According to the Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook, not only are jobs in skilled trade industries—which include any business centered around electricians, carpenters, welders, bricklayers, plasterers, plumbers, masons, or any other skilled trade—growing, many are growing at an “as fast as average” or “much faster than average” rate.
Case in point: the average job growth rate for all industries from 2016 to 2026 is seven percent according to the BLS. Yet, carpenter occupations are expected to increase at a rate of eight percent during that 10-year timeframe. Electrician jobs are slightly higher at nine percent, and jobs in masonry and plumbing are even better yet, with 12 and 16 percent increases expected respectively.
This is great news for individuals who are considering establishing businesses within these categories of skilled trades. But just giving your company a name and setting up shop isn’t enough.
Ideally, you want to create a business that helps you pay your bills, save for retirement, and enjoy life a bit too. How do you do that? Here are three factors to consider.
Write a Business Plan
I know, I know. This is probably the last thing you want to do, but, as the U.S. Small Business Administration (SBA) says, “Your business plan is the foundation of your business.” It tells you where you are, where you want to go, and, perhaps most importantly, what you need to do to get there.
The SBA shares that there are two basic types of business plans: traditional and lean startup. The traditional plan is often preferred by individuals who are detail-focused and like to know exactly what steps they need to take.
This type of plan contains these eight sections:
- Executive Summary – a summary of your company and how it will be successful
- Company Description – a description of what problem or problems your business solves
- Market Analysis – an analysis of how you compare to other businesses within your market as well as industry-wide market trends
- Business Organization – the internal structure of your business and the hierarchy of its employees
- Products and Services – a list of the products and services you intend to sell and share how they will make your customers’ lives better, happier, easier, etc.
- Marketing and Sales –how you plan to market your goods and services to continue to increase your sales
- Funding – how much money you will need to start and grow your business, as well as which financial resources you intend to pursue
- Financial Projections – your business’s financial outlook for the next five years
If your business is “relatively simple” or you’re in a hurry to get it going, the SBA says that a lean startup business plan may be enough. This type of plan requires that you simply identify the key partnerships, activities, and resources needed to get your business going.
A lean plan also involves identifying who your customer base is and how they’ll interact with your business. It identifies your competitive advantage, states how you’ll handle initial and ongoing costs, and says what your revenue streams will look like.
Although both of these options can take a little bit of time to prepare, going through the process of creating a business plan helps you develop a clearer image of the company you want to create. It also forces you to look at it from many different viewpoints, making it easier to anticipate where your hardships will likely be and what you need to focus on to set yourself apart from your competitors.
Some small business owners tackle this planning task themselves, whereas others seek assistance from their employees, giving them a “wider view” of all of the issues that need to be addressed for greater levels of success. And if you’re really stuck, you may even consider hiring a professional writer to help you create a solid business plan. Because it is “the foundation of your business,” this could definitely be money that is well spent.
Create a Winning Hiring Strategy
Recent headlines indicate that this factor isn’t always easy. For instance, on December 4th, 2017, CBS New York published a piece titled “Nationwide Skilled Trade Shortage Creating Critical Need for Plumbers on Long Island.” Just a few months prior, on March 11th of 2017, The Daily News in Memphis Tennessee reported a “Shortage of Skilled Workers Creating a Crisis in Construction Industry.” Does this mean that, as a trades-based business owner, you’re going to struggle to find quality employees? One survey says yes.
In October of 2016, the ManpowerGroup revealed the results of their 2016/2017 U.S. Talent Shortage Survey, which included that 46 percent of the U.S.-based employers questioned said that they find it difficult to fill open positions. The absolute hardest ones to fill? Those related to skilled trades.
Sadly, this isn’t new news. The ManpowerGroup goes on to explain that skilled trades have consistently held the top slot for hardest-to-fill jobs in the U.S. for seven consecutive years. Globally, it’s been number one five years in a row. What makes skilled trade workers so elusive that companies in this field are struggling to hire the number of people they need to fill their open positions?
