The 21st century is the age of the entrepreneur. After the recession in 2008, the economy underwent a lot of changes. The job market has now become saturated and money isn’t as easy to come by as it used to be. However, this doesn’t mean that you don’t have a chance at making a decent living. A great thing about this age is that entrepreneurship has become really easy. There are a lot of ways through which you can set up your own business. Having your own business is tough, but it also gives you far more returns than any job ever could.
One of the best ways to set up a successful business is to find something that you love to do and try to monetize it. If you have a love for woodworking then you’re in luck, because woodworking is a really profitable business. Wood-based products are always in demand because wood is such a versatile material. It can be used in a number of different ways and has the ability to look good and be practical at the same time.
In order to start your own woodworking business, you will need to take a bunch of factors into consideration. Our guide is going you through the entire process of setting up your business. you probably have loads of questions bombarding you. Things such as do you need any certifications? how much does it cost to set up a wood shop? Where will you get all the supplies that you need? By the end of this article, you’ll have a framework to guide you on how to bring your business idea to life.
The Business Setup Process
Regardless of what kind of business you’re about to start, you need to take care of a bunch of different things. You need to make sure that your business is viable and also legally compliant. Following these steps will make sure that you’re able to set up your venture properly.
Make a Business Plan
Planning is going to be an invaluable asset for your future as an entrepreneur. You must have a clear plan that will map out all the specifics of your business. Your plan should cover the following topics:
- What will be your business’ target market?
- What will your business name be?
- What’s going to be the cost of your start-up and how will you finance it?
- How long will it take for you to break even?
Finding the right answers to these questions takes time and effort. You’ll need to do a decent amount of brainstorming in order to get your answers. Fortunately, we’ve done plenty of research already that will make brainstorming a lot easier for you.
Your Target Market
Knowing your target market is really important. It helps you determine where can you sell your product, to whom, and at what pricing. When it comes to woodworking, your target market is going to consist of people who are wood enthusiasts. People who appreciate handiwork and have higher disposable incomes. This means that your target market will be selective, but you will also able to charge more for your products. Your business’ profitability will be determined by the quality and complexity of your products. The more skilled you are, the more complex products you will be able to make. And complex products can be sold for higher prices.
Your Business Name
Naming your business can be the easiest and the toughest thing to do. You need to come up with a name that is unique, memorable, and also reflects the nature of your business. You can brainstorm a bunch of options and check for their availability by googling them. If there aren’t any similarly named businesses online then you’re good to go. You should also check whether you’ll be able to find a matching domain name for your business’ website.
Your Start-Up Cost
The financial part of setting up a business needs a lot of eyeballing. You need to figure out how much will your setup cost you and how will you arrange your capital. In a woodworking business, a large chunk of your investment will go into buying materials and equipment. Here’s a breakdown of all your major initial costs:
- $3,500 for working materials and equipment
- $1,200 for a computer (if you don’t have a spare one)
- Around $800 for buying your domain and setting up your website
- $1,200 for miscellaneous expenses.
Now, these costs aren’t set in stone, they will vary from person to person. If you’ve been pursuing woodworking as a hobby before, you might already have a bit of tools and equipment lying around. You might not have to invest in a new table saw for your wood shop. You might already have a dedicated space for setting up your wood shop as well. Making do with what you already have can be a great way to save money.
Other expenses such as getting a computer and setting up a website can be worked around as well. If you’re really short on capital, you can always make do with a Facebook page instead. If you don’t want to cut corners, you can consider applying for a loan at your bank. Or you could find someone who’s willing to invest in your business.
When Will You Break Even?
Every start-up is dying to know when can they break even? A business can only break even once it has returned all the investment that was put into it. The time taken to break even depends on the size of your investment and your revenue generation. Like we mentioned above, your skill level will play a role in how much can you make from your work. Complex products will let you have wider profit margins. More profit means more money coming in, and more money means a faster break-even.
Legalities
After you’ve finalized your business plan, you’re going to have to go through legalities. These can be boring and confusing, but they are also important. They’ll help you legitimize your business and also save you from personal liability. Now, there are loads of different business structures that you can choose for your business. It is recommended to get help from a professional who can guide you on what sort of structure you should choose.
Taxation
As a legal business, you’re going to be paying taxes. Before you can do that, you need to register your business for taxation. Tax registration has become quite easy nowadays thanks to everything being online. The first step of the tax registration process is to get an EIN. You can get this from the IRS website without any cost.
Opening a Business Bank Account
It is very important to keep your business’ assets and your personal assets separate. This prevents your personal assets from coming under fire in case your business gets sued. Having a separate bank account for your business is one way to keep the two separated. As a business owner, you need to make sure that you don’t pierce your corporate veil.
Having a separate bank account for your business will make your accounting and taxation a lot easier as well. You can also get a credit card for your business. A credit card (if used carefully) can help you build a good credit history for your business. This can come in handy in the future when you need loans for investment.
Once you have setup your bank account, it is important to record all your expenses for it. The easiest way to do this is to document everything. You can find accounting software that makes this process really simple.
Getting Permits & Licenses
There are a variety of licenses and permits that are needed in order to operate your business. You will need to check for yourself what permits apply to you and obtain them as soon as possible. Failing to have permits can get you in a lot of trouble.
If you’re planning on hiring employees, then you should also consider getting insurance. In fact, some states make insurance compulsory in order to hire employees.
Developing Your Presence
Your business won’t make money if it doesn’t have customers. And the best way to get customers is to establish a presence. Setup yourself on social media and begin advertising yourself. You should also get leaflets, brochures, and signs printed as part of your marketing effort.
