tips

Expense management tips for tradesmen

Running your own business has many benefits. It allows you to work on your own terms without having a manager or boss dictating to you. However, it also has drawbacks. As a tradesman, working on your own can result in neglect of your personal life and time.
Managing all aspects of the business is rewarding yet demanding. Often, crucial aspects can be neglected. The most common areas often end up being administration and finances, particularly expense management. These oversights can easily put you out of business.

1. Rental and utilities

If you rent premises, you will have dedicated rental expenses. If you work from home or out of your garage, you will have to pay for electricity, water, and other expenses.

2. Tools and stock

Depending on the type of business, you will require tools and stock to keep the business going. Plumbers, hairdressers, and electricians all need their tools of the trade.

3. Workwear

While workwear is not an everyday expense but rather an ad-hoc expense, it is still worth recording. Handymen and mechanics may need overalls, gloves, and boots. These do count as a necessary expense.

4. Travel costs

Most tradesmen will have to travel to their clients, so fuel is an important expense to manage. Some tradesmen, a mechanic, for example, may operate from a workshop. They will not have high fuel expenses unless they attend to breakdowns or onsite repairs. Servicing and maintenance of your vehicles is also an essential expense.

5. Salary/wages for assistants

Some tradesmen may prefer to work alone, but most have an assistant to aid with passing tools and handling repairs. Some additional cost might be incurred for admin assistance. Separate the fixed costs of permanent staff from the variable costs of temporary staff.

6. Cellular bill

As a tradesman, your mobile phone is the backbone of your business. It allows for instant communication with existing and potential clients as well as suppliers. Forgetting to pay your bill and having your services suspended could mean that you lose clients and experience unnecessary delays. Smartphones allow you to send quotes or invoices to a client while you are onsite. This saves time and manpower. You can also make use of various apps to manage stock, finances, and other aspects of your business while you are on the job.

7. Business insurance

Business insurance is a monthly expense that will cover you in unforeseen circumstances and help you to replace equipment that may be stolen or destroyed by fire.

8. Sundry expenses

Budget for and keep track of sundry expenses. If not managed, these can add up quickly.

How to manage expenses

Now that you have a clear idea of what the typical costs are, it will be easier to keep track and cut down where you can to keep your expenses to a minimum. Here are some easy-to-follow tips to help you manage your expenses:

Keep track of all your expenses regardless of how small they are
Have a clearly defined expense policy and budget. Keep your personal expenses separate from your business expenses. Meeting a client over lunch can be claimed as a business expense
Expense management applications will help you keep track anywhere and anytime

If you find your financial management an issue to deal with on your own, there are various solutions:

• Digital management

You may find an online application that will assist you in keeping track of these expenses. There are many different options to chose from, most of them extremely powerful. They are user-friendly and can often help with other financial aspects of your business. Always remember to keep the slips for tax submissions.

• Temp Assistance

You can hire a temp to assist you once or twice a week. This should be adequate to manage your administrative needs. Having your paperwork in order is critical for when you need to submit your tax returns.

Temp Assistance

• Virtual Assistance

If your workshop does not have the space for administration staff, you may even go the route of having a virtual assistant. Virtual assistance has become a solution for many small businesses. They handle aspects such as your data capturing, social media marketing, your bookkeeping functions, and even manage your email inquiries. This allows you to spend your time and the aspects that you are passionate about in the business.
A builder, plumber, mechanic, hairdresser, or artist has skills that require you to be hands-on and providing a service. This leaves little time for administrative tasks. Weigh up the cost of having a virtual assistant to handle the admin aspects of your business while you concentrate on service delivery to your customers. Your time is often too valuable to spend on hours of admin.
A good budget and an app or software to assist you is the key to controlling your expenses and managing cash flow.

Related Articles

Leave a Comment

Your email address will not be published. Required fields are marked *