# Earning a living from wood working



## Tusses (30 May 2008)

How many of you do ?

What do you do ?

how do you market it ?

I want to !

Do people pay for 'fine furniture' or is it only woodworkers and antique dealers that recognize the work and attention to detail ?

I am well into VW's and my bread an butter work will be converting vans into campers and making camper interiors to sell separately. Its all pretty much pattern cutout, glue and nail/screw stuff tho - no place for dovetails :lol:

A few years ago I tried to sell repro antiques from a pitch in an antiques barn, but I found people didn't want to pay for the amount of work involved ??

maybe I need to be in a 'quaint' little village somewhere !

I see stuff for sale in the net at the right kind of prices - but it doesn't mean they sell !

any advice ?

ta

Rich


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## Tusses (31 May 2008)

:?: :?: 

no one want to give their secrets away ?

:?: :?:


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## skipdiver (31 May 2008)

Well i'm a joiner so i earn my living from woodwork but i dont think that is what you mean is it?I have built the odd kitchen and sets of wardrobes in my workshop and once fitted out a Peugeot Boxer van to turn it into a camper van for someone but whether i could get enough work to sustain a living purely from making stuff i dont know.I think it may be something you would have to build up to.Try and get some orders and do them in your spare time,slowly building up a customer base by word of mouth til you feel you have enough work to go it alone.

Just got my first commission for my new workshop today.Niece wants me to build some wardrobes for her.She works as a teacher and i suppose i could take some pictures of my work and get her to hand them around her school.Similarly,when i did a bespoke kitchen for another niece,i got a lot of feedback from her friends but didn't take it any further as i was too busy with my joinery work at the time.

I am also looking to do more home based work in the future as lugging my gear around different houses and building sites is starting to lose it's appeal.My good lady has suggested making some stuff and going to a few craft fairs or whatever and possibly setting up a website.I go to a lot of music festivals and some of them allow the setting up of stalls and even let you on the site for free.That could be one possibility for me,so if you give it some thought there are lots of avenues to pursue.


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## NeilO (31 May 2008)

I find its not a case of getting the work, but getting it at a price that pays for itself....

I recently got hold of a fair amount of reclaimed timber, and made a trio of coffee/occasional tables for our home, and did indeed have lots of comments for friends/family and visitors in general, but also find people are not willing to pay £40-50 for a coffee table.
now I know the wood didnt cost me the earth , but I would expect to be paid a reasonable amount for my time and effort and would say that a coffee table takes somewhere in the region of 4-6 hours work to complete (not all in one hit ) cuttting , planing, sanding, assembly, finishing.....

so why do they expect to get it for peanuts?
the likes of Ikea, Lidl, Aldi and the like that ship in from abroad, where the wood costs next to nothing and the labour is paid in pennies.


Thats why you cant make a living or profit from diy woodworking


I`m not really after making a living or a profit as such, just to pay for my hobby would be fine by me...making enough to buy the next lot of timber, and maybe save a tiny amount towards that next "I need" Tool...


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## Mr T (31 May 2008)

Hi Rich

The first requirement to being successful as a fine furniture maker is a spouse with a large income, a doctor, solicitor or merchant banker perhaps. Failing this, one must be in receipt of a large pension, perhaps from the services or a merchant bank. In the absence of the above, one needs a wide circle of wealthy friends and family prepared to buy your furniture.

This might seem a rather pessimistic view of things but it is true that it can be a struggle without something to ease your progress. I have estimated that to start from scratch as a furniture maker (ie no experience, premises or machinery) will require about £80,000 capital. Assume that you may need professional training £16,000 - £20,000, machinery £10,000, advertising publicity and web site etc £5,000, income for the first three years when you will not make any profit £40,000.

The other consideration is that making it a business will change your relationship to the craft, you will have to be more mercenary towards it, would this spoil it for you.

However it will mean that you are doing work (I hope) that challenges you, in which you will learn something new every day, that you will never clock watch (unless to check its not going too fast) and where you will get those "I made this " moments more often than you will keeping it as a hobby. 

Chris


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## Frank Drew (31 May 2008)

Rich,

I found Alan Peters' book _Cabinetmaking - A Professional Approach_ both good reading and absolutely accurate about what goes into setting up a professional shop. One thing he decided early on was to hire assistants, which spread the fixed costs over several income-producing benches. Unless you're so good, and well-known, that you can charge a king's ransom, it's tough making it as a one-man operation.

I don't know why this is, but there are several other crafts or artisan endeavors that at times can be priced at a significantly higher rate than cabinetmaking, at least here in the States. I once made a piece of furniture for a family who'd had some faux-painting done in their library; the fellow who did the work carried everything he needed for the job in a small box, was done in a short day, and -- this was twenty years ago now -- charged $2,000, more than I'd gotten for a piece that took me several weeks.


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## mister henderson (1 Jun 2008)

A good move for anyone thinking about doing fine woodwork for a living is to visit an antique shop. See what they charge for a table and chairs (or anything else for that matter) then consider how much you would need to charge for similar pieces. It can be quite frightening. Most antique stuff, the kind of thing you see in shops in places like Burford, sells for less than half of what a professional woodworker would need to charge.

In the past I have worked for many different people of the wealthy persuasion. When people like this want to furnish one of their houses they don't start looking for a local craftsman to build heirloom pieces for them. They go to the auctions and bid on antiques, or to the posher antiques shops, or if they want something modern they go to Harrods.

Furniture making is primarily a hobby activity. Even those people who claim to make a living at it are mostly doing so by teaching or writing or as Mr T points out, being supported by external sources.

Show me someone in this country who claims to make a living making fine furniture and I will show you someone who isn't telling the whole story.


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## OPJ (1 Jun 2008)

I read a comment (somewhere...?) recently that's stuck in mind since. It said that in order to justify the "high-prices" you charge as a furniture maker, you need to get the point across that Ikea stuff is only built to last around five-years max. You put all the hours in to making a piece of furniture so that you can confidently say that it will outlast your lifetime.

