How to Start a Successful Woodworking Business

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If you love woodworking and building things, no doubt the idea of starting a woodworking business has crossed your mind at least twice. Of course, there are a LOT of questions involved – mainly, will your business actually make any money?

In this post we’re going to share everything you need to know to start a successful woodworking business and cover a lot of tips we’ve learned along the way.

how to start a woodworking business

If you’ve been dreaming about starting your own wood craft business, this post will help guide you step by step to create a plan and outline what actionable steps to take.

Part One: Planning + Research

As soon as you get serious about starting a business, the most important thing you can do is your research and planning. The more you plan, the more prepared you will be to avoid common beginning business mistakes.

Here’s a checklist of everything to do in this important step of starting a woodworking business!

1. Research + Choose Your Business Name:

Choosing a business name for your woodworking business could probably be a post all on its own! There are all kinds of options for your name – you could use your personal name as your business name, or you could register a company name to use as your brand.

When choosing a name here’s some important things to consider:

  • Make sure that the name isn’t already in use or trademarked
  • Research what is required by law in your state for registering a business name
  • Research trademarking the name + what it will cost
  • Make sure it is easy to remember, spell and pronounce.
  • Check for domain name availability – In today’s world having a website is a must! Make sure you are able to register your business name as a domain.

2. Determine The Most Profitable Woodworking Projects to Make and Sell:

When you’re planning your business, you are going to want to make sure that whatever you decide to make is something that A. People actually want to buy and B. Is cost-effective to make in regards of supplies and labor.

Don’t know what you want to make? Our post on 65 Woodworking Ideas to Build and Sell can give you a great place to start brainstorming on what you might want to make!

Here are some factors to consider when deciding what products you will offer:

How much workspace do you have? How much space for inventory?

If you don’t have a large wood shop or garage, chances are you will probably need to stick to smaller projects that don’t take up as much space in storage or to build.

What is the Cost to Make?

Calculating the cost to make something is pretty simple. First, you add up the cost of all the supplies. Then, you add up how many hours it takes you to build something and determine how much you want paid per hour. This is your cost, not your sales price! Your sales price also needs to reflect an amount to make a profit!

Let’s take a basic example of a table. Let’s say it costs $75 to get the supplies for the table, and it takes you 6 hours to build the table, sand it and finish it with paint or stain. You want to make a minimum of $20/hour for your labor.

$75 + 6 x $20 = $75 + $120 = $195. This is your cost!

Note that your SELLING PRICE should be higher than your cost. You want a profitable woodworking business, right? Decide on how much you will mark up products, whether it is 25%, 50% or even 100%.

It is very important to make sure you factor in a profit for your business, as there are a lot of hidden expenses in a business that goes beyond just supplies and materials.

Perhaps a wise business lawyer my husband talked to once summed it up best: Do you have a job or a business?

If you’re only making “cost” – you have a job. If you’re making a profit on top of your labor costs – then you have a business!

Competitive Research: What Does a Similar Product Sell For?

After you calculate the costs of manufacturing something, you next need to think about how much that item would actually reasonably sell for.

In the example of our table, would you be able to sell it for $350? $600? If that’s the case, it could be a very profitable choice. However, if you’re seeing similar tables are only selling for $50, then this is probably not a profitable choice to make.

Take some time to look at companies who are selling similar products to what you want to make. Keep in mind just because something is listed at a high price doesn’t mean it actually sells for that price!

Where Will You Get Supplies?

Getting your supplies cheap or at a discount on a regular basis is a must for any person starting a woodworking business. Yes, lumber prices fluctuate frequently as they are a commodity – but it is important wherever you get your wood has a good selection that is always in stock.

One thing you might want to consider is buying your wood from lumber mills directly. This will save a good bit of money, but you will be required to apply for an EIN/Tax ID number in order to open a wholesale account and buy wood at a discount.

Keep in mind that buying wholesale also often requires a minimum order quantity – which may or may not work for you. If you don’t have a lot of start up capitol or a place to store a large quantity of wood you may be better off to stick with smaller suppliers.

If wholesale is not for you, buying some supplies in bulk can also reduce your supply cost. For example, let’s say you know you need screws to build something you make. A small pack of screws might cost $12 whereas a giant bucket of those same screws might cost $40. Yes, the $40 is more money upfront initially, but your price per screw is drastically lowered the more you buy.

Consider Products That Can Be Made and/or Sold Together:

Nearly all wood projects have scraps leftover – savvy business owners find a way to use these scraps to make complimentary products to their main items. For example, my Dad who makes wooden buckets found that his wood scraps could be used for making lanterns.

Successful woodworking business owners also think about their customers and what they need. There is a lot of opportunity to make and sell products that compliment each other well.

