# Working with Contractors



## Chuck1685 (Jun 4, 2015)

Hello All. I have a few questions when it comes to working with contractors. I should start by saying that I am not new to furniture making, but am new to owning a business. I recently decided to turn my long time hobby into a full time profession. Anyways, I have been getting some requests to build furniture from local contractors who refurbish old homes and build new homes, local to my area. So far they seem to be proposing that I build a few pieces for the homes they will be showing and that if the pieces sell with the home, than I get paid. (They tell me that 80% of the time the pieces sell, but not sure how accurate that number is). If the pieces do not sell then I would be stuck with them. They would have me working with designers and architects to guide in the process. Here are some questions I have. What is a good base to start with as far as pricing? I general charge 40-60$ hour + Material cost for residential custom pieces, but should that price change when dealing with contractors? Also, I was thinking about trying to negotiate so that they pay for material cost up front, and if the piece(s) sell then they can deduct that amount off the total, essentially getting their money back. However, if the piece(s) do not sell then they are out the material cost. I don't know if this is a good tactic, but it seems to at least be giving me some bit of insurance. If anyone has any experience in dealing with contractors, please feel free to let me know what you think. Thank you all in advance!


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## Gilley23 (May 9, 2017)

They're trying to stage their houses for free…at least for them. They're proposing that you stage their house for them. Ohh and if the buyer wants the piece, then yay for you, but if not, well then good luck with that.

Hell no. They don't work for free, so why should you? And there's no telling how long it'll take to sell the property.

I would propose that they "rent" the pieces that you build for them. If they sell with the property, then the rental fees will be deducted from the price. That way you get paid and they still potentially get the staging for free.


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## jonah (May 15, 2009)

There's no way in hell I'd do what you're proposing. Most houses do not sell with the staged furniture included, at least in my area. You're basically banking that the buyer's taste will be the same as the designer/contractor's taste, which is exceedingly unlikely. You're taking all the risk there.

A "rental fee" arrangement is one solution, but honestly, I'd probably not even do that, since you're likely going to be stuck with them anyway, and all you'd get is a small rental fee to defray the time and material cost of the pieces.


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## Chuck1685 (Jun 4, 2015)

What do you guys think about 50% down payment up front of the total bill? If the piece sells then they can deduct the amount from the sale. But if it does not sell they are out the 50%. This would at least cover material cost plus some labor. I also would get the furniture back if it does not sell, so there is still an opportunity to sell it and make some money.


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## tncraftsman (Oct 21, 2009)

no , no and hell no.

It's a terrible deal for you. They are taking advantage of you. Like Gilley said, they want to stage their home for free.

I understand it's tempting, getting your work out to be seen and networking your business.

If you decide to go this route then do whatever you can to get your money upfront before putting your work in their houses.

Renting is a good idea but who is to say they will pay you a monthly fee.


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## tncraftsman (Oct 21, 2009)

This is tempting but what about this business case:

What happens if none of your wares sell and all get returned in the same month draining all your cash reserves putting you in the red, eliminating your cash for current projects forcing you to buy on credit?



> What do you guys think about 50% down payment up front of the total bill? If the piece sells then they can deduct the amount from the sale. But if it does not sell they are out the 50%. This would at least cover material cost plus some labor. I also would get the furniture back if it does not sell, so there is still an opportunity to sell it and make some money.
> 
> - Chuck1685


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## Chuck1685 (Jun 4, 2015)

tncraftsman

Yea it really isn't the best deal for me unless they 100% guarantee that my pieces will sell and I have that in writing. But in reality there is never that guarantee. I know its kind of a crap scenario for me, but I am trying to figure out some way to make it beneficial. Right now my business is starving for work, so I have to consider every opportunity. What do you think would be a good solution besides walking away from it all together?


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## avsmusic1 (Jul 10, 2016)

Agree w/ others

Do you have a sense for what they will typically be looking for and the level of customization? Are these big subdivisions going up that appeal to second or third time home buyers who already have furniture? Is the ask of you to produce single pieces for a model home with the potential of building multiples thereafter for anyone who wants to buy? I would also think about it from the angle of the person buying the property - if you were buying one of these homes, what would you need to also want to include certain furniture pieces in the deal?

