Can a Tradeperson or Contractor Successfully Transition to Business Owner?
The simple answer is yes.
The reality is: it's hard, but not in the way you think it might be.
You're not a dummy.
You're smart and clever. You've already proven that.
You have already mastered a whole vocabulary of technical terms and you are heavily invested in your work. You're good at it, you can solve problems and figure out technical puzzles. You want to be your own boss, work with clients, provide great service, have more control over your career path.
The truth is, business management is not much different than managing a project or working on to a project's budget. But you still have to a bunch of stuff that's not taught to you in trade school, in the field, or on the site.
You're No Unicorn, My Friend
The challenge for folks in home construction and renovation, home improvement, HVAC and home performance is this: there's no fit between what you do and what most business or entrepreneurship courses offer.
Lots of coaching and training programs are out there, and they are, for the most part, focussed on a 'get in, get out' model - the techbro 'unicorn' model where you build an app or a platform or a product then sell it, ideally for a LOT of money in the shortest amount of time possible, and then do it again. That's a 'serial entrepreneur.'
In this industry, we're not typically serial entreprenuers. We're creating long-term businesses off the back of our own labour. I've done that for years as an Energy Advisor, consultant and renovator, and I've worked alongside thousands of others doing exactly the same thing.
Thing is, your revenue is only flowing when you're on the tools, or supervising/running crews on the tools, or working with clients. You need ways to keep the revenue flowing via marketing of some sort or another, and be accountable for all aspects of the legal entity you've built.
Sometimes this is called a 'lifestyle' business by those who are out there chasing unicorns and looking for ways to leverage ideas. The difference is, your company is completely performance based: if you're not out there doing the work, you're not bringing in any revenue.
Of course there's nothing wrong with unicorn chasing (and if you've got a great idea to monetize GO FOR IT!). However, if you've built up your skills and mastered your trade, it's simply not the business model you need or want.
You'll kill yourself trying to scale up.
You also don't need the large corporation model like the one used by your suppliers and distributors. Nor do you need online retail or service, or even bricks and mortar retail (although you might build those!).
So what IS your business model?
Your primary business model is Fee-for-Service: you've got specialized knowledge, and people pay for it. This is different than the gig economy, where you hustle as an independent worker for someone else for short-term commitments. While you need to hustle for projects, you're not working for someone else. You're working for yourself and you create the strategies and plans that will get projects to flow to you.
'Solopreneurs' Are A Large Portion of The Home Construction Industry
Did you know that most of the people who carry out the work run Very Small Businesses? I'm talking about all the people you know and work alongside: HVAC contractors, plumbers, electricians, renovators, home improvement, home performance, energy auditors, designers, estimators, custom builders.
In Canada and the US, somewhere between 70 and 80% of homebuilders and specialty trade/contractor firms are self-employed independent contractors, and nearly 2/3 of firms the industry generate less than 1 million dollars in total revenue annually.
More than half of all firms in our industry have less than 4 people on payroll - and nearly half of those have no-one on payroll. That is: they are a one person shop.
Wherever you fall on the spectrum of 'microbusiness', you will have to:
- Wear most, if not all the hats
- Juggle most, if not all the plates
- Fill most, if not all the roles
- D, all of the above
If you have made the decision to become your own boss, you need some guidance and support as you develop a plan that allows you to come up for breathe every once in a while.
Maybe even one that allows you to thrive.
That's the point, right? You get to control your own path.
I've been a solopreneur in the home performance world, working the fee-for-service model, for most of my adult life. I've learned along the way as best I could, and made some not-great decisions that set me back as well. If I'd had a mentor, coach, or clear path to follow, I would have made different decisions.
I'm rather ancient now, and I'd kinda hoped for a unicorn with the online training business, but what I've ended up with is a hard working donkey. But I love it. I'm still in it for the long haul, still full of passion and curiousity and pride in my skillsets.
What Are You Talking About?
Becoming an owner means you need to master a few more vocabularies. The good news is you're likely used to numbers (sizing systems, doing take offs for estimating and so on). Working your way through balance sheets, P&L statements and other financial elements will not be that hard, once you know the meaning and rational behind them. They're just formulas. They've got a logic behind them.
Same for marketing and advertising.
Same for planning, budgeting and forecasting your growth.
But you need to understand the language to see how the pieces all fit together.
Your fee-for-service business runs a little differently than a business selling products though. A product seller can always order more product if they sell out of it. You've got finite resources. You can't order more time. You can hire more people, but that's going to also cost you time to find, hire, and get them onboard, right?
When you start, you'll come across this standard formula for determining your hourly rate:
Add the profit you want to earn
Divide the total by your hours worked
This is the minimum you must charge to pay your expenses, pay yourself a salary, and earn a profit.
Straightforward, eh?
What are your overhead costs? How do you figure out what your profit margin could be, or what it should be? How do you find people who will be willing to pay your rate? What are other people quoting for a going rate? How do you show then why you should get a higher rate? What if you're not using hourly rate or fees plus materials for contracts but your contracts are fixed cost, or cost-plus?
Where do you find the knowledge base let alone the time to learn?
There are a few books, some trade journals. Probably your local community college has an online program. Large learning platforms like Udemy have huge catalogues of courses - good luck sifting through to find the ones that suit your needs.
Here at Blue House Energy, we think a success path for busy people in the home construction industry (whether your role is in HVAC, home performance, envelope-focussed retrofits, new builds, or home improvement) looks a lot like this:
On-demand learning + curated resources + live expert sessions + 1:1 coaching.
These 4 pieces represent a wrap-around program that you can dip into when you need access to specific information or learning.
One that provides the resources to help you develop and plan your own path to success. One that takes the obstacles out of your way.
One that you can trust to curate and vet the content so that it suits your needs.
One that keeps you up to date with industry best practices and innovations.
One that shows you how to move forward as a business owner.
One that helps you optimize your business so you can have a life off the tools and enjoy the fruits of your labour.
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We're working on that! It's called The Home Performance Accelerator Add your voice to developing this program: |
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