Whether you are just getting started with your woodworking business or are looking for ways to make it run better, these 20 tips will get you where you need to be.
#1. Have a Clear Plan in Place
If you want to operate a woodworking business, then a clear and precise plan is essential for your future success. A business plan will help you to map out the specifics of this opportunity so that you can discover the unknown variables that might hold you back. You will want to consider what the startup costs are going to be, what the ongoing expenses are, and if there is enough of a target audience in your community to support your new company.
Additional factors to evaluate include how long it will take you to break even after your capital outlay and what the name of your business should be.
#2. Define Your Business Structure
Most woodworking businesses can be a sole proprietorship or a partnership because there are a few risks involved when interacting with customers. If you have people shop for items around the tools that you use, then you would want to consider becoming a limited liability corporation instead.
Under the latter structure, you can protect your personal assets in ways that a sole proprietorship or partnership will not allow. You must define this structure as you form the business, so weigh the pros and cons of all the options before you start trying to generate sales.
#3. Become Familiar with the Expenses
The average woodworking business that begins on a shoestring budget can become operational for less than $10,000. Expect to spend at least $2,000 for your wood and other artistic materials. Another $1,500 goes toward your woodworking equipment and tools. If you need a good computer, then expect to pay between $500-$1,000 for that item. Then you’ll want to look at having business cards, digital advertising, and other methods of brand exposure that can start bringing people toward your products.
If you need a shop or retail space for your woodworking items, then that expense will be an ongoing issue to manage. Utilities and other ongoing expenses can be unexpectedly expensive at times too.
#4. Ditch the Hobbyist Mentality
People start a woodworking business because they have a passion for making some sawdust. When you go from the hobbyist realm to a commercial one, then there must be a shift in attitude. You’re still creating, but you must do so from the purpose of meeting consumer needs instead of personal desires. It is almost impossible to make a profit if the only thing you’re willing to create are the items that you appreciate. Start to work on your business mentality right away, and you will become another step closer to the success that you want.
#5. Research the Wholesale Market
You have two opportunities to make a positive difference with this tip. You can secure some of your materials and supplies from a wholesale resource when you become a business. There is also an opportunity to supply finished items to distributors so that you don’t have to worry about the retail markets. Selling items at wholesale will reduce your income levels initially, but you can make that up by increasing production or cutting costs.
Research the companies in your area to see if there are any attractive deals. You can contact them directly as a business owner to determine if you qualify for any discounts. Be aware that most wholesalers do have a minimum purchase or product standard to meet.
#6. Fit into a Niche
Many small woodworking businesses fail because they attempt to be everything to everyone. Your greatest opportunity for success exists when you can establish niche expertise for your brand. There are numerous opportunities to pursue in this industry, including home décor, furniture, sculptures, religious items, and jewelry. Once you have established a pattern of success, then it is easier to break out into other areas to expand your revenues further. If you attempt to solve every problem right away, then there might not be any money left at the end of the day.
#7. Establish a Workshop
Woodworking is far from a quiet enterprise. What you can do is establish a workshop that creates space between your personal and professional responsibilities. It is essential to find a work-life balance as an entrepreneur in this industry because your creative energy can strike at any time. When there is a dedicated area available that allows you to establish a successful crafting experience, then you can have several advantages come your way.
A separate workshop can help to keep your tools and materials more secure. It will add an atmosphere of professionalism when meeting with people about custom pieces or orders. Some business owners might also benefit from the current tax code with this tip.
#8. Get Your Licenses
When you have your woodworking company organized, it is time to obtain the various licenses and permits you’ll need to conduct business. It’s a straightforward experience for most entrepreneurs, but it can take some time to obtain the necessary paperwork. You will want to give yourself between 30 to 90 days to complete the entire process, so patience is going to be a virtue here. If you plan to operate out of your home, then there may be zoning requirements that your city council will want to review before permitting your agency to sell items.
Most woodworking businesses need a general license for permission to sell and a sales tax permit. The requirements can vary by jurisdiction, so you’ll want to evaluate this need locally.
#9. Go Outside of Your Space
Mini woodworking businesses first start selling items from their home. That process can put you in touch with local consumers, but it won’t maximize the reach of your organization. You’ll want to consider attending trade shows, craft markets, or even farmer’s markets to show off your wares. Online sales venues like Etsy can open some revenue possibilities for you. It might be useful to sell on multiple platforms to see which ones offer the most opportunities for your new company.
#10. You Need Marketing Materials
You might’ve heard that as an artist, the quality of your work will sell itself. That might be true once customers start walking through your door or begin to view your listings, but they need to know about your company in the first place. The only way to make that happen is through a marketing push. You will want to create several different marketing materials so that people can begin to know where you are and how to contact you if they want something. Low-cost items in this area include business cards, social media advertising, and email marketing.
