Katie from Profit First for Tradies discusses tips to become a profitable tradie using financial planning, job management programs for data reporting, and outsourcing tasks that are not your specialty.
What is Profit First FOR Tradies? [0:01:42s]
Katie wrote her book “Profit First for Tradies” as an easy to read and useful tool for Tradies, and it has helped many trade companies run a more profitable business since it was first published in 2020.
As a certified profit first professional and bookkeeper, Katie has worked with tradies throughout her entire business career. After seeing the financial struggles many have in the trades and construction sector she was encouraged by “Profit First Cash Flow Method” author Mike Michalowicz to write a version especially focussed on helping tradies. In the interests of getting to the point, Katie removed some chapters to keep it short and sharp, and this has received positive feedback from her readers.
Since it’s publication, Katie has witnessed the life changing effect her book has had on tradies lives. Her program provides access to business knowledge, allowing them to enjoy more free time and not be consumed by work. Work life balance is something Katie is passionate about having grown up with parents that owned a small business which dominated their lives and left little time for family activities.
Importance of Planning for End of Financial Year [0:05:10s]
The end of the financial year is the perfect time to make change in your business. Review your bookkeeping and job management systems, what’s worked and what hasn’t? Identify areas where you can improve efficiency and investigate if you need to add or change systems in your business.
Katie notes that many people are only using their job management system to 30-40% capacity, which isn’t a great return on investment. Are there any new software features and functions you could be using to streamline your processes and make your software work harder for your business?
It’s important to invest in yourself and your system to get it working as efficiently as possible. Many software companies make it easy to sign up, but basic training may not be enough. Optimisation training sessions can help you learn more about best practices and ensure you are getting the most out of your software.
Pain Points for Tradies [0:08:55s]
Recently there has been a lot of turmoil in the construction industry and stress is becoming as a major pain point for tradies. With bigger builders going under, material pricing issues, and difficulty finding staff, tradies are getting stressed about these issues and can’t see a way out or better options.
Katie advises against listening to everything in the media. It’s important to do your own research and make your own judgment calls on jobs, don’t let media distractions stop you from continuing what you’re doing.
If I can help one tradie and one family have a little bit extra time on a weekend or not be in the office doing quotes every night then it's totally worth it.
Benefits of Using a Job Management System [10:30]
Making decisions based on actual information instead of gut feel is crucial for success in business. A job management system helps in managing work effectively by providing information on what work needs to be done within a specific timeframe while collecting valuable business data.
Numbers don’t lie, and analysing data from job management systems can provide valuable insights into business operations. Data reports will help you make informed decisions and identify which jobs are most profitable for your trade business.
Hiring more staff does not necessarily lead to increased efficiency or profitability. Instead, businesses should focus on optimising their systems and processes.
Paying Yourself as a Business Owner [15:22]
Paying yourself a wage as a business owner is crucial, even if you are just starting your trade business. Katie recommends that you start taking your wage now, even if it’s just $250 per week, and create a plan to incrementally increase your wage over time. Failing to pay yourself can hide unprofitable business practices.
Don’t prioritise buying tools or machinery over paying yourself. Plan forward to be able to have those tools rather than living on fresh air just so you can have them.
Learning from Failure [20:24]
Analysing failures can help identify what went wrong and what needs to be changed to make better decisions going forward. It’s important to be proactive about making changes in your business rather than waiting until a health scare or other crisis forces action.
Having an external set of eyes or an advisor can make a world of difference in identifying areas for improvement and holding yourself accountable. Katie believes that building a team of advisors with different specialties is a fast track to success.
Being held accountable helps ensure that you stay focused on important tasks and don’t get bogged down in day-to-day operations. Setting up supports and having people who will prompt and hold you accountable is key to achieving your goals.
The data will tell the story of your business and it may not be the story you like, it may not be the fairytale but it does not lie. It gives us the opportunity to learn from that and make better decisions.
BENEFITS OF OUTSOURCING AND HAVING A SUPPORT TEAM [23:32]
Outsourcing tasks that are not the best use of your time can lead to better results for your business. We can’t do everything ourselves, so it’s important to build a team of specialists who can provide guidance in different areas. Having a support team of outsourced experts can be more efficient from a time, energy, and financial perspective for your business.
It is important to have an understanding of financials and bookkeeping even if it is outsourced. Handing off financial responsibilities completely without paying attention can be dangerous to your business and livelihood.
PREPARING FOR END-OF-FINANCIAL-YEAR REVIEW [27:16]
Katie’s suggestion to prepare for end-of-financial-year review is to keep an ongoing list of issues as they occur so by the end of financial year you have a clear outline to draw from. Use this list as a starting point when reaching out to specialists for help.
- Do a review of systems and processes in place.
- Make a list of frustrating or time-consuming issues.
- Categorise issues by type (e.g., bookkeeping or job management).
TAKE NOTES AND ASK QUESTIONS [29:52]
Taking notes and asking questions is helpful for both the client and the service provider, opening up discussions that can lead to fundamental workflow improvements.. Don’t hesitate to ask questions if you are unsure about something, it can lead to more efficient communication and problem-solving.
If you are spending too long trying to figure out the answer to a problem, send an email with your question! An efficient way to quickly communicate is by using cloud-based video screen recording software Loom. A 30-second or 60-second video can convey more information than typing out a detailed description of an issue. Screen recording is particularly useful when dealing with technology issues because it allows you to physically show what’s not working.
Business may not always be smooth sailing but it doesn’t have to be as hard as what it seems to be for so many of us. You don’t have to be the specialist but you just need to start asking some questions. If you don’t feel like the answer you’ve got is right, ask somebody else! You don’t just have to ask one person and then take that as gospel.
MEET THE SPEAKERS
KATIE CRISMALE- MARSHALL - Profit First For Tradies
Katie teaches tradies real-world financial strategies through speaking, authorship and master classes.
Clinton is driven by a passion to help the construction and field services industries evolve through the use of technology and education.
