# A monkey working for peanuts



## woodspark (May 8, 2010)

We all want to build custom furniture. It's not always easy though, well not for me anyway. I'm not talking technical side. I'm talking numbers; the cost, the labor, the profit, calculating the price. Working out the cost of materials is still OK, but how do you figure the time it will take to build something you never done before? Off course experience helps. I've been playing this game for quite some time and mostly I come through OK. But once in a blue moon, I under quote by a long shot. Off course, you only realize this some time into the build. That is when you get this sinking feeling, when you know it will take much longer than you figured. Goodbye profit, hallo monkey working for peanuts!
That is what I am with my current project, a monkey! I guess the fact that work is rather scarce at the moment, that I really wanted the job, had a lot to do with my low quote/bid.
So the shop is ticking over but I am still a monkey. 
Am I alone here, or are there just maybe some other monkeys out there as well?


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## pommy (Apr 17, 2008)

I think we should all go work for IKEA payed monkeys for their cheap crap mass produced


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## fge (Sep 8, 2008)

I'll be a Monkey! Count me in! My current job, we really needed the work. I shot my customer a real fair price, likely I am sure I beat all my other competition on a kitchen. She called me excited but needed me to come down 1500.00 off of my price in order to manage within her budget. I did and now I am suffering. But the shop rent got paid and some utility bills are paid. I am about out of gas and food though! I does really suck to work for less then what you know you are worth. She told me if we could not meet her budget she would have went with stock oak cabinets from Home Depot that would have met her budget. Boy did we need work and I am sure if I did not take the job we would still be sitting without work. Of course as most know I work for TX full time so that helps but we do rely on cabinet work to help pay bills because TX does not pay enough.


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## a1Jim (Aug 9, 2008)

You have to price the project according to it's value . Then you have to calculate if your making money working for what it's value is and if you will have customers if you charge what you consider the value is.
If Ikea is selling an entertainment center for $ 750 how much better is your because of better construction and better material. Think of it as a customer would, If it cost you $650 in material and labor and your selling it for $950 then don't make entertainment centers .


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## huff (May 28, 2009)

This is a slippery slope a lot of woodworkers find themselves on, especially during tough times. We want (need) the work, so the natural thing to do is to underprice it just to get the work…...and then try to justify it by telling ourselves that at least we have work. The problem is…...your electric Company didn't cut their price for your electricity just because you cut yours, the gas for your truck is still the same, your insurance is still the same, along with everything else it takes to operate your business…......and when you go to the grocery store, they don't give you a break because you gave your customer a break. The slippery slope is this, I've seen too many shops start to cut corners, use cheaper materials and offer less services trying to make up for the lose of revenue. They ruin their reputation trying to stay afloat. 
I used to go crazy trying to compete with places like the big box stores, Rooms-to-Go, IKEA, etc., until I realized they can't compete with me. They're pushing two things: Inventory and price!. Another words, they stock a lot of junk at a cheap price. We have to educate the consumer and realize that the larger percentage of people are more interested in price then quality. Focus on the people that's more interested in quality and work from that angle. 
Do you really think someone like Sam Maloof (while building his career in woodworking) designed, built and priced his chairs to compete with IKEA or Home Depot? He didn't bring himself down to that level and either should we. It's got a lot to do with how you think of yourself and your work. Easier said, then done and boy over the past 25 years I've seen alot of ups and downs ( and I've gone hungry more then once), but I've held true to myself and refuse to give my work away. I'll do that during good times, known as charity.


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## Puzzleman (May 4, 2010)

I agree with Huff. When your customer said that she would go to HD if you didn't come down on price, alarm bells should have gone off in your head. It means that she values your work as an equal to HD.

In my niche market, I sell at a higher price than my competition. I tell my retail and wholesale customers that you will pay me more than XYZ company. However, I then explain why I charge more. Most times I win them over and then prove why I am worth more. I do have some that only look at the price and they don't buy from me. I do let them know that if they have a problem with their vendor, I am always here to take of their order correctly.

