Turning Woodworking from Hobby to Business
To say we didn’t see this coming would be a major understatement. We have readers who contact SaveYourBucks.com monthly asking about various business models. Believe it or not, one of the top business’s readers are asked about how to start a Woodworking Business. This is exciting for us just to understand there are a tremendous number of craftsmen & women in the marketplace that want to create – share- and make a living doing it. If we are talking about woodworking, pottery, welding, painting, and on and on. Creative people who want to do what they love and make a living doing it.
Honestly, we spent a lot of time trying to find a woodworking entrepreneur to write an article for and provide vetted content for SaveyYourBucks.com readers. We’ve Had no luck. So we decided to curate some of the best information we could find and make it available for our readers. If you have read many of our make money articles you know we often talk about the make money or build a business that makes your money philosophy that our founder Dale Calvert has been talking about for years. From the research we have done as a staff, we feel this philosophy is one of the most important factors when starting a woodworking business or any other type of business that requires craftsmanship. We think it will serve our readers well if they keep this top of mind as they read the articles. We have curated here for those who have an interest in turning their woodworking hobby into a business that makes them money.
How to Start a Woodworking Business From Home
If friends and family regularly praise your woodworking skills, you’ve probably considered selling your creations to the public. While not everybody wants to make the shift from hobby to business, many people have found a great deal of satisfaction in making money doing something they truly enjoy. Many people have seen their innocent side gig woodworking business blossom into how they make their full-time income. Many craftsmen work with wood, clay, metal, and the list goes on and on. If you want to ultimately do what you love and make a full-time living, we hope these tips point you in the right direction.
Decide on a Niche
As a craftsperson, you will probably have the most success creating a specific niche of products. For example, you may opt to create furniture, jewelry, home decor, or even religious objects such as plaques or prayer beads. You may decide to branch out into other areas eventually, but as you get started you may find it easier to make your name as a creator within a niche, and master that niche. A good idea is to focus on making items you have a personal passion to connect to.
Research Wholesale Sources
As an experienced woodworker, you are probably aware of many different companies that supply the materials and tools you need. These companies may offer attractive wholesale terms to business customers. Research the companies online, or contact them directly, to find out their policies regarding wholesale discounts, minimum purchases and payment terms.
You should also research suppliers that do not sell directly to consumers but only wholesale products directly to business owners. These companies can be harder to find and may have more stringent requirements for establishing wholesale accounts, but they may offer a wider range of better quality materials at lower prices.
Develop a Business Plan
Once you have a vision of the kind of products you’d like to sell and have some idea of the cost of producing them, you can begin to develop a business plan. Business plans are important, even if you intend to keep your business small. For one thing, the business plan can help you stay on target with your goals. In addition, if you decide to expand your business and wish to seek financing from investors or lenders, you’ll need to produce a business plan so that funding sources can make a decision about working with you. We highly suggest that if possible, grind it out. Don’t seek outside funding for your business if at all possible, but cause you to lose control and some say it creates pressure that disrupts the creative process.
Your business plan should include a description of your business and your goals. It should also provide financial projections for the next few years, detailing the cost of getting your business started as well as estimated revenues to the point where your company should break even. Finally, it should also include information about the demand and market for the kind of products you hope to sell. Some side gigs start with a loan from family or friends. Maybe there is a piece of machinery you need to purchase. Providing a basic business plan to those you want to borrow seed money from, can be a good idea.
Establish a Workshop
Your workshop will be your place of business. Having a dedicated workshop is often essential to establishing a successful craft business:
Keep tools and materials secure: A separate workshop that can be locked and secured will protect your tools and materials against theft and vandalism. Keep in mind that items such as hand tools, wood and other materials can easily be resold, making all of these items very attractive to thieves.
Work-life balance: Many people who operate their own businesses find that having a separate area for work activities helps them maintain an appropriate work-life balance.
Professionalism: If you plan to work with clients on custom pieces or orders, having your own workshop establishes your professionalism and increases client confidence in your business practices.
Taxes: There may be some tax advantages to having a space that is dedicated entirely to the operation of your business.