Short answer is I probably wouldn't give them something for nothing regardless, but it may be worth giving the contractors a heck of a deal if they only needed a couple pieces for a model home with the opportunity to sell to every potential buyer of the 200 parcels.


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## Ripper70 (Nov 30, 2015)

I don't believe that 80% of the homes sell with the furnishings. That number seems too high. Perhaps, if you sell them the piece at full price and agree to buy it back for half price it'd give the realtor more incentive to push harder to sell the furnishings along with the home. I'd even let them sell the pieces for a profit and keep the difference, if they're able. But to do the work and risk not getting paid for your labor is not the way to go, IMHO.


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## TheFridge (May 1, 2014)

Negative ghost rider.

The pattern is full.


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## Chuck1685 (Jun 4, 2015)

From the phone conversations I have had, they are mainly looking for items to fit a specific space. For example, a hall table that fits in a little nook or a mobile kitchen island for a small kitchen that tucks away in a specific space out of the way. So it does make it seem like it would be higher likelihood of the item selling with the house in those scenarios. They also said I can pick and choose what items I would like to make. So if they want ten items made I can just choose the ones I think would sell. The issue I neglected to mention is that they did say that I could advertise my products as well with business cards, pamphlets….etc. So there may be some value in that as well.


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## wormil (Nov 19, 2011)

They smell desperation and opportunity for them. Forget furniture and get work from them doing built in, closets, etc.


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## tncraftsman (Oct 21, 2009)

"Yea it really isn't the best deal for me unless they 100% guarantee that my pieces will sell and I have that in writing"

Do you have the time and resources to fight should they not pay? Can you wait 30,60,90 days to get paid. They won't pay you until they get paid.

"But in reality there is never that guarantee. I know its kind of a crap scenario for me, but I am trying to figure out some way to make it beneficial. Right now my business is starving for work, so I have to consider every opportunity. What do you think would be a good solution besides walking away from it all together?"

We've all been there. In the end it's your call and a gamble with the odds stacked in the builders favor The pros is you get some advertising to an unqualified market. If it doesn't work out you are left holding all the cards and if it fails will add to your stress. Yes you get your wares back but you'll be motivated to sell. Which will mean selling at a discount continuing to undercut your own price

"for items to fit a specific space"

If that's the case then I'd propose something that is built in which you build and install and bill as a sub.


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## tncraftsman (Oct 21, 2009)

> They smell desperation and opportunity for them. Forget furniture and get work from them doing built in, closets, etc.
> 
> - Rick_M


+ 1, yep


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## Fresch (Feb 21, 2013)

Make them your salesman on commission see how they feel then!


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## the_other_ken (Apr 3, 2010)

I wouldn't do it. But if you decide to do this, make sure you get something out of it even if nothing sells.

That is, work on getting some free exposure for you work. Make sure that your business advertising is prominently displayed with the work. This would include business cards and maybe a flyer showing the type of work that you do. I would also advertise (in the house) that this piece is for sale separately and display the price on the piece and that a similar piece can be custom built to fit in their house if they like this piece but want something specific (wood type, different size, etc).

I also like Rick's idea mentioned above that they need to give you some other paid work (like the built-ins, closets, etc). If they are not willing to give you that work (at your full rate), then they just want to use you for free.


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## becikeja (Sep 12, 2010)

You need to look at it as advertising, plain and simple. Depending on the level of homes they are building and the designers they are engaged with, building 5-6 pieces could be very cheap advertising at targeted customers. Assume you will never be paid for these pieces, and then use the opportunity to build strong relationships with the interior decorators. That's where the investment will payoff, not with the contractors.


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## Loren (May 30, 2008)

I would take a look at the proposed designs,
size of the pieces, material costs and storage
costs for pieces that don't sell.

Some stuff the designers want may be relatively
low risk to bang out, and you can add them
to your portfolio. Others may be just stupid
to get into for one reason or the other, goofy 
design, unreasonable amount of work or whatever.

