new WW business

[Wes Ramsey]

If I were buying furniture, ready to drop a few grand on a dining room table, there’s no way I’d get it from a guy who has made “a few pieces”.

Before you even consider the basics of running a business, what’s your level of understanding the basics of woodworking? Wood movement? Joinery? Finishing? How do you design your furniture?

Also, strictly from a business standpoint, what hourly rate do you plan to charge? In my opinion, anything under $60/hr is not good business practice. Some will say that number is $100/hr. Either way, you have to value yourself.

On your next project, make an estimate of how much you would charge for the piece. Then keep an honest running total on how long the project takes. For everything: design, emails/calls to clients, material pickup, milling, joinery, sanding, finishing, delivery. Then figure out what your hourly rate is.

I don’t like being so negative but I also don’t want to encourage you to make a life changing decision that goes bad. Somebody said in one of the many of these threads that if you have to ask you’re not ready.

You’re looking for information, so here’s a site I found helpful.
http://www.solowoodworker.com

That site is exactly what I was looking for. Thanks! He gives some good advice on pricing, among other things. Since I will mostly be using wood I source and mill I think the right path would be to work out a formula to determine the cost of the wood from tree to final S4S. That will simplify my project estimates.

To be fair, I don't know that I would even consider building a table for a few k $$, at least not yet, and I wouldn't expect anyone to ask me to. I know my tools, I know the properties of my local woods and how they work/move/look/finish and I know more about joinery than I've had the pleasure to use so far (I read and study technique, design, function and use case a lot). I'm experienced with several types of finishes and have an understanding of how to pick the right one. For my designs I currently draw a non-scale draft on graph paper, then draw a final, to-scale version on graph paper with views of each 'module' and exploded diagrams of joints. From that I make my materials and cut list. I've been playing with Sketchup for a couple years and will probably start using it more, or I may hunt up a better CAD program as it is kinda hard to use.

For now, as a hobbyest, my rate is $20/hr. I fudge on that when the learning curve makes the cost unreasonable, knowing the $$/hr will go up quickly with experience. For now my profits are all reinvested in my shop. For turnings that don't turn out as expected I finish them anyway and sell at a discount or let my boys see what they can do with it.

And really - I didn't come here expecting encouragement. Y'all have experience to burn and I'd be a fool not to consider your advice. I know what I know - what I don't, well, that's where y'all are helping, and I appreciate anything you're willing to share.

Also, this is just me trying to build a business doing what I enjoy doing. I'm not stepping off the cliff until I know I can support my family without hurting more than I'm helping.

[Jessica de Boer]

Be ready to fight tooth and nail in the beginning to bring in work. It will take several years to build a customer base and reputation for yourself, not to mention a relationship with suppliers. You also need to prepare for the fact you won't be making any profit the first few years because you need to invest it back into the company. If you want to play with the big kids you'll have to invest in machines to drive down the cost of manufacturing (table saw, band saw, jointer, belt sander, shaper, thicknesser and of course professional quality electric hand tools). Settle for a reasonable salary. And you need to fully realise it's not a hobby any more so fully hand made objects will mostly be a thing of the past. There are machines that do it faster, more accurate and repeatable.

[Richard Coers]

$20/hr? At that rate you must be making $10/hr considering overhead. Have you hired a plumber lately? All his overhead fits in a truck and they charge about 4 times that in my area. That's what I meant when I said hobbyists charge for their work like they are buying it. Try charging $80/yr for a while and see how much work you have showing up. Of course you will have a lot of work when you work for minimum wage. Don't fool yourself with the idea that your speed will greatly increase and you will make a living wage. Custom woodworking is very difficult. You have to invent jigs and fixtures for so many jobs, and you need to make the same amount of money when doing that work as well. Often he first approach to building may not even work out, so be prepared for lots of lost time. Lost time also includes the phone calls, lost estimating time when you don't win the contract, and all the talking with a customer that prevents any machines from running at all. Also woodturning is even harder to make a living with. Even turners with work in museum collections have to criss cross the country doing demos and marketing their signature line of tools to make a living. No one really needs a $500 vase sitting on a self. The only turning work I have done well with is cremation urns (human and pet) and heritage turning. People that have an emotional connection with a tree that has to be removed. In most cases, multiple pieces are ordered at one time so other family members get a remembrance too.