That makes a lot of sense to me, but I can't see a lot of clients actually taking that in when they're only looking to spend so little. :x 

If you want to make a living from making furniture, it appears to have to offer something unique that no-one else has done before. Or, what a lot of companies do now is to offer a fine furniture service along with kitchen cabinets and joinery. That could be the way to go - and, indeed, I may follow suit at some point... :wink:


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## BradNaylor (1 Jun 2008)

Hey Tusses,

Don't let these negative waves put you off!

Messrs T and Henderson are quite right, though. It is extremely difficult to earn a good living making 'fine' furniture. Generally speaking people are not prepared or able to pay the money necessary for pieces of exquisitly designed and made pieces of furniture. I'm not sure they ever were. Even Chippendale couldn't make it pay and went bankrupt!

It is still possible to make a good living making furniture, however. The secret is to embrace built-in or fitted furniture and the wonder that is MDF! To some this may seem a compromise on one's values; however the important thing is to pay the bills!

There are many people on this and the other forum earning a living from their woodworking;

Jason B
OryxDesign
Karl
Tim
JFC
Dom
Me
Senior
and several others 

One thing that we all have in common is that the bulk of our work would appear to be fitted furniture built principally from man-made boards and either finished with real wood trim or given a painted finish. 

I am sure that we would all prefer to be crafting fine pieces in solid wood - and from time to time such a job comes up - but the bread and butter comes from fitting cupboards into alcoves or building a run of wardrobes.

I like your camper van idea. This could work well for you as it is a niche market that few people are in. I have been talking to a local importer of American campers about doing the same kind of thing.

I disagree with Frank about employing staff. I have employed staff for the last few years but it is only now, working on my own, that I have started to earn a proper living. The key thing is keeping overheads *LOW!* 

By low I mean *really* low!

Ideally work out of a workshop at home. If you are going to have to rent somewhere try and find something you can share with another woodworker. I do this and it works great.

Marketing these days is easy. Build yourself a website and make sure that it comes up near the top of the Google rankings for your area. That on its own should bring in enough enquiries to get you started.

Figures are difficult but you should be aiming to turn out £1000 - £1500 worth of work each week. Material costs will take between 15% and 25% of this.

If you can keep your overheads down to £150 per week you can earn between £600 and £1125 per week on these numbers.

So yes, it is possible to earn a living from woodworking!

Cheers
Dan


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## mister henderson (1 Jun 2008)

Dan Tovey":1f5wl3yz said:


> Figures are difficult but you should be aiming to turn out £1000 - £1500 worth of work each week. Material costs will take between 15% and 25% of this.



VAT registration is required at £64,000 PA at the moment, so if you work 50 weeks a year then you need to keep sales (turnover) below £1,280 a week, otherwise you are going to be giving HRMC a lot of your money



Dan Tovey":1f5wl3yz said:


> So yes, it is possible to earn a living from woodworking!



Agreed, as you have made the distinction between _fine_ woodworking, and woodworking.

Somehow, though, I get the feeling the OP was thinking about free standing pieces rather than builit-ins


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## woodyone (1 Jun 2008)

I'm really glad someone has brought up this topic as i am a student doing a resistant matrials GCSE at the moment and hoping to go through the education system studying furniture making and then hopefull starting my own business. I have always wondered how it all works really and all the posts so far have been really interesting so keep'em coming   

Thanks for the advice

Woody.


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## BradNaylor (1 Jun 2008)

mister henderson":v8djty6u said:


> VAT registration is required at £64,000 PA at the moment, so if you work 50 weeks a year then you need to keep sales (turnover) below £1,280 a week, otherwise you are going to be giving HRMC a lot of your money



The VAT registration theshold is actually now £67,000. 

You are quite right that one should stay below this if possible. I estimate that having to charge VAT on sales would cost a woodworker working at around that level of sales over £140 per week!

I have heard that some scoundrels stay under the VAT radar by accepting payment in cash from certain clients and not declaring it to HMRC!

:shock: :shock: :shock: 

Cheers
Dan


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## skipdiver (1 Jun 2008)

I agree.The costs involved in fine furniture making are very high,especially the labour costs.People just dont want to pay for it and besides,most folk nowadays want to change their furniture every few years.We live in a fad driven throw away society,so making stuff from mdf like wardrobes is the way to go.Not ideal but better than your 9 to 5.


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## BradNaylor (1 Jun 2008)

skipdiver":3dwd8qyd said:


> making stuff from mdf like wardrobes is the way to go. Not ideal but better than your 9 to 5.



Exactly!

The main reason why someone should be self-employed is because they don't want to work for anyone else.

If you want to make fine furniture get a job with one of the high-end cabinetmaking companies that still exist, or do it as a hobby.

If you want to work for yourself you've got to do what the market demands - which these days is MDF wardrobes etc!

You can always make that Maloof rocking chair in your spare time - if you have any!

Cheers
Dan


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## BradNaylor (1 Jun 2008)

Tusses":2uezklxv said:


> :?: :?:
> 
> no one want to give their secrets away ?
> 
> :?: :?:



Far from it!

It's just that any pro guy would have been in his workshop at that time. Saturday is just another working day for the self-employed.

Sunday too, for many!


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## houtslager (1 Jun 2008)

> Saturday is just another working day for the self-employed.
> 
> Sunday too, for many!


 well said Dan.

I am on a coffee break now as I type :? Getting the final touches to a GII. sofa table - this with some help from another member is very nearly ready to be re-united with its owner in Oslo.

I work hard at my hobby ! but to earn a living wage here in Germany I rely on a lot of my old clients who want a piece restored, no matter where there are in Europe [ or USA for that matter ] I will offer to do the work, further to earning a living wage I make "utility" furniture from MDF. 

Occasionally I'll get a client that will want something made in REAL WOOD :shock: but when I tell the client how much ! they often need a chair to sit on, 
why ? you ask - 

well the timber will cost between 20 and 30 %

machining the rough timber a further 20%, then one has the other materials which can come too another 20%.

Then the real work starts, and that is where I have to earn a wage too. So, my wage is often 40 to 50% of the price of which I have to pay the fixed costs and the dreaded TAXMAN :evil: which, looking at the basic maths leaves with very little to have a beer with .  :?