For example, you might want to focus on “kitchen items” and sell things such as wooden bowls, cutting boards and wine racks. Maybe you want to stick with “pets” so you create funny wooden pet signs, pet food stands, dog kennels, and dog toy boxes.

This is called finding a niche and can really help you target a specific audience for the wood crafts you make!

3. Research Start Up Costs + Plan Your Budget

Many small business owners fail to accurately research potential start up costs. There are a LOT of little details in starting a business, and those little details can quickly add up to expenses.

How Much Start-Up Cash Do You Have?

Ideally you should have enough in savings to cover your living expenses for 6 months. It’s also helpful to have a spouse/housemate who is able to provide a main source of income while you get your business off the ground.

In addition to making sure you will be able to cover your living expenses, it’s also important that you have enough cash to cover your start up business expenses.

How Much Does it Cost to Start a Woodworking Business?

Expenses will vary state by state and person to person, but here are some examples of what it might cost to start a woodworking business:

  • Registering Business + Applying for Applicable Licenses / Tax Exempt Status : $75 – $250
  • Filing for Trademark (optional but recommended): $400-$900
  • Hiring Accountant / Lawyer : $2500 – $5000
  • Woodworking Tools + Equipment: $1200 – $4500
  • Laptop / Computer / Printer : $700 – $2500
  • Website Hosting + Setup / Online Marketplace Fees : $250 – $6000
  • Packing + Shipping Supplies: $200 – $500
  • Insurance – From $100 – $1200

As you can imagine, there are a lot of variables on what costs you might expect as a small business owner. This is why it is so important to do your research and plan accordingly!

4. Research Legal Requirements Where You Live

Every single city, state, and country is different – so it’s VERY important that you research what the law requires for starting a business where you live.

In the U.S., the SBA.gov website can be a helpful resource for how to start a business. You may also want to check with your state’s tax website and your local county / city / township websites.

5. Research Accounting

Like it or not, accounting is part of ANY business. Many people attempt to do their own accounting only to realize months later they are way behind and not really keeping good financial records.

There are many different ways to make a budget and keep track of expenses. For some people, a simple spreadsheet works just fine. Others like to use different apps and software programs.

The good news? If you really hate the idea of accounting, you can always hire an accountant to manage your taxes as well as a bookkeeper to keep track of your business expenses.

6. Write a Formal Business Plan!

Yes, you really do need a formal business plan. A business plan is like your road map to success – if you get lost, it’s easy to find a way to get back on track.

The good news is business plans do not need to be 200 page long reports with detailed financial charts and analysis.

Here’s what to include in your business plan:

  • Company Name + Mission Statement: Who You Are, What You Do and Why
  • Description of Products + Services: What You Make and Sell
  • Target Market: Who Will Buy Your Products
  • Competitive Analysis: Who Are Your Competitors
  • Financial Details: Your Budget, Start Up Costs + Projected Revenue
  • Sales + Marketing: How You Will Sell + Market Your Products {we’ll cover this in more detail in Part 4 of this post!}

Once you’ve done your initial planning and research you’re ready for the next phase – actually taking the steps to make your business a reality!


starting a woodworking business

Part Two: Business Development

In this part, we’re going to cover step by step the actions you need to take to get your woodworking business off the ground and running.

1. Register Your Business and File All Necessary Paperwork:

Depending on where you live and the type of business structure you choose, you will need to fill out some paperwork and register your business.

Working with a small business attorney can be very helpful in this step. While it is an additional cost to hire an attorney, most small business owners agree it is well worth it in what they gain in peace of mind and less problems later down the road!

Here are some things you may need to file:

Fictitious Name/Doing Business As: If you are using a company brand name, this is required in most places.

Tax Exempt Status / EIN Registration: This is necessary if you will be collecting sales tax and/or buying your supplies wholesale.

LLC Paperwork: If you are forming an LLC, you will need to file so accordingly.

Trademark Registration: Not every small business owner registers their company name as a trademark, but it can make sense for many people to protect their brand name.

Permits + Licenses: Some jurisdictions require a special permit or license to run a home based business. If you are selling at craft fairs, you may also need a vendor license/permit depending where you live.

All of this is unique to your business and where you live – working with a business lawyer can help you make sure you have everything you need to officially say you’re open for business!

2. Open Up a Dedicated Business Bank Account

It’s very important that you keep your business finances separate from your personal finances. Opening up a business checking account at your local bank is typically a painless process.

If you plan on taking credit card payments from customers at craft and vendor shows, you may also need to open up accounts with online payment processors such as PayPal or Square for example. These should also be separate from your personal accounts!

3. Set Up Your Accounting

Right out of the gate, you are going to have expenses you need to keep track of. Starting good financial record keeping early is a good way to avoid headaches later down the road.

Now is the time to get familiar with your chosen method of record keeping and budgeting that you researched in part one!

