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Tradesman Insurance: Keeping Your Finances on Track: Tips for Tradesmen

As a tradesman you may feel like you've got a lot to juggle. Not only do you have to do the practical work which your livelihood depends upon but you've also got to keep track of the admin side of things and make sure that you're on top of your finances. We've put together a list of things you can do to try and reduce your business costs and increase your income. Hopefully, these tips should go some way to making those anxious quieter months easier to handle and also help you to make the most of busy periods.

Planning

From carpenter to tiler, good planning is key to keeping you in business.

Think about the work you've got coming in and any outgoings and put together a cash flow forecast so you have a good idea of where your current and future finances stand.
Make sure you have enough money put to one side for tax and national insurance.
Draw up a plan that helps you get the most out of your time.

Reviewing

Any good tradesmen should keep their eye on the ball by regularly reviewing what's going on with customers, suppliers, products, services and staff.

Ask for your customers' feedback and act on it. By doing so you'll be able to improve customer care and service. Hopefully they'll come back for more.
Regularly review the products and services you offer. Scrap those which aren't making you money. Are there any other things you can offer? Could you tweak anything you're already doing?
Look at your business records and expenses. Are there any areas that can be changed?
Review your fees and other charges on a regular basis.
Keep an eye on stock levels - too much or too little can severely disrupt business.
Review staff pay and performance regularly.

Reducing costs

Whatever your trade, there are all sorts of ways you can keep your costs down. You'll find some ideas below.

Reduce your operating costs by shopping around to find products and suppliers.
Cut out the middle man. Go directly to business service suppliers, for example tradesman insurance providers.
Reduce your bills (and carbon emissions) by turning off lights and equipment which are not in use - save your pocket and the planet.
Change utility providers if you can get a better deal elsewhere.
Reduce, reuse and recycle where you can.
Take advantage of group purchasing schemes.

Invoicing and payment

There's no point working yourself to the bone if you don't get paid for it. Keep on top of your invoicing and watch out for late payers.

As dull as it sounds, don't forget to let your customers know your terms and conditions.
Invoice promptly and follow up late payments.
Don't be afraid to use the late payment law in the event of non-payment. You can find details on www.berr.gov.uk
Increase your prices for customers who consistently pay late.
Set credit limits for your customers.

Using these tips should go some way to helping you keep your finances on track, reduce business costs and maximise your profits. But, if things do feel like they're getting out of hand then don't be afraid to ask for help.