Business Organization, Licensing, Insurance
Talk to your attorney about the best way to set up your business’s legal structure. Options include sole proprietorship, partnership, limited liability company or even a standard corporation. Your attorney can review your plans and goals and suggest a structure that protects your assets as you develop your woodworking business.
Once you have organized your business, you’ll want to get appropriate licenses and permits to operate. In most cases, this will be a straightforward process, particularly if you plan to operate out of your home. If you are unsure of what licenses and permits you need, contact the Small Business Administration office in your area.
Another consideration is that of business liability insurance. While it is unlikely that anybody will be injured by your products, liability insurance can protect your home, savings and family in case an issue does arise. In addition, business insurance will protect you if a customer who is visiting your workspace becomes injured. An experienced business insurance agent can help you select the policy or policies that meet your needs.
Tip
If you plan to work out of your home, let your insurance agent know about this. In many cases, you will need a home business rider on your homeowner’s or renter’s insurance to be fully covered. These riders are generally easy to obtain and are not expensive. Also, talk to an account that understands the tax advantages you qualify for by operating a business from home.
Research Sales Venues for Woodworkers
You’ll need to find venues for selling your products. Many craftspeople, including woodworkers, get their start selling directly to consumers at craft markets. Other options include local retail shops that sell home decor, as well as online platforms such as Etsy & Facebook MarketPlace. You may need to try selling via multiple platforms initially, to determine which works best for you and your products
Create Marketing Materials
Business cards can be the most effective marketing tool a craftsperson has. If someone sees your work and likes it, hand them a card and let them know that you have a business. Establishing a website with high-quality, professional photographs of your work is also a wise idea. Some woodworkers that sell high-end furniture use $100 Bill Business Cards to offer potential customers $100 off their first purchase.
If you opt to sell your products at shows, make a point of getting the contact information of people who stop by your booth. You can let them know either by email or snail mail when you will be at another show. While this approach can take time to bear fruit, you will eventually be able to develop a customer base that not only buys your products but refers new business to you. THE REAL VALUE OF A BUSINESS IS THEIR CUSTOMER AND PROSPECT LIST. If you decide to merge or sell your business at some point in the future, your email list is a huge asset and something we believe is important to a woodworker as their table saw. Here is the email system we recommend business owners start with AWEBER.
4 Rules for Woodworkers to Live By
I have visited enough craft shows and retailers of custom furniture viewing their products, hearing shopper comments and checking out these pieces myself to suggest the following rules which, I believe, will make you highly successful in your woodworking home business if you have a long-term build a real business mentality.
I never wavered from these.
And, obviously, I feel quite strongly about my love for woodworking.
1. It’s All About Your Attitude
If your only goal is to make as much money as you can from your home woodworking efforts by turning out piece after piece as fast as you can, then I suggest you reconsider this wonderful opportunity. This statement kind of points back to the way we started this post. “Are you building a business that will create profits for you or are you starting a woodworking business to make money?”
ANSWERING YOUR PERSONAL Why IS IMPORTANT!
This is an opportunity in which your craft is your prized possession.
To not be the very best you can be at your craft, as embodied in your own finished products, is to blow the tremendous profit-making opportunity of your woodworking home business.
2. Quality. Quality. Quality
It won’t happen overnight.
But I suggest that working toward being the best you can be by practicing and trying different ways to “only” turn out a product that is truly a treasure–something you are beyond proud of–is a truly satisfying way to earn a significant part-time or full-time income. (Probably much more income than you thought possible.)
Exact, yes exact. Measurements like the ones you get from a flat metal ruler of various lengths with a scale starting at 1/32. Please don’t use the traditional tape measure! Like most craft-oriented businesses, passion for your projects goes a long way when you are in the Woodworking business. Don’t get me wrong. Unpassionate people get started in this business and others every day, but they come and go and never last very long.
The measure of the success of your venture will depend upon the exact quality of your product being viewed by a potential purchaser as a treasure. Nothing less. That’s what custom woodworking is; no nails, no screws just mortise and tenon joinery and mirror-like finishes!
