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Top 9 Tips and Tricks to Being a Financially Successful Tradie

Building a small business can be both exciting and challenging. Being on the tools, quoting new jobs, growing and managing your team, keeping an eye on cash flow and everything in between, makes for a busy life as an entrepreneur.

It’s a life where no two work days are exactly the same and where the opportunity to build a successful business are limitless! If you’re thinking about starting (or you already run and manage) your own business, check out the following top nine tips to improve your chances of success.

1. What's the ideal structure for your business?

Good question! The most common type of structures we see in the building and construction industry are generally sole traders and companies.

There is a tendency for businesses at the start of their business cycle to have a sole trader structure; when businesses grow and mature, they tend to restructure into companies. There are a couple of reasons for this: companies can be more costly to maintain and potentially have an added degree of complexity.

However, there are a number of benefits to running your business through a company structure.

These include:

  • asset protection
  • the ability to tax plan to minimise tax
  • the flexibility of adding in further business partners as the business grows and expands

We note that there are other potential structures involving trusts, partnerships and joint ventures. Whilst there is no blanket rule for your business structure, we would suggest catching up with your accountant or business adviser on a yearly basis to ensure your structure is the best fit for you.

2. Have a strong support team

It is incredibly important to have a strong support team in place that can help guide you to grow your business. This support team may include an array of trusted advisers such as your accountant, bookkeeper, solicitor and finance brokers. Not only will they assist you in areas of their expertise but they can provide a valuable sounding board for ideas and scenarios as they may arise. A trusted adviser will have your best interests at heart and they will strive to help you in your quest of business success.

3. Protect and develop your wealth

As your business expands and you develop wealth for you and your family, it is important to ensure that your wealth is protected as best as possible!

This can be done through a variety of ways. Reviewing your business structure regularly and ensuring that your will and estate planning is up to date and reviewed at least on an annual basis (or following any major changes in your circumstances including getting married, divorced or having children) is a great start.

4. Get organised and understand your strengths and weaknesses

This is a crucial part of running a successful business that is often overlooked. Being organised, prompt and being able to identify your strengths and weaknesses, will go a long way to help you achieve the success for your business.

What should I use for record keeping?

There has been significant improvements in technology and cloud accounting software recently. Cloud accounting has a number of benefits for the business owner including:

  • An ability to see your business’ up to date financial position at any time
  • No need for traditional daily or weekly backups being stored on external drives, as data is backed up on a continuous basis
  • Multi-user access meaning your accountant/bookkeeper can access the data simultaneously
  • Updates are automatically done (depending on the cloud accounting platform)
  • Bank transactions can be automatically fed into the platform
  • Being able to access your financials on a variety of devices, such as laptops, tablets and mobile phones

Examples of cloud accounting software include Xero, MYOB and Quickbooks, with Xero being a clear favourite for us!

Apps and add-ons

Xero does a great job of tracking your expenses, income, accounts receivable, accounts payable and payroll, but you may need specialist software designed for the building and construction industry.

Bills and receipt tracking

Here’s a list of some of the most common expense management software:

Hubdocs has recently been acquired by Xero and is now included in all of their business plans.

Workflow management

If your business is running several projects consecutively or runs lots of small jobs at a time, a workflow management app will help you keep track.

As an example, a plumbing business going from job to job over the course of the day completing small jobs could benefit from an app like Tradify, Xero Projects, Workflow Max or Servicem8, where jobs can be scheduled and allocated to team members.

For builders in particular, we understand how time consuming and risky quoting and job management can be for constructing a new home. One overlooked cost, can be the difference in the job making a profit or loss. Buildertrend and Buildxact are a couple of apps which can assist with this process and are more project orientated.

5. Forward planning and save on tax!

As noted in the above sections, it is important to continually assess your business plan and put in place your next range of business goals and targets. That could include increasing profitability, investing in a new asset or premises, greater work/life balance and family time or even a round of golf on a Saturday morning!

Unfortunately, many businesses get up and running quickly with little to no thought about what actually constitutes a success.

Budgeting/cashflow budget

Budgeting is an important part of business that is commonly overlooked.

A budget is a good starting point to give you oversight of upcoming expenses and income. A good budget will give you an insight into what must be done on a weekly, monthly or quarterly basis to achieve your yearly goal. Banks and lenders are increasingly asking for budgets when businesses seek to borrow.

A budget could start off as an Excel spreadsheet or depending on the accounting program, can be inputted directly into the businesses accounting system. Most cloud accounting programs have an inbuilt budgeting component or there are apps that can assist with this.

A cashflow budget is critical in ensuring that you have the necessary funds to operate/complete a particular project/expand your employee numbers.

Your accountant or bookkeeper can help you to develop a cashflow budget to make sure you always have enough cash to keep your business afloat.

Why should I have a business plan in place?

There are a number of reasons why you should have a business plan in place.

These include:

  • Helping to steer and guide your business as you start to grow
  • Helping you forecast where your business will be 3-5 years in the future
  • It’s not as hard as you think! An initial business plan can be 1 page and can be expanded as the business develops
  • It can help you get funding. A business plan is becoming more and more necessary from a bank or lenders point of view
  • There’s no wrong way of writing a business plan. Any business plan is better than none!

A template business plan is available for free on the Business Australia website.

Tax planning

We would recommend that you put aside time to speak to your accountant throughout the year to ensure that your actions are minimising the tax you need to pay.

Taxation laws change frequently and taking advantage of a new measure — like the instant asset write-off — may save your business thousands in tax simply by timing the purchase of new equipment.

