Living the "dream"

[jHop]

 - long post, now rebuilding...

 

I think this thread needs to be moved to the "going pro" section... and possibly made sticky.

 

I just finished a semester of a Small Business Management course as part of my Associates in Small Business Management.  For the final project, we had our choice of a 15 page paper, a case study analysis and 15 minute presentation, or a business plan.  I chose the plan.  While I did the typical college procrastination, it still took me the better part of 3 days of dedicated work (6+ hours per day) to do the plan, and I cut a few corners.  If you are serious about doing this, I'd really recommend doing your own business plan.

 

In my plan, I discovered I'd still be losing money after year three.  $20k per year losing money.  I also discovered what my break-even point is, and it worked out to (on paper) 13 hour days five days a week, while keeping the part time weekend job (10+ hours per day).

 

My situation is not yours.  I have a very specific product set that I want to do.  Yours may not be mine.  I found research that suggested the products I want to create takes approximately 40 hours to produce, meaning essentially one of these per week.  My plan requires me to sell a minimum of four of these per month to approach breaking even, and I still need to crank out three smaller projects per week.  (Thank gods for glue-up times... stack a couple simultaneously to make time work for you.)

 

My plan required me to add shop space, and tools, six months in.  This is because I realized the shop space I have now is not large enough to maintain this level of production.  While this isn't a bad thing, on the budget I have now this will be very difficult to accomplish.

 

If you are seriously interested in creating a business plan, and I certainly recommend that you do one, there are several books out there you can find.  The one I had for class I picked up on Amazon for under $10, called "Entrepreneurship" and the eighth edition.  (The class called for the 9th, but the information was the same.)  I also have a hand out or two that helped organize my thoughts to making the business plan.  I'd also consider, if not taking a Small Business Class at your local community college, talking with the professors in the Business department at that college.  Since you are a member of the community, you can pick their brains and float the idea past them as part of the "should I take this course" interview you ought to do with them.  (And it usually won't cost more than a cup of coffee to do this.)

 

A word of warning about time: if you do the typical college procrastination thing, it will be a lot of research crammed into no time.  Do yourself a favor and do about an hour's worth of work every day or so.  You will get better results, and it won't take you more than a month to do the plan.  And you will discover up front just how serious you want to be about this.

 

In my instance, the plan is merely delayed 12 months - for graduation purposes.  I'm not quitting, just have to complete some other priorities first.

[Tom King]

The money in woodworking is in talking about it, and writing books.  I've been in business for myself since 1973-woodwork is just a part of it.  Here are a few rules of thumb that I suggest.

 

Don't work for other people.  The worst is, "I don't know what I want, but that's not it."

 

You can make twice the money, with much, MUCH less stress by building stuff to sell, than with building something trying to please a client.  I did it with houses for 33 years.  I built a couple for other people when it looked like times were getting tight, but both were mistakes.  UNLESS, you get a client who understands that quality costs, and doesn't mind paying for it.  I found exactly one of those families in the 33 years.

 

Build big things that you can get big money for. 

 

If you can't afford the time and cost to build something to sell to make MORE than enough money to live on, do something else for a living.

 

In 2006 I built my last spec house.  I figured that all the other builders were smarter than I was, so I'd better get out of it.  I'm glad I did.  I've been only restoring old houses since then.  Lessons I learned in business have paid off in that.

 

I may build furniture to sell when I get too old to climb and jump.  If I do, I'll only build stuff to sell, and then find a market with money, and has to pay admission to get in the show, or just have it to sell in a storefront on property I already own.

 

I had an Uncle, gone now, that gave me the best financial advice I've ever gotten when I was a young man.  I thought he was a crazy old man then.  He told me, "Make money, not payments.  If you start making payments, you won't ever have any money"

[krtwood]

Build big things that you can get big money for.

 

UNLESS, you get a client who understands that quality costs, and doesn't mind paying for it.  I found exactly one of those families in the 33 years.

 

 

This is one of those things where I know the money (and the fun) is at the higher end but I have a philosophical reason that gets in my way from pursuing it.  This touches on a different topic so I don't want to get too much into here, but if we're going to say that the only way to make money woodworking is to make things for rich people then we're basically saying that quality is a luxury that only the rich can afford.  And then the second part of your post that I quoted becomes a self-fulfilling prophecy.  We make it so the only choice people have is the mass produced junk or the high end pull out all the stops stuff and then complain when they pick the only one they can afford.  If we want more people to appreciate quality then we've got to make things that are in the middle too.