This will get your foot in the door with designers
though. They can be a pain to deal with in some
ways. I've found architects more realistic about
what it costs to build stuff.

I'd take a look at the drawings before I said no.


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## rbrjr1 (Nov 2, 2017)

I guess I just assumed you were talking about built in furniture, in which case when you deliver/install it, you should be paid in full in 30 days.

Remember to exercise your lien rights!! in some states (like GA) you will forfeit your lien rights if you don't file a notice to contractor with the county you're working in (costs you $5 here)..

Good luck, furniture making is a tough business (unless you're talking about commercial millwork, which is mostly PLAM).


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## 000 (Dec 9, 2015)

I used to build furniture for model homes. Items included things from built in's, to desks, to floating shelves and whatever else the designers had the budget for.

Designers would stage the models and they would have me build the "Extra's" for them.
The designer paid me for them, (of course I gave them a cheaper rate.)

When buyers bought a house they might want what they saw in the model, and most of the time I would get the recommendation to bid it for them. (directly with the buyer)


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## Carloz (Oct 12, 2016)

Forget about "...I would take a look at the proposed designs…". 
This kind of offer cannot come from an honest person and you would be at the loosing side no matter if the furniture sells or not.


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## gargey (Apr 11, 2016)

You're in over your head if you even have to ask these questions.


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## tncraftsman (Oct 21, 2009)

Thinking about this offer reminds me of this:

"I will gladly pay you Tuesday for a hamburger today"


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## Chuck1685 (Jun 4, 2015)

Thank you all for the insight. It seems like an overwhelming NO from most of you. Special thanks to Gargey, for the "expert" opinion. But in all seriousness, thank you very much…. there is not very much information on this type of scenario, especially for newer business owners like myself. Thanks again guys!!


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## Knockonit (Nov 5, 2017)

I"ve been a GC for over 40 years and have never asked someone to build something on the chance that it will sell in a product i'm selling.
I have commissioned several pieces or built my own pieces to sell with the home, I mean if its specific to an area or spot in home, what good is it after it doesn't sell,

I'm of the mind these folks are looking for a free show and tell on your nickle, I'd have to say no, but would be happy to sell you finished product with 50% down now and balance on completion.

good luc
Rj


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## Loren (May 30, 2008)

The problem with never doing any work unless
a client is paying for it in my experience is the
pieces that come out of such an arrangement
run to bland casework and such. If you get 
known for casework you'll be tempted to acquire
all sorts of cool equipment to do it faster and
you may never build any real furniture thereafter.

If you want to build furniture pieces, especially
interesting ones, you're going to have to find
a way to build pieces that excite you.

If you can afford to do it for awhile, make what 
you want and sell what you make.


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## gargey (Apr 11, 2016)

You're very welcome.



> Thank you all for the insight. It seems like an overwhelming NO from most of you. Special thanks to Gargey, for the "expert" opinion. But in all seriousness, thank you very much…. there is not very much information on this type of scenario, especially for newer business owners like myself. Thanks again guys!!
> 
> - Chuck1685


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## RichT (Oct 14, 2016)

Looking through the thread, I haven't seen any mention of the legal and contractual aspects of this arrangement. Call me a cynic (I am), but I would consider the possibility that the house sells, the designers pull their staging wares - including your furniture - and you're left trying to get it back. The police won't help you, and hiring a lawyer is expensive.

If they won't agree to providing a deposit, then you're likely to get screwed, and there's not much you can do at that point. Even if they pay rent, get a deposit.

Finally, while gargey and tactful won't ever appear in the same sentence, he makes a good point in his crass way. Instead of asking a bunch of guys on the Internet about this, you should be talking to professionals. A paralegal can assist you in drawing up contracts, and your bank can give you advice about securing deposits to be held and properly dispersed when the time comes.


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## Sparks500 (Jun 30, 2017)

From the Naked Gun>

Priscilla Presley: "How could you be so cruel? How could you be so heartless?"

Ricardo Montalbon: "You forget my dear, at one time I was a building contractor…..."


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## gargey (Apr 11, 2016)

> Finally, while gargey and tactful won t ever appear in the same sentence.




