23 Feb Steps to starting a test and tag business?
Thinking about starting a test and tag business? We thought we would help you out!
Before we start
Yes, we run a Test and Tag Franchise! And before you ask. Yes, of course we would prefer for you to join us rather than starting your own test and tag business. But we know that’s not for everyone! Some people want to learn on their own, get their own website, do their own marketing & build their own brand, we get that! Other people don’t want to take on all of that or just don’t have the time! Both ways are totally fine! So this post is for you, to help you be successful, however you choose to do it! Whether you are looking to become a franchisee or start your own brand, we hope you get some value out of this information. Because at the end of the day, there is enough business out there for everyone!! We know if we help you on your journey to starting a test and tag business. Not only will all the clients you get, look at the test and tag industry in a better way, if your trained correctly. But there will be more people out there talking about test and tag & getting test and tag done. So ultimately there will be more work for everyone!
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 (e.g. Hairdresser, Traides etc) and we have also won & managed many large government tenders (500+ schools). We have also done everything in between. We have done jobs in nearly state and territory in Australia! We have worked on the tools, for almost all of this time. Now we are growing a National Test & Tag Franchise. So 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! Our hope is that you will too!
Starting a test and tag business, but why?
There has been many things that Test and Tag has added to our live. We live in a nice home, near the beach, we holiday regularly & most importantly our business doesn’t own us! We have been franchisees ourselves previously also. We owned 2 juice bars & also a restaurant that was franchised. However, we kept coming back to test and tag. The quality of life we have with test and tag, far outweighed our quality of life, we had when we owned a $1,000,000 restaurant. We hated the long days, long nights & weekend work. And when we weighed up everything we earned, we made a lot more money with test and tag! High overheads, high rents & high labor costs killed us in these retail businesses. However 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?
Ok cool, so you have heard some impressive benefits starting your own test and tag business. Your ready to get started. Now how do you opening a test and tag business? And how do you ensure it’s going to be successful?
I’ve broken this down into the below steps:
- Customer Service
- Invoice (Get Paid Fast)
- Repeat Work
Step 1 Planning
Its time to start planing 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 to often past over & people generally say: I know what I want to do. I highly recommend you to not skip this step. Just by going through the process of writing down you plan to open, do marketing, budgeting etc. you will have a lot higher chance of success! Visit the below link to get more information on writing a business plan & also downloading a business plan template.
I recommend starting with at least $10k – $15k to get your business off the ground. This doesn’t mean you need $10,000 all in cash right now. If this feels like a blocker for you, because you don’t have this much money to spend on a business. Save and collect things slowly. Save up for a month and buy a PAT Tester ($1,000 will generally get you a good one). Then next month buy something else. This way it wont seem so daunting.
Step 2 Learning
Now it’s time to go out and get your test and tag licence. There are many good trainers out there. 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. Later if you decide you want to do fire extinguisher testing or other fire 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. Adding fire equipment testing can be a good up-sell.
Step 3 Advertising / Marketing
Ok, so you have all of your equipment now. You have your licence & your ready to start making some money! Well done. 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 – This is the extension of the previous step, tell everyone about your new business on Facebook.
- Website – Getting a website will make you come across a lot more professional. Wix offer a free website
- Sales calls – Calling businesses in your area and asking if you can send a quote to them. This is something we did a lot when we first started.
- Door Knocking – Drive to an industrial area & start walking the streets & speaking to business owners & dropping off your business cards
- 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. I think they think, I didn’t spent 4 years as an apprentice to be walking around putting stickers on things. So contact them. You can always work out a 20% finders fee for them. This is a good way of finding ongoing leads.
- SEO (Search Engine Optimisation) – This works well, but similar to Google Adwords it’s expensive. We spend about $78,000 a year on SEO and generally they charge a minimum of $500 per month. But after you have been running a few years, this can be powerful.
Step 4 Customer Service
Now lets assume you have used some of the above marketing methods & you actually won some customers. It important to keep them happy because the great thing about test and tag is it’s repeat work! So as long as you keep your customers happy, they will keep paying you, 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 on.
- Arrive on time
- Be friendly with staff. However, don’t talk their ear off, they are there to 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 asap. Don’t leave it two weeks.
- Make sure you call the client, when their testing is next due (Generally 1 month before they are due, to book in a date to be re-tested).
Step 5 Invoice
Ok, 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. And yes, 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 paid.
- Only have 7 to 14 days on your invoice. Giving 30 days, just means you go to the bottom of the pile. Also for your cashflow, you want that money in your account asap! I suggest starting with 7 days & then once you have been operating for a couple of years, you can increase to 14 days if you want to.
- 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 I would highly recommend is a minimum charge. Setting a minimum charge means you wont be running around going to the other side of the world just to test a couple of items and only making $20-$30. Setting a minimum charge means if you do go an hour away to do a job for a couple of items, you will at least make that amount!
Step 6 Repeat work
Test and Tag is a repeat job, think about it. You performed their last round of testing. So you know exactly when their appliances are next due to be tested again. So 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 to do it, don’t overlook this is a 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 back 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 & I think in our first year we made $14,000. This isn’t an impressive amount, but year after year we grew the business steadily and before we knew it, we were making more than most people we knew. So we recommend if your not joining a franchise where the leads can comes a lot faster. I recommend start as a part time gig & when you start to get busy, then look at doing it full time. This will mean you aren’t putting yourself into 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 1800 056 225 or 1800-0-LOCAL-GUYS.