Expert: Jamie Yocono - 5/2/2008

Question
Hi: I am a part time woodworker I have built several furniture pieces, and I have a small work shop 14x16.
 I am thinking about starting my own business, starting part time then going full time.Should I specialize or take every thing that comes in, or should I just do cabinets.
And how do I quote a job if I have never done it before.
I live in baton rouge La.
Any info you can give me or recomend I would appreciate

Answer
Guy,

I've answered this question a couple of times, so I am going to cut and paste part of those older answers here. And I'll add a few things pertinent to your situation. So grab a cup of coffee, this will be a long answer!

My first impression of your question is this - and I don't mean to be cruel here, but don't quit your day job. The questions you asked lead me to believe you have little experience, other than hobby type experience. It's a pretty competitive world out there, and even well established, skilled woodworkers are having a tough time of it. So someone with little experience can be eaten up in these shaky economic times.  Here are some things to think about...

I'm not sure if you have a lot of experience, or a little, but I'll assume that you have little, as you said you don't know how to price things that you build. That's probably the single most important thing you do. I mean, the bottom line is to make money at what you do. So if you can't, why bother? I'll try to give you some things to consider when going into business.

I think the biggest thing for me was acquiring the proper tools to allow you to work efficiently. In the beginning of my woodworking career, if I needed to crosscut a wide board (say...a large table top), it might take me an hour with a router and a straightedge. Later, when I bought a huge radial arm saw, I could accomplish that same cut in about 10 seconds.  A shop that is the size of yours won't be able to produce a huge volume of work, it's pretty simple math.

So.... good tools = time savings = more profit.

Next, I would limit yourself to what you know best. If it's building kitchen cabinetry, then become an expert in that, and only that. Don't try to spread yourself too thin by making kitchen cabinets one month, and then bedroom furniture the next, and then building a deck the next month. Find your niche, and stick with it. You'll acquire the specific tools for that niche, and you won't need to buy every tool out there.

Refine your methods of building so that you can build a variety of work with a minimum of joinery. What the heck does that mean? Well, I cut nearly all of my joinery with a router table, making dados and rabbet joints with ease. Those two joints are adaptable to a variety of pieces, and I am an expert at cutting and machining them. It doesn't have to be fancy, it just has to be strong and able to be duplicated.

Next- consider outsourcing. There are some things that I simply cannot do in my shop and make money at it.....like cutting dovetailed drawers. Yes, I have a dovetailer, but it's complicated and a pain in the neck to set up. So if I have a client who insists on dovetailed drawers, I buy those from a drawer manufacturer. I can buy them cheaper than I can build them.

You also need to keep excellent records. I keep a file on ever piece I've ever made. It doesn't have to be fancy, just information about each piece, like a material list with prices, and a small sketch.  I have a time sheet for every piece, so if I want to see how long a 6 drawer dresser took me to build, it's easy to find out. If I lost money on the job, because it took me longer than I anticipated, I make a note of it. The next time I price a dresser to a client, I won't make the same mistake.

After a while, you should be able to look at a job and know how long it will take you to complete it. Yes, you will make some mistakes, and yes, it will take some thinking about the job. You need to know your capabilities, and obviously, if something looks complicated (and you've never attempted it before) you need to add some extra hours onto your price to cover for your time.

That brings up another thing: I've learned to not get in over my head. People have brought me ideas that they want me to build, but if the work involves something that I cannot do expediently, I have learned to turn those jobs down. For example, if someone wants me to build something that involves carving or veneer, I am not equipped to do those tasks in my shop, so I turn the job down.  Unless I am going to make a buttload of money for the job, I simply cannot make any profit in a job that I have to buy extra tools for, or learn a new technique.  I stay with the stuff I know.

Another thing...over the years, this has been a formula that has worked for me. If I am trying to figure out how much to charge for a piece of my furniture, I first price out all the materials that I will use. I mean, everything....from the lumber to the plywoods, the hardware, the screws, the glues, the sandpaper and the finishes. Don't forget a thing.  That doesn't mean I know exactly what each screw costs, but I will simply include a supplies charge that might include normal shop supplies like screws, sandpaper, and glue.

OK, once I have a total cost of materials, I use a multiplier of 5 or 6, depending on if it's a piece that requires a lot of work, or a little. What does that mean? If a piece has a lot of detail work, like drawers or hanging doors, it's harder to build than say, a table with no drawers. So you have to examine the piece and discern if it's a complicated piece or a relatively simple one to build.

For example-say you have a client that wants you to build a dresser. After figuring all the parts, you come up with a $400 price for materials. Building a dresser is pretty complicated, with drawers and drawer faces...so it's priced using the higher multiplier.  So a piece with $400 in materials (multiplied by 6) would cost $2400 to my client.

Now, I am in Nevada, so my overhead might be higher than yours.

***This is important - you should be able to look at a piece of furniture (or cabinets) and know what it will cost to build it. Period. That means you should have a good idea of how long it will take you  to build it(hour wise) and what the materials will cost. ***

If you're renting a shop space, you need to include an overhead charge for that.

You'll need an accountant to help you sort out all your money and pay your taxes. There are a lot of tax write-offs in starting a new business, and you can even declare a loss for the first few years, until you get on your feet. It shouldn't take too long to figure out if you're making money or losing it. And that's the bottom line.

OK, so the quick run down.... buy the right tools, become an expert in whatever area you choose, know your limitations, keep good records, and hopefully, make money. Oh yeah....and have fun.

My best suggestion to you is to do some research, figure out what you might like to specialize in, and then start marketing that skill. I know a fellow who makes nothing but table legs on the lathe. He has a small shop, and does well, selling to other woodworkers. It's all about niche markets, in my opinion, so figure out your niche. Research it well.

Oh - if you can, try to locate the book - Working at Woodworking by Jim Tolpin. It might help you.

OK, I hope this helps. It's a complicated subject, but certainly one that you need to think about. After all-it's your livelihood! Feel free to write again if you come up with any other questions.

Jamie Yocono
Wood It Is! Custom Cabinetry
Las Vegas, NV
www.wooditis.com