CU Woodshop - $10,000 to join?

[John Schreiber]

There's a retail woodworking shop opening just a few miles form my house. I'm excited about it and a little worried about what it will do to my pocketbook to drive past good tools every day. It looks like it will be a great store.

I had also heard seen that they would have a shop which could be used by woodworkers. I was pretty excited about that too. There's lots of equipment I don't have, a lathe for example. Imagine being able to go over and rent time on a equipment for some fair price. They will also have a pro finishing room. Sounds great. An article in the local paper says it will cost $10,000 to join plus about $1,000 per year. You also get some 0.2% of some kind of ownership in the store for that price. That is way way way out of my price range.

If they can get the business, more power to them, but it seems way out of line to me. Is this realistic? Are their other shops like this? I could put together a pretty impressive shop for $10,000. They hope to get 95 people to join. That's $950,000.

What do you think?

[Jeff Bower]

I'd think a local woodworking group would be better to join. Usually the members will help each other out and let you use a machine if you need it...free of charge!!

$10,000 seems REAL high to me...maybe the paper added a 0 on accident??

[Kevin Cantillon]

John,

I also think that $10K is high. You can buy a lot of tools for that amount. The newspaper article said they already have 8 people signed up for this.

The part that I like is actually having a WW store close by.

[Anthony Anderson]

John, it seems high to me. Maybe the paper did add an extra "0" to the membership price, as the other poster suggested. Don't take the newspaper's word for it, call the store and ask for specifics. I don't think they will find many "takers" on their offer. As you stated, a person can set up a nice hobby shop for $10k + $1k/year.

It is difficult for a woodworking store to survive, without internet sales.

The long term viability of such a store is questionable, making a partial ownership, possibly worthless.

Regards, Bill

[David Hostetler]

That is so far out of line it's not even funny. You can with shopping right fully equip your own workshop... This makes no sense to me at all...

[Ken Fitzgerald]

That is so far out of line it's not even funny. You can with shopping right fully equip your own workshop... This makes no sense to me at all...

This might make sense if you don't have the property to build a shop, you belong to a home owners association that doesn't allow out buildings or using your garage for something other than it's intended use.

Still...priced way out of most folks league. It would be an elite group in my area.

[Chip Lindley]

Read The Fine Print! SCAMS are made of these things! IF it is Ligit, its wayyy expensive, and designed to lure apartment/condo woodworking enthusiasts who have no shop space! $1000 sounds more like it, but there ARE those who have $10,000 to burn in order to be a real woodworker!

Being a stock holder is one thing! Being sucked IN is quite another. LOTS of New Yorkers have bought the Brooklyn Bridge! It would be Funny/Tragic IF the shop NEVER OPENED, after selling *shares*!

[David Hostetler]

This might make sense if you don't have the property to build a shop, you belong to a home owners association that doesn't allow out buildings or using your garage for something other than it's intended use.

Still...priced way out of most folks league. It would be an elite group in my area.

While true, there are other, far less expensive options available, at least around here. Woodworking clubs, Storage warehouses with lax usage policies etc...

[Jerome Hanby]

Seems unworkable to me. If I paid that much upfront plus the yearly fee, I would want my own work area with at least a bench maybe an assembly table where my projects in progress could live. I don't see how they could accommodate nearly 100 woodworkers at only 10K a piece.

If all I was getting was access to the tools, I'm with you, I can buy a lot of tools for 10K up front and 1K a year.

[Rod Sheridan]

There's a retail woodworking shop opening just a few miles form my house. I'm excited about it and a little worried about what it will do to my pocketbook to drive past good tools every day. It looks like it will be a great store.

I had also heard seen that they would have a shop which could be used by woodworkers. I was pretty excited about that too. There's lots of equipment I don't have, a lathe for example. Imagine being able to go over and rent time on a equipment for some fair price. They will also have a pro finishing room. Sounds great. An article in the local paper says it will cost $10,000 to join plus about $1,000 per year. You also get some 0.2% of some kind of ownership in the store for that price. That is way way way out of my price range.

If they can get the business, more power to them, but it seems way out of line to me. Is this realistic? Are their other shops like this? I could put together a pretty impressive shop for $10,000. They hope to get 95 people to join. That's $950,000.

What do you think?

What an intriguing idea.

I signed up on their website for further information on the woodworking club aspect, although I don't know if they'll send me info due to my location.

Their website gives a virtual image tour of the lounge, classroom, machine and bench room as well as the finishing room.

