If you’re a woodworker who wants to make some extra money, starting a woodworking business can be a tremendous opportunity to become your own boss and live the life of your dreams.
Just images being able to work on your favorite projects all day, instead of having to go to work at a job you hate.
Sounds amazing, right?
In this post, I’ll explore how to start a woodworking business, some of the pros and cons of starting your own business, how much it costs to start a woodworking business, and much more. Let’s get started!
Benefits of Starting a Woodworking Business
Starting a woodworking business of your own can come with many benefits.
Unlimited Income Potential
As a business owner, your income potential is practically unlimited. You can make as much money as you want, and it’s all up to you how successful your business becomes.
Of course, there are always risks involved in any business venture, but the potential rewards of owning your own woodworking business are great.
When you start a woodworking business, you can make as much money as you want and live the life of your dreams.
For most entrepreneurs, this is the main reason why they decide to start a business in the first place.
Related: Is Woodworking Profitable?
Work Your Own Schedule
Working whenever you want must be nice, and it’s completely possible by starting a woodworking business.
Want to work late at night? Go for it!
Want to work early in the morning? Have at it!
Gone are the days of having to get to work at a set time and leave at a specific time. By owning a woodworking business you can clock in and out whenever you want.
Don’t get confused, though. You’ll still have to work in order to make money. But you’ll be the one in charge of your schedule.
Work from Home
Another benefit of starting your own woodworking business is the ability to work from home.
By owning a home based business, you can avoid wasting time and money commuting to and from an office every day – which can certainly benefit your mental health.
This is even more beneficial if you have a family and children living with you. Instead of only seeing your family after work hours, you can spend time with them whenever you have a minute.
Another pro of working from home is the ability to make your own meals and save money on eating out.
While some people might have a hard time being productive running a home based business, the benefits will outweigh the cons for most people.
Enjoy Your Work
If you hate your job, starting a business of any kind can help you find enjoyment in work again.
You’ll be surprised how motivated you become when you’re working on projects that you love.
If you crave time spent in your wood shop and love the smell of sawdust, starting a small woodworking business is the perfect way to bring your passion to life and make a living doing what you love.
Some people start businesses with the goal of helping others. And while it might be more difficult to make this claim with a woodworking business, it can certainly bring a smile to some peoples faces.
For example, you could donate some of your profits to charities or create wood products for those in need.
Helping others is a great way to make the world a better place, and it can be a very rewarding feeling as an entrepreneur.
Cons of Starting a Woodworking Business
As with most things, where there are pros, there are cons. Below are some cons of starting a woodworking business.
As an entrepreneur, there is no one to blame but yourself if your business fails. This can lead to months or even years of unstable income, which can be tough to handle both emotionally and financially.
As a business owner, it can be extremely difficult (if not impossible) to predict your income from month to month. This can make it difficult to budget and plan for the future.
There are many ways to combat this con, but it’s important to be aware of it before you start a woodworking business.
For example, living below your means and saving as much money as possible can help you weather the tough times.
Another option is to have a backup plan in place, such as a part-time job or a side hustle, in case your business doesn’t generate enough income to cover your expenses.
Relatively High Startup Costs
Starting a woodworking business can be expensive. You’ll need to purchase tools, machines, wood, and other materials to get started.
Not to mention, if you’re planning on starting a business from home, you’ll need to have adequate space to work in as well as a place to store your lumber, materials, and finished products.
More Work & Longer Hours
Growing your business can be extremely time intensive.
Unfortunately, just because you start a business, it doesn’t mean you’ll make money right away.
If you want to grow a successful woodworking business you’ll need to dedicate the time and energy to grow your brand and reach more customers.
This can often mean working long hours and working during the weekends, which can be difficult if you have other commitments outside of work.
What to Do Before Starting a Woodworking Business
Now that you’ve weighed the pros and cons of starting a woodworking business, there are a few things to consider before going all in.
Perfect Your Woodworking Skills
Quality is vital in any business, but even more so in the woodworking industry.
If you’re not confident in your woodworking skills, it would be a good idea to perfect them before starting your business.
This way you can ensure that your products are of the highest quality and that your customers will be happy with their purchase.
Try practicing various techniques and methods to see what works best for you.
There are plenty of online resources, books, and even woodworking classes that can help you improve your skills.
Ask Advice from Mentors
If you know other small business owners or woodworkers, don’t hesitate to ask for advice.
