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Starting a Woodworking Business #16: More change

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Blog entry by Sam Yerardi posted 1645 days ago 1531 reads 1 time favorited 9 comments Add to Favorites Watch
« Part 15: Late nights Part 16 of Starting a Woodworking Business series no next part

It’s been a while since I jotted down my thoughts and some things have changed a bit since my last post. During the past month, I’ve been very busy with remodeling jobs, but more and more, I’ve been getting more cabinet work which is exactly what I had hoped for. I just finished up and installed (with my son-in-law’s help) a large entertainment center. That has led to another entertainment center and some stained glass work. I’ve also been working on getting some parts machined for some very expensive kitchen chairs that a customer wants repaired. Another job came up last week for a basement finish job (wainscot, trim) for later in the spring. In the meantime, something came up and I needed to make a decision. Another lumberjock, Todd Klippinger, gave me some sage advice on what I should do. Fortunately, what he told me was right in line with the direction I was going in, but he added some good points . Anyone needing good, solid business advice – - check out Todd’s postings.
What happened was I recieved calls from three different contract employers who are bidding on work at the plant where I got cut. They asked if they could include my resume in a bid package. After some thought I agreed. It will be a 9 month contract but it may turn into a long-term contract with all of the work that is expected there. The main reason is not because of the business, but the fact that I need insurance for my wife who has diabetes. Right now I’m not making enough to cover my normal expenses and insurance coverage. I have coverage through May and then was going to go on Cobra for myself. What really twisted my arm was what the various companies offered me. I elected to go with a local company, and they are all good friends of mine. I will continue the business, but as a side-line for now. One benfit in going with the company I chose is that my time will have some flexibility, depending on the work load, so I can still be free in the days at various times if I need to be. That was the clincher for me. I didn’t want to stop the business (no way), but since the business is moving more towards cabinetry, I will be able to focus more on shop work and a little less on field remodeling work. I will return to my first love, Greene & Greene, Arts & Crafts, lamps and furniture. Todd had a good suggestion about not putting anything on my website until I can support it production-wise. Going back to work will help me to continue to outfit my shop in the manner I need for this type of work.
So that’s it in a nutshell. I feel even stronger about the business, but I do have a slight worry that the work load may outpace the work load of going back to engineering. I thought about tapering off on advertising, but I will continue that and see where this boat in the stream takes me.

-- Sam



9 comments so far

#1 posted 1645 days ago

Sam,

I think you’re making a good decision. Its important to stay away from debt. My wife and I have been in business for many years and I can tell you, the single most important decision we ever made was to stay clear of debt.
We don’t have ANY debt. Not for the house, the car or any credit cards.
We do make purchases on the credit cards, sometimes for inventory or equipment, but we NEVER charge anything for which we don’t have money in the bank.
Well, how do we, a couple in our 70s, on very modest income, do this? Well, it isn’t easy. Here’s how.

We don’t hire out any work. That includes electrical, plumbing, household repairs, website build and maintenance, LAN build and maintenance, security electronics, digial business telephone system install, showroom furniture, inventory control and business bookkeeping.

The only thing we’ve hired out in recent years was a new roof. I wanted to do it, but my wife and adult children were adamantly against that.

We do it all ourselves (except the roof).

It isn’t easy, but while other people start businesses like ours and fail over and over, we survive and even flourish from time to time.

Another thing is to stay flexible. From the sound of things, you already have that well in hand.

Sam, I wish you well and success. Keep on keepin’ on!

db

-- Will trade wife's yarn for tools.

#2 posted 1645 days ago

Just one other thing.

I make sure I don’t get into trouble with the woodworking end of the business by three things I list on the back of my business card.

We don’t do housecalls.
We don’t do antique restorations.
We don’t do emergencies.

At my age, I’m not up for such challenges. <big>

db

-- Will trade wife's yarn for tools.

View Sam Yerardi's profile

Sam Yerardi

244 posts in 2491 days


#3 posted 1645 days ago

Thanks Don. Very good advice about not hiring out things. Thanks again

-- Sam

View Todd A. Clippinger's profile

Todd A. Clippinger

8711 posts in 2695 days


#4 posted 1645 days ago

I was wondering how you were doing since we last talked.

