Starting your own trade business can be one of the most rewarding career paths. However, it is important to go about it the right way to set up a sustainable venture for long term success. This guide will walk you through everything you need to know to launch a thriving trade business in the UK.
We will cover key areas like preparing a business plan, choosing the right trade sector, obtaining licenses and certifications, setting up business structures, hiring employees, financing, marketing and more. By following the steps outlined here, you will lay a solid foundation for your new trade business. With dedication and the right strategies, your business can flourish over the years. So, let’s get started on how to successfully start your trade business.
Preparing your Business Plan
Having a well-thought-out business plan is one of the most important things when starting a trade business. Here are some key elements to include:
- Overview of your business goals and objectives
When writing the business overview, focus on defining your goals and objectives for both short term (1 year) and long term (3-5 years). Clearly state things like expected revenue targets, number of employees to hire etc.
- Industry Research
Spend time researching your selected industry, target customers, demand trends and competitors. Analyze factors like market size, growth prospects, strengths/weaknesses of competitors etc. This helps prove viability of your trade business ideas.
- Products and Services
Provide details of the core products/services you plan to offer. Give descriptions of individual offerings along with prices. Mention how your offerings are differentiated from competitors.
- Operational Plan
Explain how your day to day operations will work in terms of workflows, supplier/vendor management, inventory, hiring employees etc. Having efficient operations is key for a trade business.
- Management and Organization
List the key roles and responsibilities within your organization. Also insert profiles of your management team highlighting relevant experience.
- Funding Requirements and Financial Projections
Present a fundraising plan by listing your monetary needs for startup and ongoing capital. Prepare a 12 month profit and loss projection supported by research. Include sales forecasts along with detailed expenses.
Choosing the Right Trade Sector
When starting a trade business, one of the first big decisions is selecting the right industry or trade sector to enter. Here are a few top UK sectors to consider:
- Plumbing and heating
Dealing with essential services, plumbing and heating installations have steady demand. Target both residential and commercial clients by offering services like boiler repair, radiator installs, piping etc. Work experience as a plumber gives a solid base.
Related Article: How to Start a Plumbing Business in the UK
- Electrical
From household wiring projects to industrial systems, the electrical sector sees ongoing requirement. Specialize in specific electrical contracting jobs or provide full range of services. Certification as an electrician is critical in this field.
Related Article: How To Start An Electrical Business in the UK?
- Carpentry and joinery
Joining, construction and renovations create opportunities in areas like cabinet making, woodworking etc. Carpenters fabricate fixtures from blueprints. Expertise with tools such as saws is a must.
- Construction
Establish yourself as a general builder focusing on residential builds from foundation to finishing. Alternatively, specialize in one aspect like tiling, bricklaying or roofing. Connect with developers for large projects.
Related Article: How to Start a Construction Business in the UK?
- Renewable energy
A fast-growing sector with demand for solar panel installers, heat pump specialists, battery storage pros and more. Government incentives boost this green industry. Qualify through certification programs.
Analyze each sector to pick one that matches your skillset and is thriving in your local area. Consider factors like growth projections, ease of entry and profit margins for your trade business.
Build your 7-figure renewables business with expert guidance from Trade Mastermind’s Renewables Business Academy!
- Obtaining Relevant Licenses
Most trade businesses will require certain licenses depending on the industry and work involved. Get properly licensed to operate legally and gain customer trust.
- Contractor’s license
Essential for general contractors and subcontractors undertaking major construction projects. Covers building, electrical and plumbing jobs. Shows demonstrated competence upon approval.
- Specialized trade license
Examples include electrician’s, plumber’s and HVAC licenses for working independently in certain trades. Requires passing exams on codes and regulations in respective fields.
- Business license
Local business permits needed for operating your commercial enterprise. Provides legal clearance to work in selected municipality. Cover registration of trade name and tax compliance.
- Certificate/accreditation
Domain-specific certifications endorsed by industry organizations for skills like solar installation, boiler servicing etc. Indicative of technical expertise for relevant offerings or specializations.
- Insurance policies
General liability, professional liability and worker’s compensation should be in place prior to jobs. Critical risk coverage for trade contractors and employees on sites.
Applying well in advance will ensure you obtain necessary authorizations to launch your licensed trade business operations on schedule.
Selecting a Business Structure
The appropriate legal structure depends on individual factors like business scale, taxation plans and personal liability risk. Consider these four popular options:
- Sole trader/sole proprietorship
Simpler formation for single person businesses with lower costs but unlimited liability. Owners report personal tax returns including profits.
- Limited Liability Company/LLC
Provides both flow-through taxation of sole trader with liability protection of a limited company. Single or multiple owners can form an LLC.
- Limited company
Limited status means owners’ personal assets remain protected. Requires more legal formalities and record-keeping. PLC is an alternative for larger public companies.
- Partnership
Two or more co-owners share decision making and profits/losses. Again liability is joint but lesser compliance than limited companies. Formal partnership agreement advised.
Weigh tax implications, level of personal risk exposure and future growth plans before registering your business name through Companies House. Hire an accountant for guidance on incorporating the right structure for your trade business.
Listen to this Podcast: How To Go From Tradesman to Businessman With CEO Joseph Valente
Final Thoughts
So, these are the aspects that you need to keep in mind when you are thinking about starting a successful trade business in the UK. You can always consider taking assistance of the experts and get all the aspects covered. Good luck!
