How do I Start a Small Woodworking Business?

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Traditional hand planes are still used for some woodworking finish tasks.
Traditional hand planes are still used for some woodworking finish tasks. (Image: wood plane tool image by Wiktor Osiecki from Fotolia.com)

Woodworking businesses can tailor their products to a variety of customers. For example, Entrepreneur Magazine notes that some woodworking companies provide building contractors with custom-made molding or millwork. Homeowners with remodeling projects may also require specially configured architectural components. Small woodworking businesses also provide components to other companies that manufacture a finished product. For example, your business can provide wooden dowels to be used in decorative shelf units. With careful planning and versatile equipment, your woodworking business can serve more than one market.

Things You'll Need

  • Business license
  • Permits (if applicable)
  • Sales tax license (if applicable)
  • Written zoning department approval
  • Potential product line
  • Shop layout
  • List of needed equipment and supplies
  • Marketing sheet

Structure your woodworking business. Select a business structure with help from a Certified Public Accountant familiar with small production or service businesses. Meet with a commercial insurance agent with similar experience, plus a strong liability background. Visit your city or county clerk’s office for a business license, and determine if additional permits are necessary. Finally, ask your state Department of Revenue if you’ll need to pay sales tax on your woodworking products.

Determine your woodworking shop location. Select a location accessible from major highways, and with sufficient maneuvering room for large equipment delivery trucks. Confirm that the shop can be well secured against potential equipment theft. Before you finalize a lease, consult with your city’s zoning department to ensure that zoning regulations permit a woodworking business at that location. Obtain written zoning approval before you proceed further.

Select your woodworking product line. Woodworking products include furniture, decorative pieces and architectural components such as fireplace mantels. You can also perform production woodworking for furniture manufacturers or other large companies. Realistically examine your available space, woodworking skills and production capabilities. Identify markets with unfilled demand, such as a backlog of bookshelves for a popular furniture style. Select a product line that offers current income and good expansion potential.

Design your woodworking shop layout. Your woodworking business will function more smoothly if you carefully design your shop layout. Proven Woodworking recommends that you position similar-purposed equipment together. Group table saws and planers to cut wood to the length and thickness required for finish work. Station your drill press, band saw and router table together to promote a more efficient finish work process. Finally, plan your shop on paper first. Draw a floor plan to scale, and place paper “equipment” around the shop as planned. Evaluate your plan’s efficiency before moving your real woodworking equipment into position.

Order your equipment and materials. List the equipment and supplies required for startup of your woodworking business. Consider the scope of your operation when you purchase equipment. If you plan to make only smaller components, for example, a smaller table saw takes up less space and is likely less expensive. Shop around for the best prices and manufacturers’ specials. Used woodworking equipment presents a good value if it has been well maintained. Woodweb features a woodworking machinery exchange continually updated with listings by private individuals and businesses. Each listing features a description, photo and seller location.

Hire qualified woodworking staff. Once you’ve established your product line, determine the types of woodworkers you need. For example, the United States Bureau of Labor Statistics reports that some woodworkers perform many tasks that range from raw wood processing to finished cabinet assembly. Conversely, other woodworkers are more specialized, performing a small number of tasks regularly. If your shop utilizes computer-controlled machinery, woodworkers who can operate this complex equipment are assets to your business.

Market to your potential customers. Confirm that your woodworking shop is ready for business. Prepare a one-page marketing sheet that highlights your production capabilities, as well as your staff's expertise. Contact potential customers personally, and request an opportunity to submit a bid for production work. Follow up in person or via telephone to demonstrate your commitment to good customer service.

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