Wood has always been a thing of great utility value and is popular for both its natural beauty and practicality. Nowadays, making furniture out of wood shows that the bearer has got some good amount of money. This is because the need for lumber and high demand for the wooden furniture has increased over the years, which in turn increased the cost of the same. Today, the rich continue to look for and spend considerable bucks to buy or make customized wooden products. Considering all these points, it is easier to conclude that the wooden industry has a better scope for making enough money. A woodworking business typically deals in carving furniture, producing customized products, and other items to put in the display as samples.
As per the IBISWorld report, the manufacturing industry of wooden products is a $6 billion industry which is still growing rapidly. 50 leading companies in this sector command less than half of 100% of the market. So, this leaves a plethora of opportunities for others to begin their startups and other minor wood shops. A person who is planning for an entrepreneurship in this regard will have to have a positive attitude, willingness to learn and accept the wealth of woes of the business, and an endless passion cum perseverance towards his/her business idea.
If woodworking is what you excel in, then creativity is the fast thing that you should not fall short of. After all, turning a simple block of wood into something admirable is a work of art in itself. So, whether you are a woodworking enthusiast, or want to transform your passion into a profitable business, then you are at the right place to get some effective ways to start your woodworking business. Here, we have given a stepwise explanation of how to do the business and what to do in it, and more. In the concluded segment, we have added some tips to consider before starting your personal woodworking workshop. Sounds perfect? So, let’s begin!
4 Step Process to Start a Woodworking Business
Starting a business is a lot more than just getting it registered under your state’s authority. There are some fundamental factors to get a successful beginning of your business. These will make sure of getting your woodworking business well-planned, organized, properly registered, and legally compliant. For more information on woodworking tools, you can visit theedgecutter .
- Step 1: Make an Outline of Your Business
The first step towards being a successful entrepreneur is to make a clear plan of your business. It will guide you in spotting the specific requirements and essentials of your business and discovering what else you should add to the list.
Here are some of those topics that you must have in your plan:
- What is the overall expenditure of startup and ongoing costs?
- What is your target market?
- How much will you charge from your customers?
- What shall be the name of your trade?
Note: We will discuss the fourth point individually under Step 4.
- Step 2: Evaluate Your Plan
Startup Cost of a Woodworking Business
The amount of expenditure to set up a woodworking business is significant, yet manageable. The business entrepreneurs might plan to spend not more an average of $6,500, which is divided into the following:
- $2,000 for wood and other relevant items
- $1,500 for the tools and equipment required in woodworking
- $1,000 for a PC
- $1,000 for other expenses
- $800 for a camera and website
- $200 to make business cards
This instance does not count the cost of leasing space for a storefront or shop. There are many business entrepreneurs who were previously woodworking hobbyists but now became professional. So, they already have their personal workshop for woodworking.
Those business owners who have the necessary woodworking tools with them can further reduce their expense, as they already have the equipment they need.
Ongoing Expense for a Woodworking Business
The primary ongoing costs for a woodworking business include the material and overhead costs. Material costs must be met by selling the finished products in exchange for the ones that the entrepreneur might require. Overhead costs typically include utilities, rent, and buying small supplies (such as sandpapers, nails, and finishing materials, etc.). All these expenses equal to 15% of labor and materials costs.
What is Your Target Market?
An ideal customer of a woodworking business is someone who values the wood products and has discretionary expenses. Such types of clients tend to be more interested in wooden products and can afford to have them.
How Much Will You Charge From Your Customers?
A woodworking business can make enough capital by producing and retailing wood products. These could be furniture (as example; cabinets, dressers, or Adirondack chairs), or smaller products, such as manual coffee, jewelry boxes, cutting boards, smartphone holders, or wooden beer mugs, and more.
How much price you will charge from your customers would depend upon the number of orders/products, the type of wood used in making the product/s, time taken to do the job, effort, etc. For instance, Svetulka on Etsy retails the name signs for kids pricing between $19 and $73 (based on the entire product finish and the number of letters carved). Kolorize sells similar signs, but its range is much higher (lying between $68 and $163), on the same site. The price to be charged from the customer should also be based on the overhead costs in making the product and other selling expenses which include shipping cost (in case of overseas orders).
Here is the ultimate formula to follow:
Material Cost + (Number of hours worked x Wage per hour) + Retailing Expenses = Price of the Wooden Product
Set the price chart of your workshop made products in the above order, as it makes price calculation easier.
- Step 3: Add More Classes to Increase Your Business Profitability
The only way of grabbing more selling opportunities to your more customers, thereby earning more profit, is by offering classes. Classes attract those who have knowledge and interest in this domain, while some may decide to buy finished products, inclusive of taking a class. So, make sure to have that provision in your workshop.
The profit potential is solely based on the entrepreneur himself/herself; based on whom the owner is selling the products to and how skilled the business owner is. While some take local orders and supply small finished products. Consequently, their profit is not more than what a part-time worker makes. Conversely, there are craftsmen who are masters in woodworking and so demand a high price for each product they manufacture. Earning a lump sum in woodworking through incomparable expertise is of no surprise. Their monthly earnings can even break the six figures.
- Step 4: Give an Enticing Name to Your Business
Though it does not seem much of a big deal, choosing the accurate name for your business is a challenging task. While naming your woodworking business, make sure it matches your work expertise and product quality. If you are yet to decide a name or not having one in mind, Google it out to get some innovative naming ideas.
Note: If your business is running under a sole proprietorship, it is better not to operate it under your name but a business name.
Before getting your business name registered, we suggest researching that name by checking the following:
- State’s records of your business
- Trademark records of both central and state
- Social media platforms
- Availability of web domain
- It is imperative to secure the domain name for your business before someone else takes it
Tips to Consider Before Starting Woodworking Business
- Packaging, Postage, and Delivery
Take care of these three factors. Make sure that none gets compromised or it may put a negative impression upon your customers and they might not return to you for future orders. Your business should be backed by a swift courier service, plus a trusted wooden product packaging company that could protect your parcels against rough handling during shipping. Most of the time, it is the on-time delivery that keeps your customers returning to you.
Note: Before signing a deal with a courier service, make sure to do a brief research of the company background and its staff regarding how and how fast they deliver the parcels. Some companies give the least towards the to-be-delivered package and intense rough handling, which sometimes hampers your reputation in front of the customers. This is not a good thing for a business which has just started getting clients on its way and is yet to earn a brand reputation.
Additional tip: There are certain supplier challenges that a business owner might go through. Creating a network of connections with different suppliers and experimenting with them is crucial, yet risky in this regard. You need to be prudent with whom you are working with and whom you do not want to continue with for future orders. Here is a tip, try to build a network with your local sawmills and timber merchants. That way, you won’t be required to expend more on the transportation cost of purchasing raw materials from them.