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## Digit (1 Jun 2008)

> I have heard that some scoundrels stay under the VAT radar by accepting payment in cash from certain clients and not declaring it to HMRC!


Shocking! :lol: 
Any form of of self employment requires a certain degree of masochism. The hours are long, the rewards often meagre and the customers a Damned nuisance!
But it beats being a wage slave every time!

Roy.


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## Benchwayze (1 Jun 2008)

mister henderson":18ixr9d6 said:


> Dan Tovey":18ixr9d6 said:
> 
> 
> > Figures are difficult but you should be aiming to turn out £1000 - £1500 worth of work each week. Material costs will take between 15% and 25% of this.
> ...



I might be somewhat naive, but I thought that if you were 'VAT' Registered and paid VAT to the Treasury, you simply add that to your bill; the buck stops with the consumer?
I might be wrong of course, but that's what I was told. :? 

regards
John


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## Karl (1 Jun 2008)

Benchwayze":8q7n7sxz said:


> I might be somewhat naive, but I thought that if you were 'VAT' Registered and paid VAT to the Treasury, you simply add that to your bill; the buck stops with the consumer?
> I might be wrong of course, but that's what I was told. :?
> 
> regards
> John



That's true, but it also means (assuming all other things are equal) that you are 17.5% more expensive to the customer in relation to a non-VAT registered trader, meaning you will get less work.

Cheers

Karl


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## mister henderson (1 Jun 2008)

karl":1rlj8y5m said:


> Benchwayze":1rlj8y5m said:
> 
> 
> > I might be somewhat naive, but I thought that if you were 'VAT' Registered and paid VAT to the Treasury, you simply add that to your bill; the buck stops with the consumer?
> ...



Very well put. 

From a consumer's point of view, their concern is how much money is leaving their pocket, who keeps which portion of it is of no concern to them.


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## Mr T (1 Jun 2008)

Hi

I understood that you could reclaim the VAT on materials and some overheads, so you will not actually be 17.5% more expensive, is that so?

Some random observations, most of them pessimistic I'm afraid:

Dan's remarks about fitted furniture, MDF and £1500 turnover bear out my comment about turning your hobby into a business changing your relationship to the craft. For some it may spoil it.

Woodworking as a business requires a different mind set compard to the hobbyist. The hobbyist has the luxury to choose to make a piece with hand tools if they wish, because that is a nice way of doing it. As a business you are always looking for the most efficient way of working to a high standard, a difficult balance

Being self employed is not for everyone. You need an understanding family and a lot of stamina. You also need great self confidence, you have to believe you make the best furniture their is. You also have to have the same attitude to your business sense, as you may have to stake money on it (see my previous comments about start up costs).

It is true that the throw away approach to interior design and the French country look promoted by the glossies has made it difficult for fine furniture makers. But one of the unique selling points that we have is the relationship we build with the customer in order to make a piece just for them. Some (very rich) customers are prepared to pay quite a lot for that relationship. This is another reason for having great self belief.

Regarding training. I believe makers offering professional training at a price have a duty to be blunt with prospective students about what they may be letting themselves in for. "A New Career for you In 2008" can be misleading. Even after a year with a top maker very few people are ready to set up on their own. It would be interesting to see stats. on the drop out rate for graduates from these courses. It is better to get employed as a maker for a few years, then you can make your mistakes at someone else's expense rather than you own. 

Sorry to be a rather wordy wet blanket. I want to say that working as a maker is a great way of earning an income, even if it is small; but you should know the realities before you start.

Chris


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## ProShop (1 Jun 2008)

..


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## Tusses (1 Jun 2008)

I would be interested to know your mindset on how to use vat to your advantage. I had a computer shop for a few years and was vat registered, and yes - buying and selling, you can claim your vat back - but in a craft , you have to charge vat on your labor which you cannot claim for ?

to put a bit more detail to 'my' picture I will paste this post that I put on the other forum.....




_I am very into VW's (I have about 20) and I go to the shows anyway.

I bought 7 of the newer vans a few months ago (before the summer prices came ! ) and the prototype is nearly finished. Ive made patterns of the finished design, so the other 6 should go quickly.

I have been self employed for the past 12 yrs doing this and that - had a computer shop for about 5 years and hated it ! I did a few houses when the prices were going up at a silly rate !. I had a narrow boat shell built, as we now live by the canal, but I just sold that unfinished because the boating market has took a bigger dive than the houses ! I got out quick and got back my money so am happy with that one.

I keep coming back to wood tho. The only reason I haven't stuck with wood so far is because I havent found the bread an butter stuff to keep me going. Maybe the camper thing will be it ? Who knows !

Then I can 'create' whatever fine stuff I like and just offer it for sale in an online gallery or something with no worries about 'having' to sell it quickly (apart from the space needed to keep it ! )

I have just about all the equipment I need bar a few router bit sets for making door mouldings and stuff, and I have a small but workable workshop 16' x 20'_


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## BradNaylor (1 Jun 2008)

ProShop":3vfea4b1 said:


> And as for keeping below the VAT threshold :? :? :? .
> How the hell are you going to grow a business with that kind of mindset :shock: . i just fail to understand why people seem to be afraid of VAT, or see it as a barrier of some kind. VAT can in fact be beneficial if you learn to use it in the right ways.
> 
> 
> ..




Sure, if 'growing' a business is what interests you then you're going to have to break through the VAT theshold and join their club.

Most makers I know however, have no intention of or desire to 'grow' a business - the just want to earn a decent living doing something they enjoy. I have been VAT registered for the last 25 years; it is only now that I have downsized my operation that I can see how much money I have been throwing away to HMRC. Although I am no longer VAT registered my selling prices remain the same - in other words I have successfully put my prices up by 17.5%!

In a business such as furniture making the bulk of ones selling price is made up of ones own labour. The costs of materials and overheads is relatively small. Consequently the amount of VAT you can claim back is very small.

