Custom woodworking business?

[Mike Kees]

Andy you missed my point entirely. I told you I screwed up by NOT charging enough out of the gate. If the OP does the same then he did not learn anything from reading this thread. No I did not charge enough in my early years and it cost me dearly. This is solid business advice,take it for what it is worth. If you plan on going into or being in business and expect to earn your living from it starting out charging enough is very important. If the OP wants to do this as away to supplement his income then that is a whole different game. Mike.

[Jim Becker]

MK--what you guys are missing is that this is a startup, not a profitable company with employees, and with the company executives earning $200+/hour. I'll bet when you started out, 25 years ago, you did't charge every minute of time spent at $100/hour. It is misleading to imply that this is what the OP should expect to get while he is trying to start a new business. There'll be lots of time spent that can't even be charged into the jobs he may be fortunate to get. And there'll be jobs where he winds up on a very steep learning curve and not all his time will be chargeable.

I'm a start-up and my target rate has been $100 an hour from the get-go, whether it's work I'm doing with my hands or machine time for the CNC. I'll cut a true friend a break, but decided early on that undercharging is a hard thing to break away from as mentioned by others above as well as by folks I trust who have their own small businesses in trades and otherwise. Yes, it's true that there will be "uncompensated time", especially in the beginning when initial marketing is involved, but that's not something that should be used to drive the expected hourly rate down since it will only hurt later on.

[Matt Day]

I should also mention to the OP that this topic comes up every 6 months, so do some searching here to find lots of information. I wonder how many of those guys we knock some sense into?

[David Kumm]

When discussing rates per hour it is also important to understand that not every hour is billable and controlling the nonproductive unpaid time is critical. When explaining rates to clients in the accounting business, I tell people the rate is irrelevant without knowing how productive or fast someone can work. I learned long ago not to ask how hard someone works but rather how much they got done. It is also important to - at times- overwork everyone including yourself. The available work usually consumes the available time and it is only when you are overbooked that you find out what everyone is capable of. Those are the times you make real money. The times you are comfortably busy pay the bills and maybe make you a living. Dave

[Wade Lippman]

I tried to get into it years ago but didn't make a go of it.

1) While you certainly should get $100/hour, good luck getting work at that price. A table for $5000?! Maybe once you have established customers.

2) You have to do things that are wholly objectionable. A customer wanted a "cherry" fold down desk to match an Ethan Allen chest of drawers. That required putting dark stain and dye on cherry. Couldn't talk him into birch; had to "paint" the cherry.

[Darcy Warner]

If I have stuff to do that doesn't really pay, or that I can bill for, I work those 4 hours after my regular 10 hours I already put in. My boss is a Richard.

[Yonak Hawkins]

I envy you guys who can get $100 an hour every hour of the week. If you keep busy at that rate, more power to you. In my area, if I asked for $100 an hour, I'd be sitting looking at the phone a lot.

[Darcy Warner]

I envy you guys who can get $100 an hour every hour of the week. If you keep busy at that rate, more power to you. In my area, if I asked for $100 an hour, I'd be sitting looking at the phone a lot.

I live in podunk IN, you don't ask, you tell. I have never made any money from poor people. The more I ask for my services, the better the clients get.

[Patrick Kane]

Yet another hobbyist here. I started off selling crap on etsy--coat racks made of base of all things lol. I think i was 23ish and just out of school. Really enjoyed working on the house, and decided i wanted a small shop of my own. Unfortunately, i had diddly after the house, which precipitated the etsy stuff. I tracked expenses and time like a maniac, and i think i averaged $20ish an hour. At the time, i bet i was only making $18-20 salaried at a corporate job, and i was happy with the etsy stuff. Every dime i made i poured back into tools. Upping my tooling lead to a wider array of jobs i could take. Theres only so much you can make with a dewalt miter saw and a couple crappy F clamps. My goal was always to make as much or more than my hourly rate at my office job. For quite a few years, i was churning out quite a bit of business. Last year things peaked, and i also started to feel a little burned out. Also didnt help that i essentially had every tool i 'needed', which was the primary motivator originally. For whatever reason, banking a lot of cash on the side in exchange for my fleeting free time started to lose its allure. I turned 30 this year, have a banging shop, and a nice jumpstart on a retirement account. Im a little sad i spent a lot of my mid and late 20s working late nights and weekends, but it also helped me dig out of student debt and meaningfully contribute to a 401k when i otherwise might not have.