When people ask to to discount my pricing, I ask them when was the last time that you volunteered to take a pay cut from your company. Then tell them this is what you asking me to do. I am giving you a fair price where I can pay my bills and make a little money. If the price is too much for you, I understand. One more thing, in a few years down the road, will the money that you want to save really be that important when you have problems? Since I am the best quality, my product will last for many years longer than the other one.

Jim


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## toolchap (May 28, 2010)

Huff…...I agree. I walked that road for many years…even tried to educate along the way….often pearls before swine. My personal saying is they want Yellowwood for the price of Pine. A wise friend once told me he would rather sit at home doing nothing, than work for nothing. So for the last few years I have let that be…let others scramble for quotes and wear themselves silly running after clients and battling with suppliers. Funny thing happened. I sat at home without work, struggling. Looked around and thought "I would like to build a tool for myself." It started like that. Now I sharpen for some guys, repair their tools or jigs, maybe build a machine or two. My metalshop grew and so did my metalworking side. I struggled, really struggled. Now? I do metal for money….hate the smell, the screech, the noise. I however remain passionless to a large degree about the metalwork….it is precise, has to fulfill a function and I dont feel regret when the client collects the project, wishing I could have afforded to keep that for myself. BUT…BIG BUT…..The wood..the love..the passion is now mine. I can do woodwork for my pleasure, in a stunning shop….all for me. My treat…for me.


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## fge (Sep 8, 2008)

What is said above has a lot of good wisdom. On this job we are selling high end/quality cabinetry for maybe even less then Home Depot price. I cannot be sure without getting an actual HD quote. I can say this though, it is very easy for people to speak about this business philosophy, but when it comes down to it I have a wife and a 4 year old daughter, a 2 year old daughter and they all three depend on me! That is tough. I had a shop payment to take care of and needed the work to cover that along with some other basic needs/expenses. It is nice to have food in the refridgerator and gas for the tank, etc… Truth be told if I had to I would sweep floors or clean bathrooms if that is what it took for me to care for my children and wife. I work for TX and trust me when I say I make peanuts working for TX! But geuss what, I just met with a pediatric surgeon yesterday so my 4 year old can have a minor head surgery. If I did not settle for peanuts working for TX then what would I do for my little girl? Maybe I could tell TX to go suck nuts because I am above peanut wages and then place my family on welfare. My wife is a full time Mom and loves that so we do custom cabinet jobs on the side to make ends meet (so she does actually work full time besides being a full time mom). My lowest paying kitchen job was my first one, we sold that for 5600.00 for 62' of cabinet. My current job is the second lowest paying cabinet job, we sold it for 5100.00 for 42' of cabinet. My first job took us 3 months to complete and this current job will take us 2 weeks to complete. I originally bid my current job at 6500.00 and came down because we absolutely needed the money. A friend told me I should have been closer to 8000.00 for the 42' of cabinet. That is all good but when you look into the eyes of little girls and an adoring wife, it is hard to stick to your guns and tell the customer to go to HD and meanwhile I will just see if my mom or sister or some uncle can donate to my needy children.

As far as the HD comparisons with us, I believe HD cannot compete with us and there is no comparison. But out of ignorance on part of the customer, that is sometimes what happens. It is a fact of life when dealing with a customer on a tight budget. And when you find customers on CL you will end up finding them on tight budgets.

As far as quality goes, our cabinets probably are close to the top compared to other custom shops in San Antonio. We build a very high quality cabinet, my last customer (that job sold for 9500.00 for 59' of cabinet) told me that I likely could have come up 2000.00 on my price and still would have been very competative based on the product we provide.

The real issue we have and most woodworker might also struggle with is being known. You can have the best deal going in town but if no one really knows where you are or who you are then it does not matter what great product you have. Marketing really is the issue. But I feel there is a fine line between throwing money at just any marketing scheme and just wasting money or finding the proper methods and getting the most bang for your marketing. I have often wanted to read some books by Jay Conrad Levinson, Guerrilla Marketing to find good tips and tricks of effective frugile marketing plans and ideas to get the word out to the community that would say "yes we exist and we have a powerful product!"

I guess I just rambled and vented some here, hope no person takes offense. It just sucks to work for cheap while providing a quality product in the name of supporting my children and wife and feel condemned by others because I cut my price.

