Cashflow issues are a common problem for tradies, but solving them often requires additional time and admin. Here’s another way.
Whether you’re a carpenter, painter, plumber, electrician, landscaper – or any other trade – sending out invoices and staying on top of your cashflow is a big part of the job. Aussie and Kiwi tradies on average spend over 16 hours a week on admin. This equates to over one week each month.
But despite all this paperwork, 30% of Aussie tradies and 26% of Kiwi tradies only feel in control of their business sometimes or seldom. In fact, 5% of Kiwi tradies never feel in control of their business.
It’s not hard to understand why. You probably spent years learning the skills of your trade in order to start your own business, but how much time did you spend learning to actually run that business?
Figuring out how much to charge for a job so you can turn a profit and grow isn’t easy, especially when you’re dealing with high labour costs and late payments. This can put unnecessary pressure on your cashflow.
But with a buy now, pay later app designed specifically for small businesses like hummpro, you can spend less time worrying about your finances and more time on the tools.
Here are some of the most common cashflow issues tradies face and how hummpro helps solve them.
Between the high cost of labour and the fact that you generally need to purchase tools and supplies before you start a job, many tradies have significant overheads. This can lead to cashflow issues, especially in the early years when you might be tempted to sacrifice some profit margin and submit low quotes to get more work.
You can reduce the pressure of high overheads by using hummpro to pay for the tools you need for a job upfront, without having to wait until you have sufficient cash in your business. This means you’ll be able to expand your service offering, complete jobs quicker and provide a higher quality of work. Because you can also buy all the raw materials you need upfront without having to take a deposit or charge customers in advance, you can provide a better customer experience and increase your repeat and referral business.
All your hummpro transactions are bundled into a single monthly bill, which you won’t need to repay for at least 30 days. And if you’re facing a cashflow crunch, you can defer your repayment until your financial situation improves.
To succeed as a tradie, you need to be diligent about invoicing clients as soon as your work is finished. The longer you wait to send an invoice, the longer it will take to get paid and the tighter your cashflow will become. Digital tools can help speed up the process of creating and sending invoices, which means you’ll be less likely to put off this important admin. You can also invest in a bookkeeper or office assistant to stay on top of invoices and chase up payments. Even though hummpro won’t do the invoicing for you, it can help pay for the tools and resources to help your business become more efficient.
Even if you’re good about sending invoices, it doesn’t always mean you’ll get paid on time. Late payments are a common problem for tradies, and they can have a serious knock-on effect on your ability to cover labour costs and take on new work. But when you’ve got so many other tasks on your plate, it can be hard to find the time to chase up clients. Using hummpro to pay for your everyday expenses gives you greater control of the money flowing out of your business while you wait for funds to flow in. If you’d rather not wait for funds, you can always give your small business customers the option of paying their invoices with hummpro. It’s a win for both parties – you get paid upfront and your business customer can manage their repayments according to their own cashflow.
From high overheads to late payments, hummpro helps you manage your cashflow issues without getting bogged down by admin.