Tradies' guide: Prepare now for a fresh start in 2024
December is known as the holiday season and the height of summer. It's also recognised as one of the busiest months of the year for hardworking tradies and contractors, especially as homeowners hustle to get their homes in tip-top shape ahead of the festive season. But after the tools are put down for the break, tradie businesses will find themselves in the post-Christmas slowdown, with more opportunity to enjoy their downtime, reflect, and plan for the year ahead.
After the Christmas buzz, things in the trades tend to quiet down a bit. It's a great chance to take a breather and enjoy some well-earned rest. But let's not forget, businesses and bills don't completely stop. This quieter time is actually a golden opportunity for tradies to get ahead of the game and prep for the busy season that picks up in February. By planning ahead and staying on top of things now, you can dodge any financial stress that might come with this slower spell.
Getting paperwork and finances under control can be a tall order for many tradies, especially as it involves getting their heads around administrative tasks that may not be their core strength. Fergus' research reveals that 33% of Australian and 43% of New Zealand trades businesses still rely on manual work and spreadsheets to help keep across their finances and schedules. This can create delays in processing payments and create scheduling errors, especially during the pre-Christmas rush.
The cost of living is on the rise, and many property owners are feeling the pressure; as such, now is not the time for tradies to lose focus, especially when it comes to their accounts. It's critical that tradies take the opportunity ahead of the January cashflow slowdown to get their business in shape so they can make a fresh start. As well as ensuring there's enough cash in the bank to cover January expenses, they should look at what worked and what didn't throughout the year to ensure they maximise revenue and any dip in financing isn't made worse by poor planning or letting paperwork go astray.
Planning for growth
There are three top tips to help tradies prepare now so they can make the most of the quiet period, get ahead on paperwork, and ensure their business thrives in the new year:
1. Charge customers upfront: December's busy season means good income, but beware: the post-Christmas lull from 25 December to mid-January can lead to a cash crunch. It's sensible to request at least 50 per cent upfront as a down payment to secure a booking. This goes beyond guaranteeing client commitment; it also helps to secure a healthy cash flow, which is essential to navigate the shift from a busy December to a quiet January.
2. Provide flexible payment options: in a season known for its expenses, offering varied payment methods can make tradies a preferred choice for clients, ensuring they appeal to a wider customer base while fostering client trust and loyalty. This can deliver a competitive edge that could mean the difference between securing a job and missing out on opportunities.
3. Invest in timely invoicing: efficiency is key, especially when many people have costs tied up in presents and holiday commitments throughout the festive season. It's important to dispatch all invoices by 7 December. This accounts for the 14-day invoice grace period and ensures timely payments before the year ends.
While each of these steps can help businesses thrive in the new year, one of the best steps tradies and contractors can take to maximise their opportunities and get their paperwork and finances in order is to invest in technology solutions that will streamline their administrative tasks. Fergus's research also shows that 28 per cent of New Zealand and 33 per cent of Australian trades businesses encounter issues in generating accurate quotes and invoices. At the same time, 42 per cent of Australian and 25 per cent of New Zealand tradies struggle to track progress and deadlines. As the rising cost of living shines a light on the financial pressures Australians face, it's crucial that tradies take steps to ensure that not a dollar of profit slips through the cracks, especially during the January slowdown.
Navigating the ups and downs of the December-January period can be challenging. Essential administrative work can take a backseat, especially when tradies and contractors are hard at work delivering on projects, which often leaves businesses out of pocket. Investing in technology solutions that help to automate payments and streamline processes can bridge the gap between working on the business and working in the business, leading to a stress-free silly season.
