Most business plan advice is aimed at people seeking investment or loans — heavy on market analysis, financial projections, and executive summaries. A tradie starting out doesn't need most of that. This guide gives you a practical business plan structure that actually helps you run your business, not impress a bank manager.
Why Have a Business Plan at All?
The value of a business plan for a self-employed tradie isn't to impress anyone — it's to force yourself to think through the key decisions before you make them under pressure. Key reasons:
- Forces you to calculate your charge-out rate properly before you start quoting
- Makes your financial needs explicit (how much you need to earn to cover all costs)
- Identifies gaps (insurance not sorted, no accounting system, no contract template)
- Gives you a reference when you're too busy to think — what did I decide about X?
A plan doesn't need to be long or formal. A 5–10 page document you actually use beats a 40-page document you never look at.
Part 1: Your Business Basics
Start with the fundamentals. These might seem obvious but writing them down clarifies things.
Business structure: - Sole trader, partnership, or limited company? (Most tradies start as sole traders) - Business name (registered at companies.govt.nz if trading under a name other than your own) - Physical address (your home address is fine for registration; many tradies use a PO box for customer-facing mail)
IRD registration: - Are you registered for GST? (Required if turnover exceeds $60,000/year) - Do you have a separate business bank account? (Strongly recommended — makes GST returns and accounting much easier)
Licensing: - List all licences held (LBP, PGDB, EWRB, etc.) and renewal dates - Any licences you need to obtain before starting certain work?
Part 2: Your Services and Target Market
What you'll do: - List the specific services you'll offer (e.g., "residential carpentry, decks, renovations — no new builds") - List what you won't do (being clear about scope prevents jobs you don't want)
Your target customers: - Residential homeowners in [region]? - Commercial clients? - Property managers and repeat-order clients? - Builders as a subcontractor?
Your geographic area: - What radius will you work in? Fuel costs and drive time affect profitability on small jobs. - Will you travel for larger jobs?
Part 3: Your Numbers — The Critical Part
This is the section most tradies skip, and it's the reason many undercharge and wonder where the money went.
Minimum Billable Rate Calculation
Work backwards from what you need to earn:
| Item | Your figure |
|---|---|
| Annual personal income target (after tax) | $_ |
| Annual income tax on that (estimate) | $_ |
| Annual ACC levies | $_ |
| Annual KiwiSaver contributions | $_ |
| Total net personal cost | $_ |
| Plus business overhead costs: | |
| Vehicle (running costs, rego, WOF, loan repayments) | $_ |
| Tools and equipment (purchase, maintenance, hire) | $_ |
| Insurance (public liability, vehicle, income protection) | $_ |
| Accounting and bookkeeping | $_ |
| Phone, internet, software subscriptions | $_ |
| Marketing (website, advertising) | $_ |
| Consumables and small tools | $_ |
| Training and CPD | $_ |
| Total annual cost to run the business | $_ |
Divide total annual cost by your expected billable hours per year: - Full-time sole trader: approximately 1,400–1,600 billable hours/year (allows for admin, quoting, travel, holidays, sick days) - Part-time: adjust accordingly
Minimum charge-out rate = Total annual cost ÷ Billable hours
Add your desired profit margin on top. If the result is higher than what you think the market will bear, you either need to reduce costs, increase billable hours, or adjust your income expectations.
Part 4: Your Pricing Strategy
Fixed price vs hourly: - Fixed price suits well-defined jobs — more predictable for the customer, rewards your efficiency - Hourly suits jobs with significant unknowns — protects you from absorbing the cost of unexpected issues
Materials markup: - What percentage will you add to materials cost? 15–25% is standard - Will you charge a procurement fee for time spent sourcing materials?
Travel: - Do you charge for travel time? If yes, at what rate and from where? - Do you charge for travel to quote?
Part 5: Operations — How You'll Actually Run the Day-to-Day
Quoting and contracts: - What system will you use to produce quotes? (Tradify, Fergus, BuildXact, Word template) - Do you have a standard contract template? (Essential for anything over $1,000) - Variation process: will you require written approval before additional work?
Invoicing and getting paid: - What payment terms will you use? (7 days, 14 days, on completion?) - Will you accept credit cards? (Square, Stripe, or through accounting software) - How will you follow up unpaid invoices?
Accounting: - What accounting software will you use? (Xero or MYOB are standard for NZ tradies; HNRY works for very simple businesses) - Who does your GST returns? (You, a bookkeeper, your accountant?) - When will you set aside GST? (Set it aside immediately on receipt — don't spend it)
Scheduling: - How will you manage job scheduling? (Job management software: Tradify, Fergus, ServiceM8) - How much lead time do you give customers? - How do you handle urgent callout requests?
Part 6: Goals — Where Do You Want to Be?
Set simple, realistic goals for year 1, year 2, and year 3:
Year 1 goals (example): - Generate $X in revenue - Establish consistent payment processes - Build a base of 5–10 repeat customers - Get website live and Google Business Profile set up
Year 2–3 goals (example): - Hire a first employee or take on an apprentice - Revenue target of $X - Reduce quoting time with better systems - Decide whether to remain sole trader or form a company
Part 7: One-Page Summary
Summarise your plan on a single page that you can put on the wall: - My business does: [X] - My target customers are: [Y] - My minimum charge-out rate is: $[Z]/hour - My target annual revenue is: $[A] - My three priority actions for the next 90 days are: [1, 2, 3]
Review this summary quarterly. Update the underlying plan annually.