How to start a trades business

Starting a trade company as an electrician, plumber, builder, or other tradesman is exciting and profitable. We go through it step-by-step to help you get started on your building your first business.

Starting a trade business in the UK, whether you're an electrician, plumber, builder, or another type of tradesman, is an exciting venture. Whether you’re transitioning from employment to entrepreneurship or moving to the UK with new ambitions, this guide will walk you through the essential steps to establish and grow your trade business.

How to Start a Successful Trade Business in the UK

Structuring Your Trade Business

Creating a Business Plan

A solid business plan is the foundation of your business. This plan should outline your business goals, target market, pricing strategy, and financial projections. Here’s how to get started:

  1. Executive Summary: Provide a brief overview of your business idea and why it will be successful. Include your mission statement, the services you offer, and basic information about your company, employees, and location.
  2. Company Description: Detail what your business does, what market needs it meets, and how it stands out from the competition. Highlight the specific trade services you offer and your target customer segments.
  3. Market Analysis: Research and analyse your market. Understand your industry outlook, target market demographics, and competitors.
  4. Services: Explain what services you offer. Describe the benefits of your products or services to your customers.
  5. Marketing and Sales Strategy: Outline your marketing strategy and how you will attract and retain customers. Describe your sales process and strategies for growing your customer base.
  6. Funding Request: If you are seeking funding, provide a detailed account of your funding requirements, potential future funding requirements over the next five years, and how you plan to use the funds you receive.
  7. Financial Projections: Provide financial projections to back up your funding request. Include income statements, cash flow statements, and balance sheets for the next three to five years. Break your projections down into monthly or quarterly segments for the first year, and then annual projections after that.

A well-thought-out business plan will not only guide your operations but also help attract investors and secure loans.

Registering Your Business

Choosing the right business structure is crucial for your trade business. You can operate as a sole trader or a limited company. Here’s a breakdown of each.

Sole Trader

This is the simplest business structure. You operate your business as an individual, and there’s no distinction between you and the business legally. The setup is straightforward with fewer regulations, but you’re personally liable for all business debts. This can be risky in the trade industry where accidents can lead to significant liabilities.

Limited Company

A limited company offers protection by separating your personal and business finances, meaning you have limited liability. This structure is often seen as more professional, which can boost client confidence. However, it involves more paperwork and regulatory compliance, including annual accounts and confirmation statements.

Steps to Register Your Business:

  1. Choose your business name.
  2. Register with Companies House if you’re forming a limited company.
  3. Register for taxes with HMRC - It’s essential to register for tax purposes as soon as you start trading. The requirements vary depending on your business structure
  4. Set up a business bank account - Separate your personal and business finances by opening a business bank account. This is crucial for maintaining clear financial records and simplifying tax reporting.

Commercial, Industrial, and Domestic Work

Decide whether to focus on commercial, industrial, or domestic work, each with its own requirements and opportunities.

Commercial Work

Involves working on business premises like offices, retail stores, and restaurants. Requires compliance with commercial building codes and often involves larger, more complex projects.

Industrial Work

Involves large-scale projects in industries like manufacturing, oil and gas, or power production. Requires additional training and strict adherence to safety regulations.

Domestic Work

Typically involves working in homes on smaller-scale projects like repairs, installations, and renovations. Requires excellent customer service skills.

Get Insured

Insurance is vital to protect your business from unforeseen events. Here are the key types of insurance you should consider:

Employers’ Liability Insurance

Legally required if you have employees. It covers you if an employee gets injured or sick due to work-related activities. Failure to have this insurance can result in heavy fines.

Public Liability Insurance

Highly recommended, though not legally required. It protects you if a member of the public gets injured or their property is damaged due to your business operations. Given the nature of trade work, where accidents can easily happen, this insurance is crucial.

Professional Indemnity Insurance

This insurance covers you against claims for professional negligence or mistakes that cause clients financial loss. While not mandatory, it is highly recommended, especially if you provide consultancy or design services.

Tools and Equipment Insurance

Protects your tools and equipment against theft, loss, or damage. Considering the importance of these assets to your trade work, this insurance can be very beneficial.

Securing Funding

Starting a new business often requires significant capital. Here are some options to consider:

Start-Up Loans

The UK government offers start-up loans from £500 to £25,000 with fixed interest rates. These loans require a solid business plan and a credit check.

Small Business Loans

Banks offer various types of small business loans, including term loans, business lines of credit, and equipment financing.

Finding and Attracting Customers

Digital Marketing

Build an online presence with a professional website and active social media profiles. Register your business on Google My Business to appear in local searches and collect reviews.

Steps for Effective Digital Marketing:

  1. Create a Website: Ensure it’s mobile-friendly and optimised for search engines.
  2. Social Media: Establish profiles on platforms like Facebook, Instagram, and LinkedIn. Post regularly and engage with followers.
  3. Content Marketing: Create valuable content like blog posts, videos, and how-to guides to attract and engage potential customers.
  4. SEO: Optimise your website and content to rank higher in search engine results.


Not all marketing needs to be online. Consider traditional methods like distributing flyers, placing ads in local newspapers, and branding your business vehicles.

Choosing Reliable Suppliers

Choosing the right suppliers is essential for maintaining the quality and efficiency of your trade business. Here’s how to select the best suppliers:

  • Payment Terms: Check if they offer credit terms, which can help manage your cash flow.
  • Range of Materials: Choose suppliers with a comprehensive range of products, so you don’t have to source from multiple places.
  • Prices: Compare prices among different suppliers to ensure you’re getting a good deal, but don’t compromise on quality.
  • Quality: Ensure the materials are of high quality by checking reviews, seeking recommendations, and personally inspecting products when possible.

Handling Enquiries and Booking Appointments

Managing customer enquiries and bookings efficiently is crucial for your business operations.

Job Management Systems

Implement a job management system to streamline the process. This can help you manage leads, schedule jobs, and keep track of customer interactions.

Handling Enquiries

Respond promptly to customer enquiries. Use a professional and friendly tone, and provide detailed information to help them make an informed decision.

Pricing and Quoting

Setting the right prices and providing clear, professional quotes is essential for securing business and building trust with your customers.

Planning for the Future

Long-term planning is crucial for sustainable growth. Here’s how to ensure your business thrives:

  • Set Goals: Define clear, achievable long-term goals for your business.
  • Invest in Technology: Use software and tools to streamline operations and improve efficiency.
  • Expand Services: Consider offering additional services or entering new markets as your business grows.
  • Monitor Progress: Regularly review your business plan and adjust as necessary.
  • Stay Informed: Keep up-to-date with industry trends and changes in regulations.
  • Seek Feedback: Regularly gather and act on feedback from customers and employees.

Starting a trade business in the UK requires careful planning, adherence to legal requirements, and effective marketing. By following this guide, you can establish a strong foundation and build a successful business that stands out in the competitive market. Whether you are an electrician, plumber, builder, or any other tradesman, these steps will help you create a thriving enterprise.

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