New to the business world

[James_2]

Hi guys,

I have a fairly new business, 16 months or so, and I guess I'm here to find reassurance that I'm not the only one having a tough time and completely drowning in things to do!

So where do I start?! I did start the business with someone, however we disagreed on a lot and I ended up doing 90% of the work anyway so we parted ways. The business is going from strength to strength but with the success comes more and more troubles! We definitely found a gap in the market and we are very popular, we are in the property sector and mainly deal with letting agents and landlords which brings trouble in itself.

The biggest issues I find is money (cash flow and working capital) and finding the time to do everything!

Cashflow is arguably the biggest issue, working in the sector that we do, we are always working 30-40days behind payment due to the term we have to give. So as we are growing month on month, I am trying to pay this month's bills will last month's profit which is usually smaller.

Being on my own is also very hard, there just isn't enough time to do everything. I pretty much have sunk all my money into this but there is barely enough money at the end of the month so paying myself for the last 12months has been pretty much impossible and I've had to do side jobs to try and make some kind of income, but this distracts me from the main business.

I'm definitely at the difficult part where it could go somewhere and probably will but there isn't enough money right now to afford to get the more staff and I just have to hope I can whether it long enough to start making some actual profit. Anytime there is sign of extra profit, I put it straight back into the business in some form or another eg employee, marketing etc

The endgame is to have all sales and appointments set through the online portal that we have but it just takes time and development, which unfortunately I am not a web developer. My ex business partner was the web guy,

I don't have any business skills, I have had to learn everything to date. What I do know is the property sector very well and the Service we provide.

This has turned into a bit of a vent, sorry for that! It's difficult for me at the moment because it's quite lonely without somebody to speak to about this, my wife is amazing but doesn't know business or property so kind of glosses over when I speak to her. She also is extremely worried because of our lack of income the last year, I have a lot of stress trying to make the business work while trying to be a good husband and be home for dinner and a good dad and try to have time to play with my boys. to have her crying because we have can barely make the mortgage payments only makes it worse. I just keep telling her this time next year!

This wasn't in the how to be an entrepreneur Manuel

Sorry again for the vent, any advice or encouragement would be greatly appreciated

 

[Mark T Jones]

It seems you have fallen into the common trap of becoming too busy doing the job to run the business

There is too much here to give clear or concise answers, but the start point is to take a big step back and consider your business model - and to distance yourself from 'being busy'

You definitely need a credit control process


I suspect you would benefit from putting your prices up and being more selective in the work you take on

Learn to delegate and outsource

 

[James_2]

I think you're right, a lot of the time I'm super busy and when I get home I think.. what have I done today?! A lot of the time I feel like just a busy fool!

Credit control is getting better, I now have a bookkeeper/accounts 3 days a week but with that comes extra cost.

I have wondered about price increase and selective clients, we provide a premium service which is very convenient so should be paid for. I completely fell into the trap of just saying yes to everyone at the beginning because I was terrified of not having any customers and now I'm in a situation where they pay too little for our service.

It's definitely a live and learn thing, a long as we're still here in 12 months I'm sure it'll be all forgotten and experience well experienced.

I appreciate your reply

 

[mattk]

I think you have to take a step back and calculate if the business is actually viable and if so, can it scale and how long will that take.

At the moment, you don't even have a jobs (as you say paying yourself is impossible), let alone a business. This isn't a problem if you have a clear and realistic roadmap to profitability, but the honest truth is a lot of people toil away at their "business" and make less than minimum wage until the day they pack it all in.

You mentioned a web portal. Streamlining processes and introducing efficiencies is definitely the way forwards. However, have you had quotes on how much that will cost to develop and therefore how long it will take you to turnover enough to afford that development?

As @Mark T Jones says, it is hard to give you clear advice without knowing precisely what it is you're doing, but being honest about the realistic potential is always a good first step.

 

[Mark T Jones]

I have wondered about price increase and selective clients, we provide a premium service which is very convenient so should be paid for. I completely fell into the trap of just saying yes to everyone at the beginning because I was terrified of not having any customers and now I'm in a situation where they pay too little for our service.

It's definitely a live and learn thing, a long as we're still here in 12 months I'm sure it'll be all forgotten and experience well experienced.