[Jim Becker]

I agree with Richard. You'll need to bump your shop rate up to at least $45 to $80, depending on complexity of task/pain-in-the-backside factor. I use the lower number for "odd job" type things, delivery/sourcing time, etc, and a much higher number for "craftsmanship time". Heck, my CNC machine makes at least $100 an hour and doesn't take lunch, vacations or get sick time. (I hope LOL) And seriously, Richard also makes a good point relative to labor time that's just not chargeable...and there is a lot of that, especially when one is trying to establish a business, for marketing, accounting, prototyping as well as overhead for insurance (which you must have), accounting services, utilities (even if you are using your home's utilities), etc.

[Darcy Warner]

Except that time should be billable. It's part of your overhead. You are darn right I am making money sourcing material, parts, etc. Someone has to pay for it, and it's not me.

[Jim Becker]

Darcy, you are correct, but the "overhead" time that actually cannot be directly attributable to a specific client/job can only be "billed" by having its cost be absorbed by your rate for the jobs. That's part of what I and I think Richard reference and why we've suggested that the billable rate needs to be a lot higher so that "actual" hourly rate after everything is considered isn't a pittance.

[Darcy Warner]

Don't forget marking materials or supplies up either.

[Martin Wasner]

It's 8:11pm. I punched in a little after six this morning.

I do this a lot.

Keep working for someone else. It's way easier. You will sleep better, worry less, and live way longer.

[Patrick Walsh]

$75 hr shop rate in my area.

[Darcy Warner]

It's 8:11pm. I punched in a little after six this morning.

I do this a lot.

Keep working for someone else. It's way easier. You will sleep better, worry less, and live way longer.

Yeah, but oh that's all I got. Lol.

[Martin Wasner]

Yeah, but oh that's all I got. Lol.

You and I are stupid and unemployable. Change my mind. Haha

[Chris Parks]

Except that time should be billable. It's part of your overhead. You are darn right I am making money sourcing material, parts, etc. Someone has to pay for it, and it's not me.

That is a good point, my lawyer charges me every time he makes a photocopy or talks on the phone etc so I started to do exactly that noting down the time I was on the phone or doing anything that related to the job but not on the tools. It is all part of completing the job and someone has to pay. Another thing that costs money and often does not get fully charged for is the miscellaneous stuff like screws, small parts of all descriptions, if you don't want to count it at least make a standing charge for that stuff. I bet a lot of guys don't charge for glue but it costs money as do dominos, dowells etc.

[Wes Ramsey]

Lotta wisdom and food for thought here. I guess my first step is to set some goals with go/no-go criteria and a floating timeline. Then I can go at it as hard and serious as I want. Probably won’t be a year from now. Maybe 2 or 10. And I know I will have to weigh how much I and my family are willing to sacrifice. I guess worst case is I end up keeping a great job that lets me do this for fun until I retire. When I put it that way it isn’t such a bad prospect. Maybe I just need to take a sabbatical and get it out of my system. Let’s call that plan B

[Dave Sabo]

$20 / hour

With Amazon rank and file making $15/hr and that being the defacto minimum wage anyway, I cannot see how you’re going to be anything more than a hobby by charging $20.

You mentioned liking Corp. benefits. If you don’t account for benifits in your pricing and business plan - you’re a hobbyist. If your spouse doesn’t have them, it’s going to be really tough unless you both generate a huge amount of cash flow to not really worry about it. Except then, you’re accountant is failing you by not structuring your business to benefit you by paying yourself with pretax dollars.

And at 20/hr - I really don’t see you covering basic overhead , let alone benefits.

[Wes Ramsey]

$20 / hour

With Amazon rank and file making $15/hr and that being the defacto minimum wage anyway, I cannot see how you’re going to be anything more than a hobby by charging $20.

You mentioned liking Corp. benefits. If you don’t account for benifits in your pricing and business plan - you’re a hobbyist. If your spouse doesn’t have them, it’s going to be really tough unless you both generate a huge amount of cash flow to not really worry about it. Except then, you’re accountant is failing you by not structuring your business to benefit you by paying yourself with pretax dollars.

And at 20/hr - I really don’t see you covering basic overhead , let alone benefits.

Agreed. 100%. But that’s where I’m starting while it is a hobby. And yeah, those benefits. The Corp says I earn close to 3x what they pay me. Only way I see to compete with that is to keep that job and play with wood for fun. I gotta figure out what we collectively are willing to give up and weigh the balance. Plenty of time to figure that out tho.