Jerry


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## woodspark (May 8, 2010)

Hey Jerry, I'm with you there brother. We all know the theory of it but when the wolf is at the door, you do what you can! I also have 2 daughters, 6 years and 10 years. There is actually a photo of the youngest under projects: "Little lumberjack in my lumber yard."
Thanks for being honest and admitting to being a monkey as well. Makes me feel a lot better! At least you got the job and it adds to your portfolio and lessons learnt (apart from food in the fridge!).

We are all slightly missing the point though. It is more about estimating the time required to build something unusual, something you have not done before. When all you do is tables, it is easy to price one that is slightly longer, or wider or with some extra feature. It was under estimating labor that got me on this one.

Huff, what you said is o so true, and a slippery slope it is indeed! Finding enough people that will pay a little extra for quality, THAT is the challenge. If you have enough, well done, you have the marketing skills…more important than the woodworking skills!


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## pommy (Apr 17, 2008)

I price my jobs on a day rate £120 aday plus material costs so if the job takes 6 days thats £120×6 that gives me a good day rate after tax


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## Puzzleman (May 4, 2010)

Div it is so true. When I started my business, it was because I liked wood working. Now I have found that my real job is marketing and sales. If you don't do the marketing and get the sales, it doesn't matter how good your product is.

Marketing is the number ONE job.

Jim


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## fge (Sep 8, 2008)

Thanks for letting me rant some.

Div, I do think I have a situation I went through in the past that fits the scenario you speak of. A customer asked me to build a very nice wall unit entertainment center. The unit featured two 1/2 pillars that acted as the foundation for the upper cabinets that spanned across where the television sat. I bid the job with what I found to be a fair price. Well, the third time I built those 1/2 round pillars, yes I actually built them 3 separate times, I nailed it and the result was perfect in every way. But I spent probably 6 times as long as it needed to build those and I spent 3 times as much on materials to build them. Shortly after building that huge wall unit, I moved to kitchen cabinets… 

That job we worked for peanuts!!!

Happy woodworking, Jerry


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## fge (Sep 8, 2008)

Div, I looked at your sawmill post. Great deal! And the young helpers are just the best in my book. I am sure we can relate having the two daughters.


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## Wood_smith (Feb 12, 2010)

Puzzleman- I loved your line "I ask them when was the last time that you volunteered to take a pay cut from your company." You hit the nail on the head, and I'm gonna memorize this one for the next time I get asked.


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## huff (May 28, 2009)

Jerry, I know what you mean about the family comes first and you do what you have to do to take care of them. Didn't mean to offend anyone and I'm glad you vented some. (This is a very frustrating business at times) LOL. When I first started woodworking for a living, my wife worked full time and that really helped pay the personal bills when things where slow. When cancer took my wife and I became a single parent, I had nothing to fall back on. It was me or nothing…...so I really understand about taking care of the family first.
I don't think there's a woodworker out there that does this for a living that hasn't worked for peanuts from time to time. Whether it's because of the economic times and we need the work or if it's simply because we've under bid a job. The only thing I was trying to warn about, is the habit we can fall into if we're not careful. The more we need that job, the more we have a tendency to lower the price just to get the job and that can become a habit. 
I don't mind sharing my experiences (good or bad) with fellow woodworkers, if it might help them down the road. 2008 was the best year I ever had in the woodworking business as a 1 man shop….....2009 was the worst!!!!! Down 53% from the year before. That sucks. This time last year, I couldn't find work at all, no matter how I priced it. I thought for sure I was going to be forced into early retirement and end up becoming a Wal-Mart greeter!( you know, the old man that stands at the front door of Wal-Mart and hands out shopping carts). As things slowly began to pick up at the end of last summer, it was really hard not to just underbid jobs to make sure I was getting the work. I'm back on track this year (so far…..knock on wood!) but have no idea how the rest of the year will play out. 
To go back to Div original post, we will always have a job now and then that we under bid. I love to push myshelf to design something new, which means, I have no idea how long it will take to build it. Sometimes I do alright and other times I'm the monkey working for peanuts. I try to look at the positive side of it. First, I learned something new and expanded my portfolio, and Second, over time, I've built a clientle base that is where I get my best referrals from. That's your best marketing you will ever do, but also takes the longest time to see real results.
Jerry, hope the surgery goes well for your daughter. she'll be in our thoughts and prayers.


