Financial expert shares top four tips for electricians

Our recent research found that almost three-quarters (74%) of UK electricians don’t feel confident handling their company finances and many have ended up making a loss on jobs because of pricing errors (25%).

With this in mind, we’ve partnered with Rick Smith, Managing Director at Forbes Burton, the business rescue and recovery specialists, to share five pieces of expert financial advice for tradespeople.

1. Be stricter with invoices

“As a small business owner, your income depends on the payment you get from your customers. However, getting funds from your clients on time can be difficult, and this can cause a strain on your mental health and well-being.

“To avoid this problem, it’s best to try and implement a ‘50% up front’ policy. Doing this will help maintain a steady cash flow. It will also help you identify genuine customers interested in your product or services; thus, you save time, resources and money.”

2. Look after your cash reserves

“Your most important asset, as a business owner, is your savings. You can rely on your savings in difficult times or when you need to handle unexpected expenses. Besides that, you can also take a break when you need or want one. It is crucial that you have cash reserves as they allow you to handle these expenses.

“If you want to be comfortable, it is advisable to save 30% of your earnings each month.”

3. Pay your taxes on time

“Tax returns are usually put off for a long time, and you will find this last on the to-do list for most people. Voilà, it’s another year, and you are rushing to submit your tax returns with just a few days to go, which may turn out to be larger than your expectations.

“The easiest solution is to prepare your tax returns as early as possible after April 6th. Doing this will help you handle this critical task on your to-do list efficiently and quickly. Also, it informs you of the amount to pay the following January; thus, you get to avoid any horrible surprises, and you have a lot of time to save if the need arises.”

4. Try to think ahead

“We’ve learned from the previous few years that the COVID pandemic is anything but predictable. Thus, you need to have plans for different scenarios that may happen in 2022 as a business owner.

“You need to have a plan for things like the possibility of another lockdown following the reopening of the country, and a possible increase in demand for products or services. How much money have you saved for possible eventualities? What kind of help or options are available? There is no such thing as being over-prepared.”

If you’re a business owner, prepare for future work by stocking up on your tools and equipment. Check out our range of sockets and wiring, smart home components and heating and ventilation products.