Making decent money

      Advice on making a living in the business of contemporary craft woodwork. June 6, 2001

Question
I used to build custom hardwood furniture in my own two-man shop, and just barely eked out a living. I'm now thinking about building small items only--contemporary craft woodwork for galleries, in moderate quantities. My marketing savvy has vastly improved since back then. Do you think I can make a decent living in this area?

Forum Responses
The Rosen Group, Buyers Market of American Craft, does a good job of making sense of the wholesale craft industry. They have a wealth of free materials, a newsletter, guest passes to the shows, etc.



I can make "decent " money selling used cars, but I prefer this line of work. It's "hack and stack" box making ninety percent of the time, but the other ten percent is the creative fun. The shop pays the production overhead, payment on the shop property, supports 6 workers, health insurance, retirement fund, my own weekly check and this past year we had a $20,000 profit on cabinet work, $18,000 profit on installing kitchens, and $7,200 clear on renting space to others.


I mill exotic woods and do ok. If you like what you're doing, and your workforce is paid and proud of their end product, you will know if you will survive and profit.

The end product, be it a box or a roll-top desk, must be an eye catcher. I have clients that wait one to two years for my spalted maple. I end up having the money to wait for the right woods for the right piece and the right market. The price of uniqueness has never dropped and never will. I just milled the wood for a 1720 pilgrims desk and my client put it together. It sold for 17,500. It was made of spalted curly red alder, and put together on the weekends, so don't quit your daytime job, yet. Find that thing that is easy to make, but always make it different from all the others.



Yes, there are lots of people in this industry who are making excellent money. If I had to sum up the trick to doing so, I'd put it this way:

Do the work you know you can make money on, and insist on making money for the work you do.

So many woodworkers take jobs that are almost impossible to estimate accurately, saying that they don't care, that they want the experience, or to make an artistic statement, or whatever. Then, the same guys complain about not making enough money. But you can't have it both ways.

Go into every commission you take with your eyes wide open, knowing what you expect to derive from it. If you're doing it for experience, great -- plan to do no worse than break even, and then don't whine when you do.

If you're doing a job for money, price it so you'll make some. A lot of guys give their stuff away, afraid to charge what it's worth. Know this: you will NEVER find a high-end clientele until you start pricing your work in their price range.

As I've noted before (longtime visitors are probably sick of hearing it): It's hard to turn away work where your price is too high, or to pass up an opportunity to bargain. But it's only hard the first couple of times. WALK AWAY. If you really know what it costs you to do work, you'll quickly become equally comfortable asking for it, and saying, "Thanks, but no thanks" when somebody tries to talk you down.

(If you don't know what it costs you to do work, that's an internal issue, and one that you must deal with before you can get the prices you deserve.)

People only get quality if they're willing to pay for it. And the woodworkers who make good money are those who insist on getting paid what their work is worth.

Anthony Noel, forum technical advisor



I have my own custom woodworking business. It can be difficult to eke out a living if you're not realistic about what you are getting yourself into. Don't quit your job to start the business.

You need to build a reputation for quality work within your local area and it doesn't come overnight. Advertising, which is expensive, can get you a job or two, but it really doesn't pay for itself. I advertise once in a while, but I don't realize any significant return on the investment. The best advertising that anyone can get is word of mouth. Quality and customer service are the most important issues. On an average, I get 2 1/2 referrals for every job that I do.

I recommend starting part time, ensure the quality of your work, and get the references. I currently have a 2-month backlog in my shop. If the backlog gets longer, I raise my prices to reduce it.

Talking with other custom shops in my area, I have found that they do not stay in business long due to lack of references, they are not specialized in any one area, or their work is overpriced. The going rate for estimating, here in southwest Ohio, is about $55/hr for a qualified cabinetmaker. However, it cannot take you a week to build a bookcase. You also need a reliable, inexpensive source for wood, which most lumberyards don't carry. I order 1500 - 3000 board feet at a time, which cuts the cost. If you buy at lower quantities, the prices can double, which either reduces your income or raises your price, which can result in your being non-competitive or not making any income. The large custom shops do almost all commercial work, so I am not in competition with them.

I am making a decent living specializing in residential "built-ins", furniture and cabinets. I have had a few commercial jobs that caused major problems because my shop was not large enough to handle the orders. I had two trophy cases that were 8ft long x 7ft high and 24" deep, for a local college, that took up half of the shop and had us falling all over ourselves.

If you are not sure of your estimating, a good rule of thumb is to price your work at 3 to 4 times the cost of supplies until you get a handle on what it is actually costing you for a job. Be careful to consider sandpaper, fasteners, bits, sawblades and other overhead items. I found that a lot of shops don't consider these expenses when estimating. You also need to add in utilities and rent.

There are some excellent books available on starting a woodworking business that I found in the book sections of woodworking magazines or in the woodworking supply catalogs. They have sample forms which are extremely useful when you first start out. The other thing to consider is a financial software package and a CAD package. I have used QuickBooks Pro and TurboCad Professional for several years and they are more than enough to handle a small shop. Their costs are only a few hundred dollars and they can save you hours of work.



The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).

Comment from contributor A:
I have been "running" (crawling actually) my own custom furniture shop for the past year. I know it is a short time in business but it has taught me a great deal about how tough it is to command the required price for a piece when the general public has been conditioned to accept that "second rate" is really "top shelf." The secret is to find the market and aim *only* to clients who appreciate the work required to create individual, high quality work. Unfortunately, this has proven difficult for me as the general climate of the market in my part of the world (Adelaide, South Australia) is conservative. Also, starting off without a name and still honing my skills put me at an immediate disadvantage when trying to pull an income while supporting a family (wife and 5 little darlings). You just have to be realistic and start small. Good things will come with time. Unfortunately mine has all but run out and I am planning a return to the general workforce and scaling back my cabinetmaking to a part-time/hobby scale.



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