The Formula for Success? – Question of the Week
This week’s question comes from SGT Grigsby, a Serviceman in Italy who asks: “I am exiting the Military in a couple of weeks and on to Furniture-making school (Thank you GI Bill), My questions are: when you decided to start your own business, what was your formula for self success? How did you balance income versus new tools before the WW’er fame? Did your market shift (meaning did you start out doing finishing work and then ease into furniture design?) I guess i just need to know if it’s just a little luck and a lot of effort or is it just being in the right place at the right time?”
And this was my response:
First off, congrats on the furniture school. That is awesome. And of course, thank you for your service to our country.Now I try not to get into the habit of giving business advice, since my experience is rather limited. I only ran my business for about 2 years before I started The Wood Whisperer. And obviously that changed everything. So I can’t really offer you the wisdom of years of experience. But I did learn quite a bit in that time and I will share some of that with you.
So my formula for success? Hmm…not sure I had a formula or even a definitive plan. If there was any secret, it was remaining flexible and going where the money was. Now I don’t know if that would have been sustainable over a long period of time, but that’s what led me where I am today. So obviously mine is a unique case.
First, I learned to juggle. Meaning…I became a jack of all trades. Finishing, refinishing, on-site repair, cabinetry, built-ins, commercial jobs, and of course, studio furniture. They were all fair game for money. Keep in mind that the crap jobs can always lead to new builds. Several of my refinishing customers eventually turned into custom furniture customers. And nearly all of my custom furniture customers were repeat customers over time.
The next thing I learned was that not everyone wants your “best” work. Your best work is very expensive and should be reserved for the customers who are willing to pay for the time and effort you will put into it. So figure out ways to scale back the cost, without making tremendous sacrifices in quality. But sacrifices will need to be made in order to keep your doors open.
Another thing I had to do was stop thinking like a hobbyist. Hobbyists buy tools and supplies because the want them. A business-owner buys tools because he needs them. And in many cases, this can be more fun because when you do buy a tool, you should buy a GOOD one that will not cause you more expense over time. Also, hobbyists tend to work a lot in small bursts. When I finally had a full 8-10 hour workday to utilize, I had trouble adjusting. It wasn’t until I worked in a refinishing shop and started partnering with other craftsmen, that I realized just how much I could accomplish in a full day.
Also, make sure you get to know some of the other craftsmen in your area. Not only can you pass work back and forth to each other, you can also collaborate on major projects that you could never accomplish on your own. And leave your business cards everywhere! Nicole was a master at this. lol Make sure you target the markets that have the most money. It may sound shallow to say this, but people with more money are more likely to spend it on custom furniture.
Oh and the final piece of advice would be to learn how to run a business. You should not take this lightly. Without a solid understanding of how a business should be run, you are much more likely to fail. Look for either continuing education night classes or even free seminars given by the city that will help you choose what kind of entity you want to be and how to run it. That’s about all I can come up with right now. Good luck my friend, and keep your nose to the grindstone.
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This is great information, Marc. Thanks for the info. Would it be possible to make another podcast with some business/marketing strategies, with your lovely wife Nichole as a guest?
Marc — I think that is very solid advice. I’ve run startup (tech) businesses for the last 8 years and everything you say is right-on. It’s very important to be flexible and work hard – running/having your own business is very satisfying, but extremely time-consuming. Be ready to have fun working long days (either on paying projects, or finding new business!).
And definitely get a little experience / education on the business-running and money-side. That will help you keep score as to how successful you are. Good luck!
Well from personal experience on this exact question, I thought I would weigh in on the subject.
Furniture school is great. You will learn so much in such a little amount of time. I went to school knowing and hoping to cram what would take me 10 years to learn on my own into 2 years. Use the time to find what you might call your style. Learn what it is that you like, because if you like it there are others out there that will like it also.
Another suggestion, know before you start the program that when you get out there won’t be a long line of clients waiting for you. The studio furniture business is not an easy one to make a living in. I would suggest, unless you have a lot of capital to invest, that when you finish go and work for someone else.
Marc said best, while in school you never really work a 8-10 hour day. Your learning new skills, that takes time. What will take you 4 weeks to build in school should only realistically take you less than a week in the real world. By going to work for someone you learn a few things. You learn what you can realistically produce in an 8-10 hour day. You learn speed, how to make something smarter and faster. Where you can cut corners for those clients that don’t want to pay for your best hand work. You also learn a lot about the business end of furniture making.
Doing it for a living is such a romantic dream. Working in our shop in the backyard, spending days and weeks perfecting each joint. When in reality it is a business, the longer you spend on something either the more you have to charge for it or the less your going to make.
With all that said, I say follow your dreams. Because it’s the only way you will be happy. I would rather know that I tried to do something and fail at it, than to wonder my whole life if I could have done it. Good luck.
Kaleo
OK, not a furniture business but I did run my own engineering consulting design and manufacturing firm for 12 years full time. Now I work for a University (quite a paradigm switch…). But as to starting your own company, be VERY prepaired for cash-flow issues. Try and have enough squirreled away to sustain you for 3 to 6 months of zero income. And during those lean times, don’t, I repeat don’t take on a project by low-bidding to where you are certain to loose money. It won’t help your reputation in the long run and it certainly won’t help your attitude about the work. Learn how to say “no” to a job or a customer that will be nothing but a time sink. Sometimes you can say no by trippling your price for a project. Occasionaly that will backfire and you will still get the job!
