Start Up, No Capital But Full Shop Of Machinery


From original questioner:

So who's been there? Honest description of how it went? Where you found your first customers? Did you sh!t your pants a bit in the first year?

Our local culture in shops is starting to look grim... wondering if I can do better.

Dish it out! I'm listening :)

From contributor ri

I kept my day job until I had 6 months of work back logged. That's when I left the corporate job and opened it full time. Worked a few years of 80-90 hour weeks at two jobs before that day.

From contributor FO

What, we aren't just a bunch of fat old white guys now? Turns out you don't know it all?

Well I'll be...

From contributor Pa

How many saw this coming?

Remember a business is different than being a woodworker. If you are a bidness man/woman it does not matter much what the bidness is.

From contributor Da

If you love the craft you better find a job. It's very difficult to run a business and make sawdust at the same time. Not to mention tiring and stressful on both yourself and loved ones...

From contributor Ri

I would rather have a bunch of orders to have to figure out how to fulfill than a bunch of machinery waiting for orders. You can always hire out fulfillment today. And you have to have money to make money. You can bootstrap a great deal, but you have SOME cash or credit to operate.

From contributor Le

If you have no capitol then it's going to be rough.

I worked at a shop for a while then worked for a builder using a shop he rented with some of his tools and some of mine. Slowly it morphed into me renting the shop and owning all the tools.

Since I was the one who made the beautiful woodwork, clients would realize that. After a while I turned 1099 and needed to find my own clients. Since I had a bunch of followers it was easier and the word spread that I was available.

The builder was the one that pushed me to 1099 and encouraged me to get my own work so he would be legal and I wouldn't be an illegal 1099 that should be classified as an employee.

After years of that he moved out of my area and I was driving 1 1/2 hours each way to work on jobs he bid. Got old quick. So I set up shop near my house and then I was mostly on my own.

All it took was one client in a richer part of town to spread the word. I call her ground zero. And if you put a dot on her house and drew a circle with a 1/4 mile radius around it, that would be my main working area.

So, having a shop full of tools isn't going to get you much if you can't tell people you are there. It takes time to build up a list of clientele. It takes years to get established unless you have a bankroll behind you.

Get a website made, make sure you get good SEO for your area. Put some ads in papers announcing you exist. Put a sign in front of your house with your business info on it, like you are doing a project there. Talk with anyone and everyone and give them your business card. Go to your local suppliers and ask if you can leave a stack of cards there and could they pass them out to people who ask about the type of work you do.

Expect to work long hours, 60 a week is considered normal for a one man band. 90 can happen often enough and "what's a weekend?" will be a term you use often.

Do that for 5-7 years and you might end up with a business.

From contributor Pa

I'm not sure that opening a trade related business even counts as a business.

The more successful business start as a new better way of doing something. E.G. Fastcaps, closets organizing when it was new, subcontracting components out like Decor Door or DBS or Cabinet parts.

If not that then finding a niche whose demand is growing E.G. like the movie set business in Vancouver or water desalination in Calif or Home theatres.

This way you focus your marketing and your branding/positioning, and employee training and your competitive advantage.

From contributor Me

Lmao--you guys sound like me when someone asks me if they should have children. "You're life will be over!! Constant work!! The chronic whining!! No sleep!! You'll beg for your momma!!"

So lets be clear--I don't want a super duper business that makes Forbes articles and is worth all this money. I just want something I can invest this mad amount of energy I have. I think woodwork and everything around it from when I wake up to when I go to sleep--might as well do something about that. Not sure what yet, but we'll see.

Recently talked to a long time one man show--does everything from sale to spec to fabrication to install. Totally inspired. Same aim as me-- guy just likes doing it.

That said, of course I'm paying attention to what any of you have to say as you've been at the start up phase yourselves.

I'm thinking you all have a recurring theme in your posts and that it leads me to think I should start with a sales job for someone else. Then see.

Dave--was just thinking about the fact that you are a bit of my go-to for technical hardwood questions. So you must be pretty into it. Ever miss the sawdust?

FOWG--please fill out the form bellow so I can better understand your complaint...

Thanks guys, as always :)

From contributor Da

I'm a fan of finding a niche and exploiting it. I started out at 22 learning to make curved stairs and other residential architectural work. 99% hardwoods. This was a great niche that the shop I worked for was known for all over the Midwest.

