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How to Start a Woodworking Business with Limited Funds

How-to-start-a-woodworking-business

Woodworking is a very popular form ofbusiness. It could be anything from making toothpicks to making furniture. Although it is a very thriving industry, itholds about 25% to 30% of the market, which leaves plenty of doors untapped anda great many ways to establish businesseson woodworking.

If you enjoy working with wood, then what better way to followyour hobby and getting paid for it at thesame time? You can start your woodworking business from your home as well,provided you have a workshop space.

You can start the business with limited funds as well; if you have the necessary equipment, you won’t have to invest much in the capital. On this post, we will guide you on how you can transform your passion into a woodworking business easily.

How Would You Know If the Business is Right for You?

You need to be extremely creative and hardworking. Woodworking requires more self-management and self-discipline than any other astounding business management qualities. Since it is a unique skill, you will have to put in 100% efforts to establish the company on your own. You need to be detail oriented, you need to be good at mathematics, and you should be skilled with your hands. If you think you have these qualities and if you are quite diligent in making this big, then there is no doubt if you can start the business.

Business Overview

There are plenty of business opportunities in the woodworking industry. You can build products, carve out miniatures, you could publish a book, sell your designs or even pursue a teaching career. Manufacturing anything from wood ladders, cabinets, kitchenware, reels, toothpicks to furniture, statues, smartphone holders, manual coffee grinders, combs, mugs, and miniatures fall under the woodworking industry.

On a typical working day, you will spend time on making wood products, designing wood products, sanding woods and cutting woods. Your work will also include assembling pieces together, staining, or varnishing finished products or painting wood.

You will also be selling your products, sourcing materials, and marketing business. You will be making money from producing and selling wood products. You can sell locally, or serve customers nationally. However, we suggest that you start small like any other business start-up. Stability and cautious growth will lead to success.

What Skills Do You Require for the Business?

You can pursue woodworking as a hobby early in your career if your intentions of forming a business out of it remain the same as you grow up. You have to learn the art of woodcarving and other freehand work with wood.

Although there are certification courses and programs, which you can partake, you will have to learn the job practically like most woodshop owners. You can possibly work under someone, gain first-hand experience, and then refine your skills on your own. You can fully grasp the basics of woodworking, such as machine operations and other job tasks within a year. However, in order to become a skilled professional who can read diagrams and blueprints, understand calculations, plan and execute sequences and set up machines, you will require three to four more years of rigorous practice and job work.

You can work under an architect, a furniture maker, or furnishing supplier to understand the industry and know which sector you want to cater.

Start By listing Ideas for Your Woodworking Business

Wood working services can be catered to children, adults, residents, architectural projects, commercial buildings, or to individuals as job work. Start with clarity and precision, and decide which category of products you would like to work on. Basically, you will have to choose your favored niche. You can determine your niche in two ways: look at your skill sets and look at the current market’s demand and supply.

Few of the niches you can cater include:

  • Basket making
  • Wooden crates manufacturing
  • Kitchen cabinet making
  • Home and office furniture
  • Kitchen bowls, mugs, trays etc.
  • School desks, chairs, and boards
  • General carpentry
  • Jewelry boxes
  • Coffins
  • Carving

Gather Your Capital Fund

If you have the equipment, you can start with just $2000. However, if you are planning to start from scratch, you will have to spend some significant, yet manageable amount. This should be around $6000 to $8000 as capital investment, and you will have to figure out the recurring expenses as and when you start planning the business. Some of the essentials you would need to spend money on include:

  • Space for storefront or workshop
  • Wood and other raw materials
  • Tools and equipment
  • Computer or laptop
  • Marketing tools
  • Business cards
  • Staff and
  • Miscellaneous expenses

If you already are a woodworking hobbyist and have existing tools, you must have your own workshop as well. Owning the space and equipment would further reduce your project cost by several percentages. You can gather funds in a number of ways. Some of them, which we can think of, include:

  • Personal savings
  • Crowdfunding
  • Bank loan
  • Request friend or family to fund you in exchange for wood products
  • Credit union loan

Once you have figured out your favored niche and have planned your finances, it is time to set up the business as a legally compliant and wholly operational entity.

