fbpx

Whenever someone requests a quote from us we always have to ask about your annual turnover.

Most tradespeople know what turnover is, but we do get a few each week who are a little unsure.

Saving Money

To help out we have decided to put together a quick guide on turnover for tradies.

Calculating Your Turnover

Your turnover (also referred to as revenue – see below for more info) is the total of all money that passes through your business each year.

If you only provide labour services, your turnover will be the total of all labour you have charged for.

If you provide labour and product, your turnover will be the total of all labour and product you have charged for.

Essentially your turnover consists of all money that has come into your business through charging for labour, product and any other services.

What If I Use Subbies?

If you are invoicing the client for the total cost of the project and paying your subbies from that amount (which is usually the case), then you should be including the full invoice amount in your turnover.

Common Misconceptions

The most common mistake that tradespeople make is to confuse turnover with earnings.

How much do tradies makeYour earnings are basically your total turnover less your total expenses. When calculating your turnover you should not be taking into account any expenses.

Usually we can tell when someone gets their turnover wrong. Commonly we’ll get someone telling us their turnover is $100k but they employ four staff.

Clearly someone with four staff couldn’t be turning over just $100k (unless they are paying their staff a pittance!) and in most cases they are only looking at their own earnings rather than the total turnover of the business.

Is Revenue The Same As Turnover?

Yes and no. If you Google the term ‘is revenue the same as turnover’ you will find some people arguing yes and some people arguing no.

For the average tradesperson or small trades business, turnover and revenue will generally be the same thing, which is simply the total of all invoices and amounts charged during the year.

More Information

If you’re unsure about how to calculate your turnover you should speak with your accountant.

Electrician

You can also speak with the team here at Trade Risk, but keep in mind that we can only provide general advice on this subject since we are not qualified accountants.

Advising us of your turnover is an important part of the insurance process, as getting it wrong could result in the wrong premium being charged, and in serious cases it could potentially complicate a claim.

What About Profit?

When it comes to business insurance, your profit is irrelevant.

But for almost anything other than insurance, profit should be everything to you!

Whilst we can’t help you out in that area, we do know some switched on people who can.

PROTRADE United are specialists in this area, and help trade business owners to grow their business and their profits.

You can visit their website here, and we also recommend checking out the free article below which has some helpful info regarding revenue, expenses and profit margins:

How to Calculate your Financial Break-even Point

Trade Risk does not receive any financial benefit if you become a client of PROTRADE, but it’s in everyone’s interests for your business to be healthy and growing.

Tradies Love Trade Risk

In 2017 Trade Risk was awarded a Gold Trusted Service Award for the amazing service we offer to thousands of tradies from around Australia.

  • "Straight forward, easy to follow and then fast service from one of their customer service reps once online forms were completed"
    Cameron Verrills Constructions Pty Limited | Tradesman Insurance |
  • "Great service well set up"
    | Tradesman Insurance |
  • "To many emails, I almost blocked your site because you won't stop emailing me"
    | Tradesman Insurance |
  • "I purchased a new policy and it was tricky so there were a lot of emails back and forth to make sure I had the correct cover. Cheryl Boyd was super friendly, patient and professional! I really like giving good customer service but I love it when it comes back! I'm really happy with Trade Risk services and staff. Thank you."
    Benjamin Moncrieff T/As Hot Wash Pressure Cleaning | Tradesman Insurance |
  • "Good prices very professional easy to work with"
    Ian Spicer | Tradesman Insurance | Adelaide
  • "I found it very easy to do. People who I spoke over the phone were very helpful and I would definitely use the again"
    | Tradesman Insurance |
  • "Helpful staff"
    | Tradesman Insurance |
  • "Easy to renew. hassle free."
    Richard Jaskolski T/As Jacks Maintenance Services Mortdale | Tradesman Insurance |
  • "Renewed my insurance easily and without any hassles, will use them again next year"
    Ashley Joseph D'Rose | Tradesman Insurance |
  • "Excellent service"
    Barry William Crowe | Tradesman Insurance |
  • "Communication and contact support."
    | Tradesman Insurance |
  • "Great service and communication on all of my dealings with them"
    Super Inspect Pty Ltd | Tradesman Insurance |
  • "Simple and easy process to go through and would highly recommend this service to anyone"
    Tony | Tradesman Insurance | Sydney
  • "Exceeded expectations, great service"
    Cewe Pty Ltd | Tradesman Insurance |
  • "Cheap price, never had to claim so not sure how well it will hold up as a policy with loopholes etc"
    | Tradesman Insurance |
  • "Quick process exelent treatment to the client."
    | Tradesman Insurance |
  • "Excellent service"
    | Tradesman Insurance |
  • "Timely reminders and quick response emails."
    The Trustee For The Stephen & Yvonne Henry Family Trust T/As SYS Creative Pty Ltd | Tradesman Insurance |