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If your goal is to run your own business, what is the best trade to be in?

Being self-employed is very common in the trades, with so many workers operating as contractors and subcontractors.

Often to become a self-employed tradie you need nothing more than your tools, your vehicle and of course your skills and knowledge.

This means the barriers to entry may be relatively low for a trade business, but that doesn’t mean it will work for everyone.

So, what is the best trade for being self-employed, or does it even matter…?

Which trades suit self-employment?

We asked the members at Tradie Boss for their opinion, via a poll as well as comments.

The results of the poll can be seen below.  It’s difficult to read much into these results, as it probably reflects the fact that most members are either carpenters or electricians!

Chart showing the best trades for self-employment

Carpenters were miles ahead at 63%, followed by electricians at 19%, plumbers at 8% and nothing else was close.

Here are the top 10 trades for self-employment, according to the members of the Tradie Boss group:

TradeVotes
Carpenter63.4%
Electrician18.6%
Plumber8.4%
Refrigeration2.3%
Plasterer2.0%
Bricklayer1.5%
Painter1.5%
Landscaper1.2%
Concreter0.6%
Tiler0.3%

There was a wide variety of commentary from members in the group, which we’ll touch on throughout this article.

Low overheads = greater competition

An interesting comment was made by one user about preferring a trade where you can work out of a ute or van, as it cuts down on overheads compared with a business that requires its own premises.

“Anything where you can work out of a ute/van. I’m a sheet metal worker and specialise in the marine industry, and we need a shed and a heap of large machinery. Working out of your vehicle would cut costs dramatically.”

Whilst this makes sense, other users were quick to point out that this also lowers the barriers to entry, and therefore leads to increased competition.

So that’s one important factor to consider.  Being able to operate from a vehicle without any fixed premises keeps your costs low, but it’s also very easy for other people to do the same which means more competition.

Starting a trade business that has much higher entry costs, either due to the requirement for premises or expensive equipment, will certainly cost a lot more to get going but could be a better long-term bet with less competition.

Income potential

Here at Trade Risk we’re privileged to see the taxable incomes of thousands of self-employed tradies via their income protection.

Our annual ‘how much do tradies earn’ guide shows us that electricians are the highest paid out of the trades that polled as being good for self-employment.

Self-employed electricians had an average taxable income of $92k.  They were followed closely by plumbers at $86k.

How much do tradies earn

Boilermakers had the highest income at $116k, however no one on the Tradie Boss poll voted for boiler making as being a good trade for self-employment.

Although carpenters polled number one for self-employment, they were a lot further down the list of highest earners with an average of $77k.

Whilst averages are certainly a useful measure, they don’t tell the full story.  How much you earn will generally have a lot more to do with how good you are at running your business than what trade you’re in.

For example, someone who is very good at running a carpentry business is going to make a lot more than someone who is not so great at running their electrical business.  Your trade alone won’t make you better or worse at business.

Trades business

We’ll now take a closer look at some of the top trades for self-employment.

Carpenters

Chippies were far and away the leaders when it came to the poll of which trade was best for self-employment.

One of the major benefits of being a carpenter is that it’s typically the most common trade to make the jump to becoming a builder.

As a builder it can be easier to run your own business, and the financial rewards are also potentially much higher.

There were a few interesting comments when it came to carpenters:

“You can make a good living as a chippy but there’s sh*t loads of us so it can be a bit cutthroat.  Licensed trades take out the handyman aspect and weed out the nuffies.”

Matthew from Wharton Built had the following to say:

“Biased obviously but carpentry is the easiest to have a crack at for yourself I think. Up there with plumbers and electricians.

Upsides : Can work out of a van/ute and trailer. Minimal overheads to start off with.

Downsides: Lots of competition from other chippies as well as “handymen”.

Carpenters/builders also seem to have this screw the other guy mindset where they will undercut and talk down other carpenters/builders just to win a job.”

The common theme from starting a carpentry business was that it’s easier to do, but it can be very competitive and “cutthroat” when it comes to winning job.

Electricians

Electricians ranked second for self-employment, but there wasn’t a whole lot in the comments area specific to sparkies.

One of the benefits of starting an electrical business is that it’s a licensed trade in most Australian states, so at least you’re not quoting against unlicensed workers.

An electrician can typically operate out of their ute or van, and there is work to be found in both domestic maintenance type work as well as new builds.

Plumbers

Plumbers ranked third highest, but a lot lower than both carpenters and electricians as the best trade for self-employment.

As with sparkies there wasn’t a lot of comments regarding plumbing, but it would rank highly for many of the same reasons as electricians, particularly with regards to being a licensed trade.

Painters

Although they didn’t rank particularly highly on the list there was an interesting comment from Tyler with regards to running a painting business:

“I’m a carpenter but I’ve always wondered if painting would be the easiest money wise as I can only assume it wouldn’t take as long to learn the basics and make money off workers you employ.

In carpentry it’s a long process to teach things to your workers and you lose money for a while.”

Is that a fair comment?  TV renovation shows like The Block make it seem like anyone can paint, but in reality there is surely a big difference in quality from an experienced painter to an amateur.

The best trade for self-employment

If you’re contemplating starting an apprenticeship and wondering which trade would be best for self-employment, it appears there is no clear-cut answer.

Carpentry, electrical and plumbing are the most popular, but it’s fair to say these are the most common trades regardless of whether you’re self-employed or on wages.

Any trade that allows you to run your business out of a vehicle is going to have lower overheads, but you’ll also have a lot more competition.

So the answer is probably to do the trade that interests you most, and that is what will more likely result in you being successful or not.

It’d be appropriate to end with this comment from a user on Tradie Boss, which perhaps sums it up best:

“Trade doesn’t matter, all about the person running the business.”

So true…

What's the best trade for self-employment?

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