Steps to Set-up the Business

  1. Create a Business Plan: A business plan can help you in a number of ways – it can act as a guideline to achieve objectives, both short and long-term. It can act as a measuring scale to quantify your achievements. It can help you get a good loan amount from banks and other financial institutions. You have to establish a clear business plan, which would include the following elements:
  2. Your target market
  3. Your preferred niche
  4. Your market analysis
  5. Business mission and vision statement
  6. Development strategy, both short and long-term
  7. Equipment and machinery you need and their sources
  8. Office or storefront location
  9. Transportation
  10. Initial costs
  11. Financial projections, such as how long will it take to break-even
  12. Development scopes and strategies and
  13. Marketing strategies
  • Establish Your Business as a Legal Entity: You need to officially register your business. Look up your state and local federal authority’s website and find out the process for registering your business. Hire a legal and financial advisor and ask him to walk you through the different types of business structures you could form and their associated pros and cons.

You could form an LLC, a Sole Proprietorship, an LLP, or a Corporation. A business entity will prevent you from being personally affected if your woodworking business is legally sued. Therefore, starting a Limited Liability Company is beneficial – it keeps your business assets and personal assets separate, at the same time, allows you to file taxes as a sole proprietor.

  • Obtain Permits and Licenses:  Each business requires a different set of permits and licenses to be obtained. Look up your state and federal website to find out what is specific for a woodworking business. You also need to obtain a Federal Employer Identification Number from your state’s IRA. This is free of cost. If you fail to acquire the needed permits and licenses, your business can face serious fines, which may also lead to a sudden shutdown.
  • Open a Bank Account: In order to run a business and make your finances organized, you need to open a separate bank account different from your personal account. You should never mix your personal account and your business account. This will make tax filing and auditing easy. Open a checking account. EIN is compulsory to open a business bank account. Make sure you obtain that one first.
  • Get Your Business Insurance Coverage: Insurance is extremely crucial for any kind of business, be it a business as simple as pet sitting or as creative and strenuous as woodworking. It helps you eliminate or fight any uncalled situation such as damage to property, damage to good, damage at client’s end because of employee etc. You may have to buy worker’s compensation insurance if you hire staffs. Otherwise, limited liability insurance will do the job remarkably well.
  • Choose Your Location: Since woodworking is a messy work, you would not need a proper office set-up unless you decide to sell your work in the storefront. You can make do with a garage or backyard or any low maintained space for your workshop. However, make sure the place gets plenty of natural light and air has a lot of free working space and is not damp. If you are working alone, you will just require a desk and a computer to deal with clients, and a few cabinets to store the files.

If you want to open a store for your finished products, then look for a competitive and easily accessible place for customers.

You will also have to partner with a cargo transportation company to transport finished products to the end client.

Market Your Business

For marketing and building a profitable brand value and web presence, you need to checklist the following things:

  1. A suitable, promising, and modern business name
  2. A business logo
  3. Company business card, flyer, and brochure
  4. A unique selling point

Define Your Brand Value

You have to first define your brand. A brand is defined by its name, by its work and by its promises. A strong brand will help you beat the blues of competition and gain a solid hold on your customers. What you promise to offer and why your company is different from the hundred other woodworking companies around – you have to answer these two questions to establish your brand value.

Create Web Presence

Once that is done, create a web presence, starting with a responsive and promising website. Do the needful, such as SEO and PPC to bring your website on top of search engine result pages. Use social media channels to attract clients and talk about your product. Interact with potential customers in all possible ways, without acting like a stalker, while ensuring to retain your older customers, at the same time by offering special discounts, referral concessions, and value-added services.

You are all good to start your own woodworking business now. Start small; small enough that your products fit inside your client’s vehicle. Grow stealthily and steadily. Promote continuously, incessantly and rigorously, even if your business escalates to new heights. Best of luck! Please comment your views about this business below and help aspirers with valuable insights.