3. My Initial Steps at a Part-Time Business
Yes, it took me a couple of years to learn how to work smarter rather than harder. But, I persevered…costly mistake after costly mistake. I didn’t have the resources or the Internet or master teachers showing me how to get better. Nope, it was all trial and error.
I would have saved a couple of years of self-learning and the sacrificing & countless dollars if I had the solid woodworking designs by Mark Stuart.
Don’t get me wrong, my experiences were wonderful, but an expensive time, especially when I decided to venture into selling my treasures as a small business. If I had only known then what I know now. So, congratulations for doing your research and reading this post.
4. Hooking Up with an All-In-One Woodworking Supplier
From my experience, the major success of my business depended on building personal relationships, ones that have multiple on-going interactions. It’s more like having friends to bounce questions off of and getting their suggestions.
So…
The big box stores are out.
Please, never shop there.
They do not offer the quality of the tools, wood products, finishes and professional expertise when you have woodworking questions.
Their products may have the same name but they also may, for example, contain plastic parts rather than parts made of metal. Why do you think they can sell them so cheaply?
For over 25-years I have used only one supplier for everything I have used in my hobby/business. For the last 10-years, I have only shopped online. Find out who that is for you, and develop a relationship with them.
Pricing Your Woodworking Treasures
I know your woodworking home business can produce outstanding crafted treasures.
So how do you price them?
This is the way I teach new woodworkers to price their projects. Add up your time and materials cost. Beginners should price their time at $20 hr. Don’t forget to add overhead costs like gas and electric and depreciation of tools. After all, this is a woodworking home business. So, my pricing is all cost plus $20 an hour.
After this…
Well, I nearly always thought my prices were too high. I was scared my gems would not sell.
I finally got more comfortable with pricing my handcrafted crafts and furniture at a price that paid me well for my time (way more than $20 hr.) and materials.
The moral of the story is, “if you think the price of your item is way too high and no one will buy it, please add 30% more!!”
If you’re seriously proud of the finished product, it WILL sell.
Quality sells. Period.
These Master Plans have made me and many more woodworkers more money than is imaginable.
How to Start a Woodworking Business from Home the complete business plan
Are you interested in starting a woodworking business from home? If YES, here is a complete guide to starting a woodworking business with little money and no experience, however passion is a requirement if you are going to get into any skilled craft type business.
Okay, so we have provided you an in-depth simple woodworking business plan. We also took it further by analyzing and drafting a sample woodworking marketing plan backed up by actionable guerrilla marketing ideas for woodworking businesses. In this article, we will be considering all the requirements for starting a woodworking business. So put on your entrepreneurial hat and let’s proceed.
Starting a woodworking business is a great way to turn a hobby you enjoy into a money-making venture. Wood items are popular and make great decorations and gifts. But starting a business involves more than creating wooden objects. It requires research and planning, particularly in marketing and business management.
Why Start a Woodworking Business?
Obviously, if you enjoy woodworking, what better way to enjoy it than getting paid for it at the same time, right? In addition to doing something you love, you also get to experience other people appreciating your work – which can be very rewarding.
Another benefit is that working from home in your own woodshop means that you can skip the morning commute, you don’t have to dress up to go into the office and generally you can schedule your own hours. Having greater schedule flexibility really enables entrepreneurs to enjoy other aspects of their life as well, like family activities, travel, etc.
Woodworking can be a fairly low-cost business to start, especially if you already have some of the equipment you need. You don’t have to lease a retail storefront, hire staff or invest in lots of product inventory. You can start small and then expand as your client base grows. This can be a critical point for entrepreneurs on a limited budget.
Today the cost of quality equipment has come down, and some companies like Amazon not only provide low prices on equipment but also free shipping to your garage door.
There are also plenty of woodworking business opportunities outside of building products. You could teach the craft to others, write and publish a book about woodworking or sell design plans.
Starting a Woodworking Business from Home – A Complete Guide
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Industry Overview
This industry manufactures wood products not produced by sawmills or by manufacturers of veneer, engineered wood, millwork and mobile homes. Therefore, industry products are miscellaneous. They include wood ladders, cabinets, kitchenware, broom handles, kiln-dried lumber, reels and toothpicks.