Anyone trading successfully at or around the VAT threshold is going to experience significant extra costs when they register for VAT - typically around £7500 per year - as a huge percentage of one's turnover must be paid over to the government. 

Those supplying retail customers will not be able simply to add the cost of VAT onto their selling prices as price resistance will be met. If no resistance is met one would be better advised simply to put one's prices up and take an extra day a week off!

My empire building days are over. I will never employ anyone, and I will never register for VAT again.


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## Escudo (1 Jun 2008)

On the subject of VAT if any members of the forum need a little advice they can always send me a PM. (I am a practising Chartered Accountant)

Proshop said



> VAT can in fact be beneficial if you learn to use it in the right ways.



This is indeed true. A good example is to account for VAT on a cash basis, in other words only pay VAT over (as part of completing your VAT return) when cash has been received. With careful planning you can engineer three months use of the VAT money before having to pay this over. 

The same is true of purchases. Claim input VAT back early by settling invoices for overheads and materials at the end of the quarter, not the beginning.

Hope this little "tit bit" helps.

Cheers, Tony.


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## ProShop (1 Jun 2008)

.


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## Benchwayze (1 Jun 2008)

mister henderson":3qw1zkgb said:


> karl":3qw1zkgb said:
> 
> 
> > Benchwayze":3qw1zkgb said:
> ...



Ahhh but the thing is Mr. H.. 
I would prefer to use the services of someone who is VAT registered. At least I can be 80% certain that such a person does a reasonable volujme of work and has done enought to remain in business; which tells me there is an expert at hand.

So it isn't everyone who goes for the least expensive option. 
Not all of us merely know the price of everything, but the value of nothing! 
Regards
John


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## MooreToolsPlease (1 Jun 2008)

I've been self employed for 4 years now, times have been hard, hours have been longer than anyone I know will care to believe but I wouldn't change anything.
One of the traps I fell into when I first started out though was to find ways of expanding and making things bigger than necessary.
When I figured out the best way to earn well was keep things small, things turned around big time.
Go for it, you wont regret it


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## mister henderson (1 Jun 2008)

Benchwayze":28qvslm5 said:


> mister henderson":28qvslm5 said:
> 
> 
> > karl":28qvslm5 said:
> ...



Well then I guess you are the exception that proves the rule.

I don't know who you are getting at with that remark about value, though, are your customers like that?


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## BradNaylor (2 Jun 2008)

Escudo":2m4cfyqn said:


> On the subject of VAT if any members of the forum need a little advice they can always send me a PM. (I am a practising Chartered Accountant)
> 
> Proshop said
> 
> ...



Tony,

I am sure your advice is excellent for those who have no choice but to be registered for VAT; my point is for those who are at trading below, at, or around the registration theshold.

For anyone selling basically their own labours to non-business customers VAT registration is a massive extra cost. This would include all tradesmen such as plumbers, electricians, plasterers, gardeners etc.

Lets say in one week I make a piece of furniture for someone and charge them £1000.

Without VAT registration the sums might go like this;

Selling price £1000.00
Material Cost £235.00 including VAT (£200 +VAT)
Rent/Rates £100.00 (no VAT)
Other Costs £58.75 including VAT (£50.00 +VAT)

Nett Profit £606.25



If I register for VAT the sums change somewhat;

Selling Price £851.06 (+VAT)
Material Cost £200.00 (+VAT)
Rent/Rates £100.00 (no VAT)
Other Costs £50.00 (+ VAT)

Nett Profit £501.06


So in this simple example VAT registration is costing over £100 per week! 

You might argue that I should charge VAT on top of my £1000 selling price. My counter argument would be that if my customer is happy to pay £1175 intead of £1000 I may as well charge them that anyway!

Selling price £1175.00
Material Cost £235.00 including VAT (£200 +VAT)
Rent/Rates £100.00 (no VAT)
Other Costs £58.75 including VAT (£50.00 +VAT)

Nett Profit £781.25

It's looking better and better!

As an accountant your clients generally will be VAT registered and so able to claim back the VAT that you add to their bill. My clients are members of the general public who cannot do this. Their only concern is the amount they have to write on the cheque!

Anyone working by themselves and considering taking on staff should study carefully the above examples and think about the implications. The extra turnover necessary to support the employment of an assistant will push most businesses through the registration threshold. The extra turnover *then* necessary to support the additional burdon of VAT could well necessitate the employment of a second assistant! 

Which would mean moving to larger premises...


AARGH!!!


... this is a route which more often than not ends in bankruptcy!

*Keep it small and keep it all!
*
Cheers
Dan


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## BradNaylor (2 Jun 2008)

ProShop":zz63vo5f said:


> This topic has been done to death a few times on the forum in the past and to me the same issues get aired over & over again
> 
> ..



It has hardly been touched upon in the time I've been around; most regular contributors to the forum are now relative newcomers, and will not have had the opportunity to discuss this topic.




ProShop":zz63vo5f said:


> Dan, No offence but................. ......VAT a Club?



Simply a figure of speech. Do you have anything constructive or interesting to add?

Cheers
Dan


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## BradNaylor (2 Jun 2008)

Benchwayze":3o3h7jqs said:


> I would prefer to use the services of someone who is VAT registered.




I guess that you are referring here to business to business services - ie you can claim back the VAT you are charged.

I can assure you that the general public does not share this view! When I was VAT registered I would estimate that around 50% of my clients offered to pay me in cash in the hope that I would knock the VAT off their bill.

Needless to say I always declined...



Cheers
Dan
:wink:


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## skipdiver (2 Jun 2008)

The point Dan made is a valid one.I have a mate who own a company making and installing UPVC doors windows and conservatories.The more his company grows,the more staff he has to take on,hence the more work he has to generate to pay the staff.He calls it a monster devouring everything in it's path and the very thing he created to escape the 9 to 5 is now a burden to him.He hates it and has tried to get out but his business partner wont buy him out.

The point i am trying to make is be careful what you wish for.Being self employed is a great way of making a living but it can also be a pain.I love doing the work but the other aspects are not so good.Dealing with customers is sometimes a PITA and you have to be pretty thick skinned.Keeping accounts and records,ringing suppliers,being let down on deliveries.The list of stuff that is annoying is endless but at the end of the day i wouldn't swap it for anything.

