Starting a woodworking company is a perfect way to transform a hobby you love into a business that makes money. Wood products are common and they make great gifts and decorations. Yet starting a business requires more than making items made from wood. Particularly in marketing and business management it requires research and planning.
Why should I start a Woodworking Business?
If you enjoy woodworking, obviously, what better way to enjoy it than being paid for at the same time, right? Besides doing something you love, you can also experience other people who appreciate your work-which can be very rewarding.
Another benefit is that working in your own wood shop from home means you can skip the morning commute, you don’t have to dress up to go to the office and you can generally schedule your own hours. Getting more flexibility on time also helps entrepreneurs to enjoy certain aspects of their lives, such as family activities, travel, etc.
Woodworking can be a relatively low-cost startup company, particularly if you already have a lot of the equipment you need. You don’t have to rent a retail outlet, hire staff or invest in a lot of inventory of the drug. You can start small, and expand as your customer base expands. That can be a critical point on a limited budget for entrepreneurs.
Apart from building products, there are also plenty of woodworking business opportunities. You might teach others the art to write and publish a woodworking book, or to sell design plans.
Beginning a Home Workshop – A Complete Guide
Industry Point of view
This industry produces wood products which are not manufactured by sawmills or veneer, engineered timber, millwork and mobile homes manufacturers. Industrial products are, therefore, miscellaneous. They include ladders of wood, cabinets, kitchenware, handles of brooms, kiln-dried lumber, reels, and toothpicks.
Since the collapse of the housing market, the Wood Product Manufacturing industry has turned a corner, driven by household income improvement and a rebound in housing starts. The growing popularity of low-cost imports and competition from non-plastic substitutes will, however, restrict profit growth in the years to come. Nonetheless, expanding housing, dropping unemployment and improving incomes will grow the industry.
Statistics of the Woodwork Industry
The manufacturing sector of wood products has a geographic distribution close to that of other manufacturing industries. Many manufacturing facilities are concentrated in the Southeastern, Great Lakes, Mid-Atlantic and Western regions. Industrial manufacturers usually choose to locate near upstream industries like sawmills and millwork producers.
Therefore, establishments are located near major wholesale and consumer markets, as households eventually buy a considerable portion of industry goods. Production is dominated by the Southeast, comprising 24.0 percent of industrial establishments.
North Carolina and Georgia are the major producers within the region, while business establishments are widely spread across the region. In 2014 Woodworkers had about 237,200 jobs.
The industries which employed the most woodworkers were as follows: Other wood product manufacturing–23% Wood kitchen cabinet and countertop manufacturing–21% Household and institutional furniture manufacturing–11% Sawmills and wood preservation–10% Office furniture (including fittings) manufacturing–10%.
Although a few jobs are hired by many smaller shops, the manufacturing plants can have as many as 2,000 employees. The conditions of employment differ according to the specific duties. Workers sometimes have to handle heavy, voluminous materials and they may experience noise and dust. As a result they wear hearing protection devices, safety glasses, and respirators or masks on a regular basis.
Woodworkers are exposed to hazards like harmful dust, chemicals, or fumes and often need to wear a respirator or mask. Others may face excessive noise, and wear hearing protection devices. The bulk of injuries are sprains, back pain, carpal tunnel syndrome and hernia.
These injuries or illnesses are caused by excessive amounts of awkward bending, reaching, twisting, and excessive or repetitive effort. During regular business hours, most wood-workers work full time.
Is a Woodworking Company Worth Starting from Scratch or Buying a Good Franchise?
There is much discussion as to whether it is better to start a new woodworking business or buy a woodworking business on the marketplace for sale. Both retention approaches have their advantages and disadvantages. Buying an established woodworking company is more practical for first-time business owners than trying to build one from the ground up.
Established woodworking businesses are already equipped with the resources and processes which struggle to acquire new business owners. The aim is to find a company for sale that closely matches your ownership philosophy and business goals
Franchising is not a recipe for some success, but it makes it much easier. Before starting a woodworking business, you may want to evaluate whether franchising can make it easier to get started.
Challenges in the Woodwork Business
The woodworking industry is extremely complex and includes a wide variety of companies, skill sets and job sites. While some woodworkers are skilled in architectural ventures, most woodworking entrepreneurs are hobbyists interested in turning their passion into an opportunity for full-time employment.