The Wood Product Manufacturing industry has turned a corner since the collapse of the housing market, driven by improving household income and a rebound in housing starts. However, the growing popularity of low-cost imports and competition from non-plastic substitutes will limit profit growth in the coming years. Nonetheless, expanding residential construction, falling unemployment and improving incomes will lead to strong growth for the industry.
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Interesting Statistics About the Woodworking Industry
The Wood Product Manufacturing industry has a geographic distribution similar to other wood manufacturing industries. The majority of industry establishments are located in the Southeast, Great Lakes, Mid-Atlantic and the West. Typically, industry manufacturers choose to locate near upstream industries such as sawmills and millwork producers.
Additionally, establishments located near major wholesale and consumer markets, as a considerable portion of industry products are eventually purchased by households. The Southeast dominates production, accounting for 24.0% of industry establishments.
Within the region, North Carolina and Georgia are the major producers, although industry establishments are distributed prominently throughout the region. Woodworkers held about 237,200 jobs in 2014. The industries that employed the most woodworkers were as follows:
- Other wood product manufacturing – 23%
- Wood kitchen cabinet and countertop manufacturing – 21%
- Household and institutional furniture manufacturing – 11%
- Sawmills and wood preservation – 10%
- Office furniture (including fixtures) manufacturing – 10%
Although many smaller shops employ a few workers, production factories can have as many as 2,000 employees. Working conditions vary with the specific job duties. At times, workers have to handle heavy, bulky materials and may encounter noise and dust. As a result, they regularly wear hearing protection devices, safety glasses, and respirators or masks.
Woodworkers are exposed to hazards such as harmful dust, chemicals, or fumes, and must often wear a respirator or mask. Others may be exposed to excessive noise and must wear hearing protection devices. Most injuries involve sprains, back pain, carpal tunnel syndrome, and hernia.
These injuries or illnesses come from excessive amounts of awkward bending, reaching, twisting, and overexertion or repetition. Most woodworkers work full time during regular business hours.
Starting a Woodworking Business from Home – Market Feasibility Research
- Demographics and Psychographics.
Those who need the woodworking services include children, adults, corporate organizations, as well as individuals.
List of Niche Ideas within the Woodworking Industry
Woodworking is a very wide field. The products that you can choose to make are also varied and give you a lot of choices. In order to maintain better focus and to start with clarity and precision, it is better if you decide which category of products you are going to cater to.
There are 2 basic factors that you need to consider when deciding a niche for your woodworking business. You need to look at your own skillset and you need to look at the market demand and supply.
- Basket weaving
- Making beer and wine wooden crates
- Cabinet making
- Wooden beer mug
- Cardholder
- Carpentry
- Chip carving
- Craft Supplies
- Candle Holder: Wooden caned
- Cutting Board
- Hardwood chopsticks
- IPod and Device Stand
- Jewellery Box
The Level of Competition in the Woodworking Industry
Demand is closely tied to the level of home construction. The profitability of individual companies depends on efficient operations because many products are commodities. Large companies enjoy economies of scale in purchasing. Small companies can often compete successfully by focusing on a local market.
Overall, the US industry is fragmented: the top 50 companies account for about 30% of industry revenue. However, some segments of the industry would shrink due to over-attachment by newcomers.
List of Well-Known Brands in the Woodworking Industry
- ANDERSON – US
- CASCO – US
- Weyerhaeuser – US
- Sekisui House – Japan
- Stora Enso – Finland
- Svenska Cellulosa – Sweden
- West Fraser Timber Canada
Economic analysis for the Woodworking Industry
Consumer confidence and per capita disposable income are expected to recover in the next few years, boosting demand from households for the industry’s products. Downstream industries, such as wood product manufacturers, carpentry contractors, and residential and nonresidential construction industries, are also expected to pick up, supporting renewed revenue growth.
Is a Woodworking Business Worth Starting from Scratch or Is It Better to Buy a Franchise?
