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Forum topic by WiddershinsJoinery posted 03-27-2015 12:24 AM 1345 views 0 times favorited 12 replies Add to Favorites Watch
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WiddershinsJoinery

18 posts in 816 days


03-27-2015 12:24 AM

I am the Operations Manager for a Developers Cooperative and it was brought to my attention that I could access some funding for my woodworking shop. Some of you may be aware of my woodworking shop project, the renovation of a 1000 sqft detached garage… but I can access upwards of $150,000 in low-interest loans to get off the ground, for my own down-time play and getting involved in actually hiring staff and so on.

It’s really a very exciting opportunity but I’ve never written a complete business plan for myself, before. I’ve helped others do it, but not for a woodworking shop. Would LOVE The chance to speak with people about their own experiences in creating business plans. I intend to have a sharpening station, a lathe station, CNC equipment, I want to make furniture, it’ll be relatively broad-spectrum… I have many interests in this world and have a great deal of fun exploring many avenues. Multiple proper stations will allow me to work with people in my shop and collaborate.


12 replies so far

View Arlin Eastman's profile

Arlin Eastman

3550 posts in 2021 days


#1 posted 03-27-2015 12:50 AM

Good luck with your shop and I hope it really works good for you.

I help other vets and their family who are like me and I know how lack of space is a hindrance.
Also I know I can not afford a loan of any kind and I hope you will be able to afford the payments even if you never sell anything.

-- Please help me help other Vets click..> http://www.gofundme.com/m1abko.....It is always the right time, to do the right thing.

View JAAune's profile

JAAune

1634 posts in 1777 days


#2 posted 03-27-2015 12:51 AM

What product or service do you offer?

Is there a need for what you offer or is the market saturated?

Who are your ideal customers? Do they exist in your market area or did you imagine them?

Who is the competition? IKEA or the cabinet shop down the road? All of them? What about the metal shop downtown cranking out picnic tables?

Projected startup costs? Be realistic. Simple things like an electrical panel cost thousands and you can’t operate without one.

Anticipated overhead?

Marketing plan? How do people know you exist?

How long will it take to develop a client base that allows revenue to exceed cost of operation?

Regarding the shop itself, think workcells for productivity. You don’t want a sharpening station or a lathe station. You want a grinder right next to the lathe to create a workcell that is self-contained. You want stones right next to the bench where chisel work happens and clamps at every location where they’re needed.

Why do you need CNC? Do you have work for it or do you just assume it’s a money-maker?

If you do custom work, you’ll never be able to optimize tool positions since every job changes. Put stuff on wheels and keep them light. Move things as needed to create workcells on the fly. One clamp cart that weighs 500lbs is less useful than 5 that weigh 100 pounds.

Dust collection is super important. If you want employees, do your best to surpass OSHA standards and keep the shop clean. You’ll either need a powerful, central system or many smaller ones servicing a small groups of machines. You can’t pull dust from a table saw and a planer at the same time using a 2HP cyclone.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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WiddershinsJoinery

18 posts in 816 days


#3 posted 03-27-2015 12:59 AM

Arlin Eastman: My eldest brother has 12 years in the airforce, middle brother 8 years in the reserves, I spent 2 years in the army, my uncle is recently retired EME. I’m honoured that there are people like you to help vets. We need folks like you. I’m looking to help local teens in the area by hiring them and keeping them from welfare or moving away for work. We are of similar minds.

JAAune: Brilliant questions, I’ve been pondering those and more, I’ll work all those into any business plan that I’m writing. Right now I’m sorting out details and expenses with my shop. I already OWN A CNC router, the shapeoko2, and for another $600.00 I can start milling 3” thick stock, as large as a sheet of plywood. I’ve been studying dozens of techniques, products, like pens and signage, I could make coasters for local businesses, etc. The lending institution is run by someone I know, and I have a panel of business specialists who are helping me create a killer proposal. I’m personally only going to be involved part-time, hiring local people to help from time to time. I can sell my goods through a program I’m developing for the company that I work full-time for, and the market isn’t a huge issue. My full-time work, itself, will provide a stupendous avenue to sell my goods.

