How to Start a Woodworking Business
1.CHOOSE YOUR CUSTOMERS WISELY
A wood workshop must function as any business should. Many people in the world of carpentry and DIY start with doing odd jobs right and left for friends, family and acquaintances.
But in the long run, in order for your business to be viable and to progress and still be able to do interesting projects, you have to be able to support yourself. That is to say, to cover all the expenses involved in building a cabinet and other projects while generating enough profit to make it worthwhile for you.
But that’s not enough, you want to be able to reinvest part of your profit into further development of your business. Speaking in general terms, your new business has to become as soon as possible fully sustainable. And sustainability is reached through working with real clients.
When I mention real clients, I mean external clients who are total strangers to you. Because truth to be told, you can’t rely solely on the family in the long run. More than often they only want your work for a short while. Same with friends too, they’ll only use your services minimally. And even then, they are not really the right clients you need. Because with friends and relatives there’s never a clear-cut rate.
It’s only by working with real clients that you can realistically plan and invest accordingly. The accumulation of these clients will show you the true health of your company.
2. GROWING YOUR BUSINESS FROM SCRATCH
Unless you buy a business or take over the business of your father, your uncle, or your boss, well, you’ll have to build your own business. That is to say, you have to start from scratch and gradually build a clientele, a network, suppliers, and customers.
When you are starting from scratch, you rely on your customers to be part of your marketing plan as they will pass on by word of mouth (giving your phone number and address) to others which will in turn generate more work opportunities for you. This is how your business grows.
Getting hold of marketing tools like business cards and flyers really doesn’t have to cost you too much. The local print shop would be more than eager to help you out. Many print shops offer you these days a multitude of templates available to choose from and offer printing at very reasonable prices. The internet is an abundant resource of templates and design options. On-demand print services with delivery included are also widely available on the internet.
You just need to start somewhere, and then one thing leads to another. In the beginning, you will mostly turn to friends and relatives who will ask you to work at their place. Like I said above, they’re not the greatest clients, but at the beginning, they might be your only option.
If you market yourself properly with business cards and flyers or the like, they’ll be more than willing to promote you to their circle of friends. Then you’ll be able to expand to their friends and family. Slowly but surely you’ll be able to build up your own independent clientele.
What you really want to get as soon as possible is of course a big project, not just for the money, but principally for the publicity. Because once you get the right publicity you won’t need to hunt for clients that much anymore. Instead, you’ll be the one hunted for!
Suddenly you’ll be asked by all kinds of people to make kitchens, stairs, furniture and even all kinds of odd jobs. Interestingly in the world of artisanship, that is really how it works. There’s that period at the beginning of your career where you don’t know where to find work no matter how hard and well you perform. And then there’s that sudden switch, that people come to know you because of a distinguished project or piece you made, and then suddenly you find yourself in a position that you don’t know how to satisfy their requests all at once anymore.
This in turn puts you in the position that you HAVE to prioritize, and that’s great! Because now you can choose between the projects which are the most profitable for you. From a financial point of view or a publicity point of view. Or just simply because you enjoy certain projects more than others.
But in the beginning, you have to take anything available and give it your 100%, even at slimmer margins. Anything that comes along has to be everything to you. You have to give it your everything to find anything that is available on the market.
It is advisable to try to network with other carpenters. It’s not always easy because as a newcomer, others may be concerned that you’re going to be walking on other people’s toes. But then, in fact, what you will realize is that there’s more than enough work for everyone to do in most towns and their surroundings.
Of course, that is as long as you are competent and honest. If you have got the right skills and are willing to work hard, there will always be a place for you to succeed. Which is really one of the great aspects of working with wood, since it forms the basis of almost any construction known today.
3. DIFFERENTIATE YOURSELF
There’s work for everyone. There is work for all tastes, for all levels. In the sense that there will always be people who are better equipped than you will be, and vice versa.
To give an example, someone might be looking to get a complete kitchen build. Since your competitor might be better equipped than you are, they will be able to come out with a rate that will be more interesting than your offer.
But you on the other hand, instead of investing in that expensive equipment, you should specialize and differentiate yourself in other fields. Especially because you still don’t know how many jobs you’ll be offered requiring such expensive machinery.
