedback – you then know what they are saying about you and you can fix it!
  • Get on social media, set up a Facebook business page (Consumers are 71% more likely to make a purchase based on social media referrals (Hubspot)
  • Know your limitations!

Statics show that more than 55% of new contractors fail in the first year of operation and the prime reasons are due to a lack of estimating skills and not knowing the true costs of running their business. Other reasons include:

  • Not invoicing on-time
  • Not having appropriate insurances
  • Not paying BAS
  • Not paying wholesalers
  • Not making provisions for staff entitlements (including yours!)

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