Depending upon the price, and affluence of the area, it could be an attractive option for people who live in dwellings that preclude having a workshop.

If they have classes this could also be an attractive feature for many people.

Pricing in line with a golf club membership may be a good starting point.

If I hear anything back, I'll post it.

Regards, Rod.

P.S. If the shop functions similar to a co-operative, you would purchase a share in it, which you sell when you leave the co-operative. If that's the case, the $10K could be extremely cost effective compared to building/stocking a shop of your own.

[Thom Sturgill]

Looking at their website, they say $150,000 worth of equipment. At $1000 membership + $1000 year they pay for it in less than 2 years, which is not bad at all. At $10,000 + $1000/year they pay for the equipment with just 15 memberships.

The stock in the store would represent a much larger investment, and may take $1,000,000 or more to get off the ground. If the $10,000 includes a part interest in the store and property it may not be out of line and part ownership may simplify insurance and legal liability issues (Its hard to sue yourself).

I note that it is a Rockler franchise. I don't know what they sell for, but I was was told recently that a Woodcraft franchise requires $1 million investment.

[Kevin Cantillon]

Here is a link to the newspaper article about this business. From the article it sounds like you are buying into the business(store and shop).


http://www.news-gazette.com/news/business/2009/07/12/the_dreamshop_to_feature_top_tools_easy_access_to_ supplies

[Chuck Saunders]

Sounds like a nice club. Not much of an investment if your dividends are a week of your labor and $1000 loss every year. I will say that the lesser investers are a small portion of the whole instead of the promoter having a sliver of ownership and selling the bulk of the risk. Of course since they own 51% you would be using their shop and I am sure that would be pointed out.

I think I like our local guild's effort better, $35 a year and as much as you want to get involved will determine how the shop progresses.

[Martin Dubois]

The Woodworkers Club attached to a Woodcraft store in the Washington DC suburbs has a fully equipped shop with high-end tools (including a Sawstop and a PM66). They charge $329 initiation plus $79 a month for unlimited access (open about 70 hrs a week). Not cheap, but much more reasonable.

[dan sherman]

hey charge $329 initiation plus $79 a month for unlimited access (open about 70 hrs a week). Not cheap, but much more reasonable.

the $79 a month comes out to $948 a year, so that's not much less than what the new place is asking. but the $10k is either wrong, or someone is trying to recoup their investment in a really short time frame.

John, if you contact the store please let me know what you find out. If really is $10K, I have a feeling we won't have a local WW store for long.

[Joe Jensen]

It's an interesting concept, but for me I'd want it to have the next tier of equipment, stuff I can't fit in my shop.
1) big widebelt
2) Big Euro Slider saw
3) Door clamping rack
4) Dedicated vacuum bagging station

Stuff like that. The owners lounge seems like a good idea.

Concerns would be everyone wanting to work weekends. I saw like 6-10 benches. Also, I have 600 sq ft and I think I really want more like 1500. If they have 1/2 of the 15,000 ft store, how many folks can comfortably work in 7500 ft?

[Narayan Nayar]

Sounds like confirming the facts and finding out more about the shop are in order.

[Mike Hall1]

$10,000 for .2% of the business values the business at 5 Million Dollars. :eek:

Mike

[Phil Thien]

Any of you guys that want to can "buy into" my shop for only $9k initial and $900/year. :D

[george wilson]

I hope it isn't like the timeshare scams where they take everyone's money,and declare bankruptcy.

[Ken Fitzgerald]

Phil....I'll see your 9K with $8K and $800 annually.

[Steve Clardy]

10 grand. Whhhhooooooaaaa :eek:

[Chris Damm]

Good luck getting your investment back. There was a store in Grand Rapids, MI that tried that business plan (I believe it was much cheaper)....they couldn't get enough members to keep it open.

[Eric DeSilva]

The Woodworkers Club attached to a Woodcraft store in the Washington DC suburbs has a fully equipped shop with high-end tools (including a Sawstop and a PM66). They charge $329 initiation plus $79 a month for unlimited access (open about 70 hrs a week). Not cheap, but much more reasonable.

Heck, in the DC area I keep seeing a CL ad for a cabinet maker willing to rent shop space and use of his tools (very good collection) for under $1000/mo. That is just sharing with two people, not an entire club. Can't see $10K fee at all...

[Anthony Whitesell]

There was a working club that had a gym-type membership ($x to joing, $y per month). It closed when the insurance rates went through the roof.

