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

  • Brandon Boushy by Brandon Boushy
  • 2 years ago
  • Blog
  • 2
Man at the woodworking shop

We were wondering how to start a woodworking business so we looked for a company that was already a successful woodworking business. We found John Blunt, founder of Seattle-based community woodworking shop IsGood Woodworks.

John started IsGood in 1992 without accepting loans or investors. Over the years John grew IsGood from a small, self-funded contract woodworking business into an industry-renowned community woodworking shop that generates approximately $2 million in annual revenue.

Woodworking is an undeniably profitable industry. In fact, the US woodworking industry was already valued at $258.5 billion in 2018 and is expected to reach an astonishing $291.3 billion by 2024. For those who are highly skilled, woodworking is a lucrative industry. Starting your own woodworking business is rewarding for 3 reasons:

  • You are your own boss when opening a woodworking business
  • Starting a woodworking business provides an amazing revenue stream
  • Opening a woodworking business connects you with your community and other business owners.

If you’re ready to start the journey of opening a woodworking business, follow this step-by-step guide on how to start a woodworking business. Let’s get started by discussing how to develop the shop skills necessary to become a world-class woodworker.

Step 1: Develop your woodworking skills

The first step to starting a successful woodworking business is to develop your woodworker skills.

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.

You should also check to see if your area has any woodworking businesses like Is Good Woodworks where you can become a member and participate in woodworker workshops and classes. If you really want to know how to start a woodworking business, there is no better way to learn than from a small woodworking business owner.

Keep reading for information on what type of small woodworking business opportunities there are.

Step 2: Ideas for Starting a Woodworking Business

Employees creating great ideas for business

In addition to developing the skills necessary when opening a woodworking business, you’ll also need to decide what kind of woodworking business you will open. Woodworking businesses typically fall into several categories:

  1. Custom Furniture Business – Building furniture that is more ornate in design
  2. Cabinetry Business – Building storage spaces for a home
  3. Craft Business – building artistic trinkets, jewelry, and other items out of wood
  4. Carpentry Business – Building frames of house, windows, and doors according to local code.
  5. Business Focused on Finishing Work – Working on floorboards, baseboards, and other decorative parts of houses.
  6. A Woodworking Incubator – IsGood is basically a woodworking incubator. It provides tools and wood for other creators who need a space to start a woodworking business. If your area doesn’t already have a woodworking incubator, this may be a perfect opportunity for small business owners.
  7. Check out Medium’s Woodworking Blogs for other ideas about opening a woodworking small business.

Which type of woodworking business you want to start will probably be impacted by the demand for the service or products in your area. Let’s look at some frequently asked questions about woodworking.

Who are the major players in woodworking?

According to FDMC 300 annual report, a report by Pollmeier that tracks the sales of cabinet, furniture, millwork, store fixture, home organization, components, and other wood products industries, the top 5 woodworking companies are:

  1. Ashley Furniture Industries Inc. – $6.32B Furniture
  2. Steelcase Inc – $3.724B Furniture and Interior Architecture Products
  3. Andersen Corp – $2.5B Millwork, Windows, and Doors
  4. Herman Miller – $2.486B Commerical and Residential Furniture and Storage Systems.
  5. Jeld-Wen Inc – $2.475B Wood Windows and Doors, Millwork, Exterior, and Interior Doors

Furthermore, revenue has to exceed the following amounts to be one of the top woodworking businesses owners:

  • Top 15: $1B
  • Top 25: $400m
  • Top 100: $75m
  • Top 300: $10m

As you can see it doesn’t take insanely high revenue to break into the top 300 woodworking business list.

John makes around $15k/mo ( $180k/year). Anyone willing to put in the hard work can make money when you start your own woodworking business from your wood products and woodworking skills.

What is the industry outlook?

IBISWorld, estimates wood product manufacturing is a $6 billion industry, and the top 50 companies only control approximately 30 percent of the market. That means there is $4.2 billion left for small woodworking businesses.

