I'm a woodworker and college student - considering a laser

[Jameson Gillespie]

My wife and I are currently finishing up our degrees (Business Management for me) and both have about 60 hours left. I make and sell furniture/home decor on Etsy to make a little extra income to pay for the few bills that we have. We currently don't have rent or a mortgage as we are living with family while we finish school.

Woodworking is extremely enjoyable to me but it takes many hours to produce a few items and as we start to fill up our time with classes, I see myself running into a problem with time management. I plan to keep selling furniture but I will perhaps limit the items that I sell to just a few. With that said, we are seriously considering a laser to make home decor (clocks, laser cut maps, names, cutting boards, and the hundreds of other things you can possibly create with a laser) and probably seek out some local business for traditional laser engraving services (name plates, signs, plaques, etc.) My question is: does it seem reasonable to make anywhere from $500-$1000/month in profit to cover our small bills and probably a $200/month finance charge for the laser. We are considering a Boss LS2436 60W or 100W.

I have read from many people on here that there isn't money to be made in the custom design area, but it won't so much be custom design, but rather us putting forth the effort to design what we want at the outset and selling from our Etsy shop. Therefore we won't be spending the majority of our time working with CorelDraw but producing. There will be some custom work, but that will mainly be names, words, pictures, etc.

There are MANY successful laser engraving Etsy shops out there, I guess I just need to know that with a good business plan, good designs and good marketing, that we can make $500-$1000 a month in profit minimum. Any local and online marketing tips are appreciated too.

I feel that this is a prime opportunity to invest in the laser and make a little bit of money while in school, and that way once we graduate we are potentially in a position to take it on full time.

[Gary Hair]

With that said, we are seriously considering a laser to make home decor (clocks, laser cut maps, names, cutting boards, and the hundreds of other things you can possibly create with a laser)

There are thousands of people trying to do the same thing, I don't believe it's likely to succeed in this direction.

and probably seek out some local business for traditional laser engraving services (name plates, signs, plaques, etc.)

There are far fewer people doing this and the money is much better than you will ever find with home decor items. Plus, you can plan on spending far less time per dollar of sales for B to B sales than with home decor sales.

My question is: does it seem reasonable to make anywhere from $500-$1000/month in profit to cover our small bills and probably a $200/month finance charge for the laser.

With B to B I make that much or more in a single day, so with a little bit of effort, good customer service, and a quality product, yes, you could easily make that much in a month.

[David Somers]

James,

Since your current interest is woodworking, have you considered a CNC rather than a laser? I think all the comments Gary made above still apply, but the CNC might be a closer fit to your current skills and interests, and mesh better later on if you return to a woodworking business. Just a thought. All of Gary's observations are on the mark I think however, whichever route you choose.

Dave

[Jameson Gillespie]

Gary, thanks for the response. Home decor definitely seems like a very saturated market. It's very encouraging to know that reaching $500-1000 wouldn't be a very difficult goal. Would you say reaching that goal within the first month of being open is reasonable? What is/are your biggest or most frequent sellers?

That great for you btw that you are able to bring in that much per day!

[Jameson Gillespie]

Dave, I've considered a cnc but the laser seems to be much more flexible and has many more applications that my wife could put to use as she doesn't share the same affection for woodworking as I do.

[Mike Null]

Jameson

What Gary is saying is that his product is service. That's where most of us who make our livings as engravers derive our greatest income. Do I have a product? Well, yes, I make signs, labels and name tags to my customers' order.

How much I generate per day is private but it is more than your objective.

[Jameson Gillespie]

Mike,

Thanks for the response. Very good piece of advice that perhaps I missed in Gary's post. Your customers come back to you time and time again due to your reliability, quick turnaround, clear communication, etc. We will be working from home, do y'all have a storefront and if not, are there any downsides to working from home in this business?

From what I can gather, going for the custom home decor isn't a reliable source of income to start out, but seeking local business would be much more reliable to start with, and then let the decor side grow as my online presence grows. Since I haven't thought much about the local side of things, I'd be interested to know which markets would be best to target? I realize almost anybody could be your customer, but any specific targets to start with? If there's already extensive discussion on this, please feel free to point me there.

[Jiten Patel]

Jameson,

Getting into the home market is hard work. Making any sort of real money in the first year would be difficult as you have to spend time and money developing your product line to make it stand out from the millions of other "products" out there. A lot of it is generally not very good to be honest and to have that stand out product/product line takes time, money and conviction.

We did it and it took a year to turn a profit and around £30000 of investment. I'm not saying you can't do it, it just needs a lot of planning. For those you are saying it cannot be done etc no offense, but that it nonsense, it can be done. That business now turns over a decent amount (£150k + a year) and growing, but it is very very difficult. I would say write out a business plan - plan everything down to the tee with all the correct numbers (costs of materials, overheads, time (lots of people forget to charge for this part) and see what you come up with.

[Jameson Gillespie]

Jit, good word. I truly agree with planning. Thanks for those specific points to consider. I have the tendency to jump in head first but thankfully my wife is HUGE on planning. We don't have much overhead at all, really. We would be paying a few hundred dollars in personal expenses, the laser payment since we can't afford to buy it outright, and trying to save some each month as well.

That's great that you guys are making it work and doing extremely well it seems. I agree that making not only a quality product, but unique as well, is key. Thanks much for the good advice Jit. Very encouraging to know that it can be done.