I appreciate your reply

It's a common and understandable mistake, but one you need to resolve ASAP

I've just been through this with my other half -' she's getting busier and busier - more work than she can possibly handle.her business relies on a singular skill, so delegating work isn't really an option

Disappointingly (for me) her clients are prompt payers so I can't put my debt collector hat on

After a lot of nagging, she agreed to put her prices up by 10% across the board and introduced a minimum visit fee, fearing lots of complaints and customers leaving in droves - we actually wanted a few to leave

Zero complaints and, to the best of her knowledge no customers have gone elsewhere.

So it hasn't actually solved the core problem, to do that would require a 30% price rise, which is what you should consider

 

[Mr D]

Not every customer should be taken on. You may well find that you can save time by focusing on the customers that don't give you problems.

Growing the business is good, growing too fast can be a nightmare.

Figure out what needs doing immediately, at weekly intervals, at monthly intervals etc. Figure out what can be outsourced, what needs to be kept by the business, what is surplus to requirements and not to be offered to new clients.

You can be the fool who works 130 hour weeks for your clients - they may appreciate it - but you would be a fool to do so.

Step back, figure out what your business is doing and where its going.

And perhaps importantly, figure out what happens if you catch covid / get run over / need a week in Barmouth / have family tragedy and have to take a few days / twist your ankle etc.
Figure out what happens and take steps to minimise the impact on the business.
It sounds like you are the key to the business / job. However that is not a great place to be in due to external circumstances.

 

[James_2]

Hi Matt, appreciate your reply.

I completely get what you're saying, people along the way have said what's the point, but the business has grown and grown with minimal advertising only through word of mouth.

The portal is our USP, we definitely will be using that as our core moving forward and the endgame is to be fully online. In a nut shell the portal can be used by landlords and letting agents to order safety certificates for their rental properties anyway in UK. We have approved trades in each postcode and the portal completely organises the Certificate request by speaking to the tenants and offers the job to our self employed trades.
In theory 80% of Certificates should be booked all through the portal.

This whole time I've been waiting for a reason to stop but I haven't found one yet and it just keeps growing and growing.

I understand I'm too much on the inside to make an unbiased judgement on the business, I don't know how to step outside to take a look. If you know what I mean

 

[Mr D]

It's a common and understandable mistake, but one you need to resolve ASAP

I've just been through this with my other half -' she's getting busier and busier - more work than she can possibly handle.her business relies on a singular skill, so delegating work isn't really an option

Disappointingly (for me) her clients are prompt payers so I can't put my debt collector hat on

After a lot of nagging, she agreed to put her prices up by 10% across the board and introduced a minimum visit fee, fearing lots of complaints and customers leaving in droves - we actually wanted a few to leave

Zero complaints and, to the best of her knowledge no customers have gone elsewhere.

So it hasn't actually solved the core problem, to do that would require a 30% price rise, which is what you should consider

Yes, one thing we rarely can know in advance is what impact a price rise will have. Keep the same problems but be more profitable.... ?
Have heard lots of business people say - including on here - that they cannot put prices up as they'll lose custom. Without ever trying so without ever knowing.

Came across a guy the other day elsewhere that is currently making a loss every month. He cannot put his prices up he says so he keeps selling at a loss. Far as I can make out he's stuck in the 'must be cheapest' rut and cannot ever come out.

 

[James_2]

Hi Mr D,

You're smack on, I have revolved the business around myself which is not a great position. If I was taken out for a few days/weeks the business would suffer a lot.

I will take this and try to think how to make this work without me in the centre. I worry delegation just mean more money to be spent.

@Mark T Jones glad to hear your partners business is doing well, sounds like the slight price increase was a perfect move! I would love to increase our prices, I would be terrified of not having any work as it's a very competitive market ( just no one does it like we do)

 

[Mr D]

Hi Mr D,

You're smack on, I have revolved the business around myself which is not a great position. If I was taken out for a few days/weeks the business would suffer a lot.

I will take this and try to think how to make this work without me in the centre. I worry delegation just mean more money to be spent.

@Mark T Jones glad to hear your partners business is doing well, sounds like the slight price increase was a perfect move! I would love to increase our prices, I would be terrified of not having any work as it's a very competitive market ( just no one does it like we do)

Try setting higher price for new customers. Contact existing customers by letter and inform them your prices for them remain the same for at least xxx time.

 

[James_2]

Try setting higher price for new customers. Contact existing customers by letter and inform them your prices for them remain the same for at least xxx time.

