How to Start a Woodworking Business (and Make $15K/Month)

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A carpenter taking measurements using a meter on a table.

Learn from a business owner who turned spare cash into a successful woodworking business!

For those who are highly skilled, woodworking is a lucrative industry. Starting your own woodworking business is rewarding for 3 reasons: it allows you to be your own boss, create a revenue stream, and connect with your community. 

Want proof? Take it from John Blunt, founder of Seattle-based community shop IsGood Woodworks.

John started IsGood in 1992, growing it from a small, self-funded contract business into an industry-renowned community shop that garners around $2 million in annual revenue. 

This is an impressive feat considering the fact that he essentially started with a $0 budget and took no money from lenders or investors.

Woodworking is an undeniably profitable industry; in fact, the US wood products market was already valued at $258.5 billion in 2018 and is presumed to reach an astonishing $291.3 billion by 2024.

Now, follow this step-by-step guide on how to start a woodworking business. Let’s get started!

Step 1: Get the Required Experience

A carpenter wearing a blue shirt and working with wooden plank

Simply put, the first step to starting a woodworking business that will actually succeed is to be a skilled woodworker yourself. 

John had already accumulated a lot of woodworking experience prior to starting IsGood Woodworks. In his own words:

My experience when I started IsGood was house framing to high-level finish carpentry to project management to woodworking in a shop environment.

If you’re already well-versed in woodworking, then move ahead to step 2.

If you’re looking to build your woodworking skills, the Woodworkers Guild of America offers many resources for people looking to learn the basics or expand upon their current skill set.

Step 2: Starting and Growing Your Business — Figure Out the Basics

Here’s the deal: starting a business of any kind requires a lot of leg work. You can’t run a business successfully without knowing how, so develop a list of everything that must be considered before you do anything else. 

For extra help, check out our step-by-step YouTube guide for how to start your own business!

There are many moving parts involved in running any kind of business, and that includes woodworking. When asked what growing his contract business entailed, John responded with:

Worker training, office systems and management, computer-aided design, public relations, sales, conflict resolution, shop safety, and production design.

Once you figure out just exactly what services your business will provide, it’s time to create a plan!

Step 3: Create a Business Plan

Use the knowledge you compiled in step 2 to create a comprehensive business plan for your woodworking shop. The SBA offers a helpful video guide for constructing a business plan


In addition to the SBA resources, check out these free business plan templates!

Here’s the kicker… In woodworking, building a highly organized business plan is somewhat contingent on funding. John’s advice:

When you start a business with good backing, you can build a structured business plan.

John started IsGood with practically no funding, but he was able to design a more flexible business plan that worked for him: 

I made plans of course, but I always designed with multiple contingencies to allow for rapid changes. I started out as a hunter more than a creator of work.

Depending on your situation, it doesn’t matter if your plan is set in stone or loose and adaptable – just make one!

Step 4: Figure out Your Funding Sources and Budget (i.e., Fund Your Woodworking Business)

A calculator and a black iPad on a desk.

There are two essential financial components when it comes to starting your own business – finding funding and fleshing out a budget.


You might be wondering how much it costs to start a woodworking business – well, that depends on you and your ability to find funding!

The first step is to figure out just how much funding you need. 

You might need to self-fund. This can be done by tapping into savings or a 401(K), reaching out to family and friends, or – in John’s case – making ongoing investments and working hard to accumulate the funds. As he explains:

I continued to work as many woodworking jobs as I could to fund the business without loans or investors.

You can always reach out to investors or apply for a small business loan, but it is important to bear in mind that IsGood Woodworks grew into a multi-million dollar shop from being entirely self-funded. 

What’s the bottom line? Basically, there is no right or wrong way to acquire funds to start a woodworking business – just acquire them!

The SBA provides a comprehensive business funding guide.


Similar to budgeting in your personal life, creating and maintaining a professional budget is a vital component of running any successful business. 

When starting a woodworking business, considering the cost of all required materials and tools is a must.

The initial cost for enough woodworking supplies to get your business going is estimated at $3,500; $2,000 for materials and $1,500 for tools. It gets better once you get going!

For reference, the startup cost for IsGood Woodworks was around $3,000. 