Eventually, when I went out on my own, I had little work, but enough to keep me busy. I did see a solid 8-10% growth every year as I learned how to expand my little niche and word got around. No advertising at all, by the way.

I learned to borrow money for improvements and then got a Line of Credit when I leased my first larger space. As for loans, I figured a 2-3 year payback and held to it. This made the credit jockeys line up when I wanted the next loan/piece of equipment. The LOC was extremely helpful with the expenses I had at expansions, and not enough complete work to invoice. Like credit cards, it can be a crutch if you let it get out of hand. Learn to project your cash flow - in and out - to avoid dropping into a hole.
Banks are not the solution, but can be a tool to help you. Just borrow what you need, never more. Work for yourself, not the bank.

From contributor ri

I agree with David's comments. When I started out, 1988, big TVs were just coming out. There were nothing out there in the furniture stores, yet. I made a ton of cabinets and shelving units to hold those things. My line of credit was a second mortgage on our house. Way easier than talking to the banker, and it worked out very well for us. I'd also add that the world is full of people that start a business under capitalized. The worst part will be the constant stress of no cash flow. That works on your mind every minute of every day, (and nights when you should be going to sleep) and will break you mentally. Pretty soon that allure or passion of "just doing it"/"doing it for the art", will be outweighed by the stress of no money! Then you work more hours as a way to generate more money. It's called burn out.

From contributor Pe

Starting with no capital is veryyy difficult. After a failed business as a young man ( Texas recession of the mid 80's, no capital) and another 30 years getting the business under my belt, I opened again in 2010 full time. Started with more than $100k as capital and a shop full of professional level equipment. Still have a difficult time matching income to outflow. It never aligns. Working this business means handling big heavy things. You need help and help needs to be paid, unless it's a partner, and that is like being married. Better get along real well. After 5 years we will finally pass the million dollar threshold and I still don't pull regular paychecks. I had a vision of being a studio furniture guy when I started, but that is a very difficult path. My background put me in a pipeline to many project opportunities, but I let most of them pass because I need to manage the cash flow efficiently. Even with some cash behind me, mistakes can eat that up in a second, or too big a job with a poor paying client or so many other things can put one in jeopardy. Back in the 80's it was easier to bootstrap, but things have gotten much more complex since then. And it still just took one bad client to sink an enterprise.
Of course the other side of that is - I've seen big rich companies go under in 1 year with bad management, So the underlying theme to this comment is, you need to pay a LOT of attention to the business-cash management side of things no matter what your position. And that leaves little time for making sawdust. So if making beautiful things is what you want to do, it's best as a hobby and an employee. By the way, if you wanted to move to Texas, I'd probably hire you. You're asking the right questions.

From contributor De

I started my business with no capital. Not a little, literally no capital. I had a few tools and figured out what and how I was gonna do it.
I borrowed a truck from my neighbor and used my rent money to pay for a home show booth, figuring I could make enough to pay the rent and the late fee.
you have to be good at making sales happen. Giving quotes and free estimates is not selling. If your afraid of people or don't want to be in sales, go get a job because you'll starve waiting for people to walk through the door. Nothing happens till a sale is made!
As for debt, be very careful, no matter what happens the payment is due.
97.4% of the business has nothing to do with the product.
I agree on the niche, nothing worse than being in a market with 5 companies doing the exact same thing trying to differentiate themselves on price. Find what someone wants and nobody offers in a sweetspot price. Figure out how to produce it better and faster than everyone else and take your money to the bank.

Good luck.

From contributor Da

Do I "miss" the sawdust? Often. However, I was never much in the sawdust.

My story is probably a bit different than most others.

In HS I wanted to be a furniture builder. I took "wood shop" all four years. Near the end of my senior year my dad suggested I apply at a local shop that did some sort of woodworking. The only job available at the time was at the front counter, but I figured it was a way in.

However, I never got to the shop there. After 6 years I bought the company to keep my job. At that time there were a total of about 6 employees, and I stayed in the office. However, shortly after I took over the economy dived, and soon there were just four of us (one part time) and so I was in the shop trying to make money. After a few years I moved away from production (which ended up being mostly moulding, although we did furniture and raised panel doors for a few years) and eventually went back to a full time desk jockey.

I occasionally get my hands dirty with a personal project, but have not done any billable work for many years. I most often advise our employees on techniques or troubleshooting, which I also enjoy. I'm an engineer by skill, though not training.

I have a dream of building my own house, and making/installing all the interior finish work. Doors (not windows!), trim, raised panel wainscotting, kitchen cabinets, built-ins, etc. But I have resigned myself to accepting that it's only a dream. I'm satisfied having wood in my shop and seeing it go out to satisfied customers. I love being responsible for natural resources being made into functional products. While my "hands" are not in it, I am. And that's enough for me.

From contributor Me

I have no fear of approaching anyone with anything. People are people are people. Bound to be a way to capitalize on that...

And I'm with David on this one-- don't have to be passing the wood through the saw
To work in woodworking. Conceptualizing a product within a materiels parameters and selling it is all Under that umbrella in my books.

So I found a shop owner I like. Cheerful guy with an absolutely immaculate shop. He wasn't looking for staff but we somehow met twice and seem to be trying to find a way that we could work together. He doesn't have an in house sales person; recignizes that that is my old employer's advantage on him, but i guess hiring an Inhouse person for the first time may take some convincing.

I'm thinking it would be ideal-- guy wants to retire in ten years and someone will have to buy that shop. And what i wouldn't give to just find an older smarter mentor to work for!

Dunno... Lots of pondering. You folks are very helpful :)

Peter-- thank you :) :) wish all you woodwebers had local shops!!

From contributor Me

Just had a thought-- if I wanted to figure out which aspect of woodworking isn't being covered by local shops who would I ask? Designers?

From contributor Pa

It is important to survey people who are actual customers of the product you want to find out about.

E.G. designers or contractors or homeowners who have actually purchased what you want to find out about.

Ask questions that get an emotional response. E.G. are you having any problems with... what is your favorite ...

E.G. I did this once when Corian was a new thing, of homeowners who were interested in countertops. The emotional response that I got was I hate the color of the counter.

Anyway if you can get emotional answers you have hit pay dirt. People buy things based on emotional reasoning.

From contributor Ri

He would be a lot easier to convince if you brought him some leads or business. What resources does he have an excess of that you could create business for?

You could explore Etsy to see if there is anything there you could improve or sparks your fancy. If you want to work with wood, find a niche of small products that you could make with minimal tooling in minimal space. I would find a product you can sell online, easy to ship, requires few tools, has little finishing requirement, and doesn't weigh much.

A while back I was looking for outdoor Christmas decorations that could breakdown flat for compact storage. Think the ubiquitous Santa with sleigh and reindeer. Seasonal items for Easter, Memorial Day, Independence Day and Halloween, besides Christmas. Hook up with Baby and birthday yard announcement companies.

Use.1/2" MDO with vinyl decal wrapping for the color. Add LED lights for accent or message boards. Cut out on a small Shopbot. Designs that maximize yield. Work with a local sign shop. You can send me 1/2% royalty checks.

From contributor Me

Kay so the guy has a good reputation, nice sized shop with room for more anything, good crew that likes him and takes pride in the shop and the work. Where I see room for expansion is a) for now all his incoming business is from designers that know him b) he is in the middle class end of kitchens.

I see the old shop tackle a lot of high end custom but in a disarray and chronically late. Wondering if i could take that market off their angry hands....

As for conducting market research directly with home owners, we talking knocks on doors? Or is there a more clever way to reach more of them faster?

From contributor Pa

The easiest way is former customers. Contractors or designers are easier to reach.

Either way it is work.

From contributor Me

Nothing wrong with work :)

Trying to gage what the average route is from person wants cabinetry in the house to you selling it to them. How many go the designer route? How many go straight to a cabinet shop and pick what they like off samples? How many are pushing off dream renovations because the while process intimidates them? How many have contractors that get passed along a clique of friends/familly?

From contributor To

I've owned my own small biz, sold it to big corporate, and managed a biz for another. Neither of them in woodworking. Now I'm in the process of starting up a one-man, home-based woodworking shop right now. I've indentified an underserved niche, developed a biz plan and a budget, and secured startup capital. Half of my budget is a small, liveable wage. The biz plan is based on being able to make it with no income, at all, for two years. Of course there will be income but the projection is extremely conservative (estimate reasonable income, divide by four, estimate expense, multiply by two).

So if you have no startup capital, how do you buy raw material, how do you pay yourself and rent, how do you market yourself, buy supplies, etc.?

One of the biggest reasons for small business failure, if not the number one reason, is undercapitalization. Of course I don't know all the ins and outs of your situation, and I'm just getting into this industry myself, but if you can have some other source of income while you build your biz, you'll probably be a lot better off.