[Dave Stevens-Vegas]

Gary, thanks for the response. Home decor definitely seems like a very saturated market. It's very encouraging to know that reaching $500-1000 wouldn't be a very difficult goal. Would you say reaching that goal within the first month of being open is reasonable? What is/are your biggest or most frequent sellers?

That great for you btw that you are able to bring in that much per day!

Jit's approach is along the lines of how most successful businesses ramp to sustainability. Being instantly profitable in any business is not a reasonable goal. Particularly one where you are just starting in the field. By not being familiar with both the market and the equipment used in the process there will be a learning curve. On Etsy alone there are about 350k engraved items. It's not unreasonable to take 3-6 months just to figure out where you fit in the market.

Here's an fictional example. The product is engraved cutting boards sold for US$20 each. You either make the blanks yourself or buy them in bulk. Let's say that costs $8 once all is said and done. The transaction fees are 6% of selling price (3 pts Etsy, 3 pts merchant fee for payment), about $1.20. You could wrap it in bubble wrap and use a pouch, that's a couple of bucks from a packing supplier. That's $11.20. Your gross on the deal is $8.80. Let's not include other expenses a business might have, licensing, insurance, depreciation, any service fees like accounting or tax prep, this is a big time simplification. That's not including the hour labor to process the order, engrave, pack or any of the other tasks required to run the business like sourcing, paying bills, customer service, marketing. To clear a grand you need to sell 114 cutting boards a month or about four a day. From day one.

The reality is you may not sell anything for a month, or two at first. And it's likely to take the better part of a month to learn the ins and outs of your machine to be able to get the most out of it in the short term. There will be a lot of sweat equity in the form of learning what to sell and how to make and market it.

If you are up for the challenge, go for it but as with any business, it's going to take some time to develop the business. Look at the debt for the machine as an investment. If you are looking to be instantly profitable to service the debt that's a recipe for disaster. Be prepared to spend that $300 a month for the machine regardless of how well the business does.

[Don Corbeil]

If you are up for the challenge, go for it but as with any business, it's going to take some time to develop the business. Look at the debt for the machine as an investment. If you are looking to be instantly profitable to service the debt that's a recipe for disaster. Be prepared to spend that $300 a month for the machine regardless of how well the business does.

+1

And before you dive in, you should obey one of the cardinal rules of business: Know your market. Have you done any research on the demand for engraved goods in your local (and extended) market? What about Competition? Demographics? How well you end up doing is going to be very reliant on those factors. If it's just etsy, good luck with that. As others have mentioned, it's saturated with engraved stuff.

[Art Mann]

I am always so happy to reads comments like this. It keeps the number of competitors down.

Dave, I've considered a cnc but the laser seems to be much more flexible and has many more applications that my wife could put to use as she doesn't share the same affection for woodworking as I do.

[Jameson Gillespie]

Good for you Art.

Dave I see your point. I do have somewhat of an advantage in that I already have an Etsy shop (fickleandfellow) with my furniture and home decor. It's been open for a year now and with really no work on my end of advertising, it's up to almost 100 sales. Obviously not a lot in the grand scheme of things, but in a year on Etsy, and one craft show, I feel that's fairly decent. I also think that craft shows will be great for well designed, quality, home decor items coming from the laser. Not so much the typical plaques, name tags, etc. Back to my point about Etsy though, since I already have an established presence and get 100's of visitors to my shop per week, this should aid in the making money early part. I could be completely wrong though. We will see.

I do agree though, that Etsy can't be my only platform. My approach will have to be much more aggressive with Facebook, Pinterest, and even Instagram surprisingly. That's just online. The hardest part for me will be to market locally. I don't think there's any question that there's a market for both sides of the laser engraving spectrum where I live (Dallas/Fort Worth) - I'll just need to learn how to distinguish myself from the rest, and from a quick google search, there doesn't seem to be much competition - especially when you get closer to my city.

I do enjoy a challenge, especially when it comes to starting a business, and though it's a large personal expense to get the laser, it seems to be actually a pretty low-risk investment when it's something that will (hopefully) be making me money. That's part of business, take a risk and work your butt off to turn it into a rewarding risk.

[Gary Hair]

I'll just need to learn how to distinguish myself from the rest

Just don't make price the distinguishing factor. Customers who come to you for price will leave you for the same reason. Customers who come to you because you offer better service and a better product will pay whatever you ask, within reason, and won't leave on a whim. Along those same lines, don't cut your prices "just to get your name out", what you will "get out" is that you are cheap, nothing else. Charge a fair price for a superior product and your name will get out!

[Jiten Patel]

I agree with Gary, price what you feel the product is worth, but also price according to what the market will tolerate. There is no point making a product that is worth $50k when no one will buy it. Know what market level you are entering and stick with if for a while. You will naturally find that after trading for a year, things may change or you will find you are happy in your place.

There are exceptions to this rule. For example, my invitation business....when we started we were scared to price the invites for what they were worth. The usual fears of will people spend that kind of money etc. We were under-pricing for quite a while. While this allowed our business to gain a little traction, it did nothing for my bank account and ultimately devalued our service and product.

Then once we realised that actually, we are better than this, we are a luxury brand and started thinking like one, things changed. Our invites started out at the £2.50 to £6.00 per invite range when we started or an average order of £500-800. Now the average spend is £20-40 per invitation and anywhere up to £500 per invitation or around £7,000-20,000 per order. The difference is night and day, but that has taken 6 years to build and a lot of blood, sweat, tears and money. We have our niche and have developed our brand and product to suit our market and in some cases pushed the boundaries of innovation to create a market.

It is the most exciting thing you will do and I wish you all the best.