Twenty-three percent of survey respondents indicated that the problem with finding enough trades workers was “a lack of available candidates.” Some expanded on this further by citing that lack of experience (18 percent) and lack of technical competencies (26 percent) were also to blame, as was the applicant wanting higher pay than they provided (16 percent).
In some cases (12 percent to be exact), it was the lack of soft skills that prevented the skilled trades business from finding suitable employees. Job search site Monster explains that soft skills are skills that are associated with communication, teamwork, adaptability, problem solving, critical observation, conflict resolution, and leadership—skills that don’t require a person’s handiwork, but are more centered around their ability to work well with others.
How do you overcome these hiring issues? ManpowerGroup says that many skilled trades businesses reported that they are implementing a variety of strategies to help them hire the best workers possible for their open positions. These include:
- Recruiting outside the talent pool (44 percent);
- Exploring alternative sourcing strategies (27 percent);
- Offering higher salary packages (22 percent) and/or more benefits (19 percent);
- Changing work models (17 percent); and
- Outsourcing the work (12 percent).
If you’re like I am, you’re looking at this list and thinking, “Well, these are all great ideas, but most of them take money to implement (money that I really don’t have), so what am I supposed to do now?” Fortunately, there are some agencies that can potentially help.
For instance, if your business is located within the State of Michigan, there’s something called the Skilled Trades Training Fund. This is a fund created to provide grants for business owners in these fields, to give them a hand financially when it comes to “training, developing and retaining current employees and individuals to be hired.”
From 2014 to 2017, this particular grant was awarded to 1,422 businesses, 712 of which have fewer than 100 employees on staff, qualifying them as small businesses. Furthermore, the average amount of the award was just under $34,000.
No matter where your business is located, check to see what types of financial resources are available in your area to potentially help offset these types of expenses. Research local, state, and national organizations and agencies to identify whether any of them provide grants or any other financial assistance that can help you create a top-notch staff.
When asked what changes have taken place within skilled trade industries within the last few years that can impact a company’s success, Chirag Ahuja, Head of Growth at Tradify—a company that offers software designed to help trades-based business owners schedule and manage jobs, quote projects, send invoices, and more—explains that “technology has had a massive impact on the trade industries in the last decade.”
Part of this arises from the way society as a whole has changed. “Customers are used to online shopping and instant service,” says Ahuja. “They want to see a quote the day they ask for it or they’ll have already found someone else. They want visibility and accountability.”
While some technology has made certain jobs or tasks no longer necessary, or obsolete, Ahuja shares that there is also a positive side to using this class of innovations within the trades. When trades professionals “adapt and embrace it, technology is improving business, enabling them to work faster and provide better results for clients,” says Ahuja.
Examples can be found across a variety of skilled trades, says Ahuja. For instance, locksmiths are using Amazon Key (a service that enables people to receive packages or let others into their homes without having to give them a key) and more and more builders are working with sustainable and recycled materials.
“One of our customers – a solar electrical company in Australia – uses drones to inspect solar panels from the air,” says Ahuja, “saving them hundreds of man hours.” That why Tradify takes an approach of “embracing technology to help them do their job better, build a reputation for producing high quality work, and – most of all – work hard to give their customers a professional, efficient service,” says Ahuja.
Currently, Tradify caters specifically to electricians, plumbers, and those with businesses within building, construction, and HVAC (heating, ventilation, and air conditioning). Regardless of what industry you’re in, it’s helpful to find technology created for your specific field, as it is more likely to have the features that you want, without a lot of the ones that you’d likely never use.
A Final Word on the Future of Skilled Trades
“No matter how advanced we get, we still need people who can unblock a toilet, install a light fitting, and build a house,” says Ahuja, adding that, “the more we live in a computer-driven world, the more prized those practical skills become.”
“Of course, some trades die out,” says Ahuja, as “there aren’t many coopers or blacksmiths left in the world. But new trades crop up.” Additionally, “because of the shortages and the fact that a university education doesn’t guarantee you a job any more, more and more schools and institutions are pushing the trades as a viable career choice for youth who have a practical mindset,” says Ahuja. “Trades are definitely here to stay.”