Budgeting resources:

Another budgeting factor you need to consider now? Rent. In fact, John says that rent is the biggest ongoing expense for his company.

Step 5: Pick a Business Name

There are several key components that go into the creation of a good business name.

Be Clear

When picking your business name, make sure it clearly states what your business does (i.e., woodworking/woodworks/etc.) but avoid being too specific – you don’t want to limit your opportunities for growth with a niche name.  

Keep it Simple

Don’t pick a name with complicated spelling or confusing presentation – keep it as short and simple as possible.

Stay True to Yourself

Whatever name you choose for your woodworking business, make sure it represents the heart of your company and aligns with the brand you’re trying to cultivate. 

Register a Domain

A man holding a cellphone with a laptop on his side.

When registering a domain name for your business, always go for a .com.

Both GoDaddy and Instant Domain Search are great resources for registering a .com domain name quickly and easily – as if that’s not enough, Instant Domain Search will show you what’s available in real-time!

John’s business name (IsGood Woodworks) is so great because it utilizes every component mentioned above. 

Once you’ve decided on your business name, registered a domain, and run it by those who will be honest with you, register it with the government. The SBA provides a useful guide for how to do this.

Step 6: Sort Out the Legalities

When starting any business, you absolutely have to sort out the legalities. This isn’t the fun part, but it is required if you want your business to take off! 

I’ve broken it down into two essential components for any up-and-coming woodworking business owner.

Develop a Legal Structure

This is crucial. You can develop a legal structure on your own, but it’s encouraged that you work with an accountant, attorney, tax specialist, or government official of some kind for the best outcome.

The most common legal business entities are sole proprietorships, partnerships, LLCs, and corporations. 

  • A sole proprietorship means just that – the business owner is entitled to all of the profit (i.e., pass-through taxation) but is responsible for all potential risk and debt. For this reason, a sole proprietorship is not the way to go when starting a woodworking business.
  • A partnership is any informally organized business owned by 2 or more people. Similar to a sole proprietorship, partnership owners are to be held personally liable for any actions taken against the company.
  • An LLC (Limited Liability Corporation) is a legal business entity that offers personal liability protection for the business owner while simultaneously offering pass-through taxation. 
  • Establishing a corporation means limited personal liability protection and tax benefits. However, corporations are required to follow more operational guidelines than LLCs.

Most woodworking shop owners are encouraged to establish their businesses as LLCs as they tend to face a heightened risk of product liability, workplace injuries, and property damage.

Obtain Business Licenses, Permits, Tax Forms, and Insurance

Regardless of the legal structure you implement, find out if your woodworking company requires any business licenses, tax forms, or permits to operate legally. 

This SBA tool will help you when it comes to applying for a business license or permit.

In an industry as physical as woodworking, you’ll need to apply for business insurance to ensure risk protection. A concise resource for how to obtain business insurance as a woodworking business owner is available here.

Step 7:  Find a Location

Man checking for the right location on iPad

Finding a location for your woodworking business can often be done sooner or later, or you might even be lucky enough to work out of a home-based shop.

That said, it’s better to establish your funding sources, budget, and legalities first.

There are a handful of factors involved in picking the right location – refer to this SBA business location guide for more information.

With some hard work and luck, you might be able to find a location as quickly as John did for IsGood. In his words:

I was able to find a spot and open doors within one month

Step 8: Acquire the Necessary Supplies

From backsaws to sanders, to wood itself – you cannot operate a successful woodworking business without acquiring all necessary tools and materials first!

Before starting your woodworking business, consider obtaining the following must-have supplies:

  • Table Saw – A table saw is the first piece of large equipment you should purchase for your shop. They allow woodworkers to make precise, straight, smooth cuts on both small and long boards.
  • Backsaw – Unlike a table saw, a backsaw is a hand tool that is characterized by a stiffened rib running alongside the edge opposite the cutting edge. Though it isn’t quite as precise as a table saw, it’s much easier to use on the fly.
  • Orbital Sander – An orbital sander is a handheld sanding tool and a cheaper, easier-to-use alternative to a belt sander. Belt sanders move more quickly and abruptly along the wood, so it is best to start out here.
  • Circular Saw – The circular saw is one of the most versatile tools you can have in your shop, and it’s portable too! Though it serves many different purposes, it is particularly good for breaking down large boards.
  • Hammer – It might seem obvious, but having a high-quality hammer (or multiple) in your shop is essential. It will last you a long time and cause less fatigue than a cheap counterpart.
  • Router – A router is a handheld tool that can be used to carve patterns, designs, and grooves across multiple pieces of wood. Even better, you can use this tool to recreate patterns from broken pieces. 
  • Clamps – Clamps are a must when it comes to building projects in the shop, as they hold different components together before the final product is assembled. Always buy more than you think you need because you WILL need them all!
  • Dust Collector – If you want to maintain a clean, safe shop, you need to purchase a dust collector (which does exactly what it sounds like). However, you can always use a vacuum cleaner in the meantime.
  • Chisels – Chisels are inexpensive, highly useful handheld tools used to cut and shape wood. Because you’ll want them to be as sharp as possible, try to buy a set of higher quality.
  • Measuring Tape – As the most affordable item on this list (like $10 affordable), measuring tape is invaluable to a woodworker. Consider upgrading to a woodworker’s ruler or measuring block after a while for more accurate measurements.
  • Thickness Planer – A planer is an arguably essential tabletop tool used to trim boards down to a consistent thickness. Be careful with planers, though, as it’s easy to accidentally waste wood while using them. 
  • Jointer – Somewhat similar to a planer, a jointer is used to produce perfectly flat edges on boards so that they can be connected edge-to-edge. Some woodworkers call this tool a necessity, while others avoid it. 
  • Workbench – Last but certainly not least, you MUST have a dedicated bench for conducting your woodworking projects. The best part? You can make your own for under $200! 

For more information, here is an in-depth list of 27 essential woodworking tools.

Step 9: Hire Employees

An iPad and a cup of coffee on a desk

Hiring employees is more than likely going to be a necessity after some time – woodworking is hard labor. And after all, what business owner doesn’t want the opportunity to take a break every once in a while? 

Of course, there are a handful of expenses that come along with hiring employees. That said, it is imperative that you take the following steps: 


Employee compensation will be your biggest expense here – they want to make money just as you do. This expense shouldn’t be a problem if you’re generating solid revenue and don’t require much staff.

Because of the structure of his shop, John only has two employees working at IsGood Woodworks – the three of them are able to teach classes and run the business efficiently!


An Employer Identification Number (EIN) is basically a social security number for businesses. Just like an SSN, an EIN is necessary to have; you’ll need it to open a business bank account, file tax returns, and apply for business licenses. 

Apply for an Employer Identification Number (EIN) with the IRS – alternatively, call 800-829-4933 for more information.

Tax Filing 

As a new employer, federal and state guidelines will require you to keep a record of employment taxes for at least 4 years. Luckily, a complete IRS tax filing guide is available.

Federal Employment and Labor Laws

The DOL requires many small business employers to display poster notices for employees, either electronically or physically in the workplace. 

A comprehensive employer guide for how to display and distribute these posters is available on their website.

Other requirements 

  • The Federal Unemployment Tax Act (FUTA) requires any business with employees to pay a payroll tax.
  • Employment Eligibility Verification (Form I-9) allows business owners to verify the identity and employment clearance of every person they hire.
  • Meeting Occupational Health and Safety Administration (OHSA) standards enforces workplace safety and is necessary for any business (and highly relevant in an industry as physical as woodworking).
  • Worker’s Compensation Insurance is a must in woodworking, as it helps businesses avoid the cost of an employee’s medical bills and lost wages following a workplace injury. 

Step 10: Follow Ethical Guidelines

It’s time to get serious. As an employer, following safety and ethics guidelines is critical in the woodworking industry as you will more than likely have employees working under you in risky conditions.