If you have a website, you should have it search engine optimized so that its visibility increases. Your goal will be to develop a brand name for yourself. Something that sets you apart from the competition and also makes you memorable. A strong brand and good services will help you get and retain customers.
Setting Up Your Woodworking Shop
Once you’ve gone through all the highs and lows of setting up your business, you can focus on the fun part. The heart of your woodworking business will be your woodshop. This is where all of your equipment will be housed. You’re also going to be doing most of your work here. Your woodworking shop must provide you with a workspace where you can be efficient and also immerse yourself in your work.
The first step of setting up your woodshop is to find a place to establish it. If you don’t already have a dedicated workspace, you should look for a space that:
It is spacious enough to keep all your equipment and give you room to move around. A workshop that is too cramped can be dangerous to work in.
Look for someplace with good lighting. Working in low light environments can be bad for your health and your projects.
A separate place for storing materials is a huge bonus. This will clear up space in your woodshop. You will also be able to keep everything organized.
Getting Your Equipment
Once your workspace has been selected, you will need to populate it with your tools and equipment. You will have an array of hand tools, power tools, and miscellaneous items populating your shop space. It’s a good idea to keep all your tools in an organized manner. You can setup dedicated spaces for storing your hand tools and power tools. labeling each storage space respectively is also recommended. Being able to find your tools easily will make your job a whole lot easier.
A table saw is a must have tool in any woodshop. Table saws are useful but also hazardous. You should place a table saw somewhere out of the way. It’s a good idea to leave a certain degree of space around the table clear as well. Sawdust is a huge problem in woodworking. You need to keep your sawdust under control or risk having your shop space become hazardous to work in. you should always have safety goggles and a breathing mask on you when you’re working. These will prevent sawdust from entering your eyes and your nose.
You can also set up dust collection trays under your countertops. These dust collection trays will collect sawdust as you work. And once you’re done, you can empty them somewhere outside.
Should You Get Second Hand Equipment?
There’s no harm in buying second hand equipment if you have that option. You can bring your setup cost down by quite a margin. Second hand tools will have a shorter lifespan, but they can be worth it if it means getting your business up and running without overextending your investment.
When you’re purchasing second hand tools, you need to be wary of a few things. Make sure that the tools aren’t damaged or extremely worn out. Power tools that have been misused or have become damaged will give you trouble later on. Keep in mind that you might have to spend money on the tools that you buy. Second hand tools often need repairing in order to bring them back into shape.
To make sure that you don’t end up buying a tool that is damaged or useless, you should familiarize yourself with what you’re about to buy. Knowing your tools is the best way to spot any problems.
Not Sure About What You’re Doing?
It’s perfectly natural to feel swamped at various points of your business setup process. Establishing a business isn’t easy. If it were, everyone would be doing it. At times like these, you should look for guidance. You can find loads of online forums and blogs where people discuss various aspects of woodworking. WoodProfits is a great website for people who are looking to set up their own woodworking business. This website is dedicated to helping people set up their own woodworking business. You can find a lot of tips here that will help you establish a proper business while also lowering your initial investment.
Operating Your Woodshop
After your shop has been set and you have all the tools that you need, you can begin working. As a woodworking business owner, you’ll be doing three major things:
- Working on projects
- Acquiring materials for your projects
- Marketing your business
Working on wood projects is going to be your bread and butter. Making a wood product is a multi-stage process. You make mock-ups, finalize designs, cut and sand wood, assemble your projects and place finishing touches.
In order to work on projects, you need materials. As a business owner, you will spend time establishing supply chains. Once you have found reliable suppliers, you will have easier access to materials whenever you need them.
Marketing is a huge part of running any business. And there’s more to marketing than just telling people what you do. It’s about interacting with your customers, informing them about your services, and highlighting what makes you different from your competition.
How Do You Gain Experience?
Woodworking is a technical and artistic field. You need to have control over a variety of tools and techniques. You also need to be familiar with different kinds of materials and how to use them. A woodworker also needs creativity so that they can innovate and make products that are unique.
Most woodworkers start off as simple hobbyists. They learn from friends, the internet, and through practical application. In most handiwork, you learn the most by actually doing things. There are seminars and workshops that you can attend to expand your knowledge of woodworking. But you’ll learn the most when you’re in your shop and you’re working on different projects.
Even if you are a highly experienced woodworker, you should still consider attending seminars and workshops. There are always better ways of doing things that you might learn. Also, going to these places can award you with certifications. These certifications can help you make your business stand out even more.
If you’re someone who is getting into woodworking for the first time, we would recommend that you don’t jump into having your own business right away. The last thing you want is to invest loads of money and find out that you don’t have an aptitude for this. It takes around a year in order to get a hang of the basics of woodworking. It is recommended that you start off as a hobbyist first. Do a bit of experimenting on your own. And then apply for an apprenticeship program if you want to accelerate your learning. Fortunately, there are plenty of ways to learn how to become a woodworker.
Conclusion
Woodworking is a fun and noble profession. Setting up your own workshop is a great business opportunity if done correctly. There are a lot of hurdles in establishing your own business, but it is worth it. Woodworking can be quite profitable since you produce products of high value.
The initial cost of setting up a woodshop can vary depending on what you’re doing. You should start off with a basic workshop in order to keep your initial investment low. Once your business breaks even and you begin making money, you can gradually upgrade your equipment.
After establishing a business plan and setting up your shop, you can begin focusing on running your business. market yourself, acquire materials, and make products that you can sell. Running your business will be a fun and educational experience for you. And as you learn, you will continue to become better at what you do.