I wonder if by being a part-owner of the equipment/store if it re-classifies the users in terms of the insurance and thus reduces the insurance premiums?

[Greg Magone]

I agree with the other posters who don't think the $10,000 is a great investment. That's a lot of money unless a guy is doing woodworking professionally, and there are a lot of posts and articles that talk about how it's tough to make a living at woodworking.

However, I'll (politely) disagree that I could outfit a nice workshop for $10,000. I think most people on here were thinking about the equipment and tool cost, and I sure could fill an existing garage with nice woodworking tools for $10,000. But the darn building is expensive - in my area, unfinished garages cost around $25/square foot. The $10,000 would only build a 1 car garage in the Seattle area. I imagine this one is probably heated and well insulated, which would be a nice plus.

So, I think to build a detached garage and fill it with decent new equipment will probably run me around $60,000. That makes a $10,000 investment look a lot more attractive.

[Thomas Syrotchen]

By offereing you ownership, they may be limiting your ability to make a claim if they go out of business. Brand new business that seems to be catering to a high end customer in this economy? Last time I looked Walmart's business was growing, and the high end dept stores were loosing money left and right.
Not sure if you caught the fact that the $10K is tied to the retail store as capital to purchase inventory which would indicate they are having a hard time raising capital. $1 Million is probably fairly close to their entire inventory. New business failure rates are high, and quite often the ability to raise capital is a huge reason for failure. Unless I just needed to get rid of $10K, I think I'd pass. At least I would let them get past the 1 year point and see if the business model is working. Even then, I'd want a a look at their balance sheet before I'd make that kind of risky investment. Finally, that sector of the retail market in Chicago is extremely comptetive. I know Champaign is a little outside the market, but you still have the same big players there.

[Anthony Whitesell]

When you put it that it does seem more attractive. Don't forget the $1000 per year. The $1k/yr would probably come out to a wash when you factor in heating, electricity, and taxes. On the other hand, $10k would make a nice down payment on a garage and some tools. $60k spread out over 10, 20, or even 30 years wouldn't be that bad.

The plus side to your own shop is that all the tools are yours and you can leave the project setup from day to day and work on it at any time of the day or night. On the other hand, renters don't often have a place at all for a shop, which would make this a definite plus.

I would say the real question is: Are there enough people around that can't have a shop and that do have $10k to make this work?

[Joe Jensen]

I have some affluent friends and over the years there have been many serious conversations on pooling tools and leasing a bigger space. The idea is 3-5 partners get a small industrial space. Something with 3 phase power. With more space we could free up garage space, get more room than a garage offers, and have 3 phase power. We could also sell all the cabinet shop 3HP class machines, and get some large quality used industrial machines.

Now would be a great time to buy machines. I've passed on several nice 14" sliders for $6-10K, several SCMI 24" planers for under $4K, big shapers, etc.

The challenge comes in how to handle damage, and consumables like wide belt paper and cutters. I have around 100 Bosch and Whiteside router bits, 25-30 shaper cutters, and maybe $1000 worth of sawblades. In a pooled shop situation that would have to be solved.

In the end, buy in and selling of a share is the sticking point. Also, in my area we would be spending $4-5K a month for rent and insurance.

[Gary Lange]

Yea, they get a few to pay the $10,000 and when they have all the money they can milk they disappear and then reappear someplace else and start over again.

With $10,000 you could hit Grizzly and get your own tools and rent a garage or building someplace to set it up if you can't do it at home.

[John Schreiber]

This seems to be a legitimate business opening up. The building is under construction at this time and the people described as owners are real people who live in the area.

I just sent the owners an e-mail with a link to this thread. I asked them to let me know if there are any misunderstandings here and and invited them to participate in the discussion.

[Jim Foster]

These guys seem to be trying to get 95 people or so to cover the inventory for a Rocklers's franchise. Or am I missing something?


Here is a link to the newspaper article about this business. From the article it sounds like you are buying into the business(store and shop).


http://www.news-gazette.com/news/business/2009/07/12/the_dreamshop_to_feature_top_tools_easy_access_to_ supplies

[Michael Schwartz]

the 1000$ a year membership fee is more than reasonable and it is 1/7 what I pay for rent and insurance on my current shop.

However the $10,000 buy in sounds risky, and I don't know how accurate the drawings are as far as shop layout that shop could quickly become cramped if you had more than 10 people working in there at any given time.