I don’t imagine that some of your decisions have been easy ones. The good thing is that you are able to make a great living while many cannot and to have health coverage.

The flexibility of time is a big bonus. Be sure to focus on pushing your business in exactly the direction that you want it to go while you have other funding. Now that you have had a taste of it, I am sure it is easy to see what you do and don’t like about the jobs you have done.

You will have to turn some money in the business to show that it is not just a hobby. Keeping a bit of business going will take care of that.

I was talking to Scott Morrison last week and his latest DVD “The Business of Woodworking” is close to being released. You should check it out: http://finewoodworker.com/successful-woodworking-business.html

You would think that Scott and I talk about woodworking when we get together. All we ever really talk about is business. He is a great entrepreneur. If his DVD has half of the advice and things we talked about, then it is worth it’s weight in gold.

-- Todd A. Clippinger, Montana, http://americancraftsmanworkshop.com

View Sam Yerardi's profile

Sam Yerardi

244 posts in 2491 days


#5 posted 1645 days ago

Thanks Todd. I will definitely check it out. And like you, I have spent more time in the past couple of months thinking about business than I have woodworking. Primarily how to increase my efficiency and production when it comes to cabinetmaking. I read a lot about production methods, jigs, etc. and I have been spending a lot of time thinking about areas that could use a lot of improvement. Working by myself, I think one thing that would help me tremendously is a panel saw. I’ve been looking on ebay for used saws, something I can get for less than about $600-$700 and pay cash for. Handling large sheetgoods (especially anything 3/4”thk or more) is something I don’t want to do on a regular basis. I’ve been looking at Tolpin’s books and I like his production methods, but it sure would be easier to handle sheetgoods with a panel saw rather than a table saw at least for rough cuts.

-- Sam

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DrDirt

2353 posts in 2338 days


#6 posted 1645 days ago

Don – Your approach is a very sound one – don’t go in over your head and count on the business rolling in and being independant.

One question though – you mention no debt on the house. Do you mean your home is paid off – or that you’ve never taken out a mortgage?
Certainly if you borrow on a 30 year mortgage for a 200K house, you will pay double that. But it seems a bit unrealistic to buy a home with cash. A great idea, but not so practical.

-- "If we did all the things we are capable of doing, we would literally astonish ourselves." Edison

#7 posted 1645 days ago

Dave,

No, we didn’t have the cash to buy outright, but it is paid off.

We bought this 205 year old timber framed house on a private contract. It now owns us.

Best,

Don

-- Will trade wife's yarn for tools.

View RexMcKinnon's profile

RexMcKinnon

2593 posts in 1791 days


#8 posted 1645 days ago

Sam,
it sounds to me like you made a smart move. I wish I had the courage to drop everything and try something else. Then again you were sort of forced into it and I expect I might be within the next year. A positive spin you could maybe put onto your situation is when you are approached for a job that you don’t have time to do you can let the people know that you have too much work. They don’t have to know that 60% of your time is your old job. If they think you are in high demand and you have good references the clients might be willing to wait for you. A back log is great when you have a business.

Good luck

-- If all you have is a hammer, everything looks like a nail!

View Todd A. Clippinger's profile

Todd A. Clippinger

8711 posts in 2695 days


#9 posted 1645 days ago

Sam – I had looked at panel saws and realized that I do not have the space for one. My next best answer was to invest in the Festool circular saw and track system.

Keep in mind that you can buy a Festool hose and adapt it to any regular shopvac so you do not need to buy the more expensive Festool vac (though I yearn for one myself.)

Shop Vac with Switch

Shop vac with various hose connections.

Don, you have some valid points on finances.

There is a bit of an issue with doing plumbing and electrical myself as a contractor. I am not licensed to do these so the state and my insurance will not allow it. Being that my jobs often get inspected, the inspector needs to see who the contractors are.

I do possess the skills myself though. My plumbing and electric on my house are laid out neat as a pin and labeled for easy identification for future access and maintenance.

To keep from going into debt on contractors I collect enough money up front to pay them and pay them immediately. This develops reliable relations with them and keeps me clear financially.

Plus, I should be making money on the subcontractors anyway. I figure my time spent working with them and I mark-up their bill.

-- Todd A. Clippinger, Montana, http://americancraftsmanworkshop.com

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