I've been self employed since 91 and would never work for anyone again,neither would i become VAT registered,just more of the annoying stuff to me.I keep it simple and only take on work i want to do but it has taken a lot of hard work to get to this point.I must admit though that both the ladies in my life(first wife and current lady) have been very supportive and taken up the slack financially when things have been tight.

All in all,the best you can hope for is that the pluses outweigh the minuses,and in my case they do.

Steve.


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## mister henderson (2 Jun 2008)

I've noticed that there is a lot of confusion about VAT, especially amongst those tradesmen who are in a position to consider it optional. Many unsophisticated chaps can only think about the VAT that they would be able to re-claim if they were registered, and quite often they opt for voluntary registration. That's fine if they are only selling to VAT registered people who can themselves reclaim the VAT, but as Dan has pointed out, a bad move if they are selling to private individuals

What is useful for people to grasp is that VAT is a tax on the value that has been added to the goods. That's what tradesmen do, they buy goods (for instance timber) then increase its value (buy turning the timber into a piece of furniture) then sell it to a customer. The amount of tax they pay altogether (subtract the input VAT from the output VAT) is equal to 17.5% of the value that they have added to that timber. In other words, the labour that they have put in has been taxed at 17.5%.

People who mostly sell labour (us if we are professional wooodworkers) do not want to have to pay tax at those levels, so should avoid VAT registration if at all possible


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## BradNaylor (2 Jun 2008)

skipdiver":2xjfjc9q said:


> The point Dan made is a valid one.I have a mate who own a company making and installing UPVC doors windows and conservatories.The more his company grows,the more staff he has to take on,hence the more work he has to generate to pay the staff.He calls it a monster devouring everything in it's path and the very thing he created to escape the 9 to 5 is now a burden to him.He hates it and has tried to get out but his business partner wont buy him out.
> 
> The point i am trying to make is be careful what you wish for.Being self employed is a great way of making a living but it can also be a pain.I love doing the work but the other aspects are not so good.Dealing with customers is sometimes a PITA and you have to be pretty thick skinned.Keeping accounts and records,ringing suppliers,being let down on deliveries.The list of stuff that is annoying is endless but at the end of the day i wouldn't swap it for anything.
> 
> ...



Wise words, Steve.

Couldn't agree more



Mr Henderson":2xjfjc9q said:


> I've noticed that there is a lot of confusion about VAT, especially amongst those tradesmen who are in a position to consider it optional. Many unsophisticated chaps can only think about the VAT that they would be able to re-claim if they were registered, and quite often they opt for voluntary registration. That's fine if they are only selling to VAT registered people who can themselves reclaim the VAT, but as Dan has pointed out, a bad move if they are selling to private individuals
> 
> What is useful for people to grasp is that VAT is a tax on the value that has been added to the goods. That's what tradesmen do, they buy goods (for instance timber) then increase its value (buy turning the timber into a piece of furniture) then sell it to a customer. The amount of tax they pay altogether (subtract the input VAT from the output VAT) is equal to 17.5% of the value that they have added to that timber. In other words, the labour that they have put in has been taxed at 17.5%.
> 
> People who mostly sell labour (us if we are professional wooodworkers) do not want to have to pay tax at those levels, so should avoid VAT registration if at all possible



More wise words, Mr H.

Cheers
Dan


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## Mr T (2 Jun 2008)

This little anacdote may help to illustrate how being self employed changes your relationship to your work.

A couple of years ago I was cleaning the first floor windows of our house, standing at the top of an extended ladder. Unfortunately the bottom of the ladder decided to slid away. A number of thoughts could have flashed through my mind as I plunged the 15 feet to the ground, but the only thought was "bloody hell I'm going to have to take some time of work"!

Chris


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## Mcluma (3 Jun 2008)

It is strange how this thread has gone into VAT,

This has do do with WW and if people would like to pay for fine furniture,

Well the question has to be, are you making your own, or are you making box standard off the shelf everybody can buy and you should not complain if people do not want to pay a lot of money as they can also buy this stuff at the local corner shop/ikea/MFI

If you make your own, be creatif, be bold, dare and you will succeed, and then you can charge the Gbp 400 pound dailly rate for you furniture Plus material

break-out / away of the run of the mill furniture, be a designer, use your head, use your heart.

Use different material to complement wood, like glas, steel, fabrics stone

make something unusual / make something contemporary,

Just make something more creatif, 

Go to very expensive furntiure shops and look arround, and then you see, that there is a good margin to be made, use new techniques, use new modern materials, (yes people like you made that furniture and make a good living)

Fine woodworkers have to step into the 21 century, incorporate AV equipment, lights, etc etc, just be different,

If you are making MFI/IKEA desinged furniture , you cannot charge the money (people do not see workmanship, people see how it would look in their house, and how it would make them feel,

BUT MOST OF ALL ------ HOW IT WOULD MAKE OTHERS FEEL IF THEY LOOK AT THEIR FURNITURE

AND KNOW ONE THING .. WHO BUYS YOUR FURNITURE, correct 80% are woman who make the decission, and they do not give a hood if you use dovetails, sliding mortises etc etc, just does it look right, and does it look better then the neighbours one, and yes they will pay the price,

no they do not pay the price for fine woodworking, but pay the price for design!!!!

if they want somthing cheap, they go to IKEA or MFI

My advise, GO FOR IT, you have the tools you have the skils, 

But be a desinger first


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## Tusses (3 Jun 2008)

Thanks Mcluma

very inspiring . It is how I feel - thats why I posted. I can design , I can also hide the odd dovetail away just for me !

I think I might try that, in tandem with some bread and butter stuff.

I definitely wouldn't enjoy working with mdf or furniture board etc for a living.

Cheers

Rich


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## bugbear (3 Jun 2008)

mister henderson":350u6z69 said:


> Furniture making is primarily a hobby activity. Even those people who claim to make a living at it are mostly doing so by teaching or writing or as Mr T points out, being supported by external sources.
> 
> Show me someone in this country who claims to make a living making fine furniture and I will show you someone who isn't telling the whole story.