From experience, our most successful clients undertake this review every year for some very important reasons:

  • To be aware of what their likely profit and taxation position is for the year
  • To understand what strategies are available for them to legitimately reduce their tax payable
  • To see how this will affect their planning for the upcoming 12 months

Essentially, the more proactive you are, the more you will save on tax!


A crucial aspect of business that is commonly overlooked is financing.

Generally, financing is somewhat of an afterthought, until funds are suddenly needed to purchase some new plant and equipment, motor vehicle or property purchase. In the current environment, lenders are requesting increasingly more complex information from business owners to show they have the capacity to pay back loans.

We would suggest your speak to a finance broker when looking to borrow to purchase new equipment or vehicles. A finance broker will have access to a range of products and potential lenders, making sure you get the best deal for you. A broker can also review your existing finance arrangements to ensure you are still getting the best rates.

6. Managing employees and understanding the risk

Human resources

As noted throughout this guide, running a small business can be challenging at the best of times and while growing your business is rewarding, it can be daunting to hire employees and manage staff.

Debbie Innes, from Addison Partners HR & Consulting, has written a free eBook which covers all you need to know when taking on your first (or next) employee. Click here to download the eBook.


All businesses should have appropriate insurance in place. We recommend consulting an insurance broker to determine what types of insurance you need to operate your business.

Common types of insurance that a business should have in place include and are not limited to:

  • Public liability insurance
  • Professional indemnity insurance
  • Home warranty insurance for builders
  • Personal insurances such as Total Permanent Disability/Life Insurance

Workers compensation insurance in NSW is administered by icare and is a must for prospective employers. Policies can be applied for online.

Home warranty insurance

Home warranty insurance is required in NSW where residential building works exceed $20,000 including GST. As a licensed builder or tradesperson, you will need to have a current policy of insurance, which provides for a pre-determined level of work that you can complete.

It is important that you and your advisor understands your position and future work in the pipeline to ensure that you can complete such projects.

Home warranty insurance is administered by icare in NSW and there a variety of financial and non-financial factors taken into account when icare undertakes a review to increase your levels of home warranty insurance.

A brief listing of factors is included below:

  • Your financial performance
  • Your financial position
  • Your history and the businesses management structure
  • Your technical qualifications and business capabilities
  • Existing eligibility and conditions imposed by other licenses holders

Factors that may affect your ability to have your home warranty insurance levels lifted include a weak balance sheet, weak working capital and net tangible asset position. There are a number of ways to fix this, however it is important to be proactive and contact your accountant early in order to work on these deficiencies.

A weak balance sheet may occur in a situation where the company has made recurring losses or profits have been taken out of the company in the form of dividends. Weak working capital may be due to unpaid ATO liabilities, poor debtor and creditor management and should be reviewed promptly.

7. Understand your reporting obligations

Licensing and registrations

There is a requirement to be licensed with NSW Fair Trading to complete building and construction work that is valued at over $5,000 (including GST).

There are a range of different license types including:

  • Contractor license
  • Qualified supervisor certificate
  • Endorsed contractor license

Licenses are generally issued for 1, 3 or 5 years and upon change of business structure will potentially need to be renewed or applied for under the new structure. Further information about NSW licensing requirements can be found here.

Single Touch Payroll (STP)

All employers are required to report wages and superannuation information to the ATO at the time wages are paid. Most payroll software will report this information for you. For assistance, please contact your accountant or bookkeeper and visit this resource.


All employers are required to pay superannuation for their employees on a quarterly basis. Superannuation should be paid through a clearing house, your bookkeeping software or other “Superstream compliant” method.

Taxable Payments Annual Report (TPAR)

If your business makes payments to contractors or subcontractors you may need to lodge a Taxable Payments Annual Report (TPAR). The TPAR needs to be lodged by 28th of August each year. The TPAR contains your contractor’s name and address, their ABN (if known) and gross payments including any GST. For more information please consult your accountant or visit this resource.

Long Service Leave

Employees are typically entitled to long service leave after working for one employer for 10 years. The building and construction industry is different and has a portable scheme that is administered by the Long Service Corporation.

Most business owners will start off as employees under this scheme when first completing their apprenticeship. Worker’s entitlement to long service leave is tracked by their Worker Number.

Employer’s have a duty to register and lodge an annual declaration to report who has worked for them and for how many days in the financial year. Click here to learn more.

8. Purchasing your commercial property in a SMSF

A common strategy we see for many of our tradies, is the purchase of their commercial property aka “shed.” Whilst this is often done in their individual or company’s name, another potential option is to purchase the shed in a Self Managed Superannuation Fund (SMSF).

There are a number of benefits with this strategy including:

  • Profit accrued in a SMSF is taxed at a flat 15% as opposed to marginal tax rates
  • The potential to free up financing capabilities for other investments in your individual names
  • Asset protection

If you are interested in learning further about this strategy, please see this article written by our superannuation expert Jane Thomson.

9. What registrations do you need?

To operate a business in Australia, you could need the following registrations:


Starting and growing a small business is not for the faint hearted and it doesn’t come without its challenges, but it can also be a deeply rewarding and life changing decision.

Having the ideal structure, building a strong support team around you, protecting your wealth, forward planning, managing employees, exploring the benefits of SMSF, meeting your reporting obligations and staying up to date with the latest government registrations, will help you to lay a strong foundation for your business now and for the future.

Addison Partners have over 70 plus years of successfully advising our clients in the building and construction industry.

We hope that this guide has provided clarity around some of the top tips and tricks to being a successful tradie.

We can help you review your current financial position and help to identify any potential weaknesses you may have in your business whilst also exploring opportunities to help you grow, develop and build your ideal business.


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