There is a lot of debate about whether it’s better to start a new woodworking business or acquire a woodworking business in the business-for-sale marketplace. Both ownership strategies have their benefits and drawbacks. For first-time business owners, it makes more sense to buy an existing woodworking business than to attempt to build one from the ground up.
Established woodworking businesses are already equipped with the resources and processes new business owners struggle to acquire. The key is to locate a business-for-sale that closely matches your ownership philosophy and professional objectives.
Franchising is not a recipe for certain success but does make everything a lot easier. Prior to starting a woodworking business, you may want to assess whether franchising might make it easy to get started.
Possible Challenges and Threats of Starting a Woodworking Business
The woodworking industry is exceptionally diverse, encompassing a wide range of entrepreneurs, skill sets and job sites. While some woodworkers specialize in architectural projects, the majority of woodworking entrepreneurs are hobbyists interested in translating their passion into a full-time career opportunity.
- Having the Wrong Attitude
- Having a hobby mentality
- Improving Business Skills
- Promoting business
- Understanding Your Responsibilities as a Business Owner
- Being afraid of getting expert help
Starting a Woodworking Business from Home – Legal Aspect
- Best legal entity for a woodworking business
You have two legal entities available when trying to open a woodworking business – sole proprietorship and the LLC. To understand the tax liabilities for each, it is important to understand the definition of the terms. A sole proprietor business structure is, as the name suggests, a company with a single owner.
This structure is used by three-quarters of all businesses. It keeps the owner in control of the company and has the simplest initial setup. A limited liability corporation, or LLC, is often formed for partnerships when the business has grown significantly. The advantage of an LLC is more options for growth and tax advantages.
Many people would rather create an LLC than a sole proprietorship because of liability issues, but that takes money to prepare the articles of incorporation. Payment options need to be considered, a bookkeeping system has to be in place, and this all takes additional money that takes away from the funding necessary to purchase the materials to make the products.
Catchy Business Name Ideas for your Woodworking Business
- Zen wood
- Geezer Woodworking
- Tentorium
- Artisan Woodwork
- Woodworks of Art
- Old World Woodcraft
- Retro Woodcrafters
- Fine Furniture Joinery
- Forest of Furniture
- Wooden Joinery Creations
- Edge of the Woods
- Bentley Antique
- New age carpentry
- Access timbers
- Felix planks
Choosing the Best Insurance Policy for Your Woodworking Business
Woodworking businesses have a lot of flexibility. You might do all of your work on-site at a customer’s house or place of business. You might make your creations in the comfort of your own woodworking shop. Regardless of how you choose to do business, there are several potential pitfalls that can cost your business extensive amounts of money. Prepare for potential problems and hazards by making sure you have the right types of small business insurance coverage.
- General liability insurance
- Business ownership policy
- commercial auto insurance
- Workers compensation insurance
- Property coverage
Protecting Intellectual Property in the Woodworking Business
Designing a product is hard work – the result of training, experience and the creative process. You also must be a smart businessperson exploring creative alternatives to keep your cost to market low.
After you take so much time bringing your idea to life, it is vexing beyond belief when you discover your arts/crafts design or promotional copy is stolen. In the arts and crafts world, imitation is not the most sincere form of flattery; it’s a potential drain on your gross income and your ability to support yourself. In general, using plans and building projects that are proven to sell is just the way for beginners to start. The best woodworking plans we have found can be found by clicking here.
Is Professional Certification Needed to Start a Woodworking Business?
Education is helpful, but woodworkers are trained primarily on the job, where they learn skills from experienced workers. Beginning workers are given basic tasks, such as placing a piece of wood through a machine and grabbing the finished product at the end of the process.
As they gain experience, new woodworkers perform more complex tasks with less supervision. In about 1 year, they learn basic machine operations and job tasks. Becoming a skilled woodworker often takes 3 or more years. Skilled workers can read blueprints, set up machines, and plan work sequences.
Although not required, becoming certified can demonstrate competence and professionalism. It also may help a candidate advance in the profession. The Architectural Woodwork Institute (AWI) offers a national certificate program, which adds a level of credibility to the work of woodworkers. The Woodwork Career Alliance of North America also offers five progressive credentials. The bottom line is you have talent or you don’t, no matter what a diploma says. Nothing beats on-the-job training.