Sounds about right. Conversely, I routinely see (decent) furniture in John Lewis (and other local posh department stores) at the sort of prices charged by cabinet makers.

Now, if the customer bought the item from a cabinetmaker it would be bespoke, whereas the department store version is off-the-peg.

I'm not talking crazy one-off design here, just tables of the right size, book cases of the right width for an alcove etc.

This being the case, at present prices all customers should be buying from cabinet makers. Given that they aren't, the cabinet makers have a marketing problem.

BugBear


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## woodbloke (3 Jun 2008)

BB - there is something in what you say and I know the sort of furniture you mean, fairly routine, run-of-the-mill sort of stuff, reasonably well made but with no great pretension to being stunning heirloom pieces...what I would classify as decent, well made stuff, sort of kit that you can see in M&S would be the example I'd use.
But _not_ fine furniture and there to me is the distinction. The individual maker_ ought_ to have the skills (*all* skills, woodwork, design and business) to be able to make this sort of furniture which is a *far* harder market to break into which is why so many fail who only try and do this sort of stuff. Some succeed (Wales and Wales, Savage and the Barnsley shop to name three) but I suspect that most makers get by with turning out more utilitarian stuff at a price point closer to that offered by the bigger commercial stores, but with the advantage of being able to give the customer a fairly broad base (within limits) of design concepts and materials - Rob


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## mister henderson (3 Jun 2008)

Women will usually be the first to tell you that they have difficulty in visualising things from drawings. When they are selecting items for their home, or even the home itself, they want to be able to look at it, feel it, walk around it, sit on or in it, to experience the item itself in every appropriate way. They can't do this from drawings.

Most women, offered the choice of 
going to a cabinet maker's workshop and havng a bespoke item made for them, from drawings that they will have to approve, ready in maybe 3 months, 
or of going to a furniture store of whatever type will suit their available budget, having a good look at maybe a dozen different items which might suit, and being able to have any of those items in their home tomorrow................ well, which do you think they are going to choose?


As for the type of furniture seen in shops? Well, I can guarantee you that virtually every item sold in a furniture shop will have cost the shop owner less than half of the price on the ticket.

If any woodworker fancies selling through shops the only feasible way of doing that is for them to own the shop itself, and to keep the profit that the shop owner is going to require for the substantial investment that they will have made before they even open the doors. To open a decent furniture shop, with a decent quantity of decent stock, in a nice area with adequate advertising in suitable publications would probably require £100,000 (for rented premises).


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## bugbear (3 Jun 2008)

woodbloke":1yzj6nn8 said:


> ...but I suspect that most makers get by with turning out more utilitarian stuff at a price point closer to that offered by the bigger commercial stores, but with the advantage of being able to give the customer a fairly broad base (within limits) of design concepts and materials - Rob



My point, limited though it is, is that people willing to provide this service, at this price, ought to put M&S, John Lewis etc out of (the furniture) business.

But they're not.

BugBear


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## compo (3 Jun 2008)

I pretty much well agree with you bb.

The trouble is that although a lot of people can see the difference and the advantages of using craftsmen built furniture, many are in this forum. 
Unfortunately it's the old adage of preaching to the converted.

However, there are a lot of people out there with a lot of money who understand quality costs. It's a global market nowadays.

The trick is to try and tell our story to the people who should be buying our stuff. This is the problem for a lot of makers. As already mentioned, it's a case of marketing our services and our trade in general.

I think woodbloke has a point, to a point. Yes, it would be lovely to produce only 'fine' furniture. However, everyone has to start somewhere. Even a ticket from Parham (example) bags of money or a huge, wealthy contact list are not guarantees of success. It's about finding your niche and developing your client base and unfortunately unless you are self sustainable, you will have to take on a few of the more routine jobs in the meantime. BUT, you never know, who knows who and where that last job may take you.

I too say stand tall, be different and creative, shout about the virtues of bespoke and ALWAYS do your best on every job and maybe, one day there'll be a run of only really good stuff. 

In the meantime... yes madam, of course I can make it with adjustable shelves!


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## OPJ (3 Jun 2008)

mister henderson":1cbhv72c said:


> Most women, offered the choice of
> going to a cabinet maker's workshop and havng a bespoke item made for them, from drawings that they will have to approve, ready in maybe 3 months,
> or of going to a furniture store of whatever type will suit their available budget, having a good look at maybe a dozen different items which might suit, and being able to have any of those items in their home tomorrow................ well, which do you think they are going to choose?



That's a very good point.

Once (*if!*) you become established with your own, unique 'style' of furniture, you could then look at setting up a gallery next to your workshop. Not sure what your wife might say if you "borrow" the living room though... :wink: If you search for cabinet and furniture makers in your area you'll probably find that more of the medium-sized companies have such facilities available to the public.


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## BradNaylor (3 Jun 2008)

Thanks to McLuma for getting this thread back on track - even though I was one of the culprits for sending it the other way!

You are quite right - fine furniture is all about design, not construction methods or the skilled use of hand tools. 

You are also right in your assertion that women are the main decision makers when it comes to home furnishings - and here lies part of the problem.

Mr Henderson rightly points out that women in general (and I'm on dangerous ground now!) find it difficult to make a decision based upon drawings. I'm not saying they lack imagination, but in the majority of cases they find it impossible to imagine what a finshed project is going to look like, even if the most detailed drawings have been prepared. :lol: 

The other thing you get to learn when dealing with a lot of women is that function takes precedence over form when it comes to furniture. Yes, it's got to look nice, but far more important is whether it is easy to clean!

This I feel, explains most women's obsession with fitted furniture. It's neat, it's tidy, there are no awkward nooks and crannies. Nothing can fall down the back.

Hence, as a furniture maker, the majority of the requests one gets are for fitted furniture. Even when husbands get involved and want a freestanding piece fot their study, it is normally for a specific purpose like housing a plasma telly or a drinks cabinet. Apart from stating a preference for a particular wood and style of door most clients are really not that bothered so long as it fits the purpose for which it is going to be put. Most of my commissions are gained after knocking out a 3 minute sketch in pencil on a sheet of A4. So much for the 'design process'!