These people have likely been through the same process as you and can offer helpful tips and advice.
Additionally, there are plenty of online forums and groups dedicated to small business owners and woodworkers where you can ask questions and get advice from other professionals.
Types of Woodworking Businesses
There are many different ways to make money woodworking. When starting a woodworking business, you have options. Depending on your skills, some options could be better than others.
Below are a few woodworking businesses to consider:
- Open an online store
- Sell crafts through Etsy
- Start a woodworking blog
- Start a woodworking YouTube channel
- Teach woodworking lessons
- Restoring furniture
- Sell woodworking plans
- Open woodworking retail stores
Each type of woodworking business has it’s own challenges and rewards. Consider what you’re good at and what you enjoy before deciding which type of business is right for you.
Depending on the type of business you start, you can make good money woodworking so it’s well worth the investment.
How to Start a Woodworking Business (Step by Step)
Still interested in starting your own business? Keep reading to learn exactly how to start a woodworking business.
Have an Idea
Every small business starts with an idea. And your woodworking business is no different.
Start by brainstorming what type of woodworking business you want to start. Once you have an idea of what you want to do, research the industry and competition and form a business model.
This will help you determine if your idea is feasible and give you an idea of what you need to do to get started.
Create a Woodworking Business Plan
Once you’ve landed on the type of woodworking business you want to start, you’ll need to create a business plan. This document will outline your business goals, strategies, and how you plan on making money.
A business plan should include the following sections:
- Executive summary
- Company description
- Products and services
- Market analysis
- Business strategy
- Management team overview
- Financial plan and projections
New business owners can sometimes fail to see the importance of creating a business plan, but it’s one of the most important steps in starting a business.
Not only will it help you get funding from investors, but it will also force you to think through every aspect of your business.
Check out the video below for help crafting a great business plan.
Obtain Funding for Your Business
Next, you’ll need to obtain funding for your business. This step is critical and will determine how successful your business can be.
There are a few ways to get funding for your woodworking business including:
- Using your personal savings
- Taking out a small business loan
- Asking friends and family to loan you money
- Crowdfunding platforms
Just be sure to do your research and analyze each option before making your decision.
Choose a Business Structure
Determining the legal structure of your business is an important step in the startup process. This will determine how your business is taxed as well as your personal liability.
The most common business structures for small businesses are sole proprietorships, LLCs, and S corporations.
A limited liability company (LLC) is a good option for most small businesses because it offers personal liability protection and is not as complex as an S corporation.
A sole proprietorship is another option if you’re a single person owned business. This structure is the simplest and most common for small businesses, but gives you less protection.
Consult with an attorney or accountant to determine which structure is right for your business.
Choose a Business Name
Determining the name for your woodworking business can be challenging. But it’s important to choose a name that is reflective of your brand and will help you stand out from the competition.
Landing on a business name can take some time, so don;’t rush your decision.
It’s also worth noting that you should check to see if your business name is available to register before making your final decision.
You can do this by searching for your business name on the USPTO website to see if there are any trademarks already in use.
Another consideration is if the domain name is available. If you plan on creating a business website (which is highly recommended), you’ll want to make sure it is available as well.
You can search for available domain names on websites like Namecheap.
Register Your Business
Next, you’ll need to form your legal business entity by registering with federal, state, and local agencies.
- Federal: You’ll need to obtain an Employer Identification Number (EIN) from the IRS.
- State: You’ll need to register your business with the Secretary of State in the state where your business will be located.
- Local: You may need to obtain a business license or permit from your local municipality.
There are some fees when registering your business but it’s important to do this to protect yourself legally.
Get a Business License and Permits
Depending on the type of woodworking business you want to start, you may need to obtain a business license and/or permits from your state or local municipality.
This step is important to ensure you’re following all the regulations for your business.
Obtain Business Insurance
Business insurance is another important step in starting your woodworking business. This will protect you and your business from any potential liability.
There are a few different types of business insurance to consider including:
- Product liability insurance
- Property insurance
- General liability insurance
- Workers’ compensation insurance (if you have employees)
Be sure to speak with an insurance agent to determine which type of coverage is right for your business.
Get State & Federal Tax IDs
You’ll need to obtain a State Tax Identification Number (SUTA) and Federal Tax Identification Number (FEIN) for your business. These numbers are used to identify your business for tax purposes so you can complete your annual tax filing.