If you are working with an accountant and/or bookkeeper, they can usually point you in the right direction for how to keep good records and documentation of your income and expenses.

The most important thing is you make it a habit. Whether you do it daily or weekly, make it a point to record all of your expenses and income. Each month, it’s a good idea to do a basic profit + loss statement to see how your business is performing.

4. Purchase Insurance For Your Business

Insurance is complicated, but it can be less confusing when you work with a good insurance agent who is experienced with insuring small business owners.

In addition to insuring your business this is also a good time to do a review and update on your health and auto insurance – in many states if you use your personal vehicle for business you will need to add additional commercial coverage.

5. Create Your Website

A website is essential for almost every business today. Even if you only sell locally – people at craft fairs WILL ask you if you have a website!

There are plenty of Do-It-Yourself options for building a website – from using services like Squarespace and Wix to using WordPress.

Your website should contain your business name, contact details, and showcase your products and your process in creating them.

There are so many free guides available to walk you through step by step on how to build one you really have no excuse!

A blog lets your customers connect with you on a more personal level. Many successful woodworking businesses have found that their blog drives a good portion of their sales in their Etsy stores – others find it’s helpful to have items for sale directly on their websites!

5. Get Social: Create Social Media Accounts

Sites like Facebook, Pinterest, Twitter, Instagram and YouTube are all another great way to reach your audience and target customers.

Creating business profiles on each of these platforms is easy to do and well worth it so you can promote your shop and new products and connect with your customers.

Part Three: Making Your Products + Setting Up Shop

With all the legal requirements out of the way, now you’re ready to really dive in deep in the part you love the most – making your own unique woodworking projects to sell!

Here are some tips for success:

1. Reduce Your Costs + Buy Wholesale if Possible:

Buying your supplies at full retail price can really add up. While buying lumber directly from a mill is not always an option for everyone, you often can save a lot on other materials like glue, nails, screws, stain and paint.

Note that if you do buy wholesale, it is important you do so in accordance to tax laws in your state – check with your accountant to make sure you’re always in compliance with taxes.

If wholesale is not an option for you, you can still often times take advantage of bulk discounts and sales. Shop around and keep those costs low!

2. Create a Schedule to Work:

When working from home, it is all too easy to end up not working at all. Creating a dedicated schedule that you stick to can really help you stay focused and on task.

It’s important when you are running your own woodworking business that you remember to treat it just as you would with any other job!

3. Set Up a System for Efficiency

Another important thing to do is to work efficiently. Setting up a system to streamline your operations will make a big difference!

For example, you might want to dedicate an entire day to cutting, another day to assembling, and another day for finishing or painting.

Another thing that will save you a lot of time is being organized. You do not want your tools scattered all around the garage! If you don’t already have an organized work space, now is the time to prioritize this!

4. Build Up Your Inventory

As a general rule of thumb, you should have at least 10-15 products completed + ready to sell + ship before you officially list them in your online shop. If you are planning to sell at a craft fair, it is usually better to have too much than too little!

Making your first 10-15 products to sell will also give you a good idea of how much time it really takes to make each one and price them accordingly so you will not only be able to cover your labor costs but also turn a profit.

5. Take Awesome Product Photos

In order to list your items for sale, you need to have a photo of the item. Good photos can make all the difference in whether or not an item sells quickly.

Here are some tips for good photos:

  • Use bright + natural lighting when possible
  • Stage Your Products – A table looks better with a vase or place settings, a jewelry box looks better with necklaces. Little details can make all the difference!
  • Make sure the background is not distracting – you don’t want a cluttered room in your photo
  • Take multiple photos of different angles of the item

You do not need a super fancy camera to take nice photos of the things you make – most smart phones today have pretty decent cameras. Eventually you may want to later invest in a DSLR camera and professional lighting props to take more professional shots.

If for some crazy reason you are not selling online and only selling locally at craft fairs, it’s still a good idea to have photos you post to your social media accounts – this will attract people to come visit you at the craft fair!

6. Write Better Product Descriptions

Whether you sell your products on your website or on an online marketplace like Etsy, writing detailed product descriptions is important for several reasons.

First of all, it helps make a potential customer know EXACTLY what they are getting. This can help reduce on returns or unhappy customers, which is very important!

Second of all, the more detailed your product listings are, the easier it will be for people to find them when searching online.

Here are some things you should include in your product descriptions:

  • Product Size + Dimensions
  • Suggested Uses – List of Features and Benefits
  • Materials Used – List the type of wood and type of finish on the item
  • Your Process in Making Each Item {Remember – you are selling one of a kind handmade things – people will connect with you if they understand your process!}
  • Refund / Return Policy

Making sure you have all of these items can greatly help you sell more items AND help buyers feel confident in their purchasing decision.