Occasionally though, you meet the client that is different. Where the design is the principle concern and days - weeks even - are spent perfecting drawings and computer generated sketches for approval. Wood samples are prepared in a veriaty of finishes.

We have a name for this kind of client.




A 'pain in the pineapple!'

:lol: 

Cheers
Dan


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## bugbear (4 Jun 2008)

compo":bjfc0nhj said:


> I pretty much well agree with you bb.
> 
> The trouble is that although a lot of people can see the difference and the advantages of using craftsmen built furniture, many are in this forum.
> Unfortunately it's the old adage of preaching to the converted.



My (horrid) suspicion is that the sort of person who is willing to pay 800-1000 quid for an oak refectory table in M&S or John Lewis or Habitat doesn't KNOW that a cabinetmaker will do bespoke (sized) work for around the same money, and thinks thinks that commissioning a cabinet maker is for oligarchs only.

For example - if I were a 'umble customer, who'd seen a table in Habitat, but wanted a similar table 1 foot longer, how easy is it to explore the possibility of having a furniture maker do it?

How do I find a maker (bonus question: how do I find more than one, so I have a choice, without offending both of them?)

How would I (a potential customer) even know the CRUCIAL fact that custom work of this type is (in fact) available at around the same price as Habitat et al?

BugBear


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## mister henderson (4 Jun 2008)

Let’s have a chat about the actual figures that might be involved in making a living from woodworking.

First of all, let’s consider the overheads, and here I’m assuming that the cabinet maker is not starting with some natural advantages such as a large workshop in his back garden, or a wife who is a head teacher.

OK, to rent a workshop. Going to need maybe 500 sq ft, with another maybe 200sq ft for a showroom (which I consider essential, and for reasons already discussed). 700 sq ft at say £3.50 (we’re talking farm prices here) per sq ft per annum, lets say we can get the whole thing for £50 a week. Then the insurance and rates, maybe another £50 and then heating (got to keep that wood DRY) and electricity maybe another £50. I think I am being reasonably optimistic with these figures, BTW.

Now the advertising. I think you need to be thinking at least £200 a week here, as no-one is going to visit a farm workshop without having been told about it (in advertising philosophy, told at least 6 times).

There’s the car, or course. Volvo estate would be pretty much the minimum here, a long wheelbase van would be better. £30 pw sound reasonable? Don’t need to allow for petrol here because that isn’t overhead.

Wages. Good question. Let’s say £400 a week. I know one could manage on less, maybe, but that’s not going to allow for much of a mortgage payment.

So, all in all a NET profit of £800 a week is going to be needed in the above example. If we take Bugbear’s example of the table at around £800-1000, then we are going to need to make and (more to the point) SELL, more than one a week (and that’s a 52 week year of course) to make a living.

The above is why I say that, in general terms, it is not possible for a person to make a living in cabinet making in this country at the moment. Your mileage may vary.


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## big soft moose (4 Jun 2008)

mister henderson":3uxcnj12 said:


> Let’s have a chat about the actual figures that might be involved in making a living from woodworking.
> 
> First of all, let’s consider the overheads, and here I’m assuming that the cabinet maker is not starting with some natural advantages such as a large workshop in his back garden, or a wife who is a head teacher.
> 
> OK, to rent a workshop. Going to need maybe 500 sq ft, with another maybe 200sq ft for a showroom (which I consider essential, and for reasons already discussed). 700 sq ft at say £3.50 (we’re talking farm prices here) per sq ft per annum, lets say we can get the whole thing for £50 a week.



thats a good point , but anyone who is going from a hobby to a buisness (and i doubt many people are going to start a wood working buisness with no prior experience, will already have a workshop probably at home - so rent isnt an issue (tho usage/noise restrictions maybe)



mister hendersen":3uxcnj12 said:


> Then the insurance and rates, maybe another £50 and then heating (got to keep that wood DRY) and electricity maybe another £50. I think I am being reasonably optimistic with these figures, BTW.
> 
> Now the advertising. I think you need to be thinking at least £200 a week here, as no-one is going to visit a farm workshop without having been told about it (in advertising philosophy, told at least 6 times).
> 
> ...



also with the exception of "wages" which dont exist as such if you are a sole trader all of the rest is tax deductible (or in the case of larger items depreciable) so it isnt NET profit but GROSS.

and £400 per week gross wages = 1600 per month or £19,200 pa and many people who are in paid jobs pull down significantly less - tho you do have a point about mortgages , but then a lot of people casnt afford property anyway.

It may not be possible to earn a living as a cabinet maker - this not being my field i couldnt sensibly comment (i'm principally a turner) but it is possible to make a living as a general woodworker - for that you dont need the showroom and your advertsing is far less (my general woodwork is done in clients homes , whilst turnings are out put through craft fairs and shops)

the key is to keep your costs reasonable and not to take on the trappings of a bigger buisness (such as showrooms, large advertising budgets etc) if you dont need to - as some one said higher up , "keep it small and keep it all"


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## mister henderson (4 Jun 2008)

big soft moose":m0lket4q said:


> mister henderson":m0lket4q said:
> 
> 
> > Let’s have a chat about the actual figures that might be involved in making a living from woodworking.
> ...



I did specifically exclude large garden workshops, as a small one would be no good for general cabinet making anyway (refectory table in a 12x8 shed, I don't think so)



big soft moose":m0lket4q said:


> mister hendersen":m0lket4q said:
> 
> 
> > Then the insurance and rates, maybe another £50 and then heating (got to keep that wood DRY) and electricity maybe another £50. I think I am being reasonably optimistic with these figures, BTW.
> ...



I think you have misunderstood the difference between gross profit and net profit, whether something is tax deductible of not is irrelevant. Gross profit is simply put, the difference between what you buy the material for, and the money that you get for the finished article.
Net profit is the amount of profit which is left after all the overhead has been paid. This is all in simple terms, of course.

