Learning how to make money woodworking shouldn't be a mystery once you've given some thought to some business basics.
One of the costliest lessons learned by many small shop woodworkers is where the money has to come from when you don't charge enough for the items you sell.
It doesn't matter who you sell to, whether it's your favorite aunt or the president of a large company, it costs you the same to make. If you don't charge enough, then the lost money comes out of your pocket.
So, how do you make sure you're not losing money? To make money woodworking instead of losing it you have to plan all aspects of your projects ahead of time.
1. Would anyone really want to buy it? There's a lot of stuff out there that's easy to make but the market is already flooded with imports and items from other woodworkers that, unknowingly, the sole profit is a pat on the back. Making an item like this for yourself is one thing but if you include this in your portfolio of sellable items then you'll lose time and money!
2. If you want to make money woodworking, talk to an accountant. If you're planning to turn your woodworking skills into a small business then let your accountant help you set up your costs of running a shop. You'll need to hire one before tax season anyway, so do it now.
If you choose a accountant that's familiar with woodworking shops then he/she can help you set up a business model that will be profitable from the start.
3. Make a list of all your costs to make each item. When making your list you can now include the fixed costs set up by your accountant. These fixed costs are what it costs you per day just to have a shop. Insurance, rent, upkeep, etc. Then include all your material cost, even including glue, nails, and screws for that particular project.
4. Don't forget to include labor costs and a set percentage for your shop. Some woodworkers set their labor costs low and don't include a shop income. This is a shop growth killer.
If you set your prices based on materials alone you will probably get very busy with a lot of work, but, no money at the end! One thing you should remember is when your shop grows so does your expenses.
Since it's almost impossible to raise prices the extra cost has to come out of your pocket. Remember, in order to make money woodworking you have to include all your costs.
5.Now, look at cost by volume. If you decide to make an item, how many can you sell in one month or maybe three months?
To get the full use of your shop, schedule each item to be made by how many you expect to sell in any given time period.
Plan the entire month by the amount of days it takes to make a quantity of each item. This way you will have a better feel for how much it costs for each piece and how much you need to add to make a profit.6.Start your professional image when you start your shop! Your image is one of the key factors in how much money you can charge for what you make. If you conduct yourself as a professional with ethical values and treat each customer with respect, then the perceived value of your work is worth much more to them.
The price actually becomes secondary to the pleasant experience of purchasing an item made by you.
Every time your customer looks at or uses the item you made, she remembers the professional treatment while the price becomes almost forgotten. As a matter of fact, when she shows off what she bought from you , she'll tell her friends " Look at this great looking piece I was able to find!". She'll never say "Look at this cheap thing I was able to find."
There are dozens of ways that woodworkers make money woodworking. One good way to find out how to make your hobby profitable is just ask or start a new thread at any of the good woodworking forums.Be professional........., work less......., make more money!