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A new study from IronmongeryDirect has shown the typical costs for setting up a new business in four popular trades, with plumbing coming in at the most expensive. The research considered everything from insurance to marketing for the plumbing, building, electrical and joinery trades:
1) Joinery – £6642 (repaid in nine weeks, £150 a day)
2) Building – £6791 (nine weeks, £160 a day)
3) Electrical – £6873 (six weeks, £245 a day)
4) Plumbing – £9124 (six weeks, £347 a day)
Despite being the most expensive business to set up, plumbers can expect to earn back their investment quickest, as they are able to charge the highest daily rates. Averaging nearly £350 a day, the £9124 start-up cost could be repaid within six working weeks.
One of the most significant outgoings is accreditation, an area where plumbing companies are liable to pay the most. Such credentials can cost over £3000, which is significantly more than other trades.
Some expenses, however, are necessary across all sectors, such as insurance, marketing, company registration and van hire.
A new trade business can expect to pay over £600 a year to completely cover themselves with insurance. Contractors All Risk insurance is one of the most costly forms of protection, starting at £298 a year, but includes cover against both property damage and third-party injury, so is worth the investment.
Marketing is another significant outlay, but an important one nonetheless. Paying out for business cards, flyers, logo design and a new website usually costs at least £600 pounds. However, such costs will pay for themselves if they lead to a surge in new clients.
Finally, there’s the crucial cost of equipment. A tradesperson may have accumulated tools during their career, but if they are new to the industry, there are tools they will need before taking on work. Joiners pay the most here, with key equipment adding up to £600. Circular and table saws are the biggest outlays, so it could be worth looking for second-hand retailers, whilst ensuring the products are high quality, as income will depend on their performance.
The full breakdown of costs per trade is as follows:
|Type of Cost||Joiner||Builder||Electrician||Plumber|
|Other (storage, van hire, business registration)||£3672.00||£3672.00||£3672.00||£3672.00|