This is an exciting time, and great things are ahead. The stars appear to have aligned after 15 years of struggling. I hope.

View waho6o9's profile

waho6o9

7167 posts in 2037 days


#4 posted 03-27-2015 01:03 AM

Support your woodworking Vets through Arlin’s webpage:

Website: http://www.gofundme.com/m1abko

View CueballRosendaul's profile

CueballRosendaul

484 posts in 1600 days


#5 posted 03-27-2015 01:30 AM

Take it from a serial entrepreneur who’s done it all, including borrowing $250,000 and $450,000 on previous ventures; the most successful ventures are bootstrapped with little or no borrowed money. Repaying that note is a HUGE burden that you should avoid at all cost.

-- Matt CueBall Rosendaul. I don't think I've ever had a cup of coffee that didn't have cat hair or sawdust in it.

View WiddershinsJoinery's profile

WiddershinsJoinery

18 posts in 816 days


#6 posted 03-27-2015 02:46 AM

I’m also going to run a youtube series, and I’m also considering going “all-DeWalt”. I heard that, with enough patronage of their business and high-enough traffic, they may be willing to sponsor such a show. I’m rather fond of their tools, and find that their cordless line is really quite satisfying. I have extended family who work FOR the company, and have been told that it may be a sound business idea to work with them for a bulk of my tools needs. They don’t provide all of my offerings, like lathes, but it’s a thought. A little brand-loyalty.

Thoughts? I can’t afford Festool. haha.

View bigblockyeti's profile

bigblockyeti

3665 posts in 1181 days


#7 posted 03-27-2015 03:20 AM

It sounds like narrowing down what you do would be a good way to start. Getting everything you will need to produce anything could be astronomically expensive. I’ve never borrowed money from anyone for anything (except my mortgage) and I don’t really produce anything very special. What I am very good at is having someone bring me a picture and making them something the same for a specific space with proportions they specify. Not very creative, I know, but if someone has a space to fill and knows what they want, and what size they need it, I can do it. After all, Pottery Barn, Ethan Allen and IKEA aren’t going to make a one off just for one person.

View Rob's profile

Rob

704 posts in 2531 days


#8 posted 03-27-2015 03:39 AM

Coming from an engineering background, the most frustrating part of writing a business plan is making up sales numbers and running the break-even analysis to see whether you have any hope of paying your bills in the imaginary world you’ve just created inside your head.

Definitely carve out your own niche. Try pitching your YouTube show and business plan to a sponsor. Many of the online woodworking sensations have admitted that it’s extremely difficult to make a living or even break even doing anything besides kitchen cabinets unless you have rich benefactors, and in the real world they ended up doing something to serve other woodworkers instead.

If anything, consider renting out shop space to other woodworkers, and target the Maker groups. You could do this either as the main component of the business or to supplement the main business in case furniture building doesn’t work out.

-- Ask an expert or be the expert - http://woodworking.stackexchange.com

View Arlin Eastman's profile

Arlin Eastman

3550 posts in 2021 days


#9 posted 03-27-2015 03:43 AM

I did a google on business plans for you and here is a link

https://www.google.com/#q=woodworking+business+plan+example

I hope you find what you are looking for.
O and one last thing. If you are doing this as for training people maybe you can do your business as a Educational Nonprofit. At least that is what it is called in the USA

-- Please help me help other Vets click..> http://www.gofundme.com/m1abko.....It is always the right time, to do the right thing.

View bbasiaga's profile

bbasiaga

754 posts in 1455 days


#10 posted 03-27-2015 07:08 AM

No potential conflict of interest concerns with trying to use your day job to establish/support/grow your side job? Sounds like rocky paths to me. Careful there.

Also remember that most businesses fail. What will you do with the loan debt at that time? Once you cease operations most lenders will require payment in full. They don’t like waiting 30 years for you to make payments like a mortgage. I know some people who lost the house they were living in, both their cars, and some recreational land they had when their specialty toy store went under. It was horrifying for them. Make sure you know your terms.

