Woodworking Starting as a business

Having worked as a professional woodworker for the last 18 years I think I have developed some level of insight in the business aspect of it all. I also have completed majors in both marketing and management which has helped to some degree. Having these qualifications are definitely not necessary in starting and running your own business as you will learn along the way, this is more for those who want to enter the corporate world or to manage someone else’s chain store business or get into marketing and advertising and so forth.
You hear Paul Sellers mention several times on getting off that conveyor belt and start earning money from the craft. Easier said than done. There are many things to consider if you really want to pursue that avenue, it’s a life changing experience that brings many rewards and equally much frustrations. Firstly you need to consider what your going to make, what materials your going to use, solid wood, plywood or MDF or a mixture of all and so on. What methods of production are you going to employ, hand tools, machinery or both. This will be the determining factor on what type of tools are you going to need, how much capital will you need to invest, how long will each operation take to build, what market segment are your going to target and finally what time frame will you allow your business to develop. This final one in my view is where people fault the most.

masters
Large businesses like Home Depot centres like Lowe’s and Walmart in the U.S. Masters and Bunnings in Australia or BNQ in the UK take 10 years before they can expect any profit.carba tec Medium sized businesses like your local hardware store will take about 5-7 years and small businesses like yourself a one man shop will take anywhere from to 2-3 years. It all bottles down to how large the size of the operation and the starting capital investment is going to be. The more money you spend the longer it will take to pay it back. This capital needs to be earned back and reinvested and paid back again and backwards and forwards until the initial capital invested is paid back in full before you can earn a true profit. To better clarify this we’ll look at a fictitious one man shop.

You are the financial lender to your business ‘joe blogs cabinet shop’. You’ve set out a business plan, you know what your going to build, you know what market segment your going to target another words what group of people your going to sell too, how long will each build take and the initial start up cost that will keep you afloat for the next 12 months minimum.

If your on your own you will also need capital for daily living expenses or if you have a partner he or she will need to support the household while you concentrate on developing your business. Your business is a separate entity to you, you are the financial lender (the bank) and your business is the borrower. You are a kind bank who follows morality and don’t charge interest, all you want is the principle sum returned. During the first 12 months you will have a good insight on whether or not this business is viable. During the first 12 months you are unable to make any repayments to yourself because you need to reinvest back into the business, the cost of materials and the day to day running costs will be fairly high, products need to be built so a hefty investment is needed with little return to cover costs.

If your sales are sluggish within the first year as expected many small business owners become demoralised, they see no return on their capital investment, household bills pile up as your partner’s income isn’t enough to cover all those expenses so many fold within the first 12 months. This isn’t negativity or the worst case scenario but a reality that occurs daily.

Liquidators claim that 300 businesses fold every year in Australia.

Let’s look at the positive side though and let’s say you plot along and suck it all up as you should, your lucky and your partner is very understanding and wants to make a good go of it. He or she sees the opportunity of creating a better lifestyle with potentially a better financial security. In the second year your sales increase and so does productivity and you start to return the principal amount borrowed to yourself, your accountant offsets the expenses and happy days you don’t pay any tax. Still you cannot return all of that money because you still need to purchase materials and other tools if need be. In the third year you should be well established and the debt your business owes you should be paid back in full. From this point forward you would be making a profit, the business would then sustain itself and you would start considering on further development after an additional year has passed.
I wouldn’t advise anyone thinking about starting woodworking as a business to borrow money from the bank. They are not as kind as you and will hit you up with immediate repayments plus interest which may send you broke within the first six months and possible loss of home, without a home you would have a fat chance of ever borrowing money from the pricks anyway.

Production Methods

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You need to seriously contemplate on what style of production methods you’re going to employ. Are you going to be a mass producer? Are you going to build one off custom handcrafted pieces or just build general items using only hand tools and so forth. Each of these questions must be given serious thought before venturing off into no mans land.

Some woodworkers are completely money motivated and orientated while others are not and are simply just seeking a way out to live a more fulfilling and meaningful lifestyle that is away from the hustle and bustle of modern life. They are ones who are more inclined to move out to the countryside and open a small shop and sell to tourists and that’s fine if there is a steady flow of tourists to sell too. Others will work from home like I did and that works too the benefits in that is that you save on unnecessary costs on workshop rent, electricity, water bills and council rates.  Fortunately for me I work with hand tools so noise threshold levels are at mouse decibels, this gave me the freedom to work without worrying about noise complaints from neighbours.

Those who are purely money motivated will buy expensive computerised machinery, employ a handful of people and sit in their office all day chasing work, never doing any woodworking themselves. These sorts are everywhere.

So ask yourself what do you want out of this business, what are your goals, what are you trying to achieve and where do you see yourself in the next five years.

Markets

antique-flea-market-1
Many who don’t have a large capital and want more out of their craft than just money are more inclined to start off at the markets. Markets are a cheaper alternative than opening up a shop in a busy district and therefore makes good sense to set up a stall. The initial setup cost is low, a gazebo, a table and a cloth, the whole setup may be $500 at the most.