According to Globe News Wire The construction industry will be growing by about 2.2% for the foreseeable future, but business owners may find challenges in the woodworking business due to labor and lumber shortages.

This suggests that those wondering how to start a woodworking business should factor in higher than normal inflation until the woodworking supply chain stabilizes from pandemic disruptions.

Step 3: Identify the Ideal Target Market

A man holding an iPad with a cup of coffee on his desk

When starting any type of business, you must identify your ideal target market, understand that market well, and know how to reach them if you want your woodworking business to succeed. Otherwise, you might not generate enough revenue to keep your doors open!

A great way to identify and conceptualize target markets is creating buyer personas – in-depth, accurate (yet fictional) descriptions of the ideal customer or client you’d like to sell to when starting your woodworking business.

By creating buyer personas, a business owner can paint a thorough picture of the client base to sell your products.

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).

Customer Base Example 1: 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).

Making Facebook ads (digital) and placing flyers near office buildings or in industry-related publications (print) would be useful for reaching this 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.

For more hacks and tips watch another interview we’ve done with Daniel Westbrook, owner of Westbrook Carpentry and Millwork:

Another client base might be real estate wholesalers who can refer you to contracts they recently sold.

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

Step 4: Create a Woodworking Business Plan

Use the knowledge you compiled in step 2 to create a comprehensive woodworking 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 was:

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.

Regardless of your situation, your business plan should be adaptable so it can grow with your woodworking business. Just make one!

Identify Potential Challenges You’ll Face as a Business Owner

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 when starting a small business. 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 5: Figure out Your Funding Sources and Budget (i.e., Fund Your Woodworking Business)

A lady drawing on a white notebook

There are two essential financial components when it comes to starting your own business –budgeting and finding funding.


Similar to budgeting in your personal life, creating and maintaining a professional budget is a vital component of starting a successful business. The budget should include:

  • Costs associated with business licensing
  • Costs of any tools and equipment you need
  • Costs of liability insurance to protect your business if something goes wrong.
  • Employee costs
  • Costs of daily operations
  • Taxes
  • Paying yourself

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

Another budgeting factor you need to consider now?

Rent. In fact, John says:

Rent is the biggest ongoing expense for his company.

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

Budgeting resources:


You should have figured out how much funding you need based on the budget for your woodworking business, but you can learn how to start a woodworking business without learning more about the funding types.

For funding, you’ll typically want to know how you will cover at least enough to cover the startup costs and the first year’s operating expenses. You can do this through a combination of any of the following:

  • Personal funds/personal assets – Most common way business owners start a business.
  • A loan from family or friends – If your family can afford to help and believes in the business plan, they may be willing to.
  • Funds from a business partner – A business partner can help with the funding but will get a percentage of the earnings. In addition, multiple business owners may complicate decision-making.
  • Government programs – There are often government grants for minorities, women, and economically disadvantaged areas. Check the SBA site to see if you qualify.
  • Crowdfunding – Pitching your idea and getting retail investors to fund your company.
  • Credit cards – Be careful because of high-interest rates, but if you can pay the balance each month, this may be a great way of funding.
  • Home equity loan – Taking equity from your home is another option to fund a business especially if current interest rates are lower than your current interest rate.
  • Business loan – check out our partners
  • Rollover for business startups (ROBS)

You might need to self-fund like most entrepreneurs do. 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 that has a lot of good information about getting funds when starting a business.

Keep reading for how to pick a name when your start a business.

Step 6: Pick a Woodworking Business Name

An orange and a black business card

There are several key components that go into the creation of a good woodworking business name. Some of the primary considerations of picking a business name include:

  • Does the Name explain the products a woodworking business makes?
  • Does the name hint at the business location?
  • Does the name make the business easy to remember?
  • Is the business name easy to spell?

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.

You might want to include the word “furniture” if you make custom furniture out of wood, but if you make artistic wood products, you might want to include the word “Craft” in the name when starting a craft business.

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

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 7: Create a Legal Structure for a Woodworking Business

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!