In case you might be asking yourself what exactly  a “risky condition” is, physical dangers in this profession include:

  • Laceration
  • Severed fingers 
  • Skin and respiratory diseases (from wood dust and chemical exposure for finishing) 

Of course, there are many measures that you can (and should) put in place to avoid extreme worker injury and illness. Obeying ethical guidelines as a woodworking shop owner includes the following:

  • The development and implementation of written safety and emergency response procedures
  • Providing thorough worker orientation, training, and supervision
  • Executing a process for identifying, evaluating, and controlling any workplace safety hazards
  • Regularly inspecting your workplace, all equipment, and work procedures to help identify any potential hazards
  • Investigating accidents (or close calls) to pinpoint causes and prevent recurrences
  • Holding regular health and safety meetings for your workers
  • Keeping useful records related to workplace health and safety (training processes, safety discussions and inspections, and incident investigations)
  • Determining the extent of on-hand first aid required for your shop

The OHSA website provides a comprehensive list of woodworking safety guidelines that any responsible shop owner should follow.

Step 11: Establish a Pricing Structure

A lady searching for the right pricing for a product

If you want to make money, establish a good pricing structure. After all, this is an essential component to starting and managing a lucrative business. When it comes to pricing, there are 2 factors to consider above all else:


Conduct thorough research on top market competitors in the industry (e.g. Rockler). 

You can start by checking out the top 20 woodworking companies in North America and a longer list of woodworking competitors – look them up, examine their pricing models, and make yours even better!

Cost and Labor

Not only is it important to research the competition – you have to ensure that you’re making a profit off of whatever you sell. 

This informative guide from The Wood Whisperer provides new business owners with the perfect pricing formula: materials cost (+10%) + (hourly rate x project hours)

Step 12: Know Your Ideal Target Market

When starting any type of business, you must identify your ideal target market and you must know that market well. Otherwise, you might not generate enough revenue to keep your doors open!

A great way to go about this is by creating buyer personas – in-depth, accurate (yet fictional) descriptions of the ideal customer or client you’d sell to.

By creating buyer personas, business owners are able to paint a thorough picture of the client base they need to reach out to and how they need to do it.

Forbes provides the perfect detailed guide for putting together buyer personas.

Once you’ve identified your target market, it’s time to perform detailed market research on that audience to gauge their interests. This will help you decide what items to sell (and what materials you’ll need to sell those items).

For example: if your target audience is well-off adults aged 30-60, they might be interested in smaller household wood pieces such as rocking chairs, dining table sets, or ornate boxes and keepsakes.

What’s more is that after you’ve identified and researched your target market, you can create print and digital advertising materials that cater specifically to that market (and display them in spaces where that market is likely to spend time). 

For example: Making Facebook ads (digital) and placing flyers near office buildings or in industry-related publications (print) would be useful for reaching a middle-aged target market. 

If you build a solid enough client base, your business will reap long-term benefits from it. With IsGood, John built such a meaningful client base that it allows his business operations to come full circle. As he says: 

The number one entrepreneurial hack that works to create an extremely resilient community is to always go to my clients first when I have a professional need of my own.

If you think like John when it comes to client and market outreach, you’ll make the right connections and grow your business in no time!

Step 13: Have a Solid Brand and Marketing Strategy

A man holding an iPad and a cup of coffee

Having both a strong brand and a working marketing strategy in place for your business is crucial if you want to see real profit growth. 

When developing a working marketing strategy for your business, it will help you greatly to:

  • Create a social media following (Facebook, Twitter, LinkedIn, maybe even Instagram). Start a woodworking blog and invite those in your network to read it. Advertise it to your target audience.
  • Design a showroom in your shop, even if your shop is your own home. Build some of your key pieces and display them in a way that showcases their utility to customers. 
  • Send direct mail with shop information to new homeowners in your area. Invest in creating a booklet with samples of your best work to send out.
  • Rent space at trade shows, and make sure to choose those that your target audience is most likely to attend (e.g. home remodeling shows).

This Hubspot blog post is an awesome reference for small businesses looking to develop or improve their marketing strategy.

You can’t begin outreach until you look inward, meaning that you can’t implement a great marketing strategy without knowing your brand. 

Brand development is a vital component in starting and running any successful business; for brand strategy purposes, consider the following:

  • Brand Identity – Develop a strong brand identity by defining your brand, establishing clear company values to humanize your business, and differentiating yourself from other woodworking shops. 
  • Brand Strategy – Perform a SWOT analysis of your business to better understand yourself and identify industry threats, produce a clear narrative (where your business is at now versus where it’s headed), and construct a strong visual brand.
  • Brand Loyalty – Be transparent with your customers; provide authentic customer service, listen to and engage with them regularly (on social media and in-person), and always deliver high-quality products.