Ok I'll give this a go. I suppose it'll answer the question either way

 

[Mark T Jones]

Try setting higher price for new customers. Contact existing customers by letter and inform them your prices for them remain the same for at least xxx time.

This.

I don't know how you interact with customers or what your cost of sale is but you'd be surprised d that the relative impacts of discounting Vs premium pricing

As a mentor I had a client who was a gardner. He had become extremely busy on the back of only charging £10 per hour. The real problem was that he worked entirely on recommendation and every recommendation he got was on the basis that he only charged £10 per hour

He was introverted and very much not a salesman. The course of action we agreed on was that he would increase his 'list rate' to £22 per hour

When he spoke to a customer he would advise them of that rate but would assure them that he would hold their £10 rate for the reminder of the season. (My guess is that some of them are still only paying £10 per hour). Crucially, he is now being referred as a good Gardner not as a cheap one and existing client get to feel special for having the favoured rate

 

[tony84]

What is your priority at the minute?
To me it does not sounds like you need more business but either higher paying business or people who will pay sooner.

Maybe start to say all future business for new customers is at a higher rate or offer 2 pricing structures - the current rates but on 7 day payment terms or higher rates on the 30-40 day payment terms?

Think about what will happen if one of your customers goes under - will that completely mess up your finances? If so, you need to get out of that position. Cash is always king and you probably need to get off the back foot - that wont happen overnight but you have the turnover, you now need to look at getting it on your terms.

Also start working out what type of employees you need - accounts/admin/sales/people to do whatever it is you do etc and start working out what you need your income to be to pay for that, that will help you to work out what your prices need to be in the long run.

Thats just my thought - not that I am running a big business etc, but one thing I noticed was that going from 1 person to 3 people, our prices had to change.

 

[Interestedobserver]

This.

I don't know how you interact with customers or what your cost of sale is but you'd be surprised d that the relative impacts of discounting Vs premium pricing

As a mentor I had a client who was a gardner. He had become extremely busy on the back of only charging £10 per hour. The real problem was that he worked entirely on recommendation and every recommendation he got was on the basis that he only charged £10 per hour

He was introverted and very much not a salesman. The course of action we agreed on was that he would increase his 'list rate' to £22 per hour

When he spoke to a customer he would advise them of that rate but would assure them that he would hold their £10 rate for the reminder of the season. (My guess is that some of them are still only paying £10 per hour). Crucially, he is now being referred as a good Gardner not as a cheap one and existing client get to feel special for having the favoured rate

I like that

That's some jump though!

 

[Mark T Jones]

I like that

That's some jump though!

Yip!

It's far easier to come down than go up

 

[Chris Ashdown]

you are looking forward which is always a good thing, but maybe not doing what needs doing for the present. which is managing what you actually do have.

What you seems to be doing is offering a good service and that needs paying for, don't be afraid of others taking your place as long as your service remains great. they will not be able to compete

Take a Sunday off and stand back any analyse your customers and how you work at present, do you need to expand quickly? probably not, do you need to invest in time and effort so much for tomorrow and next year/ month, probably not. can you improve your time management better, most likely yes, have you made a business plan and cashflow forecast so you know where you stand, maybe the credit controller could assist with that for you far better to act on solid information

 

[James_2]

What is your priority at the minute?
To me it does not sounds like you need more business but either higher paying business or people who will pay sooner.

Maybe start to say all future business for new customers is at a higher rate or offer 2 pricing structures - the current rates but on 7 day payment terms or higher rates on the 30-40 day payment terms?

Think about what will happen if one of your customers goes under - will that completely mess up your finances? If so, you need to get out of that position. Cash is always king and you probably need to get off the back foot - that wont happen overnight but you have the turnover, you now need to look at getting it on your terms.

Also start working out what type of employees you need - accounts/admin/sales/people to do whatever it is you do etc and start working out what you need your income to be to pay for that, that will help you to work out what your prices need to be in the long run.

Thats just my thought - not that I am running a big business etc, but one thing I noticed was that going from 1 person to 3 people, our prices had to change.

Would it be wrong to say priority at the moment is sustainability. I want to get to a point where everything is running smoothly and I can take a step back and make a plan, right now I'm putting fires out left right and centre there's no way I'm having to make a plan!

I have gone for a low margin, high number game. It's a highly competitive sector, and for me it's always been a number game. There is potentially 5 million Certificates being done every year, if we had 10% of the market and made £2.50 per Certificate then it's a fantastic business. Making £25 of 1% isn't as good.