It is crucial that a woodworking business make it a point to follow all legal requirements when starting a business. Depending on the kind of business you start, you may be working in other people’s homes or have employees that could get hurt while working with wood, power tools, and other equipment.

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

Develop a Legal Structure

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.  Our partners at Better Legal can help you set up your business legal structure.

Sole proprietorship

A sole proprietorship means 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.

If someone gets hurt, it will impact your personal life because your personal finances and your business finances are tied together. you can lose everything from one accident that occurs when someone is working with wood products. It’s just not worth it.


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.

Limited Liability Company

LLC blocks and a laptop on a desk

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.  Limited liability companies can be single or multi-owner LLCs, making them a great way for a woodworker to start a business.

LLCs will typically need to have an operating agreement especially if the business is a multi-owner LLC.

Most woodworking business owners are encouraged to establish their business as an LLC because of the heightened risk of product liability, workplace injuries, and property damage.


Establishing a corporation means limited personal liability protection and tax benefits. However, corporations are required to follow more operational guidelines than LLCs. They also incur double taxation, meaning you’ll have to pay income tax and corporate tax.

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.

Some of the most common requirements for a woodworking business include:

  • Sales Tax Permit
  • Unemployment Insurance
  • General Liability Insurance

Keep reading for references on how to make sure your furniture or craft business is running legally.

Sales Tax Permit

Most states have a sales tax, and you need to adhere to their requirements. This blog isn’t the place to discuss the permits for all 50 states, but Avalara has a guide on Sales Taxes. Check it out.

Some states will only charge tax on the material costs, while some will charge tax on the wood products and the revenue from labor. Before you start your business, make sure you understand how sales tax works in your area so you don’t pay too little or too much.

Unemployment Insurance

Unemployment insurance protects employees if they are laid off. While we hope your woodworking business will not have to lay off employees, recessions occur. The U.S. Chamber of Commerce has a ton of information on unemployment and also offers links to each state agency that handles state unemployment.

You’ll have to pay $420 per employee on a federal level plus any state UI.

Business Insurance/ Liability Insurance

Business insurance is necessary to protect woodworking businesses when accidents occur. The primary types of business insurance include:

  • Business General Liability Insurance – For when costly damage occurs to a person or their property.
  • Professional Liability Insurance – If you do the structural analysis for a home and then the structure collapses you might need this type of business insurance.
  • Cybersecurity insurance – if your woodworking business handles sensitive data like credit cards, social security numbers, and other information hackers might want you might want this type of business insurance.

Most of these types of business insurance should be readily available from your local insurance agent.

Now that you are familiar with the legal requirements of starting a woodworking business, let’s look at some of the things you’ll need to do before your woodworking business is ready to take on clients.

Step 8: How to Start a Woodworking Business

Here’s the deal: starting a woodworking business requires a lot of leg work. You can’t run a successful woodworking business without considering:

  • Find a Location
  • Purchasing tools and equipment
  • Materials costs
  • Implementing the business systems
  • Following safety and ethical business practices
  • Establishing a pricing structure

There are many moving parts when you start a woodworking business. John told us some of the most challenging aspects of how to start a woodworking business including:

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

That means most of the skills John needed to learn weren’t the operation of power tools and the basics of running a workshop. They were the soft skills of business management.

For extra help understanding the process, of how to start a woodworking business, check out our step-by-step YouTube guide on how to start a business!

Keep reading to learn how to find a location for a woodworking business.

Find a Location for your Woodworking Business

Finding a location for your woodworking business will often need to be done sooner or later. You might be lucky enough to start a woodworking business from home, but as a small home-based business grows, new business owners will need to find a location for their woodworking business.

That said, it’s better to establish your funding sources, budget, and legalities first. It can be helpful to research the costs of a location before you start a woodworking business because customers are often resistant to paying higher prices because you purchased a workshop.

Include the costs of starting a business location in your pricing method, which we’ll discuss later.

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.

