23 Feb Starting A Test And Tagging Business
Thinking about starting a test and tagging business? We thought we would help you out!
Before we start
As Test and Tagging professionals ourselves, we would love for you to become one of our franchise partners rather than starting your own business from scratch. But we know that’s not for everyone! Some people want to learn on their own, build their own website, do their own marketing & grow their own brand, we get that! Other people don’t want to take on those responsibilities, or just don’t have the time! Both ways are totally fine! However you choose to start, then this post is for you, to help you be successful.
Whether you are looking to become a franchisee or start your own brand, we hope you get some value out of this information. At the end of the day, there is enough business out there for everyone! If we help get test and tagging knowledge out there, not only will all the clients you get look at the test and tag industry in a better way, but more people will get test and tagging done. The cycle of gaining work will continue to grow.
A little bit about us
We have been working in the test and tag industry for over 10 years. We have worked with local small businesses, local tradespeople, have won and managed many large government tenders including many schools, and everything in between. Currently, we have technicians in all the main states in Australia, and have completed work in almost every state. For almost all of this time, we have been out on the tools testing, and now we are growing a National Test & Tag Franchise. It’s fair to say, there isn’t much we haven’t done in the test and tag industry. We are very passionate about Test and Tag and love what we do, and our hope is that you will too!
Starting a test and tag business, but why?
There has been many benefits that Test and Tag has offered to us, and our business doesn’t own us. We have been franchisees ourselves previously. We owned two juice bars and a franchised restaurant, however, we kept coming back to test and tag. The quality of life we have with test and tag, far outweighed the quality of life we had when we owned a $1,000,000 restaurant. We hated the long days, late nights and weekend work. When we weighed up everything we earned, we made a lot more money with test and tag! High overheads, high rent and high labour costs killed us in these retail businesses. With test and tag, we didn’t have anywhere near these costs, so our overall profit margins were much better!
Some of the key benefits of becoming a Test and Tag Business owner are:
- Flexible Hours of Work
- No weekend work (unless you want to)
- Repeat work
- Non seasonal
- High Profit Margins
- Low Overheads
How to get started?
So you have heard some impressive benefits starting your own test and tag business, and you’re ready to get started. How do you start a test and tag business? And how do you ensure it’s going to be successful?
We’ve broken this down into the below steps:
- Customer Service
- Invoice (Get Paid Fast)
- Repeat Work
Step 1: Planning
Its time to start planning out your new business. If you are doing it by yourself, there are quite a few things you are going to need:
- Business Name
- Mobile Phone
- Appliance Tester
- RCD Tester
- 3 Phase Tester
- A Computer / Laptop
- Business cards
Once you have all these things, the next thing you will need is a business plan! This is all too often passed over and people generally think they know it all. We highly recommend you to not skip this step. Just by going through the process of writing down your plan for marketing and starting up, you will have a lot higher chance of success! Visit the below link to get more information on writing a business plan and also to download a business plan template.
We recommend starting with at least $10k – $15k to get your business off the ground. This doesn’t mean you need $10,000 cash straight away. If you don’t have this much money to spend on a business, you can save and collect things slowly. Save up for a month and buy a PAT Tester, then next month buy something else. This way it wont seem so daunting or immediate.
Step 2: Learning
Now it’s time to go out and get your test and tagging licence. There are many good trainers out there, but we highly recommend Test & Tag Training, we have always used them and they are fantastic! They will teach you everything you need to know. They also do additional training for RCD Testing, 3 Phase Testing and more. If you decide to do fire extinguisher or equipment testing, we highly recommend the FPAA (Fire Protection Association of Australia). They have access to trainers all over Australia and will point you in the right direction.
Step 3: Advertising / Marketing
Now you have your licence, your equipment and you’re ready to start making some money! But now comes the challenging part, finding work! There are a few ways you can do this, some of these include:
- Referrals – Putting the word out (Tell friends, family anyone who will listen)
- Social Media – Start a Facebook page and promote yourself
- Website – Getting a website will make you come across a lot more professional. Wix offers free websites
- Sales calls – Calling businesses in your area and asking if you can send a quote to them
- Door Knocking – Drive to an industrial area, start walking the streets and speak to business owners and leave a business card
- Google Adwords – This does work, however it also can get very expensive! You need to be able to have a big enough budget to know that you might end up blowing a lot of your budget.
- Partner with Electricians & Electrical companies – Generally electricians hate doing test and tag. They are overqualified to be stickering items. So contact them, you can always work out a 20% finders fee for them. This is a good way of finding ongoing referrals.
- SEO (Search Engine Optimisation) – This works well, but similar to Google Adwords, it’s expensive
Step 4: Customer Service
Now lets assume you have used some of the above marketing methods and you won some customers. As test and tagging it repeat work, keeping the customer happy will keep them coming back year after year. We still have many of the clients we started with over 10 years ago.
Some of the most important things to ensure to have a strong customer service are:
- Ensure you have a clean business uniform
- Arrive on time
- Be friendly with staff, but don’t distract them from work
- Ensure before leaving, you advise the site contact of any failed items, their location & when they will receive their reporting & invoice
- Ensure you get their reporting & invoice to them as soon as possible
- Make sure you call the client when their testing is next due to book in
Step 5: Invoice
You have completed the testing & it’s now time to get paid! There are a few ways to ensure you do this the best way possible and get paid faster. You will have to remind a lot of people to pay you. We have been lucky over the years and we have only been burned a couple of times. Some of the best ways we have found so this doesn’t happen are:
- Send your invoice ASAP! The sooner you send the invoice the sooner you can start chasing them up to be pay
- Have a short due date. Giving 30 days just means you go to the bottom of the pile. As for your cashflow, you want that money in your account! We suggest starting with 7 days to pay, but once you have been operating for a couple of years, you can increase to 14 days
- Ask for the Accounts Person details when you sign them up as a client. This way you can speak directly to the right person later when you need to chase payment.
The other thing we would highly recommend is a minimum charge. Setting a minimum charge means you won’t be running around just to test a couple of items and only making $20-$30. Setting a minimum charge means if you have minimum work an hour away, it is still worth your time.
Step 6: Repeat work
Test and Tag is repeat work. You performed their last round of testing, so you know exactly when their appliances are due to be tested again. Make sure to put it into your diary or calendar and call them 2-3 weeks before they are due & book them in again. At the Local Guys – Test and Tag we use powerful scheduling software, but a diary will work fine. However you want keep yourself organised, don’t overlook this very important step! It’s scary the number of jobs we win because the last test and tag technician didn’t bother to call them up and book in.
Finally, opening up a test and tag business can be a fantastic decision for you and your family, but it doesn’t happen overnight. It took us many years to get our business off the ground and in our first year we were scraping by. This isn’t impressive, but year after year we grew the business steadily and before we knew it, we were making more than most people we knew. We recommend starting as a part time gig an when you start to get busy, then look at doing it full time. This means you aren’t putting yourself under any financial pressure that you can’t handle.
If you want to learn more about becoming a Local Guys – Test and Tag Franchise Partner. Visit our Franchises Available page or call us on 13 11 05.