Top 5 Reasons Trades Businesses Fail (And How to Prevent Them!)

Running a trades business can be a rollercoaster ride.

Like any form of entrepreneurship, there are ups and downs, wins and losses, joys and stresses.

But the one thing that remains the same from day one?

Risk.

We get it – you have to juggle projects, keep clients happy, and make sure the money side of things adds up.

It can all be a bit of a juggle.

But if you fall short in one area, your risk of business failure rises.

In this blog post, we won’t just examine trades business owner challenges; we’ll show you solutions you can use in the real world to:

1. Reduce your risk of failure and
2. Enjoy a thriving trades business.

Let’s begin with something that trips up even the most seasoned tradespeople; project management.

Reason #1: Job Management Chaos

The Problem

You've got jobs piling up, deadlines breathing down your neck, and customers demanding nothing less than perfection.

When job management goes haywire, missed deadlines become the unwelcome norm, leaving customers less than thrilled and your wallet a little lighter.

Ineffective job management isn't just a minor hiccup; it's a recipe for dissatisfied customers and financial headaches.

Whether it's scoping projects, getting quotes out on time, or keeping the workflow smooth, a lack of control in job management can send your business on a spiral.

But what can you do about it?

The Solution

Ever heard the saying, "work smarter, not harder"? Well, that's where job management software comes into play.

Introduce this game-changer into your toolkit and you’ll get a visual calendar that gives you a complete overview of what jobs are booked, what jobs need to be booked, and who has time to do them.

You’ll also be able to quote, schedule, track and manage staff in real time, as well as invoice in a matter of seconds.

It's not just a fancy addition; it's your secret weapon against missed deadlines and customer letdowns.

Reason #2: Poor Financial Management

The Problem

The most fundamental part of any business is cash flow.

If you aren’t managing to bring in a steady stream of money to finance your staff, suppliers, or other overheads, you will quickly run into a big problem.

Missteps in handling finances can unleash a catalogue of challenges – from turbulent cash flow and budget overruns to the lurking shadow of an unexpected tax bill.

In the trades world, where precision is key, a slip in financial management can lead to repercussions that echo across every project and transaction.

Luckily, with a bit of organisation, this problem is very avoidable.

The Solution

When you start a business, it’s normal to get excited about financial freedom, extra holidays for your family, and leaving a legacy for your children.

The last thing you are thinking is that things may go wrong.

The best way of preventing financial issues is by being prepared.

But what exactly does this look like?

Being prepared means regularly monitoring your cash flow, diligently managing accounts payable and receivable, and having a clear understanding of your profit margins.

For most tradespeople, this side of the business can appear to be very daunting.

But don’t worry.

With Fergus, you don’t need to be a maths whizz to achieve excellent financial preparation, as our platform breaks everything down for you, to help you:

• Earn more money on each job
• Track each project on the go
• Get paid faster

Automating your processes for each and every project not only safeguards your business against unforeseen challenges, but helps your cashflow to rise and your ensures your business will be significantly healthier in the long run.

Reason #3: Inadequate Marketing Strategies

The Problem

As a trades business owner, you’re probably not only tied up in project management, but admin too.

So the last thing you have time to do is prepare and implement full scale marketing campaigns.

However, if you don’t have an active presence, either in person or online, you will limit the visibility of your trades business, and potentially hinder the growth of your company.

If clients are slipping through your fingers, and choosing your competitors instead, you’re doing something wrong.

Our advice is do not underestimate the power of effective marketing.

Even if you’re short on time, there are a few things you can do to keep a steady flow of work coming in.

The Solution

To understand how to market your trades business effectively, you first need to understand how you customer base thinks.

According to HVP magazine, the top five reasons for hiring and selecting a tradesperson or business are:

• Recommended to me by friends, family or a colleague (54%) 
• Great online reviews on platforms such as Google or TrustPilot (42%) 
• Cost (34%)
• Five-star rating on Google or Trustpilot (29%)
• Great online reviews on trade sites like Check-a-Trade or Rated People (28%) 

What this information tells us is that word of mouth is key for the success of trades businesses. It also highlights that, in 2024, you simply MUST have an online presence if you wish to succeed in business.

The issue with word of mouth is that a lot of business owners rely on this happening naturally.