Part Four: Marketing and Advertising Your Business

Marketing your new woodworking business is a very important part of being successful. After all, if no one knows you exist – how will they find you or your products to buy them?

Today it is easier than ever to market your business online, but there is a new challenge – which is trying to stand out in the crowd and all the noise. It seems like everybody is selling something these days, doesn’t it?

This is where your brand is very important. Creating your brand helps you really connect with your target market.

Let’s dive into some of the different ways you can successfully market and advertise your business.

1. Post Regularly on Social Media:

In order to see results from social media sites, you have to post regularly on a consistent basis. It can be challenging to think of what to post or even remember to post something, but fortunately there are ways to make this easier.

Here are some ideas for things you could post:

  • New Product Releases
  • Behind the Scenes Photos of Items Being Made
  • Your woodworking space + studio
  • Relevant News Articles to Your Product / Tools / Type of Woodworking Business
  • Lighthearted woodworking humor posts {cartoons, memes, etc.}
  • Inspirational quotes
  • Friends / Family / Pets who are involved in your business
  • Relevant Information Related to Your Products You Make {IE: How to Care for Cedar Furniture or How to Dust Your Wood Furniture the Right Way}
  • Seasonal Posts for Holidays, Change of Seasons, Etc.
  • Sales + Promotions

Most social media platforms now also have a way for you to schedule posts in advance, or you can take advantage of apps that also schedule posts. For many people, setting this up one day a month makes it easy to post consistently and doesn’t take a lot of time.

2. Consider Paid Advertising

Paid advertising costs money, but it can be helpful for many people when first starting out. You can advertise on sites like Facebook, Google, Etsy, Pinterest or even advertise on networks of private sites through many of Google Adwords approved partners.

While online advertising seems to be the most relevant today, don’t forget that many people still do read newspapers – especially local ones. Local print advertising is generally inexpensive so it might be something to consider!

3. Network and Create Strategic Business Partnerships

Another way to generate some buzz about your new woodworking business is to network with as many people as possible.

There are many small business network groups, although you may find yourself being bombarded by different professionals that aren’t necessarily going to be interested in a hand made business. It may make more sense to find local clubs and groups that would be interested in the types of products you create.

Partnering with other businesses can also sometimes be lucrative. For example, maybe you have a friend who owns a retail shop or restaurant – would they be willing to sell some of your items on consignment?

4. Attend Craft Fairs, Flea Markets + Festivals

A booth at a craft show is usually not very expensive and it can be a great way to meet hundreds of people in a single day!

Make sure you have a neat and professional looking display and also make sure you get out from behind that table to actually greet people! So often vendors sit behind a table and barely even look up at customers and then they wonder why they didn’t get any sales!

When attending craft shows, it’s also helpful for collecting potential customer names and contact info. Make sure you have a form for people to sign up for updates and business cards handy!

5. Build an Email List

Email marketing is another very effective way of communicating with potential customers. You can easily set up an email marketing list at sites like MailChimp, ConstantContact, ConvertKit and many others.

You can collect emails at craft fairs – but the easiest way to get people to join your list is to have a subscribe box with an incentive to join on your website. For example, maybe you give them away something free or a discount coupon code for something in your shop.

Once you have a list, of course the important thing is to regularly send mail out! For most businesses, this is weekly, but even just once a month is better than never!

It may take some added time to market your business, but the results are well worth it. Try to dedicate at least one day a week to nothing but marketing and promotion!

Now that we’ve covered the basics of planning your business, setting everything up, making products and marketing your new biz, let’s get into the final step – which is to regularly check your progress and make changes as necessary.

Part Five: Review Your Business Progress

This last step is something many new woodworking business owners often neglect – and this is to routinely monitor your progress and make adjustments as necessary.

While it’s true the first 3-6 months of your business may be slow, it’s still important that you carefully look at how you are spending your time, whether you are sticking to a budget, keeping good financial records, and staying on top of marketing your business.

Setting quarterly and yearly goals is a great idea because it helps you work towards a specific milestone. Your goals will be unique to you, but you may want to set goals based on number of products sold or how much of a profit you made.

I highly recommend regularly getting into the habit of monthly profit and loss statements. This can really open your eyes on whether you are spending more than you make, as well as help you see progress each month.

Another thing to factor in when reviewing your progress is some types of products are seasonal. For example, if you are selling handmade garden items you might find your sales in February are almost non-existent.

Likewise, if you’re selling custom woodworking projects as a business, you may find that your demand during holidays and wedding season is through the roof.

Above all, it’s important to make sure you have a healthy balance of working on your business and still enjoying other aspects of your life. Make sure you remember to take some time out to relax and recharge and of course spend time with family or friends.


I hope this guide to starting a woodworking business is helpful for you, and of course if you have any questions about how to start a woodworking business just ask in the comments section below – we’re always here to help!

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