Over time, these efforts will help you to develop a customer base that consistently purchases your products. It may even generate some word-of-mouth opportunities that can help you to expand your business.
#11. Get Insured
If you are creating sawdust, then your workshop has some sharp tools that could cause an injury. You will want to have liability insurance on your property and shop to protect you against unforeseen circumstances. Accidents tend to happen at the worst possible time, so make sure that you have at least $1 million of liability protection before selling your first items. Depending on what your community and business license requirements are, you might need to hold a surety bond or other forms of protection to legally operate.
#12. Time Belongs to Your Customers
The idea that you have more time to flex in any way you prefer is a myth that applies to all business owners. Your time belongs to your customers. If you’re already putting in 60+ hours per week with your woodworking business, then you have zero flexibility. It takes a lot of guts and energy to work in this space, and the commitment asked of you is often something that you haven’t experienced or needed before. Sleeping in isn’t going to happen, and neither is that Wednesday date at the golf course.
If you want to be successful as a woodworker, then you’ve got to work harder than anyone else. The quality of the products you make must be better than what everyone else creates. It could be up to three years before you turn a profit, and five years isn’t an unrealistic goal.
#13. Keep Learning
Even if you experience immediate success with your woodworking business, profits will not continue coming in unless you are willing to keep improving your skills. You must approach this entrepreneurial opportunity with the attitude that you can always become better. It is a process where you are always learning so that you can stay ahead of the competition. This tip requires a lot of work that doesn’t always equate to better revenues, but you’ll also find that continuing education is both challenging and rewarding.
You will want to decide how to operate your woodworking business during the planning stages. Taking orders from customers can help you to provide custom experiences, but it may not equate to immediate revenues. You also have the option to take your original models to the market, but sales will only happen if there is a demand for what you make. It helps to speak with people in your community about what they would like to see from your new company so that you can make items that immediately solve their problems.
#15. Consider a Franchise
If you don’t like the idea of pumping a bunch of cash into an initial marketing surge without some kind of guarantee, then a franchising opportunity for your woodworking business could be an option to consider. Although there are not many choices available in this industry, you can associate yourself with Woodcraft in several U.S. states. Additional names that you might want to look at include N-Hance, The Rustic Brush, AR Workshop, and Furniture Medic.
It does take some extra money to start a franchise when compared to a sole proprietorship. Woodcraft has an initial fee of $50,000, then a royalty/service fee that’s 5% of your gross revenues. You must prove that you’ve got a net worth of $750,000, with a minimum amount of liquid assets at $250,000.
#16. Develop Partnerships
The woodworking industry has some well-known names that you will want to begin associating with when you start a business in this area. Forming relationships with West Fraser Timber, Anderson, CASCO, or Weyerhaeuser can open new doors that won’t be available if you try to forge a path by yourself. You’ll need to be detail-orientated to be successful, with high math skills and strong dexterity, but a desire to produce can create some impressive opportunities for profit right away.
#17. Pick a Catchy Name
If you decide to operate as a small woodworking business, then it is important to choose a name that you can easily market for your new company. It should be something that is simple to remember, but the name must also be a description of the niche services you provide. The best names for this industry are distinct, short, and catchy. If you’re looking for something unique, you might consider something like Wood Shapers, Morning Wood, or Fine Wood Cutters.
If you make furniture, then something straightforward like A+ Furniture Makers is suitable for your name. Then remember to register what you decide with your Secretary of State or appropriate government office so that you can do business under that identity.
#18. Price Your Work Appropriately
It is essential to remember that a reasonable price will always perform better when you are doing business in the woodworking industry. Most customers will choose to buy something after they know what its price happens to be. That means you must consider the time it took you to create it, the cost of the role materials, and the skill level involved in the final piece. It’s up to you to determine how much profit you can receive from this effort, but your customers must be part of that decision-making process.
#19. Provide World-Class Customer Service
In an industry where products are essentially the same when the craftsmanship levels are equal, you must differentiate your business in some other way. Providing world-class customer service is going to be your best option. By letting your consumers know that you care about their outcomes and want to make things right, you’ll set yourself up for more sales in the future.
Never ignore a customer who expresses dissatisfaction, even if you know for a fact that the individual is in the wrong. Work toward a position of compromise so that negative emotions don’t spill out into public forums.
#20. Embrace the Competition
One of the best ways that you can expand your business opportunities in the woodworking industry is to turn your competition into a collaborator. Befriend your other owners as you network around your community. You might not earn as much by working together than if you try to carve out a unique path forward, but there are also fewer risks involved. If you have separate niche products that go to the market, then working together can help all parties without creating competition problems.
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