EP #30 – 3 Money Truths Most Tradespeople Learn Too Late w/ Doug D’Aubrey

Overview

What separates profitable trades businesses from the rest?

In this episode of the FieldRocket Podcast, host Tulloch Priest is joined by business coach Doug D’Aubrey (‪@dougdaubrey4954‬) from Executive Training and Consultancy breaks down why so many tradespeople struggle with business finances — and how to fix it.

Highlights

Managing finances and accountants

• (2:24) The first thing people get wrong is assuming the accountant will manage their finances. They’ll help with taxes etc, but they can only tell you the history of what you’ve done.
  • By the time you get an assessment from them, it’s months too late. 
• (4:30) Accountants are on your behalf to help you pay as little tax as possible, not to make sure you’re profitable. 
• (15:30) Different kinds of accountants will offer varying levels of support. The best for you will depend on the size of your business. 

What does it mean to be profitable?

• (6:30) Doug explains the difference between having money in the bank and being profitable
  • Insurance, marketing, accounting, and so on are costs that need to be paid for – but aren’t necessarily associated with a specific project. 
• (11:17) Doug explains what a ‘viable business’ is.
• (13:00) For one-off purchases, like a new van, try to accrue the money over time.
• (20:45) A lot of managing your finances is about taking ownership. Accounting software packages offer reporting systems to easily see how profitable you are. 
• (22:30) If you’re doing bigger projects, it may be better to look at finances on a quarterly, not monthly basis. 
• (23:30) Doug recommends setting up payments so you receive installments to help with cash flow. 
• (26:40) When saving money for a rainy day, you need to look at your overheads and salary first to understand the base income you need to make.
• (30:00) When working with a contractor, a good rule of thumb is to charge 3x the cost of the subcontractor’s salary. You need to cover their salary, your overheads, and your profit. 

A few pricing tips

• (36:30) Pricing yourself cheap will get you lots of customers, but you’ll be busy without much profit. 
• (38:10) A lot of tradespeople undercharge because they don’t believe they’re worth it – but they are.