_Something _needs to be allowed for the WW's pay, how much would you suggest?


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## BradNaylor (5 Jun 2008)

mister henderson":1zhhdsvl said:


> OK, to rent a workshop. Going to need maybe 500 sq ft, with another maybe 200sq ft for a showroom (which I consider essential, and for reasons already discussed). 700 sq ft at say £3.50 (we’re talking farm prices here) per sq ft per annum, lets say we can get the whole thing for £50 a week. Then the insurance and rates, maybe another £50 and then heating (got to keep that wood DRY) and electricity maybe another £50. I think I am being reasonably optimistic with these figures, BTW.



I think you're about right with the size - 700-800 sq ft is perfect. However, while a showroom would be nice it is definitely not necessary. That 200 sq ft would be far better turned over to a finishing area, ideally with a spray booth installed.

There are ways of having pieces on display which don't involve having a showroom. For instance, an entire office can be built into a nice cabinet situated in the corner of the workshop, housing your PC, printer, phone, and files. Similarly, your 'brew area' can be on a beautifully crafted kitchen sink unit. Most people actually like to visit a working workshop rather than a showroom. A couple of examples of what you can do as outlined above backed up with a portfolio of photographs is more than sufficient.

You are being very optimistic with the rent - but you may be right about the price of farm buildings. See my comments below, however. I'll go along with your other costings, but what about telephone costs, consumables (router cutters, sanding discs, blade sharpening etc), accountancy fees, stationery (a LOT of printer cartridges) - the list goes on!






mister henderson":1zhhdsvl said:


> Now the advertising. I think you need to be thinking at least £200 a week here, as no-one is going to visit a farm workshop without having been told about it (in advertising philosophy, told at least 6 times).



£200 pw is a bit over the top. The 6 times rule may pertain in a normal retail business but as a cabinetmaker you are not trying to attract impulse buyers; you just need to make yourself easy to find when a person looks for someone who can make them some furniture.

The answer is a website which is easily accessible through local searches on Google and Yahoo. This is easy to do yourself using a simple web design package such as WebPlus - about £30 - and a little time spent registering your site with all the search engines and as many free directories as you can find. Costs - negligible.

A small ad under 'Cabinet Makers' in Yellow Pages also works well in my experience. Make sure it features your website address though. Cost - about £200 per year.

The other important thing to consider when attracting work is the location of your workshop. My premises are just off the high street of a suburban area of a large town on the outskirts of Manchester. It is on the main route to the wealthiest area locally. Although urban, there is a 'village' atmosphere like you find in many such places. For the last four months I have placed an 'A' board on the main road directing passers by to our workshop. The results have been astonishing! In that time that board has brought in orders totalling over £20,000. For an outlay of a hundred quid! Not only that, but my mate who shares the workshop with me and myself are now becoming accepted as the 'Village Carpenters'. Not a day goes by without at least a couple of potential clients popping their heads round the door.

None of this would happen if we were stuck out on a farm 10 miles away. Our experience suggests that it is better to pay a little more in rent to get a location with plenty of passing trade, particularly affluent commuters.




mister henderson":1zhhdsvl said:


> There’s the car, or course. Volvo estate would be pretty much the minimum here, a long wheelbase van would be better. £30 pw sound reasonable? Don’t need to allow for petrol here because that isn’t overhead.



The family estate car is fine. I use a Zafira. A tow-bar and trailer can turn it into a van at minimal cost. For big deliveries get a local 'Man and Van' in - about £30 per hour.

Accountants tend to class petrol as a 'cost of sale' rather than an overhead. I disagree. A lot of fuel is used making repeat trips to clients' homes and in my case to the timber yard - I like to select my own wood. I look at fuel as an overhead.



mister henderson":1zhhdsvl said:


> Wages. Good question. Let’s say £400 a week. I know one could manage on less, maybe, but that’s not going to allow for much of a mortgage payment.



20 grand a year? You could earn that at Tescos!

I think it is important to set oneself realistic but ambitious goals. A lot of my friends are tradesmen - electricians, plasterers, plumbers etc. On average, they earn between £500 and £800 per week. One regularly earns over £1000. School teachers and policemen of my age earn over £40k a year. I don't think it is unreasonable to expect to be able to earn at similar levels.

I *aim* to earn £1000 per week. Of course I don't always achieve it, but if you aim high you normally achieve more than if you aim low.

Things happen. Jobs take longer than planned. Mistakes get made. Days you planned to spend in the workshop are instead spent locating a particular size of Belfast sink (that happened to me last week!). So you need to build in a significant factor to allow for it. Aim at making £200 per day or £1000 per week and there's a fair chance that you'll make £750. That is how the costings should be based.





mister henderson":1zhhdsvl said:


> So, all in all a NET profit of £800 a week is going to be needed in the above example. If we take Bugbear’s example of the table at around £800-1000, then we are going to need to make and (more to the point) SELL, more than one a week (and that’s a 52 week year of course) to make a living.



The table's too cheap!

£1500 minimum.






mister henderson":1zhhdsvl said:


> The above is why I say that, in general terms, it is not possible for a person to make a living in cabinet making in this country at the moment.



Not true - plenty do it.

As I've said in previous posts though, you've got to be flexible on your definition of 'cabinetmaking'. Profit is the most important thing - not your own preferences on what it is you are going to make. 

Some of the most profitable work is the most dull. Relacement doors for fitted wardrobes in MDF and then painted, for instance. Before anyone turns their noses up at the idea, consider this;

Materials - £100
Time spent - 5 days including fitting
Price charged - £1500

This is an everyday job that the true professional jumps at. The important thing is to make a profit!!

In years to come, I hope to be doing less of this kind of job and more 'fine cabinetmaking'. I can see though, that it is only by establishing a profitable 'bread and butter' business that I will be able to allow myself the indulgence.




big soft moose":1zhhdsvl said:


> £400 per week gross wages = 1600 per month or £19,200 pa and many people who are in paid jobs pull down significantly less - tho you do have a point about mortgages , but then a lot of people casnt afford property anyway.
> 
> It may not