Which is the most profitable woodworking business?

This article will go over a list of factors and issues that will affect the question in this page’s title and tell you how to work out what the most profitable business ideas or products are for a woodworking business.

The answer would naturally be “it depends” because you would need to define if the business is a large well financed one, or small one-man home business.

The obvious way to find out who is the most profitable is a simple Google search.

Perhaps the best answer to this question is for you to go and search for the businesses that are ranking on the top of the big keyword searches, or at the top of Etsy and even the top of “local Search” pages for core keywords. They are the ones getting the phone calls or direct clicks and orders from the websites.

What I am saying is this – Choose a profitable and popular product to manufacture and then build your online properties up to the point where you outrank all opposition. You win. (See a link at the bottom to get access to my free training courses on how to make the rankings online happen)

SEE THIS VIDEO FOR A LONGER EXPLANATION

searching for the big rankers via keywords

The most profitable carpentry or woodworking business is the one that can do the following things well.

• Choose the items that are the best sellers. See more on this below.
• Remember time taken to do production will drastically affect your profits.
• Minimize planning time, selling time and delivery time and focus on getting the greatest number of products manufactured.
• Keep an eye on trends – Currently, laser-cut products are doing very well, but there is a chance that the market will become over-saturated and (more likely) the buyer market trends will change, and they will switch to buying different things.
• Keeping to a single product line. IE just cutting boards or just Muskoka Chairs. That way your production system can become more and more efficient as you gain experience on that item’s best build processes sort themselves out.
• Sometimes the biggest profits come from the factories that are prepared to do what others cannot do. A good example of this is a range of kitchen cupboards with curved doors and curved islands etc. Your factory would have a high set-up cost while you create jigs and moulds (or whatever). But once they are working correctly, and the world knows what you can do, your opposition will probably never catch up.
• Finally, the quality of your tools is a massive part of profits. Blades that cut accurately and neatly etc. will save you time in the final stages of your production and everything will be more efficient and therefore more profitable. (An example from my own workshop. I bought a cheap palm sander and in less than a year it is already dying. I keep forgetting to order a new one, and I now have products piling up at the end of manufacture simply because of a bad quality tool)

The methods I use to calculate which products a business should be manufacturing will be shown to you below the next few explainer paragraphs.

this section explained

A large furniture business.

When you are a big business the production line efficiency and other details like keeping the cost prices of your products as low as possible become one of the biggest parts of being profitable.

But I want to add this point. You will still need to know what the most popular furniture items are from a buyer’s point of view.

The more you focus on manufacturing what people really want and are willing to pay a premium price for that product, the better off your business will be.

Please see my (keyword) research system explained below for tips on how to focus on bigger profits.

A small home woodworking business.

This one is far easier for me to answer as I have a ton of experience here. I will cover a few points before doing the research section of this page below.

Is this your full-time income or is it part-time?

The difference between your business being a full-time business and a part-time one will affect all your product choices simply based on your need to be profitable.

Follow your passion. (If you can do so).

If you love chairs – then try to make those. If you are creative and could make your furniture have a bright Gypsy colouring that looks great, then do that. However, if you are a heavy metal fan and think that everybody would love sculls on all their furniture you might have a problem.

Keep doing research until you find that sweet spot of what you like and what is popular.

Research your products properly.

This is huge and a lot of people think they do not need to do this. A lot of the time they are right – they will pick a product that is popular and profitable, but even then, a bit of research would show adjustments to their finished products that could increase their profits. (For example – which wood stain method sells better? Or should you sell a product “raw” or give it 5 coats of a high-quality marine varnish? The research will tell you all this)

Get the right tools for the job.

If like me, you start your business with little or no cash capital at all, this lesson is hard-earned. I am restarting from scratch in Canada and continually buy cheap second-hand tools just so I can get something produced, knowing that within a year I will need to buy a better one.

A decent blade on your saw, a sharp chisel and 100 other things will make your manufacturing process better and faster and therefore more profitable.

Finally, the tool that does the job you need to do is the right tool to use, “making a plan” with other tools might make us feel like MacGyver but we are just hurting our business’s profitability by not having the right tool for the job.

Make your workshop efficient.

Those of you with some experience will know exactly what I am talking about here.