Its all well and good to set a number you want to hit, but ultimately you are tied to market price and how effective/efficient you are. Funny how everyone has independently arrived at the same conclusion for home shop time. I always shoot for $75-100/hr gross minus lumber. Recent project was replacing furniture tops that were damaged during a move. 2 hours spent chiseling the cracked and broken granite tops off, 4 hours selecting boards, milling, gluing, and creating templates of the curves/shape of the previous granite tops, 1 hour sanding, 1 hour spraying, 1 hour delivery and install. Give or take 8-10 hours to complete the project. That was a $1100 job. I used roughly 30-40 bdft of 5/4 or 6/4 cherry that i bought out of a barn for maybe $1.50 a bdft. Turned out well, and aside from chiseling glued down granite off the base furniture, it was an easy build.

Thats an example of a random/odd job that frankly no decent pro shop would want to touch, but a guy like me can gobble up and make money on. Ive taken vacation time to do jobs and even had one stint when i switched jobs to do this "full time" for a month. The money was there, but the lack of benefits, stability, and career longevity turned me away. I am the one that needs to provide all those things to the family since my wife owns her own one-woman-show small business. Like others said, its a nice way to make a modest income, never struck me as a great way to make a lot of money. I would either run myself ragged to achieve that number, or end up managing a shop and not doing much o the work myself. Still, there is definitely merits and benefits to living an enjoyable and modest life running your own small show.

[Joe Jensen]

My point was to build the custom furniture business over time with customers willing to pay what will earn you enough to eventually make a living at it. Here is an example. My wife has a friend who was insistent that I build a custom cabinet for their home theater room. I wasn't very interested but my wife got me to quote it. Simply cabinet but the finish had to match the rest of the cabinets in the room and it was a bitch to match. I quoted like $500 a foot for an 8 foot lower cabinet. Basic, raised panels, alder, nothing special and quick to build. But when I counted;
- the 45 min drive each way to measure
- the 45 minute drive each way to install
- the time spent sketching it up to build
- the time spent driving to buy alder (which I hate)
- the time spent making samples of finish to match it
- the time spent ordering hinges, etc etc

Not counting any shop supplies, or overhead, I only made $75 an hour. Now, I'm an amateur and if a pro the material would be delivered, I'd have inventory, etc. What I am saying though as a small guy, the hours outside of building are real hours. BTW, I don't quote an hourly rate, I quote a price for the job. If the customer won't pay that then I don't work on paid projects in the shop. If I really wanted to go full time, I'd do is slowly. Keep a day job that pays insurance and do the projects at night. Build up a clientele and when you start to have A LOT more requests for work at prices that will make you a GOOD living, quit the day job and go full time. Also for the prices I'm talking about, the output has to be fine furniture grade and not something that looks like amateur hour.

[Robert Engel]

Lack of experience to produce a labor estimate is, I think THE biggest issue starting out because

1) you've got no experience doing a job and
2) you haven't yet developed the efficiency that comes with experience.

Do you "run an open tab", ie, add up the hours and charge it when the job is done? That's not feasible. Actually, I had a friend who did antique car restoration he charged like that but he had 40 years experience, was extremely talented, and constantly turned away business.

