new WW business

[Tom M King]

Add me to the list that says don't even waste time thinking about it for 20 bucks an hour.

[John Gornall]

Young fellow asked me for advice as he wasnt making money. I told him to double his rates. He said he'd lose half his customers. I told him to do the math. Half the work at twice the rate is the same income. He still hesitated. But in desparation he doubled his rates. That worked. 6 months later he doubled them again. The following year he doubled them again. Hes making money now. And he learned that those bottom end customers use up a lot of time for little money

[Jared Sankovich]

Agreed. 100%. But that’s where I’m starting while it is a hobby. And yeah, those benefits. The Corp says I earn close to 3x what they pay me. Only way I see to compete with that is to keep that job and play with wood for fun. I gotta figure out what we collectively are willing to give up and weigh the balance. Plenty of time to figure that out tho.

3x seems high, that's typically the billed / wrap rate on a contract vs base salary. 20 to 40% over base would be a typical benefits package (health care, vacation, 401k/ match, stock options..)

Mechanics charge $150-200/hr here.. 20 is far under minimum wage.

[Zachary Hoyt]

In my opinion one factor to consider is what kind of lifestyle you want to live and how much money you need to make to get that. Plumbers for instance can charge a lot because a lot of people need their services and there's not another choice, but woodworking is usually making things that are more discretionary for the buyer so your clients have more time to shop around. If you can work fast and still do a good job that will help a lot. Someone told me once that whatever you sell or do you're really in the customer service business, and that seems true to me.

For IRS purposes you become self-employed when you make more than about $400 a year on your own, last I knew, and you have to pay self-employment tax which is about 15% in addition to income tax. I have been growing into a business in my spare time for a number of years, my 'day job' provides me with room and board and some use of a car, and I do other work to provide my other needs. I work 2-4 hours per evening at my business and sometimes weekends, but it's what I like to do. I hope to be able to grow it to the point where I can support myself completely with it, and I am saving most of my income now so that I will be able to buy or build a house and a workshop in the future. I am in a niche market and can work from a smaller shop and with a lot less material volume to be stored and worked on than most woodworkers, so that makes it easier for me. I also am able to mail almost everything I make, which opens up a lot of opportunities. I routinely ship banjos all over the country and occasionally overseas. It's harder to do that with furniture, but I suppose that also would reduce your competition.
Zach

[andy bessette]

...those bottom end customers use up a lot of time for little money

A very successful friend told me the following story.
Whenever someone would bring a job to him that he could readily see was going to be a problem and/or would not make him money, he would refer it to his competitor down the street. His competitor, in appreciation for these referrals, would send work his way whenever he got too busy (often with losing jobs). Win-win for my friend.

[Chris Parks]

The single biggest hurdle any business faces is bad planning because not planning properly finds the business unable to finance operating costs until cash flow becomes adequate but what happens next is worse. As the business grows the inadequate financing ensures that the business cannot finance expansion so it gets stuck at a miserable level that it needs to break out of to ensure a healthier cash flow to lift it out of the problems poor financing had left it. Also when a business gets into problems such as this it is rarely that the person who planned it all has the understanding and the ability to see the wood for the trees and it generally needs someone to come in from outside and sort it out and 99% of business owners hate doing that as it is seen as a failure on their part.

I had a fellow business owner walk into my office one day and as part of the conversation we began to discuss how things were going. It turned out that she had never made a "profit" since the business had started and was steadily getting further into debt every day the doors were opened so I advised her to go and put up a sign saying business closed which she did and later admitted it was the only option and she needed a push from someone to get her to do it. She had opened the business with some vague idea of it working and never really knowing whether it would or not.