Have good electrical power points in the right places. Set up your power tools in the order that you would normally use them – IE table saw on the left, then your planer etc. and that way you will save time and therefore save money.

If you use a specific tool for a few different things get a second tool for the job. I use grinders for sanding with flap discs a lot but also use grinders with blade cutters to cut back (carve) and it is so logical to have two grinders set up for fast use. (And in my case allows the first one to cool down a bit ☹)

Use production-style systems even if your workshop is a one-man business.

While your scroll saw is set up, why not cut 10 of the items you are doing?

Or, when you are making a bench cut 10 x each item while you are at that specific machine.

This way you might take a bit longer to cut out the components for a piece, but tomorrow you can make the second one a lot faster than the first.

Yes, I know you need capital for the stock and that you also need the space to store your components, but if your product is a best-seller, then this method will probably double your production.

How to research your product to see if it is the most profitable.

Before we start, everything I suggest you do is listed here below and 99% of it will not cost you any money – just your time, but you might not want to do the work yourself.

If that is so, I might be able to do the research for you. (It will need 2 x 45 minutes zoom calls of your time and then many hours of my time to get done and would be a minimum of $600 and as high as $2000.)

One – Make a list of the items or products you would like to manufacture in your workshop. This could be as big a list as you like and the more research you do the more you will get valuable information and the research will more than likely prove to you exactly what you should be making.

Start a spreadsheet with all the items I am suggesting you research and add it all to the spreadsheet.

Two – List the tools that you have and or would consider buying. You will find during your research that some items will need specific tools. Small wooden toys for example might need band saws, scroll saws and Dremel-style carving tools. That is not a problem if you can get or have the tools.

Anyway, when you do a spreadsheet with your research results on it, seeing if the tools you won are enough on that list will help your decisions.

Three – Do keyword research for each item to see that there is a big enough demand for that exact item. Don’t just look up benches when your plan is a gipsy-styled carver and ornate swing benches.

Make notes of the number of people who search for that product. (I have a free course on keyword research for you if you do not know how to do this type of research).

The more you drill down in your keyword research the more you will get to an exact product that you know will sell well.

List all these details on your spreadsheet.

Four – Research the number of people selling that exact item. Then check where they are selling them. Try to see how many sales for the item are happening. This can be done on places like Amazon and Etsy. Reviews are often a great way to see if sales are good.

Five – Material costs – now do the work calculating the materials and more you would need to manufacture that item.

This can be an evil and time-thief task, so you might want to wait until you are down to a short list of products before you start doing this.

Six – Manufacture time. Try to estimate how long it will take you to make a single item. Walk through the steps you will need to take to get this finished.

If you are a total beginner, I suggest you go to YouTube and watch other people making the items you are considering for a better idea.

Seven – Working out your profit.

Sadly, in my case anyway, I always take far longer to make an item than I thought it would take to complete.

Add your material cost to manufacture cost (this will be your time estimate at a standard wage rate) and that should be your cost price.

I would then work out how much money I would like the business to make over a month’s period and divide that down to a time profit value. For example, if I would like the business to make a minimum of $6000 a month (you put your own numbers in here) and the item in question here takes 4 hours to make, then I would prefer to make a minimum of $50 an hour. Therefore, that item would need to sell for materials, plus labour plus profits. (Please note that sometimes you are the wages guy and can adjust accordingly).

Let me try to give you a real example from my own business.

My Canadian flags. I will use the small ones as an example.

They have no more than $5 worth of materials. Probably half that. Let me use $4 for this example.

I can cut paint and assemble about 8 of them in a full day’s work. That would be about $350 for the day plus the materials. I would round that off to $400. That would make their selling price $50 each. They can and do sell at that price, but I must confess that I will often discount them down to as little as $30. So, now you know why I do not own a yacht. Also, you might have noticed my courses are mostly free too.

Conclusion.

If you remember that I did say at the top of this page that working out what type of woodworking product or woodworking business is the most profitable is deeply into the “it depends” world.

All the research I am suggesting you do above here is not going to give you any final answers until you make and sell a few of your choices. I am sorry that it is the most definitive way to see who is the most profitable.

If I promised you a link somewhere in all this and it is either not there or you missed it, you are welcome to email me and ask for it.