If you’re selling products, you’ll also need to get your sales tax permit from your state. This will allow you to collect sales tax from customers and remit it to the government.
Open a Business Bank Account
Now that your business is registered, you’ll need to open a business bank account. This is important to keep your personal and business finances separate.
There are plenty of new business bank accounts you can open that are completely free.
It can also be a good idea to get a business credit card to help you build business credit.
Initiate Marketing Activities & Start Your Business
Finally, it’s time to start your operations!
You can begin any marketing activities you want to help promote your business and start attracting potential customers.
How Much Does it Cost to Start a Woodworking Business
As with any business, you’ll need to invest some money for the start up costs involved with your operations.
Between tools, materials, and marketing expenses – starting a woodworking business will typically require a few thousand dollars to get started.
Tools and Equipment Needed
If you’re already a professional woodworker, you likely have many of the tools and equipment needed to start a woodworking business.
However, if you’re just getting started, there are some essential tools and equipment you’ll need to get started, including:
- Table saw
- Miter saw
- Circular saw
- Power tools
- Dust collection systems
- Screws and nails
- Air compressor
- Safety gear
These tools and equipment can be costly but there are ways to save money. For example, you can buy used tools or rent equipment instead of buying it outright.
You can also look for deals and discounts online or at your local home improvement store.
It’s important to remember that your tools and equipment are an investment in your business so be sure to choose wisely.
Outside of the tools and equipment you’ll need to get started, you’ll also need to factor in your material costs.
The cost of lumber and other raw materials can fluctuate so it’s important to stay up-to-date on the latest prices.
Depending on the type of business you choose, the cost of materials can range from a few hundred dollars to several thousand dollars.
Growing your business will require you to spend money on a sufficient marketing plan.
This includes activities like creating a website, printing business cards and flyers, advertising online and offline, and more.
You can expect to spend a few hundred to a few thousand dollars on marketing in your first year, depending on the size and scope of your business.
How Do Woodworking Businesses Make Money?
A woodworking business makes money through a variety of methods depending on the type of business you start.
For example, if you use your woodworking skills to start a YouTube channel, you can make money through advertisements and affiliate marketing.
On the other hand, if your woodworking business focuses on creating custom pieces, you’ll make money through the sale of your products or services.
No matter what type of woodworking business you start, it’s important to have a clear understanding of your revenue streams and pricing strategy.
This will help you determine how much money you need to make to cover your costs and turn a profit.
Tips to Running a Successful Woodworking Business
If you’ve never started a business before, the woodworking business can be a bit daunting. But don’t worry, we’re here to help!
Here are some tips for running a successful woodworking business.
Find Your Niche
You know your skills better than anyone else so think about what type of woodworking you’re good at and enjoy doing.
Maybe you’re skilled at making furniture, creating custom cabinets, or completing other wood projects.
Whatever it is, find your niche and use it to market your business. By focusing on your ideal target market, you can better reach your target customers and sell more products or services.
Constructing high quality pieces is critical if you want your woodworking business to be successful.
While it is easy to limit costs and boost profits as much as possible, this can hurt you in the long run.
Instead, focus on creating quality products that will last. This will help you attract repeat customers and earn positive reviews which can lead to more business in the future.
This means using superior quality components and not skipping steps in the woodworking process.
When it comes to woodworking, there are endless possibilities for creativity.
Think outside the box and come up with new ideas for your wood products and projects.
This will help you stand out from the competition and attract your target audience.
Understand the Competition
Knowing your competition is vital to any business and the woodworking business is just the same.
Do some research on other woodworkers in your area and see what they’re offering. You can also search online to find others in the woodworking industry.
This will help you price your products and services competitively and make stronger business decisions.
Having excellent customer service seems like an obvious requirement for any business but it’s often surprising how often this area gets thrown to the wayside.
If you want to grow your customer base, you need to focus on providing outstanding customer service on every purchase.
This means being responsive to customer inquiries, addressing concerns promptly, and going above and beyond to exceed expectations.
Marketing is arguably one of the most important areas of your small business if you want to become a successful business owner.
Having a creative and effective marketing strategy will help you reach more customers and grow your business.
Utilize Digital Marketing
Having a business website is a no brainer in the 21st century. But it doesn’t stop there. Between email marketing, social media platforms, and other online marketing solutions, there are endless ways to reach new customers online.
Don’t be afraid to get creative and utilize all the tools at your disposal.
For example, one of the easiest ways to pick up customers for your new woodworking business is through paid advertising.