Markets also serve as a great form of advertising, word of mouth.

Do not expect to sell products in any great numbers that value over $100. Majority of the buyers go there to pass their time more so than to buy. The most successful businesses at the markets are the food stalls, it still amazes me at how much money people spend on eating and drinking at these venues and any venue for that matter. Even at the farmers market I see massive lineups for coffee than at any other stall and at woodworking shows the food courts are flooded with hungry people and the line up will take at least 20 mins before you reach the front of the cue.

All my analysis are based on Australia you need to do your own research for your own locality as it may differ for you.

So to have any success at the markets your pricing should be anywhere from $10 to $70 per product. A good practice is to have a catalog of the more elaborate products with you so you can show to your customers what other products you have in the hope that they will purchase the cream of your crop. These are made on order. You will need to attend these markets religiously. Now not all markets are successful, this is something you will discover very quickly.  You must travel to different markets in other locations even if its over 100km away. Give each market at least a three week trial before moving on to the next, not having success in one market doesn’t mean you have a bad product. It just means the folks that go there are not your market target, eventually you will settle on one that works for you and then stay put. By regular attending the same market you become a known face and this is important. We are told as children never to speak to strangers, trust is the key word here. When people don’t know you they simply don’t trust you, but once your a regular face you become dependable, your regular presence demonstrates your committed and in it for the long term. Your customers know where to find you and where to direct their friends to you.

Your not and do not be a quick buck cheap salesman.

You’ll have business cards on hand and a small flyer with a picture of your most elaborate piece. On every sale you’ll slip both including a small thank you card into their bag. Before you know it they will brag to all their family and friends of this unique one of a kind item and the excellent service they received, they’ll do all the hard work of advertising you for you. Like I said the best form of advertising is word of mouth, it worked for me for all 18 years and it will work for you. Always be friendly, smile and never sit down unless it’s very quiet. Next time your at the markets take note of those who sit and read a book and those who stand smiling and greeting each passerby. Who do you think will get more sales at the end of the day.

Also don’t expect every weekend to be a sellout, in business there are good days and bad days sometimes several weekends in a row, never base your sales on a few bad weekends but base them at the end of your financial year. Don’t listen to whiners they are usually the ones who sit most of their day reading a book never engaging with any potential customer. They’ve done this for so long that they’ve lost the mojo for it.

Even though markets are a good place to start you should consider this as a stepping stone towards the bigger picture. You cannot pay the bills from markets alone, not unless you produce substantial amounts and sell large quantities every weekend. You may be wondering at this point what can you make that’s under $10, not bloody much, maybe some bookmarks, no matter what it is be creative, make something that’s simple, appealing and useful. Most of your sales like it or not will be around the $30-$40 mark this could be book ends, small jewellery boxes, pencil cases. A small percentage will spend up to $70 and a tiny percentage will go beyond that.

Whatever you make for the markets keep it simple and don’t waste your time on elaborate joinery. You need to generate an income and therefore time wasted on elaborate joinery will not yield you a higher income nor will it increase your sales. Leave all that for your most elaborate work, the most expensive pieces, the big spenders, the ones who appreciate fine art. Consider the markets as your business introduction, a place where you will introduce people to the fine arts. A place where you will wet their appetites and entice them to tell everyone about you. It’s a long and arduous process and if done well with patience the dividends are enormous. You must be prepared to be in it for the long haul.

Suppliers

1237stacking-timber

Look for good suppliers do not have only one supplier, the incompetence of many businesses is their loyalty to one supplier. Their may be delays in deliveries which can turn into months on end or they run out of a product or discontinue a product due to some grievance they may have with their own supplier so it’s never a good practice to rely solely on one supplier. Also look for suppliers who will allow you to rummage through their stock pile, this will ensure that you get the best possible pieces for your projects. Also if you can steer away from those who are not interested in selling a few boards to you, these types of suppliers only want to sell to large companies in large quantities and you’re a hindrance to them. To save yourself grief and frustrations avoid them like a bad smell, rather pay a little extra and get the service and satisfaction you deserve.

Tools_DSC1047

Only buy what you absolutely need to get the job done, don’t fall for any advertising gimmicks out there and there are plenty as you already know. If you believe that a particular tool will get the job done more efficiently than the one you currently own and you will use that tool more often than not then buy it otherwise make do with what you currently have and invest that money into other more useful things, like materials, advertising etc.

Don’t buy tools that you need to refurbish, that is a waste of your time when you could be producing items that will generate income for you. Buy only high quality tools this is self explanatory you have been working wood long enough to know why low quality cheap production tools are a waste of your money. On the same token don’t spend $700 on a hand plane, there are plenty of refurbished Pre WWII tools out there that is in the middle priced range. Avoid antique dealers who give the same word for word glamorous descriptions for every product, all they want is sales, they’re not interested in your woodworking, what your going to produce nor even about you as a person. Your just dollar signs to them, so make sure you examine every photograph and ask as many questions as possible and if their answers are short sweet replies continually its best to move on and leave them be. Don’t worry you’ll find that one who actually gives a crap and he’s usually the little guy who cannot afford to fail, seek them and you’ll never look back.