Acquire Tools and Materials for Woodworkers

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

Before starting your woodworking business, consider obtaining the following tools and equipment to work with wood:

Table Saw

A table saw is the first piece of large equipment you should purchase as a woodworker. A woodworker will need a table saw to make precise, straight, smooth cuts on wood boards of different sizes.


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 wood products when on a job site or in tight areas where power tools may be more dangerous.

Orbital Sander

An orbital sander is a handheld sanding power tool and a cheaper, easier-to-use alternative to a belt sander. Belt sanders move more quickly and abruptly along the wood, so orbital sanders are better power tools for new business owners that are still developing their skills.

Circular Saw

The circular saw is one of the most versatile tools you can have in your shop. Circular saws can be bought as stationary or portable tools. These tools serve many different purposes but are particularly good for cutting large wood boards.


The king of tools. 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 cheap tools.


Routers are handheld tools that can be used to carve patterns, designs, and grooves across multiple pieces of wood. Even better, you can use these tools to recreate patterns from broken pieces.


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 of these tools 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. These tools are essential when working with wood in customers’ homes.


Chisels and mullets with a wooden handle on a table

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 high-quality set. These are great when building custom furniture or small wood products that need exquisite detail.

Measuring Tape

As the most affordable item on this list (like $10 affordable), the 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

If the job involves finishing work, a planer is an arguably essential tabletop tool used to trim the wood down to a consistent thickness. Be careful with planers, though, as it’s easy to accidentally waste wood while using them.


Somewhat similar to a planer, a jointer is used to produce perfectly flat edges on wood boards so that they can be connected edge-to-edge. Some woodworkers call this tool a necessity, while others avoid it.


Whether you are a home-based business working out of your garage or a busy workshop, you MUST have a dedicated bench for conducting your woodworking projects. The best part? You can make your own out of wood for under $200! Check out this super sweet rolling workbench with extra storage space for wood, tools, and other commonly used materials.

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

Material Costs

Material costs will include:

  • The cost of wood
  • The cost of dowels
  • The cost of wood glue
  • The cost of screws and nails
  • Cost of stain/paint and other types of wood coloring
  • Cost of sealants
  • Other wood materials and accessories

For each job, you’ll need to consider the materials you need and the cost associated with them. If you want a good reference point for materials cost in different industries, check out the Ready Ratios website for the typical gross sales margin:

Gross Margin=(Sales-Expenses Attributable to Sales)/Sales

Depending on what type of products you sell, the Gross Margin will be between 10-40% of revenue. Businesses will often sell products based on (2.5x Cost of Goods Sold) to make sure that the gross margin will guarantee the gross margin creates the profit they want for each product they sell.

Check out this Lumen Learning tutorial on estimating projects for custom furniture to understand more about estimating based on material costs.

Keep reading for tips on how a woodworking business manages its customer base.

Hire Woodworkers and Other Employees

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

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

Pay the employees of your woodworking business.

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!

Get an EIN for Your Workshop

Every business operating in the United States needs an employer identification number. It doesn’t matter if you are running a home business, operating on a free business license, or trying to create the next billion-dollar furniture business, you have to have an EIN.

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.

Maintain Tax Filing Requirements for Your Woodworking business

An iPad, calculator, and notebook on a desk

As a new business, 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.

Follow 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 (OSHA) standards enforce workplace safety and are 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.

Implementing the Business Systems for A Woodworking Business

Before opening a woodworking business, you’ll need business systems in place to:

  1. Sell your products (typically a website)
  2. Manage customers information
  3. Accept payments
  4. Keep track of inventory
  5. Manage human resources.
  6. Marketing Systems

Let’s look at each of these to help you understand how to start a woodworking business.

Sell your products (typically a website)

When you start a woodworking business, you will need to have a website. It provides a place for your customers to interact with your business. What type of website you’ll need depends on whether you are selling products online or just creating a web presence.

eCommerce: Sell products online

If you’ll be selling products online, you’ll need an eCommerce site like those found on Shopify. These sites have extensive backends and APIs to make conducting business such as managing inventory, accepting online payments, and handling sales tax requirements easier.

