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Making a living band sawing letters9/6
I have a small part time wood working business mainly making rustic pine furniture and wall decor. Big chunky letters to be exact.
My letters have been selling really well. I can wholesale them or retail them at a local vendor mall. I am also exploring other wholesale options-wineries, breweries, home decor shops, furniture store, etc.
I am wanting to go full time. I guess my question is this.
Can I really make it band sawing letters and the occasional bench, bookcase, etc?
I can make roughly 20-40 letters in a day. I have my finish down. While my bandsaw isn't the greatest, it works(grizzley 15".) My overhead is very cheap. I have a wife who is a graphic designer so I could have a kick-azz website and catalog.
I know this sounds a little crazy. Maybe that is why I am a little hesitant. Anyone doing something similar?
I'm sure your could. But someone else will see your idea, get a CNC and make 150 letters a day for 1/3rd the cost and put you out of business.
CNC companies already exsist. While they they don't make exactly what I do, they are similar. I'm competitive price wise with them. I just can't make as many.
When you say your overhead is cheap, I'm assuming that's because you work out of your garage with no other expenses such as rent and additional utilities.
Honestly, you're probably on thin ice. First and foremost is the need for liability insurance. You're selling consumer goods and you have to consider the need for product liability. The letters aren't an issue, but any of the furniture you mentioned puts you in a different category. Ever make anything that could be used for children? You're in even deeper. Using part of your home for manufacturing? Your homeowner's insurance won't pay for any claim relating to damage caused by that venture. In other words, to do it right your overhead WILL grow.
Do an honest assessment of true overhead (insurance, utilities, work space, equipment), determine exactly how much it cost to produce each piece including material, labor, delivery, etc., and how much real profit you make off each piece. Then decide how much money you expect to make in this business. If you want to make $2500 a month and your true profit is $1 per piece, you'll have to produce 2500 per month.
Thanks Bill. Yes, ins sucks. The health ins side of it scares me more than anything. I have it available through my wife's work, but its crappy and costs more. I do have a rough estimate on all of this, but planned on doing a full evaluation before going full time.
And just to be clear, I do plan on making more expensive, furniture peices as well as the letters.
The reason that you compete well with the CNC letters is that you are too cheap. By Bill's estimate, you are 1/3rd the price you should be. Don't feel bad, that is where everyone starts.
It is better to get the reality dose before you take the leap.
Single man shops can only thrive with a niche - usually a skill or something that can't be done in China or by a CNC. A shop that tries to beat Home Depot cabinets or Ikea furniture will die quickly.
Another thing that happens is the local cabinet stop lays off, or someone flunks a drug test, and the next week he is 'in business' - competing against you. He may be dumb, but if he is cheaper - can you outlast him?
With all do respect, how would you know? I havent posted prices or my competitors prices. I maybe too cheap on a few things, but i havent made too many things that i could charge 6x's materials on a very easy peice. This is a serious question- If you have a 200 dollars in materials on a very simple cabinet, can you charge $1200? I know the analogy is not linear but you get my point. And no I do not price that way. And if you can charge that much, good for you.
I dont think you get anymore niche than rustic letters. Not really competing with the really cheap letters at Michaels and such. Mine are a little different and solid wood. And people like that its cut by hand. I guess they like the idea of somebody doing it instead of a machine.
Worrying about if someone is cheaper is kinda silly. There is ALWAYS someone cheaper.
And again, I will be making other stuff. Just finishing a $850 dollar table for instance.
Thanks for all the advice guys.
Maybe a dose of reality if you use the table for $850 as an example ,, figure out how much in materials went in including finish and calculate your hours spent and whatever overhead costs and any others .
Most people just starting out vastly understate their real costs. After a few months of making minimum wage, they wise up and either get out of it, or learn what needs to be done to make a living wage. Just saying'.
As D Brown says add up all your direct costs, all your materials and labor. Materials are to be figured at replacement cost, not the stuff you had just laying around. Then something for consumables - sandpaper, etc. Then utilities and phone and rent and insurance, and about $30 per hour for your wage and taxes. Round up if in question. The trip up here is what you omit - you don't know what you missed, so be thorough.
I do not know of any one man shop that can do anything for less than about $58 per hr, where the owner takes a wage of 50k or so. I have worked in a 2 man shop off and on for 26 years, and my hourly rate I charge is now 85 to 95 per hour. I buy wholesale, and mark up materials. We will do about 350k this year.
This is a strange business where so many starting out get defensive when told they do not charge enough. I don't know why, but many of us start that way, way too cheap, and not wanting to hear that we are not charging enough. Maybe psychologically we are protecting the fact we can generate some money, and afraid if we charge too much, that will all stop.
Sure you can make it. IF, you are willing to live on what you make. You might end up selling you home and living in one of those $15,000 little homes on a double axle trailer they like to show on TV. Oh yeah, probably have to give up the TV. You may have to drive 20 year old vehicles that you repair yourself. You may have to raise your own chickens and grow your own vegetables. Maybe that is the way you already live, I don't know. But if there is the will, there is the way!
Thanks guys for your help. As I already said, I plan on evaluating everything mentioned before going full time. For now I will enjoy being busy and keep working on my business plan.
@Rich, thanks for your input. Really helpful. I do like my 20 yr old truck. Got 300,000 on it. Although I wouldn't changed my own oil if you paid me.:)
Can you sell and produce enough to show a $75k a year profit before taxes, after paying legitimate overhead? That includes paying insurance, health insurance, business license fees and equipment depreciation?
If not, keep your day job.
David just nailed the definition of professional woodworkers illness.
I've never read such an astute description of every woodworker I've ever met. Definitely described me in the first year or two.
Adam - Thanks for agreeing with the observation I made about the mindset of beginning independent woodworkers. Those of us that have been there can easily spot it in others. You are right - most of us have spent some time like that. Recognizing the problems that attitude brings is a product of rigid self examination, and determined stripping away of non productive notions. Maturity.
Many times here on Woodweb, or standing in someone's shop, I hear the same things about overhead, misunderstanding market size, and the defense of product and prices. While the person asks for help of either general or specific types, once defensiveness enters the conversationan, reasonable learning stops.
First rule of business:
Be Ye Teachable
Second rule of business:
Don't reinvent the wheel