In my mind there'll be a point that it flips, but it's just whether we make it to that or not!

 

[James_2]

you are looking forward which is always a good thing, but maybe not doing what needs doing for the present. which is managing what you actually do have.

What you seems to be doing is offering a good service and that needs paying for, don't be afraid of others taking your place as long as your service remains great. they will not be able to compete

Take a Sunday off and stand back any analyse your customers and how you work at present, do you need to expand quickly? probably not, do you need to invest in time and effort so much for tomorrow and next year/ month, probably not. can you improve your time management better, most likely yes, have you made a business plan and cashflow forecast so you know where you stand, maybe the credit controller could assist with that for you far better to act on solid information

I would like to get to a point where I feel less hectic. You're right l do need to step back and try to manage what I have already!

 

[japancool]

You could consider taking on a Startup loan to ease your cashflow problems, although this may or may not be appropriate for your business.

Now, if only there were someone here who could help you with that...

 

[James_2]

You could consider taking on a Startup loan to ease your cashflow problems, although this may or may not be appropriate for your business.

Now, if only there were someone here who could help you with that...

Ha I'm sure there is someone!

Tbh I have a bounce back loan and I have a couple of person loans in the business too. I shouldn't need anymore, the work is there I just need to make it work

 

[tony84]

Would it be wrong to say priority at the moment is sustainability. I want to get to a point where everything is running smoothly and I can take a step back and make a plan, right now I'm putting fires out left right and centre there's no way I'm having to make a plan!

I have gone for a low margin, high number game. It's a highly competitive sector, and for me it's always been a number game. There is potentially 5 million Certificates being done every year, if we had 10% of the market and made £2.50 per Certificate then it's a fantastic business. Making £25 of 1% isn't as good.

In my mind there'll be a point that it flips, but it's just whether we make it to that or not!

Have you found a gap in the market or have you just raced to the bottom?

When I started out on my own in 2013, I was a fee free mortgage broker. I was very busy, it took about 3 months for the commission came in - when it did it was not enough. I did some figures in 2014 and I started to charge a £500 fee. I worked it out that if I lost around 55-60% of business I would normally write, I would be no worse off financially. The big difference being that I am doing 55% less work.

We probably lost about 5-10% of the number of cases and we definitely lost some of the easier cases. It basically meant turnover was up and workload was down... It was the best decision I ever made.

Things have changed since then. We have built up a good reputation, we found a part of the market to specialise in, average income per customer is up and we are turning business away at times - we are competing with mortgage brokers who do not charge a fee.

I think you are at a place where you have money coming in but it is not a good enough profit margin on the terms you are providing. You are at the stage where you can start to turn things in your favour. I think as @Mark T Jones says, you need to look at reassessing your charges. If you can bring in customers who will pay you n 14 days rather than 30 or will pay you an extra 10-20% then you can start getting rid of some of the accounts you do not want OR you can go back to all of your existing accounts and say you are putting prices up by 5-10% and see which stay.

 

[James_2]

Have you found a gap in the market or have you just raced to the bottom?

When I started out on my own in 2013, I was a fee free mortgage broker. I was very busy, it took about 3 months for the commission came in - when it did it was not enough. I did some figures in 2014 and I started to charge a £500 fee. I worked it out that if I lost around 55-60% of business I would normally write, I would be no worse off financially. The big difference being that I am doing 55% less work.

We probably lost about 5-10% of the number of cases and we definitely lost some of the easier cases. It basically meant turnover was up and workload was down... It was the best decision I ever made.

Things have changed since then. We have built up a good reputation, we found a part of the market to specialise in, average income per customer is up and we are turning business away at times - we are competing with mortgage brokers who do not charge a fee.

I think you are at a place where you have money coming in but it is not a good enough profit margin on the terms you are providing. You are at the stage where you can start to turn things in your favour. I think as @Mark T Jones says, you need to look at reassessing your charges. If you can bring in customers who will pay you n 14 days rather than 30 or will pay you an extra 10-20% then you can start getting rid of some of the accounts you do not want OR you can go back to all of your existing accounts and say you are putting prices up by 5-10% and see which stay.

I like this, it sounds like I'm where you were in 2014. I am charging quite low hoping to bring in the numbers but if I did 25% less work for more money I'd be better off

What do you think of raising prices but giving a discount to those who paid within 7days. That way I get paid quicker and the price for them is roughly the same.