Keep in mind for instance when I am working on a project I have my table saw, router table, etc... setup for a task at any given time and there are times I would like to leave a machine set for a few hours, even days to be able to come back to that setting.

That shop setup might be interesting if your a hobbyist living in an apartment, condo, or retirement community and are not working on any serious projects. Maybe thats the anticipated market.

If your going to spend the 10 grand, ask questions, and pry all you can. I would also consult an attorney as well. If the place goes out of business you might very well loose that. I doubt from the looks of it that its a scam but in this day and age you have to keep an eye out for that as well. Regarding the part ownership as well find out what you get out of that in terms of a dividend, or a share of profits.

[Rick Gifford]

What concerns me is the chance to lose you money if that business goes belly up.

A dance club opened here in town many years ago... people flocked to it and paid hundred of dollars for life memberships. The place closed shop in less than a year and everyone lost their money.

$10K is just way too much. However it would be great to have access to rent time on equipment. The $1000 a year maintenance fee after paying $10K is another whammy.

Im not cheap, I spend alot on my tools. But man thats alot of cash for something you dont really own.

[Dennis Coleman]

Hello woodworkers. I am the one behind the woodworking shop and store that John Schreiber pointed out to you. Obviously there was some “sticker shock” as most of the comments were related to the cost. First, let me point out that we realize this isn’t going to work for everyone, but it’s definitely not a scam. In a scam, the developer walks away with a profit regardless of the outcome. In this situation, if our venture fails, it will be the founders who will suffer by far the greatest losses. Yes, it is a lot of money for a hobby, but how many of you have spent more than $10,000 on a boat, or a motorcycle, or an RV? In all of these cases there are significant annual costs, and your purchases depreciate rapidly. Obviously there is a certain amount of risk in our venture, but if we are successful, an owner will have access to The DreamShop for the rest of his or her life, or until their stock is sold or willed to someone else. If you have the space and the money to set up a complete professional grade workshop of your own, that’s great. We would love to sell you the equipment to fill it up. But for those dedicated woodworkers who don’t, we think we have another option.

I don’t want to use up all of your space responding to everyone’s comments here (it's a pretty long story), but for those of you who are interested in hearing the whole story, please send me an email at dcoleman@CUwoodshop.com (dcoleman@CUwoodshop.com) and I will be happy to give you a more detailed explanation of our project and will try to answer the questions raised.

Thanks for your interest.

[Chuck Saunders]

Hi Dennis, welcome to the creek. Thanks for taking your time to give us the real story. I think that the sticker shock along with not knowing what is what has kept this thread going. Please feel free to share as mauch as you care to share. If nothing else, we learn how someone else is doing it. I would love to hear more.

[Rod Sheridan]

Hi Dennis, it sounds like a great option, and as stated if the shop is a professional grade shop, the $10K doesn't buy one machine, let alone a shop full.

I can see where your approach would be of interest to people who can't have a shop at home, or aren't interested in the upfront and maintenance costs.

Please continue to keep us informed, it's a very interesting solution.

Thanks, Rod.

[johnny means]

I just moved out of this place www.stentonguild.com (http://www.stentonguild.com). $800 a month got me a large office, private John and 500 sf. of bench space that was just for me. Blades, knives, sanding belts, etc were an extra $30 a month for the kitty. smaller spaces started at $400.

Just shy of $10,000 a year.

[Joe Jensen]

I just moved out of this place www.stentonguild.com (http://www.stentonguild.com). $800 a month got me a large office, private John and 500 sf. of bench space that was just for me. Blades, knives, sanding belts, etc were an extra $30 a month for the kitty. smaller spaces started at $400.

Just shy of $10,000 a year.

Very cool way to work. Did you do this professionally? If so, did you move to your own space?

[Terry Gerros]

I would agree with pretty much every post so far...Way to expensive. They must be planning for early and sustained retirement. Wonder what the hours of the shop would be, if the store is open 8-5? Curious to know if they have any "experience" required for membership. Think of the liability insurance. I don't know about most people here, but I personally don't believe I would want to be in the shop with 5 other people at the same time. Just think of listening to rap, country, rock, classical, jazz simultaneously, when all you want to hear is the hum of machinery.

[Richard Wagner]

Unlimited access to a professional shop full of equipment...wouldn't that be nice. I'd consider it if it was anywhere near to me. I could sell off all of my equipment to pay the up front fee and about 6 months worth of membership and just about break even.