AProposRabotVeritas1Veritas is also a good option, they are medium price ranged and offer high end tools, if your looking for hand planes in the Veritas range I would opt for low angle planes because of their light weight. Old Stanley planes are also light weight, this is important, remember you will be using these planes all day everyday and heavy planes will tire you out quickly plus the old steel is easier to sharpen than modern blades. I will sometime in the near future do a blog on this.

False marketing

In the worst of economical times when jobs are scarce and businesses are hurting schools flourish. They are so good at making you believe if you attend their schools then your guaranteed work at the end of the course, an assumption or belief system which is completely untrue. On one side of the coin you will be better enabled as you will have the necessary skill sets and training if you had none to begin with but in relation to woodworking

  • A: if you don’t have these skill sets then you shouldn’t be considering entering into the craft business and;
  • B: if you do posses these skills then your not going to learn anything more. You may pick up on a few little tricks here and there but nothing that could justify spending thousands of dollars and 12 months of potential production time in any woodworking school.

You hear statements all the time from teachers how they can sell an item for x amount which is always something of a ridiculously high amount without a problem.  

I for one don’t swallow these statements because they are unsubstantiated statements that cannot be verified and if they were true then why are they teaching.

Teachers are like cab drivers who speak bullshit to one another of fantasy long fares they’ve just had.   The truth is teaching producers a lot more money than doing and there are a lot more hobbyists new comers who prefer to work wood casually on a hobbyist level for enjoyment with no monetary incentives than there are those who wish to earn a living from it.

If I were to study under anyone I would choose Mack Headley.williamsburg lathe For the last 30 or 40 years he’s been working in the Anthony Hay cabinet shop at Colonial Williamsburg reproducing furniture of the 18th century using the same tools and techniques they once did, so it makes perfect sense if your into hand tools to learn from such a great craftsman like Mack.

Paul_Sellers

Paul Sellers is another good choice nothing wrong with his teaching methods,  he focuses more on teaching you a broad range of general woodworking not just one aspect or particular style of furniture.

My preference is 18th century style of furniture and I think Mack would be a better choice for my particular needs as it involves carving, scrolling, turning all of which are advance levels of woodworking which I would greatly benefit from.
Never listen to the false hypes of the Internet and magazines but rather be smart and seek out a professional consultant. Offer him or her your business plan, the product you wish to sell, the market group you wish to target and get their opinion on whether or not this may be a potentially viable business. I would also recommend you get a second and third opinion and if they all concur there is a good potential chance of success then go for it and do not hold back but, if one agrees and the other two don’t then seek a fourth and final opinion and weigh up your options as best you can.  This may be an expensive venture but well worth it.
Magazines will only ever write what benefits the clients they advertise for and the Internet can be very misleading. You may ask yourself why and I really should explain myself here.

If you visit a woodworking blog that’s run as a business teaching woodworking, your not going to hear any negativity about woodworking as a business. You even won’t read any negative comments left by other readers who ally themselves with that particular teacher, but instead you would read how successful they are due to their successful woodworking careers and if someone dares to challenge this notion of success they are squashed, ridiculed and swept under the rug. You are bad marketing for them as you run the risk of taking away potential student customers from them hence why they over glamourise the business side of the craft. However it doesn’t affect or deter those who wish to learn the craft for their own personal benefit as amateur woodworkers.

I’m never going to say that teachers of any kind are no good or there just money grabbers, and I have come across one that is only one but he is jail now what I do think is that they tend over glamourise and not say how it really is.

Final note

Business, irrespective of what type it is needs careful planning and nurturing not to mention some luck.
There is so much more to cover which is beyond the scope of this post. My aim is not to deter you or even write as much as I did. If you wish to enter the craft business I advise to do your homework first before you invest into something that may not yield a return in the long run. Write up a business plan, seek out professional advice, trust your gut instincts and most important of all get your partner’s blessing.

Sometimes turning something you love and enjoy into a business might just take all the fun out of it.

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6 thoughts on “Woodworking Starting as a business

    1. I agree and I also miss full time working it, I’m still accepting some commissioned work but nothing on the scale I use to do. Truly you can’t have a lifestyle and run a business without sacrifices. The part that I regret was not having the time to play with my kids when they were little, working alone with no helpers using no machinery to speed up the process was the reason. Anyway it’s too late now to cry over spilt milk, I still have two at home so I’m doing my best to make it up.

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      1. I think they’ll appreciate your efforts once they’re old enough. I like to talk with my father a lot about his business. The war stories of the everyday are quite interesting now that I’m old enough to understand the efforts he made.

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