 

[Mr D]

One of my suppliers has 30 day credit terms as standard. And gives a small discount of 2% if paid in 7 days.
The 2% discount is tiny but adds up to thousands a year - and improves cashflow. Who doesn't want to save £40 on a £2k bill?

 

[MarkOnline]

Would it be wrong to say priority at the moment is sustainability. I want to get to a point where everything is running smoothly and I can take a step back and make a plan, right now I'm putting fires out left right and centre there's no way I'm having to make a plan!

I have gone for a low margin, high number game. It's a highly competitive sector, and for me it's always been a number game. There is potentially 5 million Certificates being done every year, if we had 10% of the market and made £2.50 per Certificate then it's a fantastic business. Making £25 of 1% isn't as good.

In my mind there'll be a point that it flips, but it's just whether we make it to that or not!

Sounds good, where's the money going to come from to fund yourself to this point. Unfortunately you have picked a business model which eats more cash the bigger you get. You cant grow quickly off retained profit, so either take your time growing, as your cash reserves allow or change your numbers.

 

[James_2]

Sounds good, where's the money going to come from to fund yourself to this point. Unfortunately you have picked a business model which eats more cash the bigger you get. You cant grow quickly off retained profit, so either take your time growing, as your cash reserves allow or change your numbers.

Fair point, but how do I stop growing quickly? Word of mouth is making people sign up to the site and start ordering their certs. Is a really good problem to have but it's still a problem!

 

[James_2]

One of my suppliers has 30 day credit terms as standard. And gives a small discount of 2% if paid in 7 days.
The 2% discount is tiny but adds up to thousands a year - and improves cashflow. Who doesn't want to save £40 on a £2k bill?

I think I'm going to do this

 

[MarkOnline]

Fair point, but how do I stop growing quickly? Word of mouth is making people sign up to the site and start ordering their certs. Is a really good problem to have but it's still a problem!

Put your prices up and make them pay in advance. if you can. If you generate loads of free cash you can grow as fast as your money/setup allows.

I get the feeling that your perception of this market is extremely price sensative, which it possibly is, But your inability to adapt may mean that the business isnt sustainable long term.

 

[James_2]

Put your prices up and make them pay in advance. if you can. If you generate loads of free cash you can grow as fast as your money/setup allows.

I get the feeling that your perception of this market is extremely price sensative, which it possibly is, But your inability to adapt may mean that the business isnt sustainable long term.

Your perception is right, I feel that dealing with landlords and letting agents it's so price competitive. The silly thing I know I am underselling the Service we can provide, a service that is undoubtedly worth the extra 10-15%. I guess I'm just worried people will stop using it, the business will fold and it would have all been for nothing

 

[japancool]

Your perception is right, I feel that dealing with landlords and letting agents it's so price competitive. The silly thing I know I am underselling the Service we can provide, a service that is undoubtedly worth the extra 10-15%. I guess I'm just worried people will stop using it, the business will fold and it would have all been for nothing

If you know the service is worth the extra 10-15%, put your prices up by 10-15%!

 

[Mark T Jones]

It’s not often I’d say this, but you really need to stop doing and start thinking

it’s a rare skill to successfully build a discount model. 80% fail as soon as you try to scale them

your opening post acknowledges that you are currently a bit of a headless chicken, but your plan appears to involve doing more of the same.

Start thinking in terms of better rather than more.

 

[tony84]

Fair point, but how do I stop growing quickly? Word of mouth is making people sign up to the site and start ordering their certs. Is a really good problem to have but it's still a problem!

Increase the price on your site. Dead easy.

Have a look at amazon as a perfect example. The prices they were charging for hair clippers in lockdown one seemed to go up by the day. As demand reduced when the lockdown ended and stock came back in, so did the prices.

 

[James_2]

It’s not often I’d say this, but you really need to stop doing and start thinking

it’s a rare skill to successfully build a discount model. 80% fail as soon as you try to scale them

your opening post acknowledges that you are currently a bit of a headless chicken, but your plan appears to involve doing more of the same.

Start thinking in terms of better rather than more.

Thanks for this, you're totally right

 

[Edward Miller]

Hi guys,

I have a fairly new business, 16 months or so, and I guess I'm here to find reassurance that I'm not the only one having a tough time and completely drowning in things to do!

