How to Write a Simple Business Plan for Your Trade Business in Australia

and does not constitute financial, tax or legal advice. Always consult a

Most tradies never write a business plan. They start working, build a

customer base, and figure it out as they go. That works -- up to a point.

But when you want to grow beyond where you currently are, get finance

from a bank, hire staff, or actually have a strategy for building

something worth selling, you need a plan on paper.

The good news is that a business plan for a trade business doesn't need

to be a 40-page corporate document. A good one-to-three page plan that

you've actually thought through is worth far more than a polished

document you pay someone to write and never look at again. This guide

walks you through what to include.

Why Bother With a Business Plan?

A business plan does three things. First, it forces you to think through

the numbers -- what you need to earn, what it costs to run the business,

and whether the whole thing actually makes sense financially. Second, it

gives you something to measure progress against. Third, banks and

finance providers require it when you apply for significant loans or

business credit.

Even if you never show it to anyone, the process of writing it is

valuable. The act of putting your thoughts about the business on paper

clarifies your thinking in a way that nothing else does.

Section 1: Business Overview

Start with a one-paragraph description of what your business does, who

it serves, and where it operates. Be specific. "Residential electrical

services for homeowners across Melbourne's eastern suburbs" is more

useful than "electrical work." Include your business name, ABN, and

legal structure (sole trader, company, trust).

Note your key competitive advantage -- what makes clients choose you over

the next tradie? Price? Quality? Speed? Specialisation? Reliability?

Being clear about this shapes every other decision you make about the

business.

Section 2: Services and Pricing

List your core services and, for each, the approximate price range or

your standard charge-out rate. This section also covers your pricing

strategy: are you competing on price, on quality, on specialisation? How

do your rates compare to others in your market?

Include a note on any services you plan to add or remove in the next 12

months. If you're an electrician who wants to move into solar

installation, write that here. If you're a plumber who wants to drop

after-hours callouts because they're not worth the margin, write that

too.

Section 3: Target Market

Who are your ideal clients? Residential homeowners, commercial property

managers, real estate agents, builders, body corporates? Define them

specifically -- including where they are geographically, what they value,

and how they find tradies.

Understanding your target market shapes your marketing, your pricing,

and even how you answer the phone. A trade business targeting premium

residential clients needs a different approach to one targeting

commercial maintenance contracts.

Section 4: Marketing Strategy

How do you get new work? List your current lead sources and estimate

what percentage of revenue comes from each: word of mouth, Google

reviews, Google Business Profile, your website, platform referrals,

repeat clients, real estate agents. Then identify the two or three

things you'll focus on in the next 12 months to improve lead generation.

You don't need a sophisticated marketing plan. You need to know where

your work comes from and have a deliberate plan to get more of the best

kind.

Section 5: Financial Projections

This is the most important section and the one most tradies skip. You

need three numbers: your projected revenue, your projected costs, and

your projected profit.

Revenue projection: How many jobs per week or month do you expect to

complete? What is the average value per job? Multiply these out to get

monthly revenue, then annual. Be honest -- use your actual current

numbers as the baseline, then adjust based on any changes you plan to

make.

Cost projection: Add up all your costs -- direct costs (materials,

subcontractors), vehicle costs, insurance, tools, software, accounting,

marketing, phone, and any employee costs. These are your total outgoings

before you pay yourself.

Profit projection: Revenue minus costs equals your business profit

before your own wage. From that figure, pay yourself a market-rate wage

(what you'd need to pay someone else to do your job). What's left is

your true business profit.

If the numbers don't work on paper, they won't work in reality. Better

to discover that now than 12 months into making the same mistakes.

Section 6: Goals for the Next 12 Months

Write down three to five specific, measurable goals for the business in

the next financial year. Not vague ambitions -- concrete targets. For

example: increase revenue from $380,000 to $450,000. Hire one apprentice

by September. Achieve a net profit margin above 18%. Collect 50 Google

reviews. Reduce average debtor days from 35 to 21.

These goals become your accountability framework. Review them quarterly

and honestly assess your progress.

Section 7: Risk Assessment

What are the three biggest risks to your business? Common ones for

tradies include: key person risk (the business stops if you get sick or

injured), cash flow risk from slow-paying commercial clients, pricing

risk from underquoting, and reliance on one or two major clients for

most of your revenue.

For each risk, note what you're doing to mitigate it. Income protection

insurance for key person risk. Invoice finance or faster invoicing for

cash flow risk. Job costing software for pricing risk. Client

diversification strategy for concentration risk.

Keeping It Living

A business plan that sits in a drawer is worthless. Review it every six

months. Update the financial projections with your actual numbers.