You can also use social media accounts to reach a different audience. There are plenty of marketing channels you can use, so find what works for your business.
Take Advantage of Word of Mouth Marketing
Word of mouth marketing is one of the most cost effective ways to grow your business and make more money.
So, how do you do it?
You need to ask your satisfied customers to promote your brand for you.
This can be done by asking them to write reviews, share your content, or refer their friends and family to your business.
Additionally, you can offer discounts or other incentives to customers who help spread the word about your business.
Branding is another essential element of any business, especially a small business in a highly competitive space.
Creating a strong brand will help you stand out from the competition and attract more customers.
Your brand should be unique and memorable, and it should reflect the values of your business.
You can check out the video below for some tips to help brand your business.
Use Offline Marketing Solutions
Other more traditional marketing solutions such as print ads, flyers, and direct mail can also be effective for marketing your woodworking business.
Don’t be afraid to mix things up and use a variety of marketing techniques to reach your target audience.
Hire Others to Help
If your woodworking business starts to take off, you may find yourself overwhelmed with work.
This is when it’s time to start hiring others to help you. This could include hiring an assistant or even just hiring someone to handle the marketing for your business.
Hiring and managing people can be an entirely different skillset but it’s important to learn if you want your business to grow.
Learn New Skills
If you want to expand your business and offer more services, you’ll need to learn new skills.
This could include learning how to use different woodworking techniques or expanding your product line to include new items.
You may also need to learn how to use new software or equipment in order to complete certain projects.
Don’t be afraid to invest in yourself and your business by learning new skills.
This will only make you a better woodworker and business owner.
Budgeting for Your Small Business
Because it can be difficult to know how much profit your business will make, you’ll need to budget effectively for your small business.
This means setting aside money for marketing, advertising, inventory, supplies, and other expenses each month.
You can use online tools to help you track your spending and income so you can stay on budget.
Manage Cash Flow
Measuring the financial performance of your woodwork business is important, but it’s not the only thing you need to pay attention to.
You also need to manage your cash flow effectively.
This means having enough money to cover your expenses and pay your employees, even when sales are slow.
Tracking the inflow and outflow of cash from your business is essential to keeping your business afloat.
Check out the video below for more help managing cash flow for your business!
Put in the Work!
Starting a woodworking business won’t be easy!
You’ll need to put in long hours, learn new skills, and make plenty of sacrifices.
But if you’re passionate about woodworking and are willing to put in the work, you can turn your dream into a reality.
How Much Money Can a Woodworking Business Make?
Depending on the type of woodworking business you start, your potential earnings will vary but it’s possible to make good money from your efforts.
For example, if you start a business that focuses on high-end woodworking projects, you can charge higher prices and therefore make more money.
On the other hand, if you start a business that focuses on more affordable woodworking projects, you’ll likely make less money but have a higher volume of customers.
The bottom line is that how much money you make will largely depend on the type of woodworking business you start.
In many cases, it’s possible to make over 6-figures with your woodworking business.
What Products Should I Sell?
If you plan to start a woodworking business that sells wood products, there are thousands of potential wooden products you can make and sell for a profit.
Below are some excellent options you can make and sell from your home business:
- Custom furniture
- Picture frames
- Wooden toys
- Decorative items
- Cutting boards
- Candle holders
- Storage solutions
- Custom cabinets
Where To Sell My Products
There are plenty of options when it comes to selling your wood products.
You can sell your products online through sites like Facebook Marketplace or Etsy or you can sell them in person at local craft fairs or markets.
Another option is to sell your products wholesale to retailers who will then resell them for a profit.
This could include selling your products to furniture stores, home decor stores, gift shops, and more.
It’s best to think about where your target market is when deciding on what channels to sell your products.
For example, if your target audience is younger, selling your products on Etsy might be a good option.
But if your target audience is older people, selling your products at local craft fairs might be a better option.
The important thing is to experiment with different selling channels and platforms and find what works best for you and your business.
Final Thoughts on How to Start a Woodworking Business
If you’re wondering how to start a woodworking business, luckily it’s easier than you might think.
First, you’ll need to decide what type of woodworking business you want to start.
Then, you’ll need to register your business, get a business license and permits, open a business bank account, and initiate marketing activities.
Last but not least, remember to be creative, provide quality products, and offer excellent customer service.
With these tips in mind, you’re on your way to starting a successful woodworking business.