Legal Documents Needed to Start a Woodworking Business
If you’re in business, you need a business license. It’s not dependent on what you make or sell, or if you make a profit or not. Several licenses may be necessary, depending on where you sell and to whom. You also might need additional licenses if your craft is food-based.
Your first step is to find out if you need a business license. If you plan on operating a home-based business and live within city limits the best place to check is with your city business license office. Otherwise, check with your county business license office. If you need to get a business license, you also need to check for zoning issues. You will not be able to get a business license if your business address is not zoned for the type of business you want to run.
Normally, the county will require you to get your city license first if you need one. Bring it with you when you apply for your county business license. The good news is that most counties rubber stamp your county license application if you’ve already gone through the licensing process with your city.
Writing a Business Plan for Your Woodworking Business
Most experts recommend that the business plan be put into place first, and generally, that’s a great idea. However, before doing the business plan, make some of the products and see how they sell, and just how popular the product is because it may be a great fad for five minutes before the next hot product comes along, and the creator is stuck with hundreds of pieces that can’t be sold.
The products have to be easy enough to make, durable, and affordable (at least enough to cover the expenses of the materials needed). Once it’s discovered that these woodworking products are popular, and then start setting up the business plan.
You need to have a clear plan of how you want to run your woodwork business even before you get started; the plan has to contain every little detail of your business; include the estimated amount you need as capital you need to start this business. Tools you will need to perfect your trade. Where you will purchase wood in large quantities; how you intend to market your products; other aspects of woodwork you will incorporate into your business, and business goals you wish to achieve in the next 2 to 5 years.
A business plan is made to understand and anticipate what it’s going to be like to start a woodworking business. You cross many bridges before actually coming to them and that’s helpful. It’s helpful in deciding how you would like to start, what to expect, what you will be required to do and avoid expensive errors before they happen.
Most people who create a woodworking business plan claim that it helped them in getting successful. Therefore, we suggest an informal plan that you do not have to feel pressured about. Take your time. Business plans are not made in one day. Just keep adding to it at your own pace.
A Detailed Cost Analysis for Starting a Woodworking Business
It goes to say that when you start and run any business, there are going to be costs involved. It is true even for a home-based woodworking business. Even though you will be greatly able to reduce your costs by starting from home, woodworking is usually expensive. How much money you will need to invest will depend on how you handle the business startup.
Woodworking tools – $1,500
Wood and other raw materials – $2,000
Business cards – $200
A good camera (if you have plans of selling online too) – $300
A website – $500
A new computer – $1000
Miscellaneous – $1000
Total – $6, 500
Starting a woodworking business may sound small and common but just like any other business, it takes commitment and funds to start and strive. Startup cost for a home-based woodworking business which doesn’t include the incentive for leasing or any structural adjustment was what the above-detailed cost analysis covered. With the increase in size and scale comes the increase in start-up cost.
Financing Your Woodworking Business
Of all the decisions start-up business owners have to make, the decision of how to finance one’s business has to be the thorniest. Do you beg, borrow or steal the money? Who can afford to finance a business these days?
There’s no easy solution, especially in this economy. But the fact is hundreds of thousands of people have started craft businesses and galleries, sometimes on the flimsiest of budgets. With care and planning, you can too.
- Personal savings
- Credit card caveats
- Investors
- Partnership
- Crowdfunding
- Family and friends
Choosing a Suitable Location for your Woodworking Business
One of the most common reasons people shy away from woodworking is that they think they need a huge garage or workspace. But you can successfully set up a small hobbyist woodworking shop in any space, even in an apartment. A compact woodshop just takes a little planning and preparation.
First, as most eager but hesitant potential hobbyists realize, you have to be much more thoughtful about tool selection. A 14-inch band saw? In your dreams, in a small space, you’re going to have to rely on bench-top or handheld tools. (It is possible to forgo power tools entirely in favor of hand tools, but that’s a discussion better left for another time but it is possible).