$150k sounds like a lot, and it may even get your shop set up. But then you won’t have much if any left over for paying utility bills, salaries, insurance, social security taxes etc. The rule of thumb I found most often when setting up my non-woodworking side job was to make sure you have 3-5 years of expenses on hand to get established. How much money is that for you?

I wanted to open a Woodcraft outlet once. Looked at their terms, and you’ve got to have $750k total assets and $250k liquid before they even talk to you about buying a franchise from them. Way more than you’d think going in. I’m sure that’s because, at least in part, they know what it takes to get started.

Don’t want to rain on your parade or crush your dream, but there are a lot of hard questions to answer when starting up.

Since your aim seems to be to keep kids off welfare, etc…have you considered investigating what it would take to start your business as a non-profit? This may allow you to apply for start up grants instead of having to take loans. You can still pay yourself a salary once profitable, you just can’t pay bonuses, dividends, etc.

-Brian

-- Part of engineering is to know when to put your calculator down and pick up your tools.

View Puzzleman's profile

Puzzleman

411 posts in 2404 days


#11 posted 03-27-2015 08:21 PM

Borrowing $150k sounds like a lot of money that you describe as a part time job. I didn’t borrow that much to start my full time business. I agree with JAAJune that you need to focus on your product line. Much easier to hit the bulls eye with a rifle show than a shotgun.

Regarding hiring of teens. If you are only doing this part time, how will you give them enough hours to justify them to not move away or be on welfare. How many hours can you give them at what pay scale? If you want to talk about a rough place to get employees, try my town. You know it as you have seen it in the news. My shop is in Ferguson MO. I have worked and am working with youth in the area to get job skills. This is NOT something that I could do if I was only part time. They need to learn job skills, people skills, need to have supervision. I can find good people here but sometimes you have a few bad ones. If I was doing this part time, I would not be able to help them as I could not justify the expense.

You stated that your current full time job will provide plenty of orders. I do not think it is a good idea to have 1 customer control a large percentage (or in your case all) of my production. You do not have a business but rather a subsidiary of that company. What will you do when they find someone else or decide to go a different way? How will you sustain all of the employees that you want to help and pay back your loan and pay yourself?

When will you have time to sell your services / products to other companies? What are your sales skills? Can you improve on your sales skills?

Just a few thought from one who has done it. Not trying to rain on your parade but these are all things to think about. I started full time over 12 years ago and have grown to this size. It wasn’t easy but took ALL of my time, experience and skills.

-- Jim Beachler, Chief Puzzler, http://www.hollowwoodworks.com

View ,'s profile

,

2387 posts in 3007 days


#12 posted 03-28-2015 01:32 PM

You asked that we share our experience with our business plans? Not sure if our situation applies to your question or not but our experience has been extremely successful and I would think utilizing a recipe for success would be to your benefit. I began our business with around 200.00 in the bank (I was netting 1,500.00 per month as a state worker, wife was stay at home mom of 2 babies, we were starving). I adopted a “cash as I go” philosophy when we opened in 2010. As a result we have minimized overhead, strengthened our ability to weather lean periods and now find ourselves in a position of strong equity and our profit margins are maximized. We 100% own our shop, vehicles and all of the equipment inside the shop.

I think starting up with 6 figure debt is not a great decision. In fact I am certain we would not have made it if we were saddled with a 6 figure debt in our first 5 years. I will say that I have benefited a lot over my first 5 years from other shops making bad business decisions. I have enjoyed watching my competition make bad business decisions and close shop. It tends to feel like Christmas to me as I set there bidding on their equipment. In fact, we just upgraded our CNC to a stronger and newer machine by grabbing a CNC from a shop that closed as a result of bad business decisions.

The thing that has kept us strong has been high quality product and craftsmanship. You mention this as a part time gig which is also concerning since I am aware of the effort that is required to produce a very high quality product. My business requires my full time effort. Being close to my product at all times I am able to closely control quality. I have had bad experience with using outside labor and have learned a lot from this area.

Not sure if any of this helps. I need to get out to the shop and get to work though.

-- .

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