So where do I start?! I did start the business with someone, however we disagreed on a lot and I ended up doing 90% of the work anyway so we parted ways. The business is going from strength to strength but with the success comes more and more troubles! We definitely found a gap in the market and we are very popular, we are in the property sector and mainly deal with letting agents and landlords which brings trouble in itself.

The biggest issues I find is money (cash flow and working capital) and finding the time to do everything!

Cashflow is arguably the biggest issue, working in the sector that we do, we are always working 30-40days behind payment due to the term we have to give. So as we are growing month on month, I am trying to pay this month's bills will last month's profit which is usually smaller.

Being on my own is also very hard, there just isn't enough time to do everything. I pretty much have sunk all my money into this but there is barely enough money at the end of the month so paying myself for the last 12months has been pretty much impossible and I've had to do side jobs to try and make some kind of income, but this distracts me from the main business.

I'm definitely at the difficult part where it could go somewhere and probably will but there isn't enough money right now to afford to get the more staff and I just have to hope I can whether it long enough to start making some actual profit. Anytime there is sign of extra profit, I put it straight back into the business in some form or another eg employee, marketing etc

The endgame is to have all sales and appointments set through the online portal that we have but it just takes time and development, which unfortunately I am not a web developer. My ex business partner was the web guy,

I don't have any business skills, I have had to learn everything to date. What I do know is the property sector very well and the Service we provide.

This has turned into a bit of a vent, sorry for that! It's difficult for me at the moment because it's quite lonely without somebody to speak to about this, my wife is amazing but doesn't know business or property so kind of glosses over when I speak to her. She also is extremely worried because of our lack of income the last year, I have a lot of stress trying to make the business work while trying to be a good husband and be home for dinner and a good dad and try to have time to play with my boys. to have her crying because we have can barely make the mortgage payments only makes it worse. I just keep telling her this time next year!

This wasn't in the how to be an entrepreneur Manuel

Sorry again for the vent, any advice or encouragement would be greatly appreciated

Hi James
Looked at your website and all looks professional. Are you giving separate certificates for each check or are you giving a certtificate to say that all safety checks are done for the next year?

Rates seems reasonable enough, but are you struggling to get tradesmen to sign up? I assume you pay them the majority of the fees quoted?

 

[James_2]

I'm impressed you found me, I was careful not to say just incase it looked like I was advertising.

We give separate Certificates and a subscription to keep all Certificates valid. We have a lot of trades now, nearly 500, but it can be a challenge to recruit them. I think because trades are too often approached by agencies who try to rip them off, I know because I am a trade.

You are right, 80-90% of the cert cost goes to the trade, the purpose is to have trades want to do the certs for us (at the right price) but also a good price for landlords/agents. We just take the bit in the middle.

I assume you know the industry a bit so you'll know that gas safety certificates are every year, as are smoke detectors and Pat. I think I can get to a place where the clients give us the Certificates and we just go ahead and complete them every year.

This was set up to give clients an easy place to order what they need, knowing a good trade will turn up and do a good job.

But as I mentioned, i have gone the route of low margin from high numbers and just hope it pays off. If I'm honest, I think the idea and the niche is there it just needs more people driving it. At the moment it's just two employees and me with my multiple hats on

 

[Edward Miller]

It does seem like a lot of administration is required!
So I take it there are other companies doing this? Are they using a portal to distribute leads which the tradesmen can pick up and allocate themselves?
How do you compare on price to your competitors?
What do you need, more landlords/agents or more tradesmen?

 

[Mark T Jones]

I'm impressed you found me, I was careful not to say just incase it looked like I was advertising.

We give separate Certificates and a subscription to keep all Certificates valid. We have a lot of trades now, nearly 500, but it can be a challenge to recruit them. I think because trades are too often approached by agencies who try to rip them off, I know because I am a trade.

You are right, 80-90% of the cert cost goes to the trade, the purpose is to have trades want to do the certs for us (at the right price) but also a good price for landlords/agents. We just take the bit in the middle.

I assume you know the industry a bit so you'll know that gas safety certificates are every year, as are smoke detectors and Pat. I think I can get to a place where the clients give us the Certificates and we just go ahead and complete them every year.

This was set up to give clients an easy place to order what they need, knowing a good trade will turn up and do a good job.