Then there are material considerations, such as how to bring full-size sheets of plywood home to cut down to size (you don’t). And safety and cleanup are two more concerns: Proper ventilation and dust collection, a cinch in a larger shop, can be quite a challenge (and a potential health hazard). Nevertheless, you can set up a great woodshop in a small space.
However, getting a good location in the woodworking business is very critical to the success of your business but this can prove quite difficult because one of the challenges of starting a business successfully is getting a good business site. But in other to get a site that can make you a formidable opponent to your competitors, you need to consider the ideas listed below;
- Demographics and Psychographics
- Good road network
- Let your location boost your brand awareness
Starting a Woodworking Business – Technical and Manpower Requirements
Although the term “woodworker” may evoke the image of a craftsman who uses hand tools to build ornate furniture, the modern woodworking trade is highly technical and relies on advanced equipment and highly skilled operators. Workers use automated machinery, such as computerized numerical control (CNC) machines, to do much of the work with great accuracy.
Even specialized artisans generally use CNC machines and a variety of power tools in their work. Much of the work is done in a high-production assembly line facility, but there is also some work that is customized and does not lend itself to being made on an assembly line.
Woodworkers set up, operate, and tend all types of woodworking machines, such as saws, milling machines, drill presses, lathes, shapers, routers, sanders, planers, and wood-fastening machines. Operators set up the equipment, cut and shape wooden parts, and verify dimensions, using a template, caliper, and rule.
After the parts are machined, woodworkers add fasteners and adhesives and connect the parts to form an assembled unit. They also install hardware, such as pulls and drawer slides, and fit specialty products for glass, metal trims, electrical components, and stone. Finally, workers then sand, stain, and, if necessary, coat the wood product with a sealer or topcoats, such as a lacquer or varnish.
Many of these tasks are handled by different workers with specialized training.
Important Qualities
- Detail-oriented. Woodworkers must pay attention to details in order to meet specifications and to keep themselves safe.
- Dexterity: Woodworkers must make precise cuts with a variety of hand tools and power tools, so they need a steady hand and good hand-eye coordination.
- Math skills: Knowledge of basic math and computer skills are important, particularly for those who work in manufacturing, in which technology continues to advance. Woodworkers need to understand basic geometry to visualize how the wood pieces will fit together to fabricate a three-dimensional object, such as a cabinet or piece of furniture.
- Mechanical skills: Modern technology systems require woodworkers to be able to use robots, computers, and other programmable devices.
- Physical stamina: The ability to endure long periods of standing and repetitive movements is crucial for woodworkers, who often stand all day performing many of the same functions.
- Physical strength: Woodworkers must be strong enough to lift bulky and heavy pieces of wood, such as plywood.
The Production Process Involved in a Woodworking Business
In the United States, most trees destined to be cut into lumber are grown in managed forests either owned by the wood company or leased from the government. After the trees have reached an appropriate size, they are cut down and transported to a wood mill where they are cut into various sizes of lumber.
Here is a typical sequence of operations for processing trees into wood;
- Felling
- Debarking and bucking
- Head rig sawing large logs
- Band Sawing small logs
- Resawing
- Drying or seasoning
- Planning
- Grade stamping and banding
Starting a Woodworking Business from Home – The Marketing Plan
- Marketing ideas and strategies for a woodworking business
Production usually isn’t a problem for most new woodworking entrepreneurs. You already know how to make finely crafted pieces of furniture and other wood products. Instead, the problem is convincing consumers to buy your products for a fair price – and that’s where marketing comes into the picture.
- Embrace Technology. Woodworkers are more comfortable in the shop than they are behind a computer. Yet profitable woodworking entrepreneurs understand the importance of the Internet and value it like any other tool in their tool chest. A business website, social media marketing, e-newsletters and other strategies can have a big payoff for new woodworking operations.
- Portfolios: In the woodworking industry, marketing activities are image-driven. No matter how well you explain your work to prospective customers, nothing can replace images of completed projects. From day one, begin creating a business portfolio that can be reproduced in print form and on your company website.