But in reality, there are simple techniques you can use to kickstart even more recommendations for your trades business.

First of all, ensure you have set up your Google Business Profile, and are active on sites like TrustPilot, or Check-a-Trade.

Then, make it a part of your customer service process to ask for a review from each and every client you deal with.

Want to boost your recommendations fast? Why not send out an email to your existing clientele, pointing them in the right direction to give your trades business a glowing reference?

Reason #4: Insufficient Business Processes

The Problem

To succeed in any business, you need to have a game plan.

If you’re still winging your project management, without a defined structure in place, the chances are you’re not earning as much as you could, and your business may not stand the test of time.

In the absence of streamlined processes, the potential for business growth becomes stifled. This limitation often results in missed opportunities and the inability to scale operations effectively.

Without clear frameworks in place, day-to-day operations can become manual and error-prone. This inefficiency not only impacts productivity but can also lead to increased operational costs.

Instead, businesses need agile processes to adapt to technological advancements and changing market dynamics.

The trades business world is moving fast, and insufficient processes hinder the ability to stay ahead of the curve, leaving your business at risk.

The Solution

It’s time to make your business more efficient.

First off, we need to take a close look at how things are currently running – what's working well, where there are hiccups, and what could be done better.

Once we have a clear picture, the next step involves documenting all the steps and procedures in an easy-to-follow guide that everyone in the team can refer to.

These processes lay the groundwork for scalable and sustainable business growth.

A way of practically achieving this is to set goals for your business that are SMART.

No, not the IQ kind, but Specific, Measurable, Achievable, Relevant, and Time-bound.

This way, you’re setting clear targets that are within reach, trackable, and directly tied to making our business smoother and more efficient.

Let’s break it down:

1. Specific:

Not-so-Smart Goal: Improve business processes.

Smart Goal: Streamline our project management process by implementing Fergus to automate project assignments and reduce manual data entry.

2. Measurable:

Not-so-Smart Goal: Increase profit margins.

Smart Goal: Improve profit margins by 20% over the next quarter.

3. Achievable:

Not-so-Smart Goal: Revolutionise the entire business overnight.

Smart Goal: Gradually implement new business processes within the next six months, starting with project management, and tailor processes based on team feedback and adaptability.

4. Relevant:

Not-so-Smart Goal: Eliminate admin time

Smart Goal: Reduce admin time by 1 day per week.

5. Time-bound:

Not-so-Smart Goal: Consider Job Management Software at some point in the future.

Smart Goal: Take advantage of the Fergus 14 day free trial and assess their impact on team efficiency by the end of the quarter.

Reason #5: Resistance to Technology Adoption

The Problem

We know from experience that running a business is very hard work.

Sometimes, you may find yourself working late, trawling through invoices, trying to get the admin right.

But, in case you haven’t realised, it’s 2024 now, and the world is moving fast.

There are tools out there to help you.

The reluctance to embrace technology isn't just a preference; it's a potential stumbling block that could hinder the efficiency and innovation of your business.

Why miss out on an opportunity to work faster, make your life easier, and stay ahead in the game?

If you and your staff are still filling out timesheets, invoices, and job sheets by hand, the chances are your business is going to be left behind.

That’s because, to put it simply, you are wasting your precious time with mundane admin that is much quicker and much easier to track if you incorporate the right technology.

The Solution

Enter a solution that transforms the way you run your business – a game-changer in the form of innovative technology.

Embracing job management software isn't just about keeping up; it's about gaining a competitive edge. Bid farewell to manual timesheets and paperwork, and enter a new era of streamlined operations.

With the right technology, you're not just saving time; you're investing it where it truly matters – in growing your business, keeping your clients happy, and reducing the risk of running into financial trouble.

Don't let reluctance to adopt technology hold your business back; let it be the catalyst for a new era of efficiency and success.

Tools Down, Profits Up!

Imagine a world where managing jobs is a breeze, your day-to-day gets smoother, and all your business admin tasks are under one roof.

That’s where Fergus comes in - your trusted companion on the journey to business success.

With Fergus, it's a journey towards reducing stress, gaining back your time, and making more money without actually having to do more work.

So ask yourself, are you ready to revolutionise your trades business?

Then start your free trial today: