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Thread: making money at woodworking

  1. #31
    Some good answers here and I'll chime in for you. I am a small business owner, not woodworking, but I own a design company. There is one BIG thing that usually separates the success and failures IMO, and that is overhead/expenses starting out. To explain, when I started my company it was nothing more than me and a computer and software, very low overhead. My father has a concrete company in a warehouse in a good end of town, and I was fortunate enough to put my desk in there when I needed to meet clients, etc. So I still kept my overhead low. He is retired, runs the business for fun, and the warehouse is paid for, so he has no need for me to pay rent or anything, and I am only out there every once an a while meeting a client. Point is, lets take a competitor that has employees, a big office with a huge rent payment, and 10X the equipment I do, well he may make more gross income, but HE HAS TOO because of the overhead. Guess what I am getting at, is the less overhead you have the more chance you have to be successful. This will be something you do for fun, so as long as you do not run out, buy a building, stock it with 100,000 dollars of the best stuff, I think you will make enough (if your good) to at a minimum break even and get all future tool purchases out of it, and at a maximum a good retirement income. So I guess the key is, if you don't "have" to make money to live, then just about anything you make over the wood you use for a customer is profit, b/c all your stuff is paid for, so just have fun and don't get in over your head. Most of the huge successful companies started out in a basement or a garage and only after they had an influx of customers did they grow. That is why so many resturaunts go under, before they are even open they are a fortune in debt just to be able to get started. Sorry for the rambling but I really believe that is the secret of anything you do for money yourself being successful and not stressful. Good Luck!

  2. #32
    Join Date
    Mar 2008
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    Portland Oregon
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    So much good info here.
    I'm a retired cabinetmaker. I made a decent living with my own shop, but it was hard work. I paid (and still pay) my own health insurance and of course set up my own retirement plan( no employer matching 401K).
    I have a decent size shop next to my dream retirement home. I made all the furniture and millwork for my house. I'd like to make a few pieces to sell, but insurance is a big issue for me. Once you sell even $1 in product you need commercial liability. If you have assets you put them all at risk in todays sue happy world. If someone visits my shop now my homeowners covers them if they are hurt on my property because I don't sell anything.

    So I would say first thing keep it simple. Find out what insurance would cost for a part-time woodworking business. It might cost $2000 or more a year. Be sure your homeowners won't be cancelled if your shop is next to your house. If you have one customer who wants a $2000 table your insurance cost for the year is paid (less labor, materials and overhead). Then you can go ahead and make money. Be sure to add up extra utilities and other costs. Will you have to buy new machines?

    In my opinion it would be a HUGE gamble to buy a lot of machines, stock,and lease or buy a shop before you have profits from the actual woodworking.

    Start small, test the waters, if you can pay your expenses and enjoy the work GO FOR IT!
    Last edited by jim oakes; 04-09-2008 at 3:16 PM.

  3. #33
    Join Date
    Jun 2006
    Location
    Los Angeles
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    636
    Another way to separate liability from your personal life to your business is by creating an LLC for your business. It costs anywhere from $50 to over $1000 per year depending on what state you live. In normal states(not california) it is inexpensive, and should be done even if you buy insurance.

  4. #34
    Without any doubt this is the very best Forum thread I've ever seen on this subject.

    While I'm in Australia everything said that has been said here applies equally in Australia.
    Its very interesting that everyone has been right in their comments.

    I'll add some other comments,

    To make $10,000 a year you are setting up a business.
    The most important part about a business is selling your products.

    I considered setting up a small woodworking school as the market potential is enormous regardless of the skill level you aim at, newby, intermediate, craftsman or master. And I cannot see competition from asia, how can you pack a school into a container and ship it.?

    The market comprises 2 important sectors,
    Babyboomers who are starting even now to consider retirement hobbies and activities.
    Women Woodies. It is surprising how many women would love to learn woodwork.

    So this is another suggestion that I'm sure would work in the US and Oz for any reasonably motivated woodie.

  5. #35
    Ray,

    You might consider posting a thread inquiring what are the "money-makers" for folks who sell their work.

    Granted, the professional cabinet guys will say cabinets, but you will be able to home in on the stuff that is realistic for you.

    -Jeremy

  6. #36
    Not sure that having pros describe what they sell will help. It might even be counter productive.

    As said before a wood company is first and foremost a company. The goal is not to discover what the others sell but what your market will buy.

  7. #37
    Join Date
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    Quote Originally Posted by Mitchell Andrus View Post
    Schedule C

    Mitch, I finally checked out your web site..... all I can say is.... YOU HAVE A LOT OF TALENT, AND A LOT OF ENERGY!

