New research by St.George Bank reveals that 75% of tradies have aspirations to be self-employed in the next 12-18 months and female tradies are alive and kicking with 40% of representation in the research.
The St.George Bank Tradie Economy Report surveyed over 600 people across Australia who identify as a tradie or someone working in the trades field. The most prevalent roles were in the fields of building and construction, electrical, followed by landscape and gardening.
The report revealed the top major business concerns for tradies were being paid on time, profitability, followed by the ability to pay bills and manage their cashflow.
Conversely, they were least concerned about the political landscape, competing with larger businesses, and having a succession plan.
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.”
“However, as the St.George Tradie Economy Report reveals, for this industry to succeed they need help with sourcing new customers, hiring good workers (both 44%), managing slow paying customers (43%) and gaining better access to cashflow (36%).
“The good news for Tradespeople experiencing such concerns is that following recent Federal Budget announcements, instant asset write-offs have increased to $30,000 and expanded to more businesses with a turnover of up to $50m.
“To further support this policy, St.George has been piloting an amended equipment finance credit policy allowing us to lend to Tradespeople in the first two years of starting a business, many who weren’t previously eligible.”
“In addition, when it comes to leveraging technologies that help improve customer service, Australia’s trades industry are seeking mobile banking apps for faster payments (39%), invoicing tools that can automatically send invoices and reminders to customers (34%) as well as apps or technology that allow their customers to provide instant feedback (30%).”
Tools of the trade to drive sales
According to the majority of respondents, word of mouth is ranked the most important tool to drive sales (65%), followed by personal contacts and networking (60%), and social media sites (44%).
The top marketing channels used to increase business profits were social media (45%), their business’s website (33%) and mainstream advertising (9%).
A large portion of tradies still rely on a laptop (55%) or desktop computers (47%) ahead of smartphones like the Apple iPhone (41%) to assist in running their business.
Tradies are savvy savers
More than half of respondents surveyed financed their business through their own savings (57%) ahead of a business loan or credit card (both 33%).
In fact, a quarter (24%) stop to think about their personal finances every day and almost half (49%) visit a financial adviser to discuss their personal savings goals regularly.
“It’s positive to see tradies are taking their financial wellbeing seriously and even thinking about the long term success of their business with a quarter of respondents having a retirement plan in place.”
“However, understandably 31% are too busy running their business to seek advice or progress with their retirement plan. In addition, 30% of respondents don’t 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.”
“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.”
“There are other low-cost finance options to consider such as equipment finance for example which can help alleviate the financial pressure and also provide positive tax advantages through instant capital write off,” said Anthony.