The United Kingdom’s population has been experiencing steady growth in recent years, leading to an increased demand for industry services. The housing and industrial sectors have seen significant growth, resulting in higher demand for services such as drainage and sewerage. According to research by Ibis World, the drainage industry revenue is projected to increase at a compound annual growth rate of 1.8% over the next five years, reaching a total revenue of £8.8 billion by 2018-19. This trend indicates that it is an opportune time for entrepreneurs to launch their own drainage businesses, as there is a high likelihood of sustained demand in the market.
Jim Rabulan, the Managing Director of Drain 247 Ltd., shares his experience, advice, and tips on how to plan and establish an effective drainage company. The success of a new venture will depend on several factors, including basic financial measures that must be put in place from the outset. By following these fundamentals, a new business can become well-organised, better funded and poised for growth.
The following are essential financial items to consider at the outset:
1. Open a business bank account
A business bank account can provide significant benefits to a drainage start-up. It can make the company appear more established and professional, improve cash flow, and open up a wider range of customer payment options. Additionally, it can provide accurate taxes and deductions, as well as streamline business record-keeping.
2. Develop a business plan
A sound business plan will enable a new company to understand the target market, locate outside funding, predict financial projections, and develop effective strategies for growth. A business plan is unique to each company, so it is a crucial step in ensuring that the company has the potential to be a valuable investment.
3. Forecast for the next 12 months
For start-ups and small enterprises, forecasting the company’s performance for the next 12 months is a critical element of fiscal responsibility. Forecasting can help entrepreneurs make informed decisions, plan for expenses, prioritise objectives, and build investor confidence.
4. Ensure that your pricing is competitive
Pricing is a key factor in winning business in the competitive drainage market. The company’s pricing will depend on the type and target market, including whether the focus is on commercial or residential customers. Monitoring the pricing of competitors can help to ensure that the company stays competitive in the market.
5. Allocate finance for insurance and maintenance
Drainage businesses need to have the necessary insurance in place to cover company assets and third-party liability. General Liability Insurance, Property Insurance, Commercial Vehicle Insurance, and Worker’s Compensation Insurance are some of the kinds of insurances that companies in this sector require.
6. Save money for unexpected events
It is important to set aside funds for unexpected expenses, such as repairs to drainage equipment or vehicle repairs.
In the competitive drainage market, promotion is crucial. Ways to promote a drainage business can include building an online presence, developing a website, building up customer reviews, and sign-writing vans.
1. Build a strong online presence
Customers today look for services online, so having a strong online presence is vital. This can include building social media profiles, advertising online, engaging with customers, and generating press releases. Consistent and active online interaction can help to secure a loyal following and increase the likelihood of generating leads.
2. Develop a website
A website is essential for any business today, and for a drainage company, it acts as an online shop window. Key features of the website should include contact details, images of the company’s work, and customer testimonials.
3. Build up customer reviews
Customer reviews add credibility and trust to your brand. Positive customer reviews can help to attract new business.
4. Sign write vehicles
Although considered secondary marketing, sign-writing vehicles boosts brand visibility and credibility and can generate leads.
With the UK population and industrial activity continuing to grow, the demand for drainage company services is strong. In an expanding market, entrepreneurs who plan and establish effective drainage businesses have a real opportunity for sustained success.