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## woodspark (May 8, 2010)

Hey Guys, Thanks for sharing your stories! I am part of a family now and the support I get via this little keyboard is simply amazing! John, yeah, I'm at that positive stage now, thanks to you guys! This job will be good marketing, it's a counter for a new gallery. So, hopefully, good and many referrals. I'm actually giving it extra time for that.

Again thanks John,Jerry and Jim. May your chisels stay sharp.


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## huff (May 28, 2009)

Div, Good luck on your project and hope you will post some pictures for us when completed. I'm always inspired by your work.


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## Bearpie (Feb 19, 2010)

These are excellent responses to an excellent post! I am with all you guys out there and I went through the same exact things you are going through albeit I had a welding business to operate but the principles are the same. I am just *very* thankful that I don't have to do any woodworking for a living as I retired a couple years ago and now do all this "work" for fun. However I do not want to undercut anyone who does this for a living by putting my work out for "cheap" just because I can. I set a fair price and on exceptional work I put an exceptional price on it knowing that one day someone will pay my price. I have undercut my work too many times in the past and to do it again would be a kick in the nether regions! Yes, my collection is growing and I am running out of a table display space and may have to build a 6 ft shelving display case to show my work better.

All you LJs out there have my best wishes and prayers in your struggles to make a decent living. I do know where you are coming from, I've been there and done that all too often. Best wishes!

Erwin, Jacksonville, FL


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## Puzzleman (May 4, 2010)

Wood Smith, another of my tactics goes like this: When someone comes up and asks if I will take $20 for a $25 item, I force myself to pause and take a deep breath. Then I tell them that the best I can do on price is $30. The look on their face is priceless. Then I tell them that we can split the difference and do it for $25. Usually they still buy but if they don't, they weren't going buy anyway. 
Once someone told me that I can't just raise the price whenever i feel like it. I told him that he just can't lower the price when he wants to.

My fellow artists and crafters think that I am too bold but I don't like taking a pay cut and I price my products at a fair price.

Jim


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## fge (Sep 8, 2008)

This has been a great post. It is good to have a place to come to where like minded persons and families share in the same passions and even some of the same struggles in the business.

Huff, thanks for your post, I don't have any hard feelings at all. I probably just vented some out of my personal frustration. And Huff, I really appreciate you sharing your life experience.

Jerry


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## Knothead62 (Apr 17, 2010)

My first boss in sales told me when you cut your price at the customer's request, they will expect you to do it everytime. In all my years in sales, I never cut my first price unless a modification of the product or service warranted it. Go to Walmart and buy $100 of groceries. Ask them if they will take $80 for it.


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## woodspark (May 8, 2010)

OK, I hope all self confessed monkeys will join me to become GORILLAS! Go Jerry go!


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## DaveP (May 6, 2008)

Div,

You talked about the uncertainty of how much to charge to build something you've never built before. Lot's of good comments here, but I'll just add that if you want certainty, good luck finding it. Even working for "the Man", I've found no real stability. I remember growing up, seeing my dad and uncles, and even to some extent my brothers getting jobs that were "lifetime" type jobs with companies that had been in business for decades. Even those didn't last. These days? I'd be so bold to say, those jobs don't exist anymore. At least I haven't found them.

Keep your monthly expenses low and save what you can for the bad times, because you can only be certain of this: They will come.


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## SCOTSMAN (Aug 1, 2008)

Don't give an upfront price unless you're sure.Like some here have said if you don't know how long it will take say so and charge by the hour or day.I see nothing wrong with that.Alistair


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## OttawaP (Mar 13, 2008)

Rule #1…never devalue your work or everyone else will too.

Rule #2…if all you represent to the client is a lower price then your work will never be valued at *any* price, move on to someone else.

Rule #2…when in doubt refer to rule 1&2

I build mostly high end additions, remodelling and the occasional new home. I rarely lose a job due to price, realistically less than 15% of the time. I try to build in some WW into each job for extra money and fun. In all my career I've never once dropped my price to get a job and never will, I charge a fair wage and make a good living. I have had clients come back after year once they've saved up some more cash and have had clients hire someone else only to call me a year later to fix the mistakes…and those are costly. I've also had clients say "your level of work is too high for us, we just want a quick fix. Thanks anyway" Which is fine since at least it's an imformed decision.

