I decided to catch up a little by sharing a couple of my woodworking business blogs where I was posting a great deal before the flu monster overtook me.

One of them is called the Woodworking Business Blog and the latest posts are about several of the jobs I did over the years with photos and some details. You can find this one at:

http://woodworking-business.com/woodworkbiz/

The second one is called The Simplified Woodworking Blog and normally describes simplified methods. Lately I have been analyzing the same jobs described on the first blog with information about how I made them simpler to help speed up the completion and improve profits. This one is at:

http://woodworking-simplified.com/theblog/

Please drop by and check them out. I would welcome your comments either here or on the blogs.

Now that I am feeling much better I hope to post more often. I was worried for a while because we are leaving on a vacation starting Sunday and hoped to be completely well by then. It looks like that will work out now.

The similarities among commercial customers or residential customers could present a marketing opportunity. I experienced an example of that with lecterns (podiums) for hotels. One of the large local hotels called me to build a small, table top lectern. I designed one and built it for them and they were happy with it.
I realized that there were several large hotels in the city so I prepared a brief sales letter with a picture of the lectern that I had built. I found the address of the ten largest hotels in the city and sent the letter to the Director of Engineering at each location. Two weeks later I had several thousand dollars worth of orders for lecterns.

A couple of years later one of those hotels called me back because the lecterns were getting banged up badly and they wanted to know if I could design one that would hold up better to the rough handling they received and could more easily be repaired. So, I came up with a design that I will be sharing in a future post and sold them eight standup lecterns. I sold a dozen of them to a hotel in a community about 80 miles away and three more to a hotel in another state.

This was an enormous return for preparing and mailing only ten letters. Obviously, if one hotel can use what you made, others can probably use it also. The same goes for other businesses and homes.

Take the time to create an interesting and informative flyer that will attract attention wherever it is posted. Be sure to cover all the various kinds of work you accept to get responses from the widest cross section of prospects possible.

For a really nice looking, glossy card at a reasonable price there are various companies on the web who can handle this for you. One such company, Vistaprint.com, will print 250 postcards for about $60 or print and mail 250 cards for you for only $145 using your list. And, you can probably beat this price with a little shopping once you’re ready.

There are various ways to create mailing lists. Start with a list of everyone in your neighborhood by simply walking around and listing all the addresses. You could even walk around your neighborhood and nearby areas introducing yourself to everyone while handing out the postcards like a business card. I like the postcard better for this because people are more likely to keep it. I received calls from my postcards over a year after sending them out.

Another way to create your own lists is to go to the library and use directories that list all local properties. These directories also list income levels of the areas so you can choose the kinds of areas you want to contact. It is time consuming but will save you a lot of money. Obviously, the simplest thing is to buy a specialized list but that could also be expensive and there is no guarantee that the list will be good for your business. If your budget is tight you can get a lot of mileage from involving yourself in creating the list and preparing the mailings.

I found that the small weekly newspapers were less expensive and the ads were visible for an entire week instead of just one day. Naturally, the ads must be brief but you definitely want it to be interesting. If there is a product that seems popular, start your ad with that product and end it with general woodworking.

Make certain the ad is well written without misspellings and as interesting as possible. Include a phone number, preferably a cell phone so you are available whenever calls come in. Include an email address and, if space permits, a web site. Give as much information as possible to peak a potential customer’s interest.

Be ready for the contacts. Prepare a brief statement clearly indicating that you know your business and appreciate and honor the needs of your customers. Let your professionalism separate you from the others your prospects may be contacting. Every call is important because it could bring you a good job and the first impression can make a difference. Take the time to be prepared and professional.

Because of my failings in this area, I have been looking for an easy way (easy for me) to do my accounting for years, without success. At the beginning of this year I found something that really works for me and I want to share it with you.

First, if you can afford an Accountant, by all means hire one. A knowledgable Accountant can save you time and could well save you money in taxes. He or she could also save you from penalties for mistakes. I could never be an Accountant but I value the work they do.

On the other hand, if you run a one person business like me and wish to do your own accounting, my recent find might be of help to you. While I am recommending a company that I use, I am not affiliated in any way with this company nor do I gain anything if you decide to use them.

