Tradies using hard-earning savings to fund their businesses, says report
Cash flow and late payments are of major concern for the nation’s tradies according to research by St George Bank. The St.George Bank Tradie Economy Report surveyed over 600 tradies across Australia in the fields of building and construction, electrical, landscape and gardening.
The report revealed their top major business concerns; with being paid on time, profitability, and the ability to pay bills and manage their cashflow ranking highest.
75 per cent of tradies surveyed aspired to own their own business in the next 12-18 months, with almost three in ten tradies currently employed by a franchise.
Anthony Mathews, National Head of SME at St.George Bank said tradies are vital to the prosperity of the Australian economy.
“With the average tradie charging over $45 an hour for their services it’s no surprise to see there’s such a huge appetite for tradies to start their own businesses,” Mathews said.
While the appetite to branch out on their own may be strong, the survey results suggest many tradies have only rudimentary business skills, with less than four in ten taking advantage of technology to improve their customer service.
“The St.George Tradie Economy Report reveals, for this industry to succeed they need help with sourcing new customers, hiring good workers (both 44 per cent), managing slow paying customers (43 per cent) and gaining better access to cashflow (36 per cent),” says Mathews.
Rather than exploiting technology such as customer relationship management tools and cloud solutions, the majority of tradies (65 per cent) ranked word of mouth as their most important sales tool followed by personal contacts and networking (60 per cent). Only 44 per cent ranked social media as important, for driving sales.
The top marketing channels used to increase business profits were social media (45 per cent), their business’s website (33 per cent) and mainstream advertising (9 per cent).
The nature of a tradies’ work means many still rely on a laptop (55 per cent) to assist in running their business while on the road. Yet less than half (41 per cent) use their smartphones to assist them in providing efficient customer service solutions.
Tradies were also often far more likely to fund their business through their own savings (57 per cent) putting added pressure on their personal finances. Only one in four tradies currently have a retirement plan in place and 30 per cent fail to pay themselves super.
“This is something our St.George Business Bankers will be encouraging tradies to look at to ensure that after a hardworking career, they can lead a comfortable life in retirement,” said Mathews.
“In addition, we often find that when tradies are using their own hard-earned savings or personal lending to fund their business it can often impact on their work-life balance.”