Construction is at least as competetitive as woodworking if not more. If you build it, service it and provide an experience that is beyond they're expectation, people will beat a path to your door.


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## huff (May 28, 2009)

This has been one of the best post I've seen in a long time. Some really great responses! Thank you….. I"ve learned alot from my other LJ'ers….........I like your last post Div, I think we should all become "GORILLA'S"!
..........And OttawaP, I like your Rule #1 &#2….....and when in doubt, I will refer to rule 1 & 2. LOL .


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## woodspark (May 8, 2010)

Socalwood,
Rob, don't feel alone! In between all my other things, I am working on building up a collection of pieces for an exhibition later in the year. One was this idea I had for a coffee table…it looked so good on paper…I made the parts…I mocked it up together…I totally hated the look of the thing! The parts are now hidden in a dusty corner and I am working on another piece.


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## rhett (May 11, 2008)

Sometimes you eat crow on a project, If it happens more than a few times you need to re-evaluate your situation.

You can be an excellent woodworker and cabinetmaker but at the end of the day that is not what keeps your doors open. Taking on lots of overhead for a "bigger" shop or a "nicer tool" might make your job a bit easier but that does not always make your company more profitable. Its a very fine line.

I once had someone tell it to me like this. A business is like a dog. The bigger it is the more you have to feed it to keep it alive.


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## lilredweldingrod (Nov 23, 2009)

My grand father always said about quality; "There are two ways to buy oats, when they come out of the mill, and when they come out of the mule".

When you cut corners, a lot of the time your are just whoring up the market. I watched this happen to the ocean container transportation. When Sea/land started the container transport, the owner-operators were driving new trucks and making a good living. Then the illegals came across the border and said Hey mon we haul for cheap. They went to the grocery chains and bought their worn out junk for $2500, no insurance and when it broke down they left it on the side of the freeway and ran to get another one. Now they are willing to spend all day setting in line to return empty containers for $25.00.
I see outfits like IKEA forcing the same thing on the independent cabinet shops and furniture makers. And if we play their game, we become the whores. I think we need to find a way to pimp their ass.
Just my $.02 worth. Rand


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## BenEPW (Aug 12, 2009)

I don't work professionally with wood, but in my other buisnesses, I've got a simple formula for quoting

((COST OF MATERIAL * MARKUP) * 1.1 + (ESTIMATE TIME * HOURLY RATE)*1.4 ) + TAX)+TAX
That gives me 10% material to play with in case something is scrapped, or x other potential factors
also, if my time estimate is right, I make profit, but if X causes the job to require more time, then I should break even
Last, I calculate the tax, add it to the quoted price then calculate the tax again. If the customer bites, then there is that much more profit available, if they ask about paying cash, fine, I'll drop the taxes, then make out the invoice as tax included I'm actually still legal, but the customer is happy


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## robertp (Jun 6, 2010)

What can you do? With transportation being so cheap and the global market so large at some point any craftsman is competing against an over seas labor force that is so cheap it makes your head swim. On the other end a small shop is competing against a well capitalized industrial shop with efficiencies in tools and supply chain that make a lot of us look like hobbyists. I think the best thing that a small craftsman can do is to deliberately offer something that doesn't fit the mold of mass production, (it would be insane for us to make our own drawer slides for instance.) One problem that I see is that the marketing of mass produced cabinetry has made it seem more appealing than something built by a person. I'm not sure where I'm going with this and I have been a monkey and it makes me consider that it can be dangerous to do something you like for a living. That didn't come out right, but I hope you all will understand what I mean.


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## CampD (Nov 8, 2008)

What OttawaP states is so true, you open the door to debate with a client, they will continue to want to debate any extras and any profit is out the door. "Stand firm" on your price and most will come around and you will come off as professional. As far as figuring out what a project is worth, thats tough, you need to add in O&P (overhead & Proffit) your time you spend designing a project (which can be sustancial). If you can I enter in to a seperate Design Contract at an hourly rate (if its a custom job and you will find out their budget) this way you will be on the same page before the project starts and before you quote the cost of the final project, least that way if they find it to expensive you at least get paid for your design time and they have drawings that they are free to get someone else to quote on, most of the time they come back to me and my price.


