Is Growing Your Trade Business Always a Good Idea?

The short answer

No. Growth only helps a trade business when the pricing, planning and structure underneath it can carry the extra weight. I grew Smartfix to about $30 million and 130+ staff, and that was the year it lost money and nearly went under.

What happened when I chased trade business growth at Smartfix?

I started Smartfix in January 2018 with one ute and a set of tools in my garage. First year we did $40,000. By 2020 we had seven staff and $1.3 million in revenue. I spent the next few years chasing trade business growth, and I caught it.

We rented an office around the corner from my house, outgrew it, bought a building, outgrew that and bought a bigger one. Then we bought two more side by side, an old fish and chip shop and the bakery next door. At the peak we had 130+ staff, four buildings and about $30 million in revenue in a year. From the outside it looked like we’d made it.

Then March and April 2025 hit. School holidays, Easter, a lot of political noise all at once. That’s always our quiet season and we knew it was coming. This one was about twice as bad as usual, and we had twice the staff. We lost a lot of money in those two months.

I had to sell two buildings very fast, then the big one, mainly to free up the equity so we could pay the bills. We sold vehicles. We let staff go to get down to what we could actually afford.

I told the whole story on the podcast with Aisha Derrick if you want to hear it in more detail.

Why didn’t more revenue mean more profit?

My brother Finley Dearlove is Head of Installations at Smartfix. When we sat down to talk about 8 years of Smartfix, he put it pretty bluntly: “the revenue was going up, but there was no profit. We used to look back at the numbers and go, this is the new break even now.”

My answer back then was to push harder. Put more money into Google to get enough leads to keep the guys busy. Ten or twelve quotes a day each. We needed a 16% conversion rate and $1,100 net per job to make it work, so that was the plan.

It was never realistic. Our cost per lead from Google ended up about double what it should have been, because we were overpaying to get the quantity in. The guys had 12 quotes in their names, so they rushed. Their conversion rate dropped off and so did the average job value. Then we needed more people in the office to answer the calls.

Every fix for a growth problem added cost, and the cost grew faster than the profit. And with four buildings we had four water bills, four power bills, four lots of rates and four lots of strata fees.

My accountant actually warned me when I bought the second building. He said, “Be very careful, because as soon as you separate yourself from everyone else, things will slowly fall apart.” I figured 20 or 30 metres away was close enough. It held for a while.

Is a bigger trade business always a better one?

Dan Noll ran a mechanical services business for 14 years before he sold it, and now he’s building an app called T2U. When he came on the podcast I asked him for the biggest lesson he’d learned in business.

Dan said the habit that does the damage is trying to keep the guys busy, and dropping your prices to do it. You end up with “a whole lot more work, a whole lot more staff, and you’re not making money.”

Then he gave me the best description of an overgrown business I’ve heard. Having a massive business, he said, “was like having a bucket with a hole in the bottom of it, and you just had to keep pouring work into it.”

That was our trade business growth in 2024 and early 2025. We kept pouring in leads, staff and vans, and the money ran out the bottom. Once we actually looked, the holes were pretty obvious. Ad spend chasing volume. Buildings we didn’t need. Roles we hired for that sounded good as an idea and were never properly planned.

Why is saying no to work so hard for trade owners?

When you’re starting out you say yes to everything, because that’s how you survive. Dan was the same. His old business partner was the one who was good at saying “No, we just won’t do it,” and Dan said quite often the client gave them the job anyway.

He used to cave on “Is that the best price you can do?” too. He’d say he’d look into it. Later he learned to just say yes, that is the best price, and most people took it anyway. The way he put it: “If you know you’re doing good quality work, you’d rather sit at home than go to work and not make money.”

I still get caught on this. The morning Dan and I recorded, a customer who’d already paid us a deposit rang to cancel. He’d called around after we left and a few others had given him a price over the phone, about half of ours. I asked whether any of them had been out to site or seen photos. None had.

I even offered him a discount, because we had two guys booked there for half a day and losing the job would have been a nightmare. He told me not to discount it, just do the job properly. We kept it at the same price.

Dan’s rule of thumb for comparing quotes is worth passing on to your customers. Within 5 to 10% of each other is pretty normal. If one comes in 20, 30 or 40% under the rest, something’s been missed or someone’s cutting corners, and the customer needs to start asking questions.

Should you quote residential jobs on site?

At Smartfix we send our guys to site to quote. A lot of businesses in our space price over the phone, and plenty of customers would prefer that. Every house is different though. Where the power point goes, where the outdoor unit sits, how you get access, what’s in the switchboard.

Dan’s view was the same. For a home someone’s living in, he said, “you have to go there and have a proper look, especially for air conditioning, pick a good spot for the condenser, and even just go through what the client actually wants.”

The exception is high volume new build work for one builder. Those jobs are cookie cutter, both sides know the margins and you win some and lose some. For one-off residential work, the phone quote is usually where the underpriced job and the argument later both come from.

What should you sort out before you grow again?

If I was doing it all again, this is what I’d want in place before any more trade business growth, whether that’s staff, vans or buildings.

• A plan for every role before you advertise it. We hired people without the structures in place, winged it, then wondered why it didn’t work. No training, no standard operating procedure. Thinking out the process before the hire would have saved us a lot of money.
• More than one way to get work. We had all our eggs in Google Ads. Our letterbox flyers turned out to be one of the best return investments we’ve ever made, and it took us about two years to actually look at that data.
• Numbers you check every month. Cost per lead, conversion rate, average job value and profit per job. Look at the data and make slower decisions.
• A plan for the quiet season. We knew March and April would be slow. We went into it with twice the overheads.
• Straight talk with your team. During the restructure I learned to just tell people what was happening. I still post an update in the company chat every Monday.

It’s like servicing an air con before summer. Nobody does it, then the unit dies on the first hot day and suddenly it’s urgent and expensive. I’ve never found a marketing campaign that gets customers to service early, and I didn’t service my own business early either.

I’ve written more about what to fix before hiring more people and the systems a residential trade business actually needs. And if you’re cutting back and have to let people go, check your obligations with the Fair Work Ombudsman before you have those conversations.

What does Smartfix look like after the restructure?

We’re about 30 staff now, in one office. We kept the old fish and chip shop and the bakery, cut a hole through the wall between them and made it one building. Everyone’s back under one roof, and you can feel the difference in the culture.

The business makes a profit and the stress is a lot lower. Finley noticed it on the tools side too. Margins, staff retention and staff happiness have all improved, and in his words, “we’re not getting as many callbacks. We’re getting a lot fewer customer complaints.”

More people doesn’t mean a better team. I learned that one the expensive way.

If you’re weighing up trade business growth right now, start with your profit per job. If revenue and headcount have gone up over the last 12 months and profit hasn’t, adding more of the same will just make the hole bigger. I’ve also written about why so many trade businesses feel busy but not profitable, which is the same problem from another angle.

If you want to talk it through with other owners who’ve been through it, come along to one of my Perth networking nights, or have a look at Hypotential membership.

I work with owners across every trade, from sparkies and plumbers to builders and landscapers. If you want to see what that looks like for your trade, start with my trade business coaching pages.