NO. That won't work. The kids and grand kids won't have any place to built Christmas presents.

Most comments here have indicated that is a high cost to pay. This leads me to believe that most have not attempted to purchase liability and medical insurance for a place like that must be.

[Eric DeSilva]

I don’t want to use up all of your space responding to everyone’s comments here (it's a pretty long story).

Given the interest in the thread, it might be worth the time to explain the concept here. There seems to be a lot of interest in this model.

I followed the links to the site and even read the article (http://www.cuwoodshop.com/newsgazette.html). If I read the article correctly, there will be up to 95 members, each ponying up an almost $1K/year fee, so you will have operating income of up to $100K/year and a shop that has about $150K-$200K of equipment. Do I understand correctly that this is sufficient for the operating expenses of the Dreamshop, since the article indicates "[c]apital raised from the sale of shares will be used to provide inventory for the retail store." It seems like it should be a sufficient amount of money.

The article indicates members "also need to contribute time to the enterprise – probably 30 to 40 hours a year – providing cleanup, acting as shop supervisor or working on projects to furnish the shop."

The article also indicated that you are operating a store next door, and the Dreamshop equipment will be "used in demonstrations for the retail store." I was under the impression that most woodworking stores have such demo areas that they fund themselves.

As previously noted, the article states that the capital raised "will be used to provide inventory for the retail store." I was under the impression that most stores are required to buy inventory with their own funds.

It might be easy to misread things and conclude that this venture is underwriting costs that your store would have to fund in any event. I would be interested in whether the article correctly represents the situation.

[Jim Foster]

The building, according to Google maps, looks like it's about 60x60, but there are three buildings sharing a common driveway so it could be one of the other buildings. NOTE: It seems the Google image is old or is listing the wrong building on the road, John in the next post provides some more data.


Given the interest in the thread, it might be worth the time to explain the concept here. There seems to be a lot of interest in this model.

I followed the links to the site and even read the article (http://www.cuwoodshop.com/newsgazette.html). If I read the article correctly, there will be up to 95 members, each ponying up an almost $1K/year fee, so you will have operating income of up to $100K/year and a shop that has about $150K-$200K of equipment. Do I understand correctly that this is sufficient for the operating expenses of the Dreamshop, since the article indicates "[c]apital raised from the sale of shares will be used to provide inventory for the retail store." It seems like it should be a sufficient amount of money.

The article indicates members "also need to contribute time to the enterprise – probably 30 to 40 hours a year – providing cleanup, acting as shop supervisor or working on projects to furnish the shop."

The article also indicated that you are operating a store next door, and the Dreamshop equipment will be "used in demonstrations for the retail store." I was under the impression that most woodworking stores have such demo areas that they fund themselves.

As previously noted, the article states that the capital raised "will be used to provide inventory for the retail store." I was under the impression that most stores are required to buy inventory with their own funds.

It might be easy to misread things and conclude that this venture is underwriting costs that your store would have to fund in any event. I would be interested in whether the article correctly represents the situation.

[John Schreiber]

The building, according to Google maps, looks like it's about 40x40, but there are three buildings sharing a common driveway so it could be one of the other buildings.
The building is under construction right now. I haven't taken a tape measure to it, but 200' by 75' looks about right.

I don't know if this will be a successful business model, and I couldn't possibly afford it, but I don't doubt for a minute that it's an honest attempt to try something new in the world of woodworking.

I'm following this very closely because it's about a mile from where I live.

[Scott Wigginton]

Birds-eye view of the buildings in question. (http://www.bing.com/maps/default.aspx?v=2&FORM=LMLTCP&cp=qpngzv7n90sb&style=b&lvl=2&tilt=-90&dir=0&alt=-1000&phx=0&phy=0&phscl=1&scene=30208852&encType=1)

Biggest issue I see that hasn't been raised is their expected hours of operation (8-5 weekday, 8-12 sat) which I see only appealing to retirees.

Another question would be lumber/project storage for when you can't complete an item in a single session.

Big plus is being able to step next door for when you change your plans and now need to change some aspect of your hardware :D

[John Schreiber]

Birds-eye view of the buildings in question. (http://www.bing.com/maps/default.aspx?v=2&FORM=LMLTCP&cp=qpngzv7n90sb&style=b&lvl=2&tilt=-90&dir=0&alt=-1000&phx=0&phy=0&phscl=1&scene=30208852&encType=1)
It's under construction in the open space to the South and West of your picture.

It's not far from where I live.