Don't be Caught Out by Unforeseen Costs
Working in the trades can be a great business. There's always a high demand for skilled tradespeople in the UK, so you shouldn't ever be short of work. Nevertheless, unexpected costs can catch you out if you don't have the proper planning in place. Many small business owners focus heavily on what's coming in and sometimes forget they also need to be aware of what's going out. We've listed some aspects of running a trades business that could affect you if they go under the radar.
Training and Qualifications
Whether you're a new contractor or have an established trades business, training is often overlooked in your business plan. As standards and regulations change, you have to keep pace to qualify for new contracts and set yourself apart from local competitors. You may wish to bolster your range of services in the future or need a qualification to take on a specific job. Planning ahead for new training and qualifications can help grow your trades business, and by thinking about it now, you avoid unexpected costs.
Keeping Track of Spending
This one might sound obvious, but we've come across many situations where self-employed and smaller businesses are not keeping track of their expenditure. It's very easy to slip into a habit of not making a record or filing receipts. However, this could be catastrophic for your business later on down the line. Potentially, you could end up spending money on the wrong things, services you don't need or even missing important payments. Knowing what you're paying out for can ease the burden of future planning. For example, costs could be seasonal or associated with a type of job, so knowing these in advance means you won't be caught out when they come around.
When it comes to submitting your tax return, having your finances in order is going to make things much smoother. Any tradesman accountant will recommend holding records for all expenses and also maintaining an accurate mileage log. If you're thinking about tax-deductible expenses, you're going to need to prove to a tax inspector you made the purchase, so an invoice or receipt is essential evidence.
Knowing the business insurances you need will enable you to plan for these costs. Having the right insurance in place will cover you financially for a range of unexpected events and avoid high costs. Accidental damage to property, a slip or trip or dropping heavy machinery are all common claims which come with a hefty price tag. Employers' liability insurance is required by law if you have any employees, and public liability insurance is considered essential for most tradespeople. If you own a work van, it'll need to be insured, and we'd also recommend tools insurance for any vital equipment.
Whatever your circumstances, tradesman insurance is there to cover those unexpected events that could be financially damaging to your business. We specialise in insurance for a range of trades, including electricians, plumbers, builders and more! If you're unsure which insurance you need, call our team for advice on 0116 243 7904.