What You Need to Know About Starting a Woodworking Business
It’s both rewarding and challenging to start a professional woodworking business. It’s a wonderful feeling to get to make woodworking blueprints come to life and create beautiful furniture. In addition, woodworking is a low-cost business.
There are specific steps that you have to take though. First, you need to settle all tax and licensing issues. Second, you must prepare your shop for accepting woodworking jobs. Next, you need to find clients, win customers, and develop long-term partnerships.
As you are working on those three important aspects of business, you also need to assess your skills, develop them, and choose some areas to specialize in. Lastly, you need to know the workflow in regard to completing a woodworking project for a client. This includes developing and streamlining the creation process, organizing shipping procedures, recruiting people, and managing client expectations.
Take Care of the Legal Aspect
For a small scale woodworking business, you can choose from two legal entities. You need to know the definition of the two to know the tax liabilities of each. You can either go for LLC or sole proprietorship. A one-man business ownership is a startup owned by only one person. The LLC, on the other hand, is formed by partnering with another individual or company.
The LLC has more options for tax advantages and growth. Because of tax liability issues, the majority of business owners choose LLC over a sole proprietorship. However, a Limited Liability Corporation (LLC) requires more funds to establish than a one-man business ownership.
In addition, a bookkeeping system and several payment options have to be considered, and both of them needs additional budget to be set in place. Such extra expenses can decrease the funds allotted for materials used for making wooden products.
Set Up Your Workshop, Store, and Portfolio
Planning the workshop layout early in its establishment saves time. It can also keep you away from spending years in a poorly organized and uncomfortable space.
Marketing ventures are often image-driven. You may explain your work to customers, but nothing can beat high-definition photos of finished projects, especially your best work. From day one, compile all your past works and print them or post them to your business’ website.
Bill Fry Construction, an award-winning custom home builder, and home remodeling contractor, created a customized Anigre cabinetry project and posted it on their website and social media page. After that, the company won several awards not just because of the quality of their project, but also because of the fact that their work was so well photographed.
Hundreds of their website visitors were awed and several social media sites gave them awards. This is the power of what one high-quality image can do. It can drive traffic, increase your sales, and let your business be known to the world.
Your workshop’s layout
Arrange equipment, tools, tables, and paraphernalia properly so that nothing can go wrong. Having a great layout makes it easier, faster, and safer to work than just placing things here and there.
- Include ventilation and lighting plans
Woodworking is a delicate process. It requires an eye for detail and great concentration. You can’t work well if the place is too hot or too cold, and you’re bound to produce faulty products if your shop is not well-lit. It’s also a good idea to add a dust collection system because you’ll be producing a ton of sawdust.
- Machine placement
Where you put basic machines, such as the jointer and table saw, is extremely important. Machine placement helps determine the overall size of your shop and the clearance area allotted for all tools and equipment. It also helps organize workflow and cables.
- Group tools
- Tools that have similar functions must be stored together. Also, remember to keep your paraphernalia near the workbench. This includes both electric-powered devices and hand tools.
The amount of space you need for your workshop depends on the projects and products that you plan to make. But, for starters, a 12 x 20 area can be enough. This size is sufficient for creating a variety of wooden products from smaller projects, like wooden toys or wind chimes, and larger projects, such as furniture or bookshelves.
Equipment and tools
The machines and tools to buy for your woodworking business are determined by the budget, the workshop’s size, and the products that you intend to make. Basic woodworking tools like thickness planer, power jointer, table saw hand saw, etc., must be on your list. You can also add a ventilation system and a dust collection system.
Hone Your Woodworking Skills with Projects and Small Jobs
The key to developing professional woodworking skills is to start with small projects. Even if you already know the basics, you must practice with simple jobs before you tackle intricate ones. In this way, you can produce more products, and if you make a blunder, you don’t have too much to lose.
Woodworking involves various kinds of work in addition to furniture and toy making. It may include the repair of cabinets and furniture, the installation of wooden doors and windows, the creation of wooden paraphernalia, and many more.
To improve your woodworking skills, determine your expertise. Remember the woodworking related projects that you have finished, and list the kind of jobs that you consider your forte. This includes the woodwork that you’ve done for yourself, friends, or relatives. You have the needed experience for such projects, so you can definitely do well with requests and demands related to your skillset.
After determining your skills and level of competency, list the type of work that you want to focus on. It may be constructing cabinets, creating entertainment centers, kitchen setups, among others. Besides the things you’re good at, list the jobs that you also want to do.