    Not sure if you have pioneered selling period pieces on the internet, but you sure have done it well. Is there many competitors doing this, or are you blazing the trail? Gosh, that is a LOT of work....

    I think your approach is the wave of the future for niche ww's. Craft shows require too much travel and expenses. Bricks n Mortar stores have huge overhead and limited exposure. A niche line of ww products that can be easily shipped really does represent an oppt. that was not available to ww's in the pre-internet era. But as you suggest, learning the internet / web design, is one of the new business skills you must master, or if you have enough bankroll, pay someone... I was quite impressed by your web site. Its nice to see you can get fair prices for your work..


    Of course, none of this applies to cabinet makers or built-in pieces..... this field will not change much, other than..... today, IMO, the key is installation, as in this modern era, you can find factories to buy your doors, drawer fronts, and even CNC shops to cut your carcasses. If I was to start a high end cabinet business today (hell there is no low-end market after the imports have saturated the market), I would perfect my ability to use the latest in 3d cabinet design software to properly design / sell a job. Then send the drawings to the big houses to buy the drawers boxes, drawer fronts, carcasses, etc. At most, I would have an assembly area...

    My point is.... today, success in the high end market requires a new skill set.... these huge plants with automated machinery is no match for the small shop today. The key is selling and proper implementation of what was sold.... sorry for the ramble...

  8. #38
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    Dennis, one heck of a post! thanks for sharing....

    I too find it ironic, how as we age, we all dream up these ww businesses (mainly in the construction trade) and somehow we dismiss how physically demanding all this work is. As Dennis mentioned, I too continually underestimate how much lifting, I do, bending, torquing my back in undesirable positions, etc. etc.

    I was glad to read a previous poster mentioned he is 27 and feels his body is falling apart. My heads-up to him is.... multiply those aches and pains by 5x if you want an estimate how 50 will feel. There is a few exceptions to the rule, those who appear like superman, as their body has healed well through the years and somehow they have rejected any arthritis genes which seems to attack the rest of us. Also, excessive sports in your youth will almost always come back and haunt you later in life. I am finally starting to come to grips with this.... those were fun years, but sheeeesh....

    Anyway, its nice to hear you are turning a profit, and maybe getting some young guns to do the heavy lifting is what you need now :-)

    With the bleak outlook on new construction in most areas of the country, this is a risky times to enter into such fields.... reality sucks...

  9. #39
    Ray,

    A lot of good points and comments. I have some comments and please keep in mind I'm not trying to discourage you. I'd like to add that I think to some extent how much you make (or can charge for your work) will depend on where you live, the value and demand for what you are doing, finding a niche market, etc. Items of an artistic nature tend to command higher prices than utilitarian woodwork. Others will probably diagree with me but I think on average, cabinetwork (kitchens & bath) tend to be more lucrative in terms on making money than furniture, especially fine furniture. People are more willing to pay good money for cabinetry than they are willing to pay for what you will need to charge for furniture. The catch is to PRODUCE cabinetry at a rate that is profitable. Fine furniture is even more difficult than just building furniture, in that your clientel is a much smaller group than the average furniture buyer. I would venture to say that few in the furniture making business make a 'killing' at it unless your someone like Tage Frid or Sam Maloof, and even those guys on average probably aren't making what you think they are from building furniture alone.

    Having said all of that, I have the same game plan as you. But I only want to sell if I can, and just enjoy doing woodwork. Myself, I'm afraid if it became a business I would soon lose the love for this type of work. Maybe not, but a lot of the fun would be gone I think. My vision is colored by the experiences I've had making and trying to sell fine furniture in my area. It is extremely difficult to find customers that will pay what you need to charge. For example, I might spend 200 hours (or more) on a Queen Anne table. If I need to charge $30 an hour to cover my expenses and make some profit, how easy is it to find someone to pay me $6000 when they can get something that looks close to it from the local furniture store for a tenth of that (or less)? I can try to sell the quality, but hey, we're still talking $6000.

    So in the end result, at least for me, I make fine furniture because I LOVE IT. I met a guy the other day at a local SAPFM meeting. An elderly gentleman who did absolutely beautiful, accurate, and historically correct work in period furniture. It was obvious his work could command top dollar anywhere. He told us he's never sold one piece of furniture in his entire life. He makes it all for his family. Not by choice, but I'm doing the same thing. And it is all because of love of furniture building, not for the money.

  10. #40
    Join Date
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    Ray, I've been self employed for many years and would offer a little different, but general, perspective.

    The top 1% of any skill set can make a good living whether it be woodworking, flute playing, painting or being an economist. But if you aren't already in that 1% of woodworkers by now, you probably won't be at retirement either. That's the bad news.