[wintersedge]

We should start a new thread on this. I don't want to hijack the poster's thread.

 

I will just say that in doing glasswork no one wanted to pay for 'quality'. My standard for quality are windows(or whatever the project was) was square, I had spent time to match color and glass pattern direction, I used quality glass, and I did not cut any corners in constructing the piece. At the end of the day what this boiled down to was spending time in design, more hours in making sure the glass direction flowed, more hours in construction and at the end of the day the project was usually out of the price range of someone making less than 60k. err at least it was out of the price range of someone spending and living like they wanted to make 100k. I know I buy tools and toys that people consider well out of my price range but I am willing to save for months or years to get what I want.

 

I believe most of the middle class spends like the upper middle class to look like the rich. It may be why I see so much Sauder furniture in 250k homes and up. 

 

As I said, if you want to do woodworking for the love it, do it because you love it and just do not worry about the money. I honestly do not see how someone can make a career in woodworking, make over 50k yr, and also not cater to a high end audience. This is also assuming you do not just become a factory of making 100s of the same widget.

 

end of soapbox.

 

This is one of those things where I know the money (and the fun) is at the higher end but I have a philosophical reason that gets in my way from pursuing it.  This touches on a different topic so I don't want to get too much into here, but if we're going to say that the only way to make money woodworking is to make things for rich people then we're basically saying that quality is a luxury that only the rich can afford.  And then the second part of your post that I quoted becomes a self-fulfilling prophecy.  We make it so the only choice people have is the mass produced junk or the high end pull out all the stops stuff and then complain when they pick the only one they can afford.  If we want more people to appreciate quality then we've got to make things that are in the middle too.

[wintersedge]

Pete,

 

I would be curious to know what you consider your dream for a woodworking career? 

 

To others I too would like to know how you do this professionally? What sacrifices have you made besides time? I am also curious about salary but that may be too personal for a message board.

[jHop]

I'll be up-front about the plan I worked out.

 

(And it was one of the dumb-found moments for me, when I realized the start up company should pay me a salary, not let me live on what's left.)  I set up an annual salary of $25,000.  Not high ends, no frills, just a basic (to me) income.  Of course, I'm also planning on still keeping the weekend job, and my wife working full time (eventually, once school ends and she can get a job in her new field).  Kind of ties back into the thought mentioned earlier, about reliance on outside income.

 

Even knowing that the salary is just about what I would be over every year, I still plan on doing this.  I just need to line up some ducks first.  (And find time to get to all those classes this coming year, so I can hit the ground running.)  The nice thing about this is that the stress of wondering about everything is gone; now I just need to figure out how to pull it off.  That has been such a relief to me, that it's no longer looking like an impossible thing.

 

The plan is based on producing items in three sizes: chairs, dressers/bookshelves, and table top sized items.  (This is a catch-all, basically all those crafty items that are about the size of a breadbox, and conveniently uses up all the scrap.)  I don't think it's unreasonable to sell the chair at $800, when Stickley chairs go for that on eBay.  (Ok, so maybe they start there...)  I'm not Stickley, so I can't command their prices... yet.  

 

But, and I don't know about anybody else, going for this plan and trying to make it work is my idea of living the dream.  Success is merely the icing on the cake.

[dwacker]

I'll be up-front about the plan I worked out.

 

(And it was one of the dumb-found moments for me, when I realized the start up company should pay me a salary, not let me live on what's left.)  I set up an annual salary of $25,000. 

 

 

You should always pay yourself first. The month you dont get paid is the month you should be out of business.

[Tpt life]

http://www.dayjobtodreamjob.com/10-giants-youll-have-to-kill-to-do-your-dream-job-full-time/

Friend of mine wrote this week. It is not a direct reflection of wood working per sé and starts with some fluff but his list at the end is food for thought.

[Beechwood Chip]

I found the book that It is "The E Myth Revisited", by Michael E. Gerber.  The "myth"  in the title is the idea that if you know how to bake, you know how to run a successful bakery as a business.  The "E" stands for "Entrepreneur", I think.

 

Cool!  I figured out how to make a link to an Amazon product and put it in The Wood Whisperer Amazon store!