Adjust your goals based on what's happened. The plan should evolve as

your business evolves.

Many tradies find it useful to share their plan with their accountant

and review it together annually. A good accountant will challenge the

numbers, identify gaps, and often spot opportunities you haven't

considered. That annual review conversation, anchored by a real plan, is

one of the most productive financial hours you can spend each year.

## Setting Financial Targets Your Tradie Business Can Actually Achieve Here's the truth: most tradies avoid business plans because they think they need to forecast five years of financials with perfect accuracy. That's overthinking it. Your plan doesn't need to be perfect—it needs to be realistic and give you something to measure against. Start by setting three financial targets: monthly revenue, profit margin, and cash buffer. These aren't guesses; they're built on what you actually need. **Monthly revenue target** is straightforward. How much do you need to earn to cover your expenses and take home what you want? Add up your fixed costs (vehicle, insurance, phone, software subscriptions) and your living expenses. If you spend $3,000 a month on business costs and want to take home $5,000, you need $8,000 in revenue. If your average job is worth $1,200, that's about seven jobs per month. That's your baseline. **Profit margin** is what's left after expenses. For most trades, 20–30% is realistic. If you're doing $50,000 a month in revenue, you should aim for $10,000–$15,000 profit. This covers tax, unexpected costs, and reinvestment in your business. Too many tradies leave themselves with nothing after paying bills and tax. **Cash buffer** matters more than profit. You need money sitting in the bank that isn't allocated to anything. Three months of operating costs is ideal—that's about $9,000 if your monthly costs are $3,000. This stops a late payment or a quiet month from killing your business. In your business plan, write these three numbers down. Then track them monthly. Use software like Xero or Tradify to automate this. If you're missing targets, you'll spot it early and adjust. ## Tax Planning and Compliance in Your Business Plan This is the section most tradies skip—and it costs them thousands. Your business plan needs to address tax from day one, not when the ATO knocks on your door. First, understand your tax rate. As a sole trader, you pay income tax at your personal rate (up to 45% including Medicare levy). As a company, you pay 25% company tax plus personal tax when you draw dividends. For most tradies earning $50,000–$120,000, sole trader is simpler. For higher earners, a company structure works better. Get advice from an accountant—it's $300–$500 well spent. In your plan, allocate 25–30% of gross profit to tax. Don't spend every dollar. Put it in a separate account called "Tax Reserve." If you earn $50,000, set aside $12,500–$15,000. This removes the stress of a tax bill and keeps you honest. Superannuation is compulsory (11.5% on earnings over $20,500), but it's also an investment in your future. Your plan should include this as a cost, not an afterthought. If you're a sole trader, you can claim contributions as a tax deduction—which makes super even better. Claim legitimate deductions. Vehicle costs (fuel, maintenance, repairs), tools under $20,000 (and tools over $20,000 up to $30,000 can be instantly written off until 30 June 2026), phone, internet, work clothes, courses, and insurance are all deductible. Keep receipts and log everything. Your plan should have a section listing your expected deductions based on your trade. Insurance is non-negotiable. Tradies need public liability, tools coverage, and income protection. BizCover specialises in tradie policies and can get you covered quickly. Budget 2–4% of turnover for insurance as a business cost. ### Comparing Your Business Plan Against Industry Standards Here's how to benchmark whether your plan is realistic: | **Metric** | **What to Aim For** | **How to Track It** | |---|---|---| | **Monthly Revenue Target** | Based on 20–30 billable hours/week × hourly rate | Review monthly invoices | | **Profit Margin** | 20–30% after all expenses | Monthly P&L statement | | **Work Win Rate** | 30–50% of quotes turn into jobs | Track quotes issued vs. jobs booked | | **Days Sales Outstanding** | 30 days (payment within a month) | Monitor invoice ageing report | | **Cash Buffer** | 3 months operating costs | Bank balance in "Tax Reserve" account | | **Vehicle Cost per Kilometre** | 88c/km (ATO rate) or actual costs | Track km, fuel, and maintenance | | **Labour Cost Ratio** | If employing staff: 30–40% of revenue | Payroll records | | **Material Cost Ratio** | Varies by trade (typically 20–40%) | Invoice tracking for jobs | If you're below these benchmarks, your plan needs adjustment. You might need to raise rates, reduce costs, or change your service offering. --- ## Frequently Asked Questions About Tradie Business Plans --- Your business plan doesn't need to be complicated. One page with your revenue target, profit target, cash buffer, tax strategy, and key metrics is enough to start. The tradies who succeed aren't smarter than the others—they're just clearer about their numbers. Write it down. Track it. Adjust it. That's the whole strategy.