- Having the wrong mindset
- Getting a hobby approach
- Improving business skills
- Fostering Management
- Knowing Your Responsibilities as a Business Owner
Best legal agency for a wood business
If you try to open a woodworking company, you have two legal entities available-the sole proprietorship and the LLC. It is important to understand the definition of the terms in order to understand the tax obligations for each. As the name suggests, a sole proprietor business structure is a firm with a single owner.
Three-quarters of all businesses use that structure. This retains the shareholder in charge of the business and has the easiest initial design. When the company has grown significantly, a limited liability corporation, or LLC, is often created for partnerships. An LLC has the benefit of more growth opportunities and tax advantages.
Because of the liability issues, many people would rather create an LLC than a sole proprietorship, but that takes money to plan the incorporation document. Payment options need to be considered, a bookkeeping program needs to be in place, and all of this takes extra money that takes away the funds needed to buy the supplies for making the products.
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Wood staff companies have a great deal of versatility. At a customer’s house or place of business, you may be doing all of your work on site. You could create your creations in the comfort of your own wood-work shop. No matter how you choose to do it, there are a number of potential pitfalls that can cost your company large amounts of money. Prepare for potential problems and hazards by ensuring you have the right types of insurance coverage for small businesses.
You know many different companies, as a trained woodworking worker, who supply the necessary materials and equipment. Such companies can offer the business customers competitive wholesale terms. Research online companies to find out their wholesale discount policies, minimum purchases and payment terms, or contact them directly.
You should also study vendors who do not sell directly to consumers but only wholesale products directly to business owners. Such companies may be more difficult to find and may have stricter requirements for forming wholesale accounts, but they may provide a wider range of better quality products at lower prices.
Create a business plan
You will start to develop a business plan once you have an idea of what kinds of products you want to sell and have an idea of the cost of manufacturing. Even if you want to keep your business small, business plans are important. First of all, the corporate plan can help you keep to your objectives. Therefore, you need to create a business plan in order for funding sources to determine how to deal with you if you decide to expand your company and want to receive financing from investors or creditors.
Your business plan should include an overview of your project and your goals. It should also have financial projections for the coming years, outlining the cost of getting your business started as well as projected sales to the point that your business will break even. Eventually, information about the demand and the competition should also be included for the kind of goods that you hope to sell.
Build a Laboratory
Your work-space is your place of business. The establishment of a productive craft company also requires a dedicated workshop:
Maintain safe tools and materials
An independent, secure workshop will protect your tools and equipment from robbery and vandalism. Note that articles such as hand tools, wood and other materials can be sold without difficulty and make them all very attractive for thieves.
Most people who operate their own businesses find that having a separate area for work activities allows them to achieve a good balance between work and life.
With your own workshop, you can develop your expertise and increase client trust in your business practices if you plan to work in clients in individual items or orders.
Enterprise, Licensing, Insurance
Speak to your lawyer about the best way to set up the legal structure for your company. Single ownership, partnership, Limited Liability Company or even a regular corporation are choices. Your attorney will review your plans and goals and recommend a policy that protects your assets while you expand your company in woodworking.
Once you’ve organized your business, you’ll want to obtain suitable licenses and operating permits. This will in most cases be a straightforward process, especially if you plan to work outside of your home. If you are unsure of what licenses and permits you need, please contact your local Small Business Administration branch.
Another consideration is that of insurance undertaking liability. While it is unlikely that your goods could hurt someone, liability insurance will protect your home, assets and family in case a problem arises. Additionally, business insurance will cover you if a customer visiting your office gets injured. An experienced business insurance agent can assist you in selecting policies or policies that meet your requirements.
Research Sales Venues
You’ll need to find locations to market your goods. Most craftsmen, like woodworkers, are starting to sell directly on the craft markets to customers. Certain choices include local retail shops selling home decor and online platforms like Etsy. Firstly, you might need to try to sell can multiple platforms to decide which one works best for you and your goods.
Create Marketing Materials
Business cards can be the most powerful marketing tool which a craftsman has. If someone sees your work and enjoys it, give them a card and let them know you’ve got a contract. It’s also a wise idea to create a website with high-quality, professional photographs of your work.
When you plan to sell your products at events, make sure you get contact information from people coming by your booth. You can let them know when you will be at another show, either by email or by snail mail. While this strategy can take time to bear fruit, ultimately you will be able to develop a customer base that not only buys your goods but also refers you to new businesses.