Once you listed everything, assess your level of competency for every type of project and for each skill on your list. It’s important to produce high-quality wooden items so that your customers will return again. To do so, constantly develop each of your craft.
Next, expand your knowledge. Read woodworking books or surf the internet to look for resources. You can also check the finished product of others and compare your competency with them. But the best method to hone your abilities is to practice. Create something for your family or friends. Design and build it, and if it comes out great, you can sell the finished product to cover your expenses.
Keep in mind that your handyman skills can also be beneficial to woodworking. The payment is small, but you can achieve two things: If you repair woodwork regularly, you will not only hone your abilities, but you can also accept repair jobs for your customer’s wooden items.
Lastly, choose 1 to 5 easy woodworking projects. Commit your time to them, and you can surely develop the needed skills for you to advance further in woodworking. Cutting boards, incorporating jigs and fixtures, creating picture frames, and building birdhouses and bandsaw boxes can increase your experience and develop your skills in this job.
The Grothouse Lumber Company, one of the most creative and highly-rated manufacturers in the woodworking industry, is an example of a prominent business that just started from scratch. It was established by Paul Grothouse, a former craftsman. The unsurpassed design and quality of projects and products from Grothouse is the fruit of Paul’s extensive experience in woodworking.
When he was a teenager, he purchased a portable sawmill to finance his tuition. He learned a lot of things from the job like proper sawing, quality wood creation, and drying techniques. Even after graduating college, he still continued to pursue this craft. Now, he is an engineer and a successful businessman who owns a large company that specializes in creating cabinetry and wooden furniture.
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Finding an Area to Specialize in
Woodworking is the process of creating items out of wood – these include wood carving, furniture making, carpentry, joinery, and woodturning. If you’re a beginner, you must hone your skills first by making small projects. Baseball bats, stair spindles, candlesticks, or fruit bowls are some small items that you can make. If you’re an experienced woodworker, then you can go for both large and small projects.
Wood carving is a classic form of woodworking. It’s easy to learn, and on most occasions, you only need to use a chisel and a cutting tool. Carving is an enjoyable task. You can make figurines and ornaments made from wood. The products range from hand-worked moldings to sculptures.
Furniture making is the most profitable area of woodworking. It’s way more complex than wood carving, and it involves heavy types of machinery. Manufacturing and selling furniture is a profitable business though. Furniture is always in demand, so even if it has a lot of requirements, it can be worth every penny and every second that you spend.
Joinery involves connecting pieces of lumber or timber to create complex items. Becoming proficient in joinery is important in working on all types of woodworking projects. Whether you’re making a wooden toy train or furniture made from Mahogany, the job may often require you to join a piece to another.
Shaping and cutting wood are one of the basics in carpentry. Sometimes, furniture building and cabinetmaking fall under this skilled trade. It also involves repairing things made from wood.
Marketing Your Work
The first vital step to find customers is to make your business look professional. Purchase or create stationaries and business cards. You may print a few of them at first by buying business card papers, and then, utilize software for creating business cards.
Next, prepare all the legal credentials of your business, and print contract documents for clients. It is so unprofessional to scrawl agreements on a piece of paper for a paid job. Contracts must be neat.
After that, create a website and a photo album. Place the photos of your previous high-quality projects on a site or in an album. By doing so, visitors can immediately appraise your skills. This can attract them to buy your finished products or avail your service.
You now have everything in order, so it’s time to get the word out — contact friends, acquaintances, and relatives. Here are some of the things you can do to attract potential customers
- Consider bargain pricing to generate interest and increase sales, especially at the beginning.
- Advertise carefully. Avoid expensive traditional advertisement strategies such as print and TV/radio advertising. These days, going online to set up a social media page on the more popular platforms (Instagram and Facebook) or a website is a cost-effective way to get the word out and show potential clients the kind of work you can do. If you’re going to advertise your woodworking business, opt for industry-specific magazines or in newspapers.
- Join groups that promote woodworking businesses.
- Build a showroom in your store or in your home
- Set up booths at relevant conventions and at trade shows. Local art fairs and trade shows are also excellent events that can bring your business to the spotlight. Gallenberg Studios, a multi-awarded and well-known woodworking contractor in Wisconsin, utilized art conventions and expos to bolster their popularity. Tom Gallenberg, the owner of the company, was self-taught. He practiced on working with different products, woods, designs, methods of marketing, and styles. Today, his company is one of the most trusted woodworking contractors in the U.S.