To say it more eloquently: Whenever you consider entering into any business agreement, you have to look at who is bearing the risk, and what every party's financial incentives are.

The home seller would be consuming the value of your labor while bearing none of the risk and having no incentive to sell. No-brainer.


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## Knockonit (Nov 5, 2017)

Unfortunately times have changed everyone wants to sue someone for something.

I still do a fair amount of biz with a handshake, honesty has always been the best policy imo, but alas there is so many who want to push it into the grey area.

I've been a Contractor my whole life, either subcontractor (framing, cabinets, trim doors ect) then on to being a general contractor in both commercial and residential work, we don't usually have to bid anything, provide a quote based on owners requirements and plans and go forth, our reputation works well for us. Most of my guys have been with me over 15 years, but in the last few years have gone thru so many new hires, terrible the work ethic of many, most have been excellent hands in the trades, but reliability has been the issue, and honesty, bummer its a good honest living,

anyhow, one has to do what they must to protect what they have and the work they propose, put it on paper, get an agreement in place, and deposit as required. All will work out.
Rj


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## RichT (Oct 14, 2016)

> To say it more eloquently: Whenever you consider entering into any business agreement, you have to look at who is bearing the risk, and what every party s financial incentives are.
> 
> The home seller would be consuming the value of your labor while bearing none of the risk and having no incentive to sell. No-brainer.
> 
> - gargey


You nailed it.


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## Chuck1685 (Jun 4, 2015)

After talking more with the project manager and designer of these homes, they are pushing more of an advertisement angle for my products as opposed to an outlet for selling. The original contractor I talked to was making it sound more like a higher potential for selling. I guess I am looking at it from a couple of different angles at this point. First off, we all know that advertising is not cheap, not to mention most of the advertisement now a days is through the internet. Which for someone who sells a tangible product, sometimes pictures don't do justice. So if my product is displaying in a home for 100's of people to see, touch, sit….etc. then there is definitely value in that. Not to mention they said that I can put flyers, business cards, pamphlets and really any other sort of advertising item on my wares during the showings and open houses. Another thing that was mentioned by the project manager is that all of the actual sales would go through me. So if the house was to sell and the buyer wanted to purchase the some of the furniture I had in the house then the sale would go directly through me. I haven't yet decided if this would be a negative or a positive. Now obviously I wouldn't just make a whole house full of furniture and spend thousands of dollars of time and material just for advertisement in this case, but maybe a couple of smaller items that don't cost much to make and don't take too long. As far as talking to professionals about this matter, I have talked to multiple small business owners that I know personally along with a couple of contractors. Unfortunately none of the business owners I know personally are in the same market as me or even relatively close. So other than just some general information, like weighing the pro's vs. con's, they weren't much help. The contactors basically said what most of you are saying, that they are looking to stage the house for free, but pushing the idea that I could potentially gain from the scenario… through advertisement, sales, etc. So that is why I am reaching out to the internet. So what do you guys think about it as far as just an advertising outlet?


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## Carloz (Oct 12, 2016)

^^^ Looks like you can be brainwashed easily. I would suggest taking someone else to this kind of negotiations like your spouse or relative.


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## RichT (Oct 14, 2016)

These guys are good pitchmen. Again, what's in it for you? Folks there are looking to buy a house, not furnishings. I've done plenty of house shopping through the years, and I don't ever recall even looking directly at the furniture, much less asking if it came with the house. I seriously doubt if anyone is going to push your furniture, or even mention to the potential buyer that it's for sale. You can add your business card and flyer to the array that are going to be on the kitchen island, or wherever, for insurance agents, painters, title companies and all the others.

Other than that, my comments and concerns above still stand. Get legal advice and talk to your banker. A good lawyer will give you an initial consultation for free.


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## tncraftsman (Oct 21, 2009)

"So if my product is displaying in a home for 100's of people to see, touch, sit….etc. then there is definitely value in that."

You are assuming your products will be highlighted. What guarantees do you have your wares will be displayed and advertised? What happens if they are blocked or attention taken away by plants and other staged items??

