There’s no doubt about it - 2024 is a tough grind for tradies in New Zealand and Australia.
With a struggling economy, high interest rates, staff shortages, and COVID hangover that won’t quit, things are feeling slow. Work can be tough to come by, and making a healthy profit can be a challenge.
The good news is, we’ve been through this before, and know that the storm will pass and things will start to pick up again.
But the impact on your business and mental health is real right now, so we’ve put together some helpful tips and resources to help you ride the waves and prepare your business for a strong future.
Let's dive in…
Watch Your Finances Like A Hawk
This has always been important, but when the market is uncertain, having a clear understanding of your financial situation will help you make informed decisions and take action to avoid unnecessary risk.
Here are some ways to keep track of your finances:
- Use Accounting and Job Management Software: One of the easiest and most effective ways to keep track of your finances is by using software. A good software will equip you with the digital tools to track your income and expenses, see the health and pipeline of your jobs, generate financial reports, and manage your cash flow. You can also set up alerts and reminders to help you stay on top of your obligations. Try out NextMinute & Xero which have a two-way integration. Our back costing reporting enables you to easily see real-time actuals vs. estimates on jobs and job stages. While cutting software costs during hard times may seem practical, it can end up costing you more in lost efficiency and insights.
- Create a Budget: A budget is an essential tool for any business owner. It will help you to manage your cash flow, set financial goals, and monitor your expenses. When creating a budget, make sure to include all of your business expenses, including rent, utilities, materials, and labour costs. Regularly review your budget to make sure you are on track and adjust it if necessary.
- Monitor Your Cash Flow: Cash flow is the lifeblood of any business, and it’s especially important during tough times. Regularly monitor your cash flow to ensure that you have enough money coming in to cover your expenses. If you can predict an upcoming cash shortage, you can take action to cut costs or increase cash coming into the business before you find yourself in hot water.
- Manage Your Debts: If you have any outstanding debts, getting them paid down as quickly as possible during tough times with high interest rates can make all the difference to your cash flow. Make sure to pay your bills on time to avoid late fees and penalties. Consider negotiating with your creditors if you are struggling to make payments. It’s also a good idea to prioritise your debts, so you can focus on paying off the most critical ones first.
- Seek Professional Advice: If you are unsure about your financial situation or need help managing your finances, consider seeking professional advice. A financial advisor or accountant can help you develop a financial plan, manage your cash flow, and navigate any challenging financial situations. Check out our partners directory for a few recommendations.
Diversify Your Business
A diversified business is better able to weather tough times. Consider expanding your offerings or targeting new markets. This will help to mitigate the impact of any downturns in your industry. Maybe new home builds have decreased in your area, by council or government renovations are steady.
Increase Efficiency
Unseen inefficiencies can really impact your business in terms of higher costs and lower profit margins. Take a magnifying glass to your processes and identify areas that could be improved. Crew not at the right place at the right time? Spending hours quoting jobs you never win? Implementing systems and procedures to help automate and streamline your business can be the difference between sinking and floating in tough times.
Keep Clients Happy
Word of mouth referrals are the cheapest and most effective channel your business has to win new jobs. Managing expectations, keeping clients informed, and delivering on promises go a long way towards having satisfied clients who recommend you to their mates.
Market Your Business
When times are good, marketing takes a backseat as you have a full pipeline and people finding your business through word of mouth and personal relationships. In harder times, you need tools so potential clients can find you easily and that represents your business well.
This is where marketing your business comes in. A good website, people being able to find you on search engines and social media, and positive reviews from previous clients will help you find new work from new clients. Check out our series on marketing your business here.
Be Agile
Being adaptable is key to surviving in any business. Consider what changes you may need to make if tough times do affect your business. Can you reduce costs? Should you pivot to a different market? Having a plan in place will make it easier to respond quickly and effectively.
Get Ready To Bounce Back
As we mentioned, these tough times will come to an end. With a less busy schedule, this is a great opportunity to put your business in the best position to grow when the market comes right. Set business goals, implement good software and processes, build your marketing engine, collect reviews from previous clients, increase your efficiency, and adapt your business for the future.
Take Care Of Yourself
You are the most important asset in your business, so investing in yourself and your mental health is important. If you’re struggling, reach out to mates or family members. Talking can help make sense of all the chaos.
There are also a number of free resources and counsellors you can chat to who understand the construction industry. We’ll include some links at the bottom of this page.
All in all, while times are tough now, they won’t be forever.
We’re always here to help any way we can. Reach out to us here.
Free resources:
New Zealand:
Australia:
