Are you interested to start a successful woodworking business from home? Here is a detailed business plan guide for beginners to start a home-based woodworking business with a low investment.
The wood products industry has seen good growth in the last few years. As per IBISWorld, the wood product manufacturing sector in the United States grew at 2.4 % in the past five years. Industry experts predict the growth will continue in the coming years also.
As matter of fact, the woodworking industry is dominated by small businesses all across the world. If you have some skills in woodworking, it makes a lot of sense to start a home-based woodworking business at present.
Here are the 10 Steps to Start Home-Based Woodworking Business
Here are the basic steps for beginners to follow to start a profitable home-based woodworking business with a small investment:
1. Understand the Market
The very first step to start any small business from home is to clearly understand the local demand and trends of the product or services you are going to sell. This holds true for starting a home-based woodworking business too.
One must gather as much information as possible from local vendors and existing customers. It is advised to conduct thorough market research and collect information regarding the level of competition, the kind of wood products selling most, and the pricing of the products. Based on the information received, find out the gaps and explore them to your advantage.
2. Find the Right Niche
For a beginner, it is extremely important to develop products that have a good existing demand in the immediate market. Bear in mind, woodworking business from home is a competitive industry.
Most customers want to buy wood products that are unique and are not similar when compared to items with their relatives and friends. To be successful and create a brand of your own, you need to be creative and develop distinctive decor items.
3. Create a Woodworking Business Plan
A carefully documented business plan is an essential part of a successful woodworking business. It helps you in a deeper understanding of the business and thereby assisting you in creating a roadmap to success.
Some of the basic aspects of your home-based woodworking business plan that must cover are the following:
- Products you are Offering
- What are the startup cost and running expenses?
- The pricing of products and profit margins
- Target Customers
- How do you plan to sell products
If you are looking for funds, then put financial projections that you expect in the coming years in your business plan.
4. Name Your Woodworking Business
Choosing a relatable and catchy business name goes a long way in building a reliable brand. Take some time off and brainstorm to find the right name for your woodworking business. Talk to friends and relatives and share ideas.
There are various online business name generators that you can check out online. Do not forget to check business records of state and federal and state trademark records.
The other most important aspect is to check whether a similar domain name is available or not. If you plan to go online and create a website, the business name and website domain name must not conflict.
5. Register your Woodworking Business & Procure Licenses
If you are planning to start a legally compliant woodworking business, it is wiser to register your business. If you are from the United States, there are different types of business structures you can opt for. The most commonly preferred options for small businesses are sole proprietorship, partnership, or Limited Liability Company. Forming an LLC provides certain extra benefits like will protect your personal assets with that of business assets.
Contact your local small administration office for required licenses and permits to start and run a home-based woodworking business. You can lot many tax exemptions as you plan to operate the business from home.
Other than a business license, you will need a seller’s permit and a fire department permit to operate a woodworking business. If you are operating in a residential location and using noisy machines, you might need a conditional permit from the local authority.
In addition, it is advised to buy business insurance to protect your business in adverse situations.
6. Estimate the Cost of Starting Woodworking Business from Home
A woodworking business does require a reasonable investment to start and run. It is essential to make an approximate cost calculation beforehand.
On average, the estimated cost of starting a home-based woodworking business will be around $5000 to $7000 based on the scale of operation. Find below an approximate breakdown of costs:
- Cost of Tools & Equipment – $1000 to $1500
- Cost of Wood and other raw materials – $1500 to $2500
- Legal Expenses – $500 to $1000
- Computer & Bookkeeping Software – $ 1000 to $1200
- Promotional Expenses – $500
Since you are starting from home or in your garage space, the cost of renting space is excluded.
7. Set up the Woodworking Workshop
Setting up the workshop space for a woodworking job is the most critical part. You do not require much space to do the job. A small space in your backyard or garage space will do. However, it is essential to organize the space in a manner that allows finishing woodworking jobs smoothly.
If you plan to sell your wood products from your workshop and expect customers to visit your working place, make sure the ambiance is professional enough to create confidence among customers about your professional approach to the business.
You also need to buy the required tools and equipment to carry your woodworking jobs. Some of the basic tools you need to are the following:
- Jigsaws – both power and hand saws
- Table saws
- Wood laser engraver
- Screw Guns
- Measurement Tapes
- Carpenter’s Squares
- Different kinds of drills
8. Find the Right Suppliers
Wood is the major raw material in manufacturing wood products. You must have a network of local timber merchants and sawmills that can provide good quality supplies at an affordable price in the desired time period.
The success of a woodworking business largely depends on the proper relationship you make with the local suppliers.
9. Packaging & Delivery
Another important aspect of a successful woodworking business is the packaging and delivery aspect. The mode of packaging will largely depend on the kind of products to be delivered. For example, it is seen cardboard packaging works best for home decor items like tables, chairs, and desks.
It is always better to deliver products to customers of your own if the destination is within reach. For serving customers living outside your coverage area, make tie-ups with reputed local courier companies.
10. Create a Marketing Plan to Sell Products
Like any other business, marketing properly is the make-or-break part of a woodworking venture. You must have a carefully crafted marketing plan to be successful.
Other than creating business cards, brochures for local customers, try to get onto the online space. Nowadays it is much easier to find customers online. There are a number of online marketplaces like Etsy, eBay where you can list your products for sale for free. Online social platforms also is a good platform to sell your wood products.
If your budget permits have a website of your own. It not only helps to reach a wider audience but also creates confidence among customers and thereby increasing brand value.
Both for online and offline selling, photos of your products play a big role. Invest a little money in buying a good camera and take the best quality images of your wood items.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.