In addition, e-commerce sites have product pages, collections to classify products such as wood jewelry, wood furniture, and home decor.

Websites to maintain a web presence

If you aren’t selling products online, you should still have a website, but it won’t need as many features. Websites are one of the best ways to create a web presence and are easy for a business to maintain.

All they really need is some pictures, descriptions of your services, some information about your company, and ways to contact you. Check out our blog How to create a website to learn more about building websites.

Manage customers information

You’ll need to keep track of customers interactions with your business. Maintaining customer data is normally done through software called a CRM (Customer Relationship Management). Capterra is a great place to read reviews of CRM to establish which will work best for your business.

CRM can be integrated with email, phone calls, payment processors, your website, and almost anything else that is software-based.

Accept payments

Accepting payments for a woodworking business is typically done 3 ways:

  • Through website
  • Through a Point-of-Sale System (POS)
  • Through a mobile card reader

Depending on your business model you may need all three, but many businesses only need one or two of the option. For instance, if you don’t have a store a customer comes to, you can skip the POS.

Paypal handles most small business payments, but Square, and other providers are available as well. Until you are making over $250,000 there is not much difference between the payment processors. If you scale past that, some of them offer custom rates.

Keep track of inventory

Keeping track of inventory can be a real challenge especially for a woodworking company where you have oddly shaped pieces of wood. Some of the aspects you should track in woodworking include:

  1. Purchased materials
  2. Scrap that will go to waste (Unless you are running a business like John that lets other craftsmen use the scraps in exchange for their membership dues).
  3. Finished products.

Each of these will go into your accounting. There are various ways to monitor them including:

  • Hand counting
  • Using scales to detect changes in weight
  • Connection to POS so that every time a sale is made changes are counted.

A business will often need to use a combination of strategies to minimize the work from a manual hand count, but verify that the electronic strategies are accurate. Using multiple strategies can reduce hand counts from once a week to quarterly or annually.

Manage human resources

Once you have employees, your business will need to manage human resources. This includes aspects such as payroll, tax filing, and documentation. I suggest paying a human resource company to manage it once managing human resources starts taking more than 5 hours per month. Check out Capterra’s comparison of HR companies.

Marketing Systems

Man on is laptop doing marketing for his business

There are a ton of free marketing tools to use. You should familiarize yourself with them or hire someone who specializes in marketing woodworking businesses. Some of my favorite marketing tools are:

  • Google My Business – Shows a listing on Google Search and Google Maps for your business
  • Google Analytics – Data analytics that you can connect to all your web assets. ( Make sure to exclude your network IPs from the tracking)
  • Facebook Pixel – Facebook’s data tracking. If you are good with development, you can include a separate pixel for each product or service your woodworking business offers to have more detailed analytics.
  • Open Broadcaster Software – Great software for creating videos, podcasts, and live streams.
  • Social Media – Facebook, LinkedIn, YouTube, Instagram, Tiktok, Pinterest

All these providers have extensive help sections to help business owners and their employees learn more about how to maximize results with their software. Just go to their help features and it will give you great links for anything you need to know.

Print materials like business cards and flyers still work well for businesses too.

Follow Safety and Ethical Guidelines for Woodworking Businesses

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 inspect 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.

Establish a Pricing Structure

If you want to make money, establish a pricing structure that will lead to a successful woodworking business. 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 9: Have a Solid Brand and Marketing Strategy

An I-Pad with a white and a white illustration board on a desk

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 10: 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

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, which 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?

A man typing on his iPad at his desk

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 knowledge about how to start your own woodworking business – it’s time to take the next step!

If you after reading this, you don’t think starting a woodworking business is right for you, there are a ton of other options. You can:

  1. Buy a business through our Businesses for Sale
  2. Learn about starting a food truck
  3. Consider starting a screen printing shop.

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

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2 thoughts on “How to Start a Woodworking Business (and Make $15K/Month)”

  • Clark

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  • Sisey Bayu

    i have got good understanding on wood working .thank you


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