Tips to help your woodworking business succeed

Understand that it’s a tough market out there

One of the most important issues facing all woodworking business in this current era is lower profit margins mainly due to the falling prices.

Many manufacturers have entered the woodworking industry and they are going hard at it, causing the average price of wood products to drop considerably and hurting the profitability of woodworking in general.

On top of that we can also throw in a worldwide shortage of lumber which is causing a large spike in the cost of base materials.

Good news for the home woodworker.

The home woodworker though has got a huge amount of flexibility; you can make whatever you want. You don’t have to concentrate on only making a few particular products, the home woodworker just needs to do their research and figure out what are least commonly available types of products that appear to be very worthwhile making.

To make sure you don’t over extend yourself it’s best to restrict yourself to only a few products that you feel very confident about, make them with high quality and then do some excellent marketing or get someone to help with the marketing.

I would also suggest doing some research on the 8 wastes of lean manufacturing; you’ll be surprised just how relatable that can be for a home based business.

The planning phase is the biggest one!

When first starting out, you need to have a well-thought-out plan or strategy in place.

For a few unique reasons, if you want to start a woodworking business, having a clear and distinct plan is very critical to your future success. Set clear and exact tactics for consistently producing high-quality items with the least amount of waste.

These tactics could include things like measuring properly every time and twice before cutting, cutting carefully and without errors, maintaining all tools and equipment to high standards, always checking for square, using the right tool for the right job in the right way and lastly, proper storage and handling of base materials and finished products.

A marketing strategy can and will help you make the most of any chances that come your way, as well as identify any unusual or difficult-to-foresee factors that could hold you back or possibly set you back.

Your initial costs should not be 1 penny more than what they need to be, be frugal but also think about the ‘what ifs’ for instance, ‘What if somebody broke into your woodshop tonight and stole just about everything?’. Get the best value for money security features in place before you start and I’d be including a high quality alarm system and security cameras with that.

Get all your licenses in place before you start and you’ll need to check with your local Council and possibly your state government as to whether you can actually run a woodworking business from your home at your particular address. There might be provision for you to do so but only if you meet certain criteria and I imagine noise pollution would be a big thing here, so expect to do some rigorous sound proofing of your home woodshop before you get the big green tick from the Authorities.

You’ve got no idea as to whether you’re going to do well at this or not, so minimize the harm any threats you can think of could possibly do, how would they affect your success, the family finances and your happiness? Get all this thinking done now, before you get to busy.

You will have enough on your plate with the typical running costs after you’ve been going for a while, so having a few dollars tucked away for a rainy day could be handy. In your spare time, do all that you can do build up what could be your sales network, you need it to be a large enough audience to support your business today and desirably, where you would like to be in 12 months time. You’ll gain a lot of confidence from knowing you’ve got the people there interested at what you’ll be churning out.

Be sure to take out sufficient insurances and if you’re going to have having customers come into your home woodshop then you’ll need to be protected against them slipping over and badly hurting themselves (public liability). If you’re going to have some there working with you (workers compensation) and also consider a ‘bad times’ insurance (income protection). All of these insurances are in addition to the comprehensive insurance you will have to put in place to cover replacement costs of everything (fire, theft, flood, tornado, cyclone etc) make sure it includes all possibilities that could take everything away from you in a heart breaking instant.

Get a good certified accountant; he/she should be able to help you with the hundreds of reasons why, to me this is one of the top 3 things to do.

Review, Consolidate and Optimize

Once you’ve been at it for a few months and you’re into a steady routine, do your best to work out how long it will take you to break even with regards to your start up costs plus any other unforeseen overhead costs you’ve incurred thus far. This will give you a target to measure yourself against and as you may have heard before, what gets measured gets managed.

If a year or two comes and goes and you’re not doing anywhere near as good as what you hoped and are actually struggling to keep afloat, please consider visiting my website.

At GLZWoodworking I've spent a lot of time putting together a reasonably large amount of information on what you can do to address these unfortunate and hopefully preventable circumstances if they were to happen to you.