Australian tradies are favouring family members when it comes to who they employ – but are leaving their spouses out of business decisions, according to a survey by leading business coaching organisation The Game Changers.
The research of tradie-related businesses including builders, carpenters, electricians and plumbers found 50 per cent of the business owners had employed one of more family members. The survey also found that only one in 10 business owners consulted with their spouse on all or most business decisions.
Barry Magliarditi, Founder and CEO of The Game Changers, said the survey – which aimed to uncover the inner workings and challenges of these industries – provided some surprising insights into how these types of businesses are being run.
“The statistics show that family-run businesses are still very prevalent in Australia. While the percentage is only small, it’s interesting that 2% of respondents had at least four family members working for them, which is quite unique,” he said.
“In stark contrast, it seems this trust in the business isn’t being extended to spouses, with only a small percentage consulting their spouse on business decisions.”
The survey also revealed the biggest pain points for Australian trade businesses, with 60% struggling with cashflow and achieving a healthy profit margin.
However, despite these challenges and the fact that 2019 saw the sector suffer serious deterioration in trading conditions and profitability, small trade-based business owners were optimistic about their businesses future.
An encouraging 63% expected to be in better financial shape in the next 12 months, and a further 24% anticipated performance would remain the same. Only 13% forecast the business would be in worse shape.
Other findings of the survey include:
- 43% of tradies are primarily focused on business growth, with a further 29% saying they aimed to increase profitability.
- 80% said the cost of compliance was of concern, with almost 30% saying it was very concerning.
- 78% were concerned about a slump in demand for their services, a third of whom were very concerned.
- The top five ways owners felt they could improve their businesses were:
- Working on the business, not in it (72%);
- Having a strong client pipeline (64%);
- Having a written business plan with measurable targets (62%);
- Attracting good people (51%); and,
- Enhancing their leadership skills (51%).
Mr Magliarditi said the survey revealed some important insights into where these business owners needed support.
“Interestingly, 31% of respondents said they established the business because they were good at what they do, but struggled with the business side. A further 49% said that while the business was in good shape, there was more to be done to improve,” he said.
“Surprisingly, only one respondent described themselves as a strong leader of a business in great shape with no need for any changes.
“This research highlights that as is often the case with businesses, particularly trade-related businesses, the owner is good at their trade, but not very good at running a business. They haven’t actually been given the tools to run a profitable business that ultimately works without them, which should be a goal to aim for.
“Instead they stick on the tools and work huge hours to keep the wheels turning, as they also try to fit in the estimating, quoting, staff management, project management and all the other tasks needed to manage operations while creating a viable pipeline. Often they simply don’t have these abilities in their core skill sets.
“That is why we work with our tradie clients to assess their businesses and how they can best deliver growth, while also having balance in their lives. A key part of achieving that is to not only work on their business, what we call the ‘outer game’, but also to support the ‘inner game’.
“This has been a core part of The Game Changers offering. It’s fundamental to how we help business owners achieve some amazing tangible results, including an average 3-4x growth in revenue and profits, while also watching their personal lives flourish.”
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