For visual brand development purposes, check out this woodworking business logo generator!

John does a great job when it comes to combining digital marketing for IsGood with community engagement. In his words:

We create accurate and educational content via our blog, videos, and social media and do our best to engage in the community and ensure our readers are receiving the highest quality and latest material.

Like John, try to prioritize digital strategy development – it is 2021, after all! Keep everything as up-to-date and relevant as possible to ensure audience engagement.

Both Canva and Piktochart are wonderful, easy-to-use resources for creating your own digital and print marketing materials. Want to know the best part? They’re free to use!

Step 14: Identify Potential Challenges

In case you might be asking yourself: “Will I face any trying challenges when starting my woodworking business?” – the answer is yes.

Without a doubt, any new business owner is going to face obstacles in the startup process – after all, challenges foster growth!

This article from Small Biz Trends details the 10 biggest challenges that small business owners face, from government regulation and tax compliance to generating cash flow and expanding client bases. 

Perhaps the challenge from this list that is most worthy of mentioning, however, is the 7th one: staying passionate. When asked about any mistakes he made in the process of growing his shop, John responded with:

I waited about 10 years longer than I should have to make the shift from contract work to building a community shop and educational venue. I am a much better fit for that than I am for serving the ultra-rich.

For John, Making the switch from contract work to opening his shop is what allowed him to remain passionate about his work and to grow IsGood Woodworks into a successful business in turn. 

John also noted that one of the biggest challenges he faces as a woodworking shop owner is balancing the needs of each community member with the needs of his community as a whole. As he says:

When you are in the business of helping others succeed, it is imperative to provide sufficient professional training with ongoing robust mentoring to ensure your students and mentoring clients avoid the pitfalls of failure.

Step 15: Make Your Business Stand Out

Money flows when your business grows, and your business grows when it’s noticed! 

For a small woodworking business, there are several ways to stand out among the competition and distinguish yourself as a worthy competitor in the industry. 

Find a Niche

A yellow sketch pad and a calculator and coloured pens on the side

Finding a niche that works for you is the key to operational success for small woodworking business owners.

Whether it be a product type (e.g., chairs, high-end frames, birdhouses, tables, keepsakes) or a skill set (e.g., restoration and repairs, because many woodworkers turn these jobs down), there’s a great niche for any shop.

Help Others

This method of making your woodworking shop stand out in the crowd may not seem as obvious, but it is just as necessary. 

After all, some of the best clients and professional relationships come from spreading your knowledge and sharing resources with others in the woodworking industry.

Simply put, think of it as networking with a little more generosity thrown into the mix.

John holds the process of helping other woodworkers close to his heart and attributes that to the success of his shop in comparison to others. In his own words:  

Every maker space that I have looked at requires a basic class to use the equipment, then leaves you on your own. In a sense, they are setting people up to fail as soon as they encounter a process that is new. Without available human advisors, you will not retain your clients, and you will not build community.

John became more successful than ever when he transitioned his business from contract work to a community shop that’s primary focus is helping others succeed. As he puts it:

IsGood Woodworks has evolved to reflect my true passion, which is helping others to succeed. We are now a community shop with classes, shop rentals, and robust mentoring.

What’s Next?

To recap this step-by-step guide for how to start a woodworking business, ask yourself the following questions:

  • Do I have the required skills to start a woodworking business?
  • Do I understand the basics of this process?
  • Do I know how to create a business plan?
  • Will I be able to acquire funding to make a profit/make this business lucrative?
  • What are the costs? 
  • Where will my business be located?
  • Will I be able to acquire the tools and materials needed?
  • Will I be comfortable communicating with clients?
  • Can I afford to hire employees when necessary?
  • Why am I starting a woodworking business?
  • Do I need any additional help or advice?
  • How can I develop a working brand and marketing strategy?
  • What exactly must I do to be successful?

By now, you should have all of the tools to know how to start your own woodworking business – it’s time to take the next step!

Let us know in the comments below if you have any questions. We’d love to help!

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