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## woodspark (May 8, 2010)

Hey robertp! I don't mind being a monkey if I can do what I love. Why can it be dangerous to do something you like for a living? The other option is to do something you DON'T like for a living. That sounds like slavery to me!


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## fge (Sep 8, 2008)

Rhett made a good comment with the business being like a dog. We have not gotten big by any means but that does not mean I don't desire to grow our business but I wonder if getting to big will be more pain then it is worth.

Just an update, when I first posted on this forum, I was about 7 days removed from accepting a lower paying kitchen. Well, now that it is over with, looking back, sure I would have loved a fair price and I still bite my tongue since I really feel we did not get paid a fair wage. With that said we were blessed in many ways:
1. The customer and her husband gave us more compliments then any of our past customers. 
2. They were extremely hospitable, they invited us to their grandson's graduate party.
3. The project manager, who himself is a builder, made many compliments himself, he even stood their in the kitchen looking and said, "I am just admiring your cabinet work". Before he left, he came to me and asked for my information to ensure he had me on his future remodels/new construction builds. He told me he actually has a job that is new construction coming up soon.
4. Plus I gauranteed myself a glowing recommendation!

The job was a blessing in many ways. Anyway, I still wish I got a decent pay for job.

Later,

Jerry


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## robertp (Jun 6, 2010)

Hey Div,
What I mean shouldn't be taken to seriously but I'll clarify. Sometimes the things you love doing either can't really make a living or else are super competitive. (lets say skydiving and film making.) The danger I refer to is that in turning your passion into a business it can be less enjoyable and you might find yourself doing a lot of irrelevant un enjoyable stuff to try to make the business work, you might be tempted to work for practically free because you like doing the work when a more cold rationale eye might make for better decisions.

I have heard it said that if you want to start a business it makes sense to start one you don't know anything about. This way you are inoculated from thinking you know what you don't know because you don't know anything and will have to hire someone who does. That way your job is to make the business successful not worry about baking the pizza or whatever.

For my own sake, I have always sufferred from trying to do what I enjoy, I often think I should have gone into finance and reserved wood work etc. for a hobby.

This is not meant to take anything away from anyone who has no regrets about their choices of career.


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## woodspark (May 8, 2010)

Jerry, well done there. lots of positive points recognized. It will pay back in the end, you'll see!

robertp, I hear you, you say many true things. Its all to do with balance and the motivation for doing what you do. There is a snake in every paradise! Your profile page is pretty blank, you also work the wood for a living?


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## huff (May 28, 2009)

Hey Jerry, sounds like a lot of good came from that job. Pay is one thing, but sometimes the marketing and feedback will make up for lost wages. I try to look at those type jobs as the cost of advertising and even getting paid to advertise. Sounds like you may get some good referrals and future work from that.

robertp has some good points, but one of the conversations that has stuck with me over the years was with the owner of a very successful computor software company. I was doing a project for him at his home and he told me he was invious of me and my work. I had to ask him why, since he lived in a beautiful home on the lake with new automobiles and didn't seem to have a worry to his name as far as finances where concerned. He said he could tell how much I loved what I did and even though he made a lot of money, he hated every minutes he was at his business. Money isn't everything!. I want to pay my bills, but I would rather look forward to going to the shop everyday then drive a brand new car. My passion for my woodworking has always been my motivating factor and probably why I will never be rich (money that is).


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## woodspark (May 8, 2010)

Hey John, SO true. I have had that experience many times. Only loads of money in the bank is a poor way to be rich….


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## fge (Sep 8, 2008)

Thanks for the comments Huff and Div. Yes, looking at it like we just got paid for advertising is a good way to look at it. I am sure we will benefit in the future from this job. Thanks all, this as been a really good forum…

I also like the point Huff makes about doing something you like to do. I worked around 12 hours in the shop yesterday and it felt gratifying at the end, though I was tired I was also excited as I neared the end of a small wall unit job we are doing right now.


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