r/AskTrades • u/FournierFinishing • Jun 17 '26
Wealthy tradesmen, how did you do it?
I just had my tax returns completed for 2025 and... I'm not impressed. 30% of my total income was my salary, the business has nothing in it, and I never do cash work. My accountant told me "What you have is not a business, it's just a job. For it to be a real business, the business needs to save money."
Something needs to change. So, for those of you who made it bigly in the business, how did you do it? Profit off the backs of cheap labour? Squeeeeze your suppliers and clients for everything they have? Cheap out on materials? Bring lunches every day? Focus on high end work? High volume?
I think a whole subreddit could be dedicated to this topic. Hell the white collars have got wallstreetbets and investing subreddits. Why can't we have our own r/WealthyTrades subreddit to share secrets to creating wealth for tradespeople?
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u/Character_Comb_3439 Jun 21 '26
Every wealthy tradesman I met is no longer a tradesman but a business person.
The firms that grew organically took decades to get to where they are now. From what I have seen, the new larger firms (HVAC, Plumbing, electrica.) have had investment from PE firms (at least in my region).
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u/dh111111 Jun 22 '26
I started a business 20’years ago, and grew it to 20+ staff. I don’t feel I’ve made it yet because tax kills earning potential.
That being said my work / life balance is considerably better than before when growing the business.
I think the biggest thing I would point out. If you can’t make money without you being on the tools, then you have a job, not a business.
A business is where you can earn a living without working. This balances differently depending on what you want from life, but if you want lambo money, you need lambo earnings and there is a max earning potential to all trades.
Ie if you can make £50 a day per engineer, then you need to have the number of engineers to equal the outcome required. 10K per month is the goal? Then you need 10 engineers you can make £50 per day.
Now that’s after expenses earnings and before tax.
It’s a lot more complicated than that but the principle is sound.
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u/LE-NRY Jun 23 '26
I think it has been answered perfectly here already, but il chip in as I’m also super interested and think your idea for a wealthy trades sub is brilliant!.. here’s my thoughts..
- Pay yourself a salary, save business profits and treat yourself as an employee with a fixed personal income. The business needs to show growth in its finances too, mine is ‘saving’ about 30% of income at the moment.
- Scale where possible, this isn’t so attractive to me because of the nature of the complications it comes with, I’m a ‘one man band’ and I think lean works for me - as an electrician I think you need maybe 3/4 guys to work for you before you can make the same as one of those guys.
- Find a niche.. this is something I’m struggling with at the moment because I’m so busy working, I’m doing anything and everything to get paid.. from outside lighting to fault finding saunas.. I feel it’s scruffy from a ‘business’ point of view and I don’t currently have a USP I’m focusing on. This is my next goal, to hone in on a service I can become efficient with, I will then aggressively market the service. For me this becomes efficient because of the tools I need, the materials I need to buy will be in a smaller van, and il have everything on hand.
- Marketing, Brandjng, etc.. again I’m struggling with this because I’m so busy, but branding in my opinion helps massively.. the more the phone rings, the more you can sort the good from the bad jobs, increase rates etc..
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u/SoPolitico Jun 24 '26
It depends on what trade you’re in. If you’re in residential construction then you need to get into higher end work. A lot of people need work done to their homes but only a small fraction of that market can afford paying what it costs to actually pay a respectable wage. This is honestly the problem with lots of trades and why electricians, plumbers, and HVAC constantly get brought up in discussion. Those trades make alright money because most people will pay whatever it takes to get their power/water/heat/AC turned back on.
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u/afgator58 Project Manager, General Contractor, Commercial Jun 17 '26
This is a really good question but without more info on your finances it's hard to give you a solid answer. My first guess is that you are charging your clients a lump sum to complete their project but you aren't necessarily separating yourself as the labor from the overhead/profit for the business. This is causing you to undercharge as a business.
I'm in commercial construction and we generally have a General conditions group of line items where the staff and other overhead items get paid from and then a separate line item for contractor fee. Our subs, like you, would have a simpler setup with maybe 3 line items for projects like you work on. Project Material, Project Labor, and then a fixed percentage Overhead & Profit line item that is a percentage of the material and labor.
For example we'll use easy numbers. $10k for material, $10k for labor, and 10% OH&P. The subtotal would be $20k with the OH&P then being $2k for a total project cost of $22k. That way you would be able to pay yourself out of the labor line item, and the business would still make money from the OH&P. You would then be able to save the OH&P gains over time to grow the business or to pay yourself a bonus/dividend depending on how your company is set up.