My advice? Have you been watching the news lately? People ain't spending money right now.... I'd look into different things, mainly being working for someone else.
I've been doing wood working for 13 years now. 1-1/2 doing plastic laminate countertops, the rest as a cabinetmaker. Almost seven years on my own.
Buy new what you can, but don't be set on buying new stuff. I made this mistake when I started on my own in early 2004 and for budgetary reasons it created a lot of obstacles. Yeah, new stuff is nice, but money goes really quickly doing that. You've got a budget of $6500, and to be completely honest that won't get you very far. You've got a extremely large amount of crap to buy. There are plenty of deals out there on used equipment, it takes some time, and some patience but its out there. I got some absolute steals the past few years. I know I'll catch hell for this, but while Grizzly may have gotten a heck of a lot better than they were, its still garbage in my opinion. Around here you don't see too much in a commercial setting. I also view most of the newer equipment to be not up to spec in the quality department with what was being produced ten or fifteen years ago. Almost all of the Powermatic equipment that I had purchased new, or built recently has been a disappointment to some degree.
I spent $2500 on dust collection for my new shop. That was just pipe and gates. Something to keep in mind.
DO NOT GO IN DEBT FOR EQUIPMENT! This is what folded so many shops. Work slows down, and all of the sudden you can't make the payments. For many it is a gamble that did not pay. I also do not see the benefit to leasing equipment.
You don't have anything listed for boring hinge cups. I think I paid $1700 for my Blum mini press new, used ones are out there. There are also other options, but the press from the hinge manufacture does pay for itself in a fairly short amount of time.
Renting is not cheap. My new shop costs about $17k a year just to have somewhere to work. I had my shop in some space that I rented from family when I started. I could not have done it with out keeping my overhead as low as possible. It scares the crap out of me having that kind of costs per month now. Plus I think my liability insurance, insurance on the tools, and something to cover product en-route costs me another $1800 per year. (I think)
You don't have to worry about employee's for a while, or the associated costs. You won't have enough equipment to keep more than two hands occupied. But, you will be working plenty of hours to make up for it.
I would incorporate. Buy your tools personally then rent/lease them to the company. Most of my company's tools are rented from me personally. The key benefit here being that what you make from rent is unearned income, and you do not have to pay the 15.3% Medicare/S.S. taxes on it. Some states general contractors will not do business with a sole proprietor anymore.
Keep as much cash available as possible. When a deal comes along, missing it can be more costly than not. I went frickin' broke buying up used stuff when things really fell apart a few years ago. When you have a lean spell, (it'll happen, trust me), you still need to pay for your space if renting from someone other than am extremely understanding family member.
Don't worry about making doors right off the bat. You can't afford the equipment at this point to make it profitable anyway. Don't bother with a drum sander, save your pennies and pick up a decent used widebelt.
I personally
hate sliding tablesaws, with one caveat. If you have an over head panel lift to load the thing they aren't bad for knocking out sheet stock. A good vertical panel-saw, (Striebig, Holz-Herr, etc.) can rip and crosscut multiple sheets at one time, don't take up as much square footage, extremely safe, easy to use, and plenty accurate when cared for. Busting up sheets on a regular tablesaw does suck, but so does constantly changing the shop vs making additions to the shop.
You need to establish what kind of market you want to be in. Who are your cliental? When I started my shop, I didn't want to be slugging it out with the bottom of the gene pool. Around here the majority of the shops are using Melamine, I use plywood. Melamine drawers w/ epoxy slides, I do birch or cherry dovetails with under-mount slides. I don't get too many customers that shop the box cabinet world. I build as good a quality product as I can, and am constantly trying to improve upon that. While I may be expensive as hell, I perceive my cabinetry to be a good value.
Bid what you need to get for a job. There's no justification to working for free. You can sit on the couch and not make money, no reason going into the shop and suck up dust to do it. Starting out you are in no position to try and take down the "other guy". But, you do need to get your name out there. Its a tricky balance I guess when starting out. I don't adjust pricing for anything. I know my costs, what I need to make off of a job, and I try to maintain an image of being higher end.
Never, ever talk down the competition. Point out what makes your product superior when dealing with potential customers.
Reinvest as much as possible back into the business. It lowers your tax liability, and hopefully makes you more money.
I started off by telling you to do something else. With that said, if you can make it work in a crap housing market, when things come back around you will be sitting pretty. Self employment has its benefits, and its drawbacks. I don't play well with others, so its the best avenue for me. You will work some horrendous hours. You will be making next to nothing for a while. Heck, I think I'm doing okay, and I still probably make less per hour than my last job working for someone else. There's been plenty of late nights at the shop, or late nights at the computer doing drawings, and bidding. Plus traveling to measure or meet with customers eats up an enormous amount of time.
Some days the juice is worth the squeeze, some days all you want to do is pull the plug.
I wish you good luck.
Originally Posted by Greg Peterson
Reply With Quote