My accounting is now done by Outright.com. That’s what I said, they do my accounting and for only $10 a month. To make use of their service your business has to be formalized to some extent. That is, you can’t be mixing your personal and business funds, something you shouldn’t be doing anyway. You need to have a checking account for your business. If you make purchases with a credit card, you need a card just for your business. If you accept credit cards or paypal, you need to have those accounts solely for your business.

The way Outright.com works is that your business accounts are registered with their secure web service and they sweep information from your accounts on a daily basis. This information is categorized and formed into your account. You go into your Outright account and check on these items. They categorize but if they are unsure of an item’s category, “not sure” will be listed and you type in the correct information. From then on that expense or purchase is properly categorized automatically. You never have to post anything and you can run reports on anything you choose including sales tax, profit and loss, specific vendor information. You can also add cash and other items that may not be listed on the accounts you have registered with them. It is comprehensive and easy to understand.

Whether you are just starting out or already established and don’t already have an Accountant to handle this for you, I suggest you check it out.

Once you have the cards, start by face-to-face contact with people you know well. Let them know about your business and ask them to pass the word along. Give them one or more cards. Get friends and family to participate in getting new business.

Phone others who may be difficult to reach personally. Tell them about your new business and ask them to tell others. Offer to send them business cards.

Create a short letter describing your services and the benefits of doing business with you and send it to every address you have. Include a business card. Do the same with email and personalize the messages. Don’t send an impersonal message to a long list. Create a simple email message and then copy it. Then send a message to each individual on your list by pasting the message and typing in a short, personal sentence. It’s a lot more work but the recipient is more likely to read it then an impersonal message send to a hundred people.

If you have a web site, create a sub domain just for the business. Include pictures and emphasize the benefits of your business. Include a little about yourself but remember that most people are interested in what’s in it for them, so stick with the benefits. Mention any special qualities of your work. If you don’t have a web site, create one. The cost is now quite low. If you don’t want to spend on hosting and registration, create a blog on Wordpress or Blogspot at no cost. The important thing is to have information and pictures of your work.

Even though the web is important now, don’t overlook creating an album of your work to carry with you. Have a few pictures in an album to show people what you have already done so they can feel comfortable about you doing their job. One fellow I met recently had his album of pictures on his iPhone and it was impressive.

Make it easy for potential customers to do business with you. Be available and willing to spend time discussing jobs in detail. If you want people to be interested in your work, you need to be interested in their needs. Attitude is important so be prepared to give of your time and knowledge.

Assuming you have to rent a space, don’t start out with a large and costly space. Your monthly rent can quickly drain your reserves. Consider a small space, perhaps in some low rent storage area since most of the high end storage area do not allow businesses to operate. My storage area encouraged small businesses so it was easy to convert it to a small shop space. You can always move to larger quarters as your business grows. My last shop before I retired from woodworking was 1400 square feet.

I often hear concerns that projects can’t be built in a small space. Even though it is more difficult to work in smaller spaces, it is definitely viable. For over a year I did power tool demonstations for Skil Power Tools at Home Depot stores. On weekends I would set up a 4 foot by 8 foot space with a small table saw, a work bench, and a few other power tools and build small projects including a childs table and chair set, book case, end tables, and other projects that I would often design on the fly. I wouldn’t want to run a business from a 4X8 space but I did sell a lot of power tools because of the neat projects I was building.

I won’t bore you with the details of why but when I got started in woodworking I had no secondary income and needed a prompt and regular cash flow. With meager reserves, time didn’t permit market research to develop products, speculation, or consignment selling. I needed immediate income. I did have almost all the tools needed in a storage building.

Below is an outline of the steps I took and in upcoming posts I will go into more detail about each one.

1. Luckily, the storage facility where I had stored my tools allowed me to use my space as a small (10 X 24) shop and I set up all my tools using the one duplex outlet in the space. This was essential since I lived in an apartment at the time.

2. Having lived and worked in my hometown so many years, I knew many people and I informed many of them about my new woodworking business. Most of them by phone but many by mail. This was long before email and before I knew anything about computers.

3. The major newspaper classifieds were too expensive so I placed small ads in a couple of local weeklies that served the area.

4. I had postcards made and sent one to everyone in my neighborhood whom I was unable to contact personally.

5. I went to the library and checked Cole’s Directory to find area subdivisions with home owners who could afford my services and sent out more post cards.

