Making sure there is money coming into your trades business in time to pay your bills seems like an obvious priority, but can be incredibly difficult to do when put into practice. Here are some quick tips you can action this week to make sure there's cash in the bank in time for pay day.
#5 Nail customer follow-up
Word-of-mouth is key in the trades industry. How can you make sure your customers are happy with the end result?
Two simple steps:
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A quick call from someone to check in with the customer is invaluable. You'll quickly learn if they're not happy before you invoice for the job, instead of 12 weeks after.
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Once you do invoice, make another call to confirm they've received the invoice and understand everything in it.
#4 Avoid loss leading
If you haven't heard of it, loss leading is when you offer work at a price that isn't profitable in order to get your foot in the door. Simply put, the risk is too great for small businesses and there's enough good work out there to not need to try it.
#3 Manage your unused materials
Even though its best practice to only order the materials you need for the job, it's not always possible in the real world. How can you manage unused materials? Simple: Return all unused stock to the supplier for credit.
#2 Charge deposits for jobs over $2000
Many other industries charge deposits to confirm jobs, so why don't trades? The simple act of charging deposits means more cash flow during quieter times and the customer is more likely to pay the last bill if it's a fraction of the total cost.
#1 Invoice as soon as the job is finished (every day if possible)
Despite seeming obvious, invoicing regularly is one of the most frequently overlooked pillars of running a successful trades business. The issue is that while it's important, it isn't always urgent. If necessary, make one employee solely dedicated to invoicing.
Dan Pollard