"Not to mention they said that I can put flyers, business cards, pamphlets and really any other sort of advertising item on my wares during the showings and open houses."

Who is in charge of keeping stock of your advertising, will you have time to check it yourself? Will attention be given to your wares or the marble kitchen tops with a kitchen inspired by Chip and Joanna Gaines????

" So if the house was to sell and the buyer wanted to purchase the some of the furniture I had in the house then the sale would go directly through me. I haven't yet decided if this would be a negative or a positive."

Have you bought a house? With the reams of paperwork you sign when buying the last thing I want to do is write another check for a small item. Think of the buyer. They just committed themselves to 15 or 30 years of payments. Wrote a deposit check for 10's of thousands of dollars. About move their current household, family, move kids schools, etc. Yet their life won't be complete unless they buy your wares?????

" So what do you guys think about it as far as just an advertising outlet?"

Run this business case, what is your cost for producing your wares, in time and materials. What will the ROI be if you display your wares in these houses vs using the the cash for running ads or other forms of advertising? What is the better bang for your buck?

What is the demographics of the house buyers, what are their incomes, ages, etc. Are they the type to buy custom furniture or custom woodworking??


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## jonah (May 15, 2009)

I don't think there's *necessarily* anything wrong with looking at it as advertising. That's all going to depend on your analysis of the market for your furniture. Are these houses a good way to reach the kind of people who want custom woodworking pieces?

People will not buy your stuff along with a house, for the reasons mentioned above. You might, however, reach a few people who go to open houses or that sort of thing and are interested in your stuff. I'd personally question how valuable that is, and there's zero chance you're reaching hundreds of people unless you happen to live in an extremely hot real estate market. Most open houses draw a couple dozen people at most. Many draw less than that, and some draw almost nobody aside from investors.

Your real target market is the designers and architects. The problem there is that they'll squeeze you out of some of the profit of selling your stuff, since they'll demand lower prices than you could get at "retail" by selling directly to end users.

Making a living out of custom woodwork is a pretty hard deal, when it all comes down to it. There are people here who do it and do it well, but even more who have tried and failed. A lot is going to depend on where you live and who you know.


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## DS (Oct 10, 2011)

We have kind of a similar situation here in our showroom for our custom cabinetry.

The counters and appliances that compliment our cabinetry and even a lot of the specialty hardware such as fancy pullouts and such are all subsidized by the respective manufacturers. In our case, our mutual clients are all the same target demographic. Our showroom is a fairly permanent fixture and there is decent traffic by the RIGHT people there.

Most items are placed at about 50% discount to us, while others are at the manufacturers complete expense.
We even have an independent manufacturer's representative who invested to build one of our displays that showcases her products and in exchange, she gets to hold events in our showroom free of charge. It is a win-win since these attendees are our potential clients and our clients are her potential clients as well.

Your situation is different mainly in that the showroom goes away when the house sells.

If you go into a situation like this, it would not be in hopes of selling the displayed pieces, but rather, that they would attract new clients for you to build new pieces for. The cost of your display piece gets expensed against your advertising budget and do not expect a profit from the direct sales of the display item.

If you do not have an advertising budget, or feel this is outside your current business objectives, then I would not go into such an arrangement.


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## gargey (Apr 11, 2016)

What line of work are you leaving to get into woodworking?

Or are we just being trolled?


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## a1Jim (Aug 9, 2008)

I'm a woodshop owner and General contractor for 30 years Many people want to get into furniture making for a living and a small percentage make it as a profitable business.
You have to evaluate each opportunity for yourself whether it makes sense for you or not. If you can afford the time, material to make furniture for model homes and know that your furniture is only for display and most probably not sell and possibly get damaged by home buyers and their kids and pets then you're going into this transaction with your eyes open. 
If you decide to try this out you need to have a written agreement stating the terms of your agreement. If I were to try this and I was to think of it as advertising I would want a card or tag stating custom made by you, I would also say after the 1st 30 days they pay you to rent the furniture (say 5 or 10% of its value) and if it's damaged they have to pay you in full for the furniture.I would also limit the time they can use it. 6 months-year. Remeber in this situation they are more interested in selling the house than pointing out how great your furniture is.