Personally, that was my plan (built shop, acquiring machinery, etc.) but I got laid off from my full time gig. Things have accelerated a bit. Under a special program, I can get unemployment and assistance from SCORE in biz startup without having to look for a job. Taking full advantage.

From contributor la

A business has to have capitol.... As a start-up suppliers won't give you the deal their bigger established customers get. It will be COD. Residential is different than the commercial business I have. Here pay is 45 - 60 days after delivery. Your business plan needs a cash flow analysis. I've mostly worked a niche market, lots of curves. Competing with large established companies isn't fun.

From contributor Me

Yep, you guys are indeed correct. Have decided to postpone shop ownership. Could be doable-- I do have a financial situation that is stable and some sellable assets and good credit... But you're right-- probably a total nightmare.

Not saying never, but perhaps a few more steps in between.

Lol sometimes posting here has the same feel as a Dad phonecall :)

Cheers good folk!

From contributor To


Develop a plan and a roadmap to get you where you want to go. I wasn't one to do that when I was younger - all big ideas, dreams and lots of enthusiasm. But 10 years as a small biz owner, 80 hour weeks, and a lot of hard times cured me of poor planning and unrealistic expectations. Hard lessons.

I learned quite a few things about myself and have translated those into my biz plan now. Like - pay for a good bookkeeper/accountant (trying to do this myself might have been my biggest mistake), seriously consider whether you want to deal with payroll and personnel issues (I don't and will get PT help on a 1099 when I need it), do what you really want and outsource the rest, and most importantly, if at all possible, don't be the best at what you do, be the only one who does what you do. For me, I'd go nuts doing the same thing over and over so I've found a niche that allows some creativity within a framework that also allows enough standardization to make it efficient, if that makes sense.

Good luck to you.

- Pops

From contributor Me

Oooo I may be one of those energetic enthusiastic types with no direction.

But I can't figure out direction for the life of me. This is the part where it gets even more "Dad phone call" lol

Here goes... Figured out being a roadie (on a resume you call that live event infrastructure) that I can make big things move fast. Pleasantly. With happy crew. Slinging heavy crap across stadiums or fields. Without annoying other trades. Client enthused.

Was a husband and wife team, contracting. Known across that industry for efficiency and pleasantness. Shows ranged from 20 000$-50 000$ so not the roadie joke most people assume.

Since I hit the normal life I find the whole world moves like molasses. It's in a million little things... Actually both of us are constantly surprised at how shy/scared most of the business world seems to be.

I know there is something in that skill set that is capitalizable, and needs to keep being fed. It's a million little differences--last power outage when the manager types were having worried little meetings for an action plan, I walked out to talk to the hydro crew. Got an ETA on repairs from the horses mouth.

Doesn't seem like much, but these sort of things are mentalities: eye on the prize, and most importantly--who do I need to talk to to get this done/do this?

Still don't know where this "getting sh!t done" raison d'etre can get most fed. Barking up a sales position for now. We'll see!

Thanks Pops ;)

From contributor Mo

I bootstrapped out of nothing. It can be done.

If you have no current orders then you have something valuable that the 'busy' shops don't have -- Time.

Use this time in your shop to make a few demo products. Make them extra polished because you have time to pay attention to detail.

Use 'scrap' material that you have laying around. If you are lean enough to not have scrap and can't afford new material for projects look up craigslist for free/discounted materials to work from. Guess this depends how much 'no capital' really means to you. I remember dumpster diving to get materials to help get started. Many jems can be made from what gets trashed from various places.

Maybe make some improvements on products that have been floating around in your head. We 'busy' shops are frequently too busy to work on new ideas - it takes all of our effort to keep up with current projects. So take advantage of having some time to make a few showroom quality items.

Then you have some nice product to take great photographs of (usually this means taking initial photos, evaluating them, then adjusting lighting & positioning again for best appearance -- easier to do with something you own versus something installed in a client's location).

Use the photos for new website.
List the item on eBay, etc.
You are planting seeds for future leads to grow.

This may also help you find your niche that helps you grow to full-time status.

From contributor Me

MA--I love this sort of stuff. My home shop is full of repaired salvages and materiels acquired for free/dirt cheap. As is my house--and it does not look cheap either.

As a result of living in an ultra consumerist society, if you are creative, you can live pretty well on mindless throw aways.

Hats off, seriously!