Leading Ladies: Alison Warner

PE met with Trades Coach, Alison Warner to get her advice on how to transition from an accomplished tradesperson into a successful business owner.

Why did you decide to apply your business knowledge to the trade sector?

I would say the trades found me. I realised that in this sector, it’s arguably easier to grow the business because these are not luxury items. If your boiler breaks down or your house needs rewiring, you need it done – it’s essential. With a lot of other businesses you are competing for a smaller market.

I am very structured and process orientated so working with these individuals suits the way I worked. They need these attributes in order to scale. They have left school, learnt their trade, are very successful and employ people – but then that job becomes something very different – it becomes about successfully running a business as opposed to being a good electrician or plumber. There are a lot of professions, not just the trades, where people have been trained in a vocation and then it stops being just them and it becomes about managing a team to do what they used to do and they haven’t had the appropriate training to do so.

Tell us about your book – Build and Grow: How to go from Tradesperson to Managing Director in the Construction and Trade Industries.

I have always wanted to write a book. At the time, my challenge wasn’t too dissimilar to that of my clients – I was at capacity. I was getting more business and struggling to fit it in. I realised I could train other coaches to do what I was doing but that required me getting out of my own head and implementing a system to train others – this is how I created the BUILD system.

The book was a way of articulating to potential clients what we do. It became a training manual, of sorts, to help recruit other coaches. I took them through a three-month training course using the BUILD system, which then increased my capacity to help other businesses.

For some people, reading a book isn’t enough and they’ll want to talk it through. Often, people want a sounding board. It can be quite lonely being self-employed or running a business on your own and what can happen is, they go home and offload to their partners and then it causes problems in their home life. Having someone impartial to communicate with – the book can’t replace that experience. Some customers have said to me: its like therapy – it provides an outlet.

This feature is about Leading Ladies; do you have any advice for women in the trade sector?

There’s a real opportunity for female tradespeople at the moment. It has been proven and tested by the likes of Hattie Hasan and I think a lot of single women would feel more comfortable with a woman coming into their home to carry out work.

As soon as you niche, you will get that particular business and all of rest – it just means you market yourself towards that particular customer. I think there are very few doing this at the moment so it’s a potential growth area. Stand out and be different: there is enough work to go around.

What is a common mistake that most businesses make?

Generally, marketing was not the issue for the businesses I have worked with. It was either; they didn’t have the right people in place, didn’t have visibility or an understanding of their numbers or didn’t have the right system in place. So it tends to fall down to finance and systems or people or both. Situations would occur, for example, where a tradesperson is called out and does a quote, but it’s a long time until the customer receives that quote – in this instance, they are not making the most of the business that is coming their way because they are in a state of overwhelm.

Another problem is people try to sit in too many seats. In any business, you’ll have four key aspects: sales and marketing, operations, people and the infrastructure. Usually, when people start out, we know it’s around £85,000 turnover. It becomes very hard to grow it beyond that if you’re trying to sit in all of those areas. You are going to have to let go of something so you can focus on what you love doing and scaling it. Usually, it comes back to money – clients tell themselves they can’t afford the resources. They can’t afford it, not because of a lack of sales, but because they don’t have a fluent system. I see a bottleneck, lots of quotes sitting on a desk that aren’t being sent out to customers or booked in. Additionally, I see a lot of money being owed because nobody is chasing it and there is no process in place if a customer doesn’t pay.

You can tighten up your process: for smaller jobs, we recommend having facilities in place to enable you to take payment at the customer’s home. The customer signs they are happy with the work being done, ideally electronically so it is all going into a CRM system, and then the card machine is produced or the tradesperson rings through to the office and the office takes payment over the phone. Having this system would improve the cash flow for a lot of businesses.

Some readers have expressed in a TradesTalk Twitter chat that they use Social Media to enhance business opportunities but struggle to switch off without potentially losing business. Do you have any advice on this?

One solution to this would be to outsource it. You can do it cheaply and then you have someone doing that monitoring that is an expert in that field. Additionally, it means you don’t have to learn it yourself. You can focus on your areas of strength to bring in more money. You’ve got the flexibility with hiring somebody freelance without creating the headache of having to add them to the payroll and having that extra overhead.

What’s your key piece of advice for small businesses?

Know yourself first and where your strengths lie. If you want to grow your business, build your team around that. As you grow, get other people who are in flow doing things that you hate and they excel at – grow your team that way. Alongside that, it is crucial to know your numbers. I’m talking about something called common sizing. This is when you express costs as a percentage of sales so that makes the numbers become meaningful. This tells you if you are charging enough and if the team are productive enough.

For example, materials as a percentage of sales is very telling. Usually, although this may vary slightly depending on the trade, it should be a ballpark figure of 35-40% materials, labour 25-30, overheads 10-15%. If their materials are higher than this it may be that the business owner isn’t charging enough, there is wastage in the business or there could be theft.

A client I had recently, their materials were 56% and amazingly, their labour was so lean that they were making a profit. When we looked into their numbers, there was about 3% that was being wasted because of incorrect measurements, a 2% margin we got from raising prices a little bit and the rest of it was down to supplier. When they started out, the supplier gave them the rate for a start up business, but at no point did they ask for a better rate. When they did challenge the supplier they said that was the best they could do so it forced the client to look elsewhere. At this point, they had grown into a much bigger business, so to lose their custom would be painful. They found a supplier who was 10% cheaper, went back to their current supplier with this information and the supplier had to match. Now the materials for them are down to 40% – a difference of £350,000 more net profit across a year.

It’s knowing your numbers, knowing your strengths and having a process in place to recruit and manage the business.

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