    The good news is that if you can be in the top 25% in TWO skill sets, then you can make a decent living using both at the same time. The more "well known" woodworkers aren't the best, but they're "pretty good" and they are "pretty good" writers as well. So they make a living writing about woodworking. Or making WW plans (WW and drafting). Or building an online database of every WW article published and selling access for $10/yr (WW and web design). Norm isn't in the top 1% of woodworkers, but he is the best known TV personality in our little club.

    I know an average talented artist that only paints birds on the seashore and makes a living. Another paints scenes with razor blades. A third friend is a photographer and pilot. I kid you not, he makes a living by shooting aerial photographs of graveyards. I'm an okay engineer and an okay salesman, but there aren't many folks that do both "pretty well". So develop multiple talents to a reasonably high level.

    Being "pretty good" at two things is often enough to make you unique. To make money, find a niche and work it hard.

    And you have to decide if you are in it to make money or to have fun woodworking because you can't always do both.

  11. #41
    Jeez,

    I started reading all of of the lengthy replies and well,

    I guess I missed it, started scanning.

    So... You only need three things.

    Reputation

    Reputation

    and Reputation.

    and not just with your Mom and Kids.

    You need to make people need you, or think they need you.

    So, the true skills you work on are people skills and the subtle art

    of self promotion.

    Frankly, the same way you succeed in any self employed Business.

    Per
    "all men dream: but not equally. Those who dream by night....wake in the day to find that it was vanity; but the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible."
    T.E. Lawrence

  12. #42
    Join Date
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    Ray,
    A couple of years ago I visited fellow Creeker Ian Barley in England. He has a 1 man shop and all he makes is Adirondack chairs. He told me that what he does is cut out the parts all winter long and then assembles during the spring and summer. He hires a couple of college kids to help assemble them. He sell mostly from a web site. He told me that he had also sold quite a few to one of the cruise lines.
    I think the thing I took away from my visit was that you need to find one or two designs that sell well, concentrate on those, constantly improve on your manufacturing processes so that you can produce as much as possible while improving your quality at the same time. He has been able to establish a name for himself by providing a high quality product at a reasonable price.
    Now, the only thing I see wrong with this is that it looks a whole lot like work to me. If I am going to retire, I want to do something that is a little more relaxing.
    Larry J Browning
    There are 10 kinds of people in this world; Those who understand binary and those who don't.

  13. #43
    I would also like to add - GO FOR IT! You will get as many horror stories as success stories. Even the most successful woodworker's advice or cautions won't applying to everyone. You may find you are immensley successful even at part-time. You might be in the right area at the right time. There's simply no way for anyone to gauge that. Another area that can be very profitable is instrument-making such as violin, mandolin, and dulcimer. You just have to jump out there and try something and see what works. Do some research up front, see what's not being done in your area, see if that's something you want to try and then GO FOR IT. You may find yourself ending up making something you hadn't thought of, but discovered it because you were out there trying something else.

  14. #44
    I know a few people who make a good living doing small products, but they do it mostly wholesale at a high volume. It takes a lot of time and salesmanship to develop this type of model. That's the reason I think it could be a good (semi) retirement venture.

    Custom casework is very lucrative because consumers don't have a reference point for pricing. The average person has an idea what is a reasonable price (in their mind) for a coffee table or bed is because they are bombarded with furniture flyers in the newspaper. But they can't go to a store and see 10 foot tall built-in bookcases that fit their unique wall space. My core business is custom closets, with a lot of interesting custom projects thown in. Sure, you can go to Lowes or HD and buy the stuff and do it yourself for a fraction of what I charge, but those are not my customers. My customer is the person who can afford my product, doesn't have do it yourself skills, and doesn't have the time or interest to deal with it themselves.

    So it works for me. I am no different from anyone else. I would prefer to build humidors, jewelry boxes, clocks, etc in my shop all day and ship the product to the customer for a handsome proffit. But I haven't figured out how to do this and feed the family yet. I think it's part luck and a lot of perseverance.

  15. #45
    Join Date
    Mar 2008
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    Quote Originally Posted by Dennis Montgomery View Post

    I would prefer to build humidors, jewelry boxes, clocks, etc in my shop all day and ship the product to the customer for a handsome proffit.
    The key word here is "ship". Right now our Asian woodworking pals can still ship small stuff cheap, so I think it would be tough competition. I'm no futurist but with rising oil prices it may get real expensive to ship from Asia to the USA. That could mean less foreign competition for woodworkers in the USA.
    Last edited by Dennis Peacock; 04-12-2008 at 3:16 PM.

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