Rules vary by state and township/city as far as licensing and zoning requirements. Look into these things. The local chamber of commerce should be able to help you. I operated as a sole-propritor and kept all my books (QuickBooks is fantastic) on a cash basis. This is the simplest method but you might want to consider an LLC and getting the advice of a CPA especially when it comes to taxes. You can’t afford any suprises when it comes to taxes and insurance (property and liability).
And remember, when you work for yourself (self-unemployed???) you will always have a demanding jerk for a boss…
I’d like to add my two sense, if I may. I’ve been in business for about 2 and a half years doing primarily custom cabinetry and some custom furniture. I spent two years before that in a custom cabinet shop learning the trade while accumulating my own tools. I would second what a few others have mentioned to say that experience with a company that’s already doing what you would like to do is EXTREMELY helpful. It taught me how to work efficiently, I got familiar with many local suppliers, and made many connections within the industry. That said, it’s an uphill battle once you’re on your own. We have been blessed with some stability in the last six months or so, but before that it was busy for a month, then nothing, busy, nothing, and so on. I agree with everything that has been said, but I’ll also add a few things concerning making it work: 1) Do some research on what other shops charge for a shop rate, and see where you fit in. It will give you some perspective on your market and some confidence in your pricing. If people think you’re too expensive, don’t let it get to you. They’re probably not your customer. 2) Always write out thorough contracts for any job you do unless it’s really small or with a customer you’ve worked with in the past (that paid you!), and get a %50 deposit before you start. 3) Lastly, and this one I stress – don’t go into debt! It’s so easy when you’re thinking about a business to start justifying purchases with the old “it will pay for itself” mentality. Let the current economy be a lesson on this issue. I know many shops in my area that are struggling or failed because they grew too fast and now they don’t have the workload to support they’re investment. Purchase what you can, when you can. Be patient. You don’t have to have the perfect shop. This is a tough one, but you’ll be thankful later.
Woodshopnews.com is the web site for a magazine for professional cabinet and woodworkers. Seems like the profile a shop in each issue and the paths the owners took to getting where they are today. Might be a good resource for you. I believe the issues are available online for no charge.
The current issue of Wood magazine has an article from a full-time bowl turner. Seems to have some good advice from someone who left accounting to pursue a business that used the skills he had enjoyed and developed as a hobbyist. Although I found it pretty sobering to crunch the numbers on his production quantity (~1200 bowls/year) and sample sale price (a salad bowl he sells wholesale for $75-100 retails for $150-200) with the splits (25% materials, 25% overhead, 25% wage and 25% profit).
Jim Tolpin also has a book directed towards doing woodworking as a business.
Matt
As one who has owned several businesses, I say be prepared for a long term marriage to your business. Every business has ups and downs. Sometimes we can make it through the down times and sometimes we can’t – even though we worked smart and hard. If your business should fail, be prepared for an emotional roller-coaster ride.
On a more positive note, there is nothing like the freedom and sense of self-fullfillment of owning your own business.
As you have time while you are in furniture school, take some courses in business. Depending on where you live, you may find inexpensive courses and one-on-one help from organizations such as SCORE and a Small Business Development Center (normally at a university). SCORE is an organization that is supported by the Small Business Administration, and is manned by volunteer counselors. It is a very good place to start learning about business. The SBDC’s are also great places to learn more specifics about business such as using EXCEL, etc. Both places offer either free or low cost counseling and training.
Learn the trade and business before going into business for yourself. It may take longer to get started, but you will be much more likely to succeed.
Go to http://www.score.org to learn more.
As a student of all things design, and as a small business owner I have to say that this advice is great on many levels. The ideas and thoughts expressed can be applied to ventures other than woodworking and that’s what makes your words, Marc, priceless. The commentors also give some sound advice for anyone either trying to express themselves with their craft or someone trying to start their own business.
Awesomeness.
Lots of good advice/insights here. With all the challenges and potential pitfalls, take a look at your personality type. Having a passion for the craft is not enough to make a successful and enduring business. You have to be one of those people who can work independently, love challenges and surprises, a willingness to work very long hours when necessary. Some people are suited to it and others not. Generally most people cannot change who they are. So play to your strengths. All of this becomes a real challenge to get going if you have a family to provide for when your business is a crying baby itself demanding all you have and not necessarily providing immediate rewards. A rule of thumb I used when thinking about overhead/costs/time/billing and such was that I knew upfront that for every hour I billed I would be working another full hour at the business side of it (non-billable). That includes marketing, sales, bookkeeping, sweeping floors, anything that needs to happen. I’ve had my own graphics business for over 35 years. Many successes and many failures. Figure I could have made more money working for others but it has been an incredible life. So go for it if it is your dream. While maintaining your enthusiasm, keep you eyes open and learn what you can from others. Working for others, especially after school offers many, many benefits (and pay!). I was too impatient for that route, so it probably took me the ten years rather than two that Kaleo mentioned, but I’ve never been about the easy route. I am glad I began before I was married and had a child. Hey, should you get that far one of the most satisfying (out of many) of having my own small business was having my daughter grow up around the business. Many lessons, benefits and satisfactions there. Have fun at school, learn all you can, and follow your heart.