But as I mentioned, i have gone the route of low margin from high numbers and just hope it pays off. If I'm honest, I think the idea and the niche is there it just needs more people driving it. At the moment it's just two employees and me with my multiple hats on

which suggests that you have an asset of potential value - namely a targeted and current database of trades and landlords

think about how you can add value to your offering

think about how you can extract value from your trades base

build the database in a way that will make it valuable to a potential buyer or investor

there are GDPR considerations, so be sure that you have good professional advice

 

[James_2]

It does seem like a lot of administration is required!
So I take it there are other companies doing this? Are they using a portal to distribute leads which the tradesmen can pick up and allocate themselves?
How do you compare on price to your competitors?
What do you need, more landlords/agents or more tradesmen?

There are similar companies in that they offer trade services across the country, but the way they do it is different. The majority offer any trade services but the trades will have to "bid" on the job which they may not get and then the company take 30% of the job.
We are solely for safety certificates (and remedial work) and are the only ones with a reactive ordering portal. This is why it's our USP.

There is a lot of admin but only at the moment. Every development of the portal takes more and more of the admin away, it already txts the tenants and trades to book the job we're just here to help it along.
The aim is to be fully online and have 80% of job booked and completed online with payment through the portal also.

I will always say I need more agents/landlords/trades but I think right now I need help structuring the business and the plan out the route it's going to take. Agents and trades are the easy bit!

 

[James_2]

which suggests that you have an asset of potential value - namely a targeted and current database of trades and landlords

think about how you can add value to your offering

think about how you can extract value from your trades base

build the database in a way that will make it valuable to a potential buyer or investor

there are GDPR considerations, so be sure that you have good professional advice

I was told once that data is valuable, I am collecting a fair amount of property details, landlord details and most valuable is the reliable decent tradesmen we have.

You're right I should be paying more attention to this data

 

[Guy Incognito]

If you're experiencing rapid growth then funding and cash flow is always difficult. What sort of growth are you seeing? We went from £50k in Year 1 to £6.5m in Year 4. Managing that sort of growth is incredibly challenging and we got a lot of things wrong.

By the sounds of it your main costs will be on the technological side, which is good in a way as once built and running you should be able to scale very quickly. Whereas if you manufacture something then you have different lead times and problems to solve. It also sounds to me that you need to employ someone, we put this off for too long which affected the business negatively.

Have you considered invoice factoring? Would that be applicable to your circumstance?

Pricing - we sell direct to consumers, and have put our prices up significantly over the course of the past couple of years (some items have gone from £100 to £150 for example). We might have lost some business, I can't say, but sales have continued to grow. I would definitely say put your prices up.

 

[James_2]

If you're experiencing rapid growth then funding and cash flow is always difficult. What sort of growth are you seeing? We went from £50k in Year 1 to £6.5m in Year 4. Managing that sort of growth is incredibly challenging and we got a lot of things wrong.

By the sounds of it your main costs will be on the technological side, which is good in a way as once built and running you should be able to scale very quickly. Whereas if you manufacture something then you have different lead times and problems to solve. It also sounds to me that you need to employ someone, we put this off for too long which affected the business negatively.

Have you considered invoice factoring? Would that be applicable to your circumstance?

Pricing - we sell direct to consumers, and have put our prices up significantly over the course of the past couple of years (some items have gone from £100 to £150 for example). We might have lost some business, I can't say, but sales have continued to grow. I would definitely say put your prices up.

Congrats on the massive growth that's really impressive! I think I'm now where you were a few years ago by the sounds of it. I finished my first trading year a couple months ago so can't give you yearly sales but I know in may 2020 I had a revenue of about £1100 and in November 2020 I had a revenue of about £55k. Not quite the numbers you have but a problem to keep on top of. And I have definitely make a lot of mistakes.
I did try the invoice factoring route but it ended up being a bit of a nightmare. It may have been the company I chose to work with but it played havoc with the accounts and struggled to reconcile the bank and keep on top of what had been paid.

You're right in saying most of the costs now are for the tech and onces it's there it'll be smooth sailing (Ish) but I find that is the hardest to get and most expensive. I mentioned before my forte is property and the industry, I haven't a clue about the tech side of things. This is why is started it with my business partner who was much more web development, just turned out he wasn't what he said he was and we disagreed on alot.

I will definitely go back and take a look at my prices, it does worry me a little about the loss of customers but I do need things to change.

I really appreciate your advice on this