You could instead specialize in building precisely on the measure, creatively adapting the design to its environment. Furthermore, you could differentiate yourself through the materials that you use in your constructions.
For example by using a building material like Valchromat, which has great properties such as durability and aesthetic quality. Another advantage of Valchromat is that it is accessible, easy to work with, and has an almost endless palette of colors available. All these qualities combined make this material very suitable to adapt itself to almost any taste, style, and budget.
4. KEEPING COSTS DOWN
At the beginning of your productivity, you’ll have to do the jobs with whatever equipment you can afford. You’ll probably even have to improvise and create your own equipment by combining multiple pieces and jigs. You have to grow gradually in terms of equipment. You don’t want to get stuck with overpriced specialized machinery taking up all your space and covered under dust with no use at all.
Talking about space: if you can’t afford a proper workshop garage, don’t be dismayed! Many successful woodworkers had humble beginnings. You could for example start with working on construction sites and bring all the necessary tools in the trunk of your truck, or even your car.
Many woodworkers start by working on construction sites. They do that often for long periods, for years even. Since this is the only way to keep the costs to a minimum. Also it gives you great flexibility. Cost management and flexibility are both crucial aspects in the beginning.
Then gradually, when you start to make steadily higher turnovers, you’ll be able to reinvest part of that turnover in machines, a proper workshop and tools. But remember, the key here is to grow gradually and smartly. When making those investments it’s worthwhile to beforehand do proper research of all the different tools available on the market and their differentiating functions. Often there are tools available with multiple functions built into one, therefore saving you money.
Invest when you have money and try not to borrow at all. Only purchase the essentials when there is no other choice. If you have to take a small loan, repay it as soon as possible.
If you get offered an interesting opportunity, like a large project on a construction site, you should negotiate a down payment. This is very common and readily accepted.
6. INVEST GRADUALLY
Now you’ll be able to invest in new machinery by using this down payment. Not to mention that since you’ll continue to work on construction sites, you’ll have to choose to invest in portable machinery. Not only do you want to choose machinery that will bring up the quality and value of your work, but will also save you time.
A great power tool to invest in for example is a domino system joining machine. These go for around $1.000, but with some luck, you might be able to find one on the secondhand market. Beware though that all pieces are included and no signs of heavy usage, like cracks or the like, are evidently apparent. To be certain, double-check on the internet to inspect all components of the given device. Often you’ll be able to find online the appropriate manual too if it’s missing.
If a construction site is an option for your workspace to utilize then take the opportunity! When you feel you’re really going to need a specialized tool, ask yourself for how long and how many purposes this investment is going to be useful for. If it is worth it then it’s the time to take the plunge and invest in a specialised professional tool.
And if you negotiate well, especially when choosing to acquire them used, it’s going to be an even better investment. By the way, some hardware stores offer discounts on machinery that have been used for display purposes or have been lightly used during demos. Some stores even offer refurbishment programs. There you can get a used model which has been thoroughly inspected for safety and often include a limited warranty as well, for that extra peace of mind.
Just remember to buy them only when you really need them. Don’t go buy them a year in advance. It’s simply useless and the money has been spent for nothing if it isn’t being used. So, in my opinion, it’s better to grow gradually, buy just what you need when you need it.
I know I’m repeating myself, but there are just too many newbies who make this mistake. They get taken away by all of their imaginations and all that would be possible with all these tools.
7. THE RIGHT MINDSET
Being an entrepreneur is a kind of state of mind, after all. I’m not saying that you have to become the Elon Musk of woodworking, but it’s necessary to have an entrepreneurial spirit to think bigger and not to be afraid to take risks when needed.
You have to take into account that there will be undoubtedly difficult times too. You might suddenly find yourself with less work while still having the same bills to pay. Not just bills from your suppliers, but also bills to keep your business afloat and even your own personal bills.
You might just have invested in expensive machinery for a new job at a construction site and then suddenly you get the announcement that the job has been canceled for various possible reasons. Not always will you be able to keep the downpayment, which often depends on the cause of cancelation as well as the nature of the agreement you made.
Suddenly you find yourself over your head and on all accounts in the red. Sometimes you might be the one to blame if you made an incorrect estimation of the costs involved and the time the work will need. This may sometimes result in having to take part in the total costs on your own account, which cuts into your profit margins. Or you’ll be left with no choice to call it off, lose the whole job, and risk your reputation.