Let me illustrate with real life examples. With no prior experience, I built a complete kitchen for my home. Yup, by the time I got to the 20th cabinet box, and 20th raised panel door, I got pretty darn efficient!! After I was done, the kitchen designer we worked with came by to check it out & told me it would be a $30-35K job in their shop, (minimum depending on hardware). I was quite taken aback, then I added up the materials/hardware and it came to about $6000 (and I'm sure I didn't have them all). I have no idea of the labor, but if it was 200 hours, that's right around $30K. Truth be known, I probably had closer to 400 hours in it. My point is, I would have no earthly idea what to charge for labor prior to the job. You really have to keep track of your shop time to get an idea.

After that experience I had the opportunity to work with a friend of mine in a commercial cabinet shop. We were building cabinets for my business - yes I hired it done because after doing the kitchen I couldn't build/install them even for myself for what he estimated. Plus it was all laminate work which I don't like to do. Anyway, I learned some shortcuts, jigs and ways to build cabs better and in 1/2 the time.

I think one approach starting out is get quotes yourself from a couple shops. Then quote your prospective customer 10-15% less. This will get you in the ballpark. Your lower overhead will offset for lack of efficiency.

For one-off type work, the problem gets even worse. Let's say your asked to give an estimate & build a trestle dining table and set of chairs. He's already been to the $100/hr guy and got a quote. What do you do? You hate to say no, but f you knock off 10% you still have to invest your own time learning to bend wood, etc. when IKEA sells a well made solid wood chair $70??

A couple guys I know with successful small shops, both did that with cabinetmaking. One has a back round in a cabinet shop, the other was a carpenter. They told me the only way they can compete with the big shops in town is lower overhead/taking smaller jobs. They are both limited on the size of jobs they can take due to issues finding dependable labor. They also told me a selling point is some people want more personal service & equate "custom" with a small shop, not a big commercial shop..

One is a good friend told me his heart is really in furniture making. But in our area its pretty much non-existent market. He makes the occasional conference table or desk, (slab work, too) but he told me his custom cabinet work is what keeps him in business. 95% of his work comes from word of mouth he does not have a website, Facebook page or advertise in any way. The way he got started was building cabinets while he was working as a carpenter for a contractor 40 years ago.

I thing its a difficult business to break into because its manufacturing based, not service based, and you have to have a solid business model to compete with the big boys.

[Mark Gibney]

There's lot of good advice and honest opinion based on people's real experiences on this thread.

I would add that, like ANY business, work for someone else before you jump into launching your own business. Maybe (Eric, the OP) is working in a cabinet shop or for a furniture maker, we don't know. When you work for someone you learn so much that you're not even aware you're learning - not just how to cut wood, to build a plywood box, but the pace of the business, how to talk to clients, you also get to know suppliers, you get to really know what machines / tools you need. You can pick up tools as a great bargain comes around, and store it in your garage as you get it up and running properly.

You may even get small jobs your boss doesn't want, and you may even be able to use the shop to do the work.

Getting a shop up and running is a huge investment in money and time. If you're on your own getting your physical shop going, trying to find work, trying to design and make - that's a lot of balls in the air.

And of course if you can work out of your garage or a building on your property you'll save a bundle in overhead. If you decided you want to specialize in chairs then you can probably work out of a big garage, if you end up making 10' tables you might need to get a bigger place.

[Warren Lake]

In Europe you need your papers and more to have a bus. Likely Saw stop has sold a lot more saws here where its a free for all with injuries from people with no training (dont need to tell me about trained people who have had injuries, the realities of big jobs and deadlines is a different world )

You need your papers to be an electrician or plumber in NA. Lets get that in gear so the playing field is more even to start. Likely there would be less junk out there.


Martin in your time to make a drawer how long of that is the actual dovetailing? think last I saw you had a new dovetail machine.

[Andrew Hughes]

I got a new woodworker this week. But I had to let him go all he wanted to do is eat popsicles and complain the jointer was too tall.
I even gave him a stool to stand on.

[Jared Sankovich]

Interestingly I was listening to a Bryan Boggs podcast today where he mentioned a quick sentence or two on estimates and pricing. If I'm remembering correctly he mentioned $100/hr for his shop on custom pieces.