- Craft Fairs. For many woodworkers, craft fairs are the primary outlets for their products. Research craft fair opportunities in your territory, carefully weighing estimated traffic against booth rental costs. To squeeze even more ROI out of your appearances, create a mechanism to capture customers’ contact information (including email addresses) so they can be added to your newsletter distribution list.
Finding the Right Product Pricing for your Woodworking Business
Finding the right price requires five separate calculations to determine costs for materials, labor, overhead, profit and selling expenses. You can calculate these by hand, or use your computer and a spreadsheet. For instance, let’s price the round-top table featured in the October 2005 Woodworker’s Journal.
For starters, it took two and one-half hours to make. The materials consist of the actual parts used to make the product: the cost of the wood, plus any mechanical parts, such as hinges, mechanisms, etc. The table has 12 board feet of oak, at $3.25 a board foot, so the material comes in at about $39.00.
Labor is calculated by the hour. Suppose you want to make $75,000 a year. If you take four weeks’ vacation a year and work 40 hours a week, then you will work 1,920 hours a year. Divide 75,000 by 1,920, and you get $39.00 an hour. The table took 2.5 hours to make, so multiply $39.00 by 2.5. The labor cost for the table is $97.50. Add this to the materials cost for a total of $136.50.
Overhead consists of the rental and utilities of your shop, tools, glue, nails, sandpaper and finishing materials. An industry average is 15 percent. Multiply your total (of materials and labor) by 15 percent. For the table, multiply $136.50 by 0.15. Add this amount, $20.50, to $136.50. The total cost (materials, labor, and overhead) for the table is now $157.00.
Profit is the amount added to cover business expansion. Add 10 percent of $157.00 ($15.70, but round up to $16.00), and you have a price for the table of $173.00. This is the value of the finished table sitting on your workbench (the “workbench price”).
If someone comes to your shop and picks up the table, you could charge them $173.00, because you haven’t incurred any selling costs. At your workbench price, all of your shop costs are covered. However, if they bought the same table in a store, it would cost them $400.00 because of selling expenses.
Selling expenses consist of two calculations. The first, the cost to put the table in a store, amounts to 15 percent of the workbench price. This could be used to pay a sales rep, have a booth in a trade show or advertise the table in a magazine or newspaper. Add 15 percent of $173.00 ($26.00) to $173.00, and you get the wholesale price of the table: $199.00.
A store or gallery will mark up your wholesale price to cover their expenses. This is called the retail markup, usually 100 percent. To calculate the (suggested) retail price for the table, simply double your wholesale cost, $199.00, and you have a final price for the table, displayed in a store or gallery, of $398.00.
If you create a spreadsheet with your computer, you can calculate the price of many products quickly. You will only have to enter the number of hours to make a product, the salary you want to make in a year, and the cost of materials. The spreadsheet will calculate the workbench price, wholesale price and retail price instantly. Once you know the right price for your work, stick with it. Don’t settle for less.
Possible Strategies for Winning Competitors in the Woodworking Industry
By now, you’re probably tired of hearing how important a good business plan is to your woodworking business startup. Although it might seem like an unnecessary formality, your woodworking company’s business plan is a document that will shape your goals and strategies on a go-forward basis.
Here’s something else you should know: Business plans help prevent key startup mistakes. Lacking a solid business plan, many startups find themselves rudderless and incapable of executing consistent decision-making processes, while committed business planners rely on their plans to guide all of their decision-making and short-term planning efforts.
- Evaluate your competitors
- Turning Competitors into Collaborators
- Social Media Monitoring
- Advertise More Effectively
- Understand marketing ethics
Possible Ways to Increase Customer Retention for your Woodworking Business
A large pool of repeat customers is a scenario every business should be working towards. A customer with a good story to tell or an awesome product to show will surely come back with a dozen more people who could be family or friends. Ways to increase customer retention and make your brand super lucrative may include;
- First-class buying experience
- Stay in contact
- Don’t ignore dissatisfied customers
- Show you care
- Educate customers
- Upsell and cross-sell
- Know your customers
- Implement loyalty programs
- Try display advertising retargeting your customers
- Work together
Strategies to Boost your Craft’s Brand Awareness and Create a Corporate identity
Having a well-know