6. I made some flyers and placed them at any public location that would allow it.

Within a few days I got my first job from a neighbor who was opening a dry cleaning store and needed a new counter and some other cabinets. I had to create a contract form so I could collect a 50% deposit and my cash flow began. More in the next post.

Policy 4 – Consistently deliver the highest possible quality and make certain that the customer is fully satisfied with the work. Guarantee the quality of your work and when things go wrong, fix it promptly. Charge enough for your work so you don’t have to nickel and dime your customers for small items. Treat every customer as if they were the most important part of your business because they are.

Once a prospect is ready to become a customer based on the information you have conveyed, the two of you have laid the groundwork for an agreement. Such agreements should always be committed to paper. Perhaps there was a time when a handshake was enough and there may well be people with whom that would be adequate but it is much too risky when you are investing funds for materials and many hours of your valuable time. For that kind of arrangement a written contract is essential and it protects both parties should issues or differences arise.

Policy 2 – Before facing your first customer you should have a standard and brief contract form to be signed by you and the customer before the work begins. The contract should describe the work in detail, list the total price for the work, and set a specific date of completion. There are three additional parts that should be included with the contract. The first two of these are important and the third is critical to your financial success. The first one is a set of simple specifications describing the materials to be used and any other basic information that should be understood by both parties. The second one is a scale drawing of the project with several views so the customer has no doubt as to what he or she is buying from you. The third item is so important that I have listed it below as another firm policy.

Policy 3 – Require a deposit equal to 50% of the contract price to be paid upon execution of the contract for the specified work.

This is where some woodworkers balk and tell me their customers would never consider paying a 50% deposit before they even begin the job. I can’t speak for other woodworkers but after hundreds of jobs over more than 20 years, only three customers ever balked about the deposit. I refused to do all of the jobs. One of these customers returned to my shop deposit in hand the next day. Another one mailed me a check a week later. Both of these signed the contract later and I did their work. The third absolutely refused even though I had completed a beautiful job for their next door neighbor who had recommended me to them. That job I lost. In these calculations I am not counting General Contractors. I don’t count them because almost all of them want you to do the job and wait for payment until they get their draw from the bank. My policy pretty much left contractors to someone else and that was fine with me.

The first policy had to do with dealing with my customers. I realized early on that even though the success of my business depended to a great extent on my skills, tools, and business acumen, it also depended significantly on my customers and how I treated them was a critical element in my success.

Policy 1 – I decided to give prospective customers the respect they deserved and take as much time as necessary to help them design the projects they had in mind. I also decided that I wouldn’t allow my knowledge to create a condesending attitude and that I would always explain in detail what I believed to be the best way to build a project while listening to other ideas and answering every question clearly. I determined to improve my presentation skills so they clearly reflected my creativity, reliability, and skills so the prospect would be completely comfortable contracting for my services. Customers are the life blood of any business and I wanted to make certain each one of them knew that I understood and honored that fact.

My one venture outside of contracted jobs was when I designed, built, and donated a cross to a local church. They asked if I could make smaller versions for sale in their gift shop. I gave it a try and sold quite a few of various sizes. The crosses were seen by a large wholesaler who asked me if I could make a thousand of them. I gave that a lot of thought because the idea of making a thousand of anything did not appeal to me. Nevertheless, I gave them a price and they made a counter offer that was about 25% less than my quote, which I already considered a little low. I refused and that was my last experience with speculation. I did sell a few more crosses at various gift shops but it just wasn’t very lucrative so I stayed with my contracted work.

This is not intended as a criticism of the speculation method but simply a statement that I was never adept at it so I chose a way that was comfortable for me. I believe most who are interested in making money from their woodworking skills would like to make a living doing work they love to do. So, the important thing is to choose the way that works for you.

While I really enjoy woodworking and feel fairly competent at it, my best skills are in the business end. I have been motivated recently by Jim Hamilton’s blog about getting started in the business. He already has excellent business skills so his blog has been leaning toward the woodwork and the tools. I appreciate how he has managed without debt and really enjoy his writing. Since my posts will lean to the business end, it may provide a good balance that some will find helpful.

http://woodworking-business.com/downloads/HowMuchToCharge.xls

The yellow cells can be adjusted to your needs and the pink cells calculate automatically. Not only does it make calculating jobs easier but it reminds you of all the items that should be considered when pricing jobs. Please let me know how it works for you.