- Reward referrals with gift cards or cash for every customer that they bring.
- Send emails to homeowners in your area.
- Evaluate your target market. Know their demands by finding out what they usually look for as well as by keeping an eye on the most lucrative trends and projects, as per industry reports and by observing your competitors
Developing A Process for Creating Specific Items
Woodworking is not a simple job. You need to have a plan to ensure that your project will be worthwhile. There are three important aspects of developing your own production process.
Monitor all business plans
The production process starts with planning. Planning covers all the necessary decisions that determine future results and activities. It must also involve corresponding measures for sudden changes and for accomplishing set goals. A plan comprises aim, realization, planned results, and resources.
The plan may encompass a period of one year. One of the first things you need to accomplish in order to develop an efficient workflow procedre for creating specific items is to monitor annual business plans. Annual business plans apply to the following:
-Losses and profit
-Balance sheet for the end of the year
-Business success indices
Monitor planned and consequent work orders
By calculating all work orders, a comprehensive analysis of all indirect and direct costs is obtained. The detailed analysis must show the differences between the calculated work order and the planned calculation. The planned calculation is based on the quantity of a certain product. The comparison of consequent and planned calculation is executed to compare the perceived work order with the planned calculation.
Application of Transaction Process System (TPS)
The TPS is a data processing system for transactions that involve the modification, retrieval, and collection of transaction-related data. The primary characteristics of this system include reliability, consistency, and performance. It is also known as real-time processing or transaction processing. This is the last variable to consider for developing your own procedure for production.
In addition, businesses must always create report forms for all of their production circumstances. All of the workers need to participate in creating the reports for the different situations that they encounter during production.
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Streamline The Creation Process
There are generally 5 steps in streamlining the process.
- Utilize the 3 best practices for streamlining any manufacturing process.
- Improve quality throughout the process.
- Keep the production and sales team in sync.
- Minimize both materials and wasted time during production.
- Implement the right program.
By realizing the proper program, you can make sure that the right products are available whenever they are in demand. This can increase your productivity and revenue.
- Utilize technology to bolster communication between the sales and the production team.
These teams must spot buying patterns and trends as well as synchronize their communication with each other. There must be constant communication between teams to achieve goals or to accomplish delivery date or update the client with any change.
- Mine the data of the production history
One of the best methods for woodworkers to streamline their production is to utilize technology to measure and analyze the number of materials used, to measure the time lapse for the manufacturing process, and to know the amount of waste. By doing so, you can modify the manufacturing process to save resources and time.
- Come up with your simplified manufacturing process using all of the gathered data.
After you’ve collected all the necessary information from your original production method, use the techniques mentioned above to develop a streamlined version of your business’ production process.
Organize Shipping Procedures
There are generally 3 steps in shipping finished woodworking products
- Manage and aggregate order information.
- Pack and weigh products, choose a carrier, and label packages.
- Ship out orders.
They usually take a lot of time and they require you to be organized. Here are some time-saving tips to make shipping more efficient.
- Use a checklist or a documented process for each project.
- Learn everything about exporting.
- Use export documentation software
- Utilize templates
- Maintain records of all of your shipments
- Your records must be both safe and accessible.
- Don’t forget to track your sales team.
- Audit export compliance reports.
Bringing Others into The Organization
When your business grows, there will come a time when you need to hire people. You can either hire permanent employees or look for skilled contractual laborers. Many woodworkers prefer the latter because it is cheaper than hiring people. By choosing the latter, you’re going to free yourself from all the hassle of providing benefits and insurance.
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Managing Client Expectations
- Set a policy about returns, warranties, and refunds. If you are able to establish such systems properly, then you can just use it as reference when responding to complaints.
- Be honest with your customers. If you’re the one lacking, then provide what is entitled to them. By doing so, you may get a client for life.
- If your initial experience with them were not good, then contemplate first before you go accepting their orders again.
- Acknowledge the problem at hand. Listen to what your customer says. Satisfy their complaints and expectations by explaining what’s required to meet changes. If you’re being asked to do something that does not fall under your responsibilities, then evaluate the circumstance first before giving or providing your answer.
- While you’re correcting your wrongs, show your good spirit. Don’t frown or blame the customer when you’re fulfilling your obligations. Remember that what you’re doing is part of your job, and keep in mind that one of your goals is to develop long-term partnerships.
Typically, it takes a lot of time and effort to establish any kind of start-up. Starting your own professional woodworking business can be a challenge, but you can definitely reap lots of rewards.