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## avsmusic1 (Jul 10, 2016)

I'm trying not to join the "just walk away" crowd and help figure out an angle but it seems to be getting harder the more info you share

If you Really need the advertising help and you realistically believe the people seeing your item(s) will be able to distinguish it's yours and are *your target market*, then maybe consider a heavily discounted sale of the item ro rental agreement.

Otherwise, walk away


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## RichT (Oct 14, 2016)

> If you decide to try this out you need to have a written agreement stating the terms of your agreement.
> 
> - a1Jim


Finally another voice for a contractual agreement. Thank you Jim. Folks can reminisce all they want about the good ol' days with a handshake and a man's word, but those days are long gone, and, particularly when dealing with companies versus individuals, they will screw you if they get a chance.


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## MinnesotaSteve (Dec 17, 2015)

Visit model homes.

Look for custom furniture made by other guys.

Call them to find out what's going on.

I've never heard of it before, but maybe these are higher end homes than I'm used to looking at.


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## jonah (May 15, 2009)

Some markets staging houses is really common, to the point where people spend all sorts of time and money on it. Other markets they don't bother because an empty house will sell and people are used to shopping for empty houses.

Personally, I've never really been a believer in staging a house unless someone is actually living there. It takes a lot of time and effort and you're honestly very often much better off clearing the thing out, putting a fresh coat of paint on, and letting people use their imagination.


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## Manitario (Jul 4, 2010)

I don't have much to comment on your exact situation and question but reading through this thread and your questions it strikes me that you haven't really put a ton of thought or planning into what owning a woodworking business will entail.

Most hobby WW would love to turn it into a real job, myself included. The reality though, is that this site and the internet at large is littered with stories of woodworkers who have failed. Having a shop, woodworking skills and having had people buy your stuff in the past doesn't make a successful business.

Perhaps I've read your posts wrong, but you don't seem to have given a lot of thought to a specific business plan; who are your target customers, how are you going to market to them, are you going to do custom work or pre-build and sell from a studio etc, what is your advertising plan (and if it is Etsy or "I'll make a website" please step back for a moment and look at the 1000's of other very talented woodworkers on Etsy and ask yourself how you are going to stand out from them). Just because people have bought and or really liked the stuff you've built in the past, doesn't mean that you'll be able to consistently sell furniture, enough to cover your costs.


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## Chuck1685 (Jun 4, 2015)

First of all, thank you to all of constructive and helpful comments throughout this thread. I never would have thought that this was going to be such a responsive topic. As far as all of the "negative comments" questioning my business plans, asking personal questions such as my previous employment…I feel no need to explain my professional or personal motivations for making the career choice that I have. The whole point of this thread was to reach out to fellow woodworkers, especially those who have dealt with contractors and these types of scenarios before, to get some insight. While my choice to go full time with my business is relatively new, doing commission work for custom furniture is not a new thing for me. However, up until now I have only dealt with residential clients and have not even considered moving any further with my business other than residential. But when I get contacted by a couple of different contractors in the area proposing this, I can't just pass on it before I get the opinions of others who have experience with it. Honestly, most of what you all have said was the direction I was heading in from the get go, but I just had to make sure before I tell them no thanks. I hope this explains to you all that even though my original questions seemed to be naive, that I was just getting some outside help on a topic I was unsure of. Thank you all once again.


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## becikeja (Sep 12, 2010)

Ok, let me try to get through once more. Use this opportunity for advertisement and entry if the opportunity is to align with interior decorators of stature. Potential homebuyers are there to buy a house, not your furniture. Your potential investment payoff is with the designers staging the house, if and only if they are interior decorators and have a high end following. This will get your product in front of them. At that point you will half to sell and negotiate with the designers and turn them into advocates of your furniture with their high end clients. That's the only win here. DON'T get into this if you think you will sell to potential home buyers, that is not going to payoff.


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## wormil (Nov 19, 2011)

Think of it this way… if staging a home for free was a good idea, furniture stores would already be doing it.


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