When you get yourself in such a situation, it greatly affects your mood and suddenly it becomes more difficult to negotiate new jobs. Therefore it’s important to get creative and lift yourself up as soon as possible.
The important thing to do in these moments is to keep moving, to be proactive. You could for example place ads at local places, local internet sites (like Craigslist), etc. Don’t shy away from paid ads, often they are more than worth their small initial investment.
You could for example offer your services to make for someone stairs, tables, cabins, etc. Just make sure you advertise what you know to do best and have the basic equipment available for that job.
Craigslist is a pretty good way to find people who need your work. Usually, the people who contact you through Craigslist are people who are new to the area or foreigners who still don’t know anyone locally. Not only don’t they know anyone where to get these services from, but also they have the advantage of having many needs. They might need a new kitchen, beds, rework the entrance, floors, and so on.
What you want, as mentioned before, is to score as soon as possible a big project again. Don’t be shy to propose your services in different fields then called upon for. Show them the different possibilities available at reasonable prices according to their apparent needs.
8. KEEP YOUR PROFESSIONAL DISTANCE
Another advantage of getting clients from Craigslist and the other similar venues is that you don’t have any personal relationship with them. This in fact is a great solution when you want the advantage of not knowing your clients personally.
As explained above, it’s better not to know your customers at the beginning because this way it’s much easier to present an appropriate estimate at the real market rate for what a professional carpenter’s job is worth. When you serve family and friends there’s always a certain favor involved which makes it difficult to negotiate properly.
It’s true that these strangers might be very nice and even become friends one day. You will communicate with them on first-name terms and you might even have barbecues one day together. But at the end of the day, during work time, you can speak professionally and keep that kind of distance needed to make the right, responsible choices.
For the same reason, consider building your workshop a little bit outside of town – about 5 to 9 miles away. Not only will you be able to find bigger working spaces at more reasonable prices, but it also puts a physical distance between you and your customers. This avoids customers passing by all the time to speak to you and ask you all kinds of unrelated questions for help on odd jobs. These interactions can actually rob you of your expensive time and it won’t bring in a dime. It doesn’t mean it’s going to end badly if you go this route, but it means it might become harder to manage.
A company is not just made out of clients, it is also suppliers. And that is why you have to go out and find suppliers that are the right ones for you. You’ll need good suppliers in wood for example. Keep in mind that when you choose your wood supplier, it would be wise to choose one that can scale along with you.
Since the cost of wood might exponentially grow from 10 to 10,000 dollars a year sooner than you think. Then you have other suppliers, for screws, nails, and other disposables. And finally the suppliers of your tools and other equipment.
The choice between suppliers depends not only on what they can provide you with and at what cost, but also on the terms of payment they can offer you. That is to say, for example, many big hardware stores and wood suppliers give the option to supply yourself for one month and then the invoice is issued at the end of that month, and finally payable at the end of the following month. That should normally give you enough time to finish the job on the client’s construction site and consequently collect the payment for that job too.
So there you go, this is a very valuable tip you should definitely use. You need to know though that such a favorable payment option isn’t always obvious. It’s something that’s up for discussion, to be negotiated.
10. BUILDING RELATIONSHIPS
What’s also important with suppliers, is the relationship you’ll build up with their representatives. With whom you can have a cup of coffee and discuss the job you’re working on. This may in turn present you with other opportunities, as they may show you new products and new rates available.
It’s during these small meetings, while you drink a cup of coffee and take a breath of fresh air that you hear of what’s going on in the industry. For example new construction techniques and materials. But also you might hear, or even inquire actively, during these informal chats about what’s happening in your neighborhood, like new construction sites they’ve heard about. It’s an opportunity to meet your suppliers and make new connections. Because even if you won’t be going on vacation with them, they’re still mostly very nice people.
It’s important to have good contact with your suppliers. If the contact isn’t top-notch, or you don’t trust them, change suppliers. I think it’s very, very important to trust the person with whom you work with.
If there was a problem with a delivery, like something that was damaged or the like, if there is reciprocal trust in place, it’s in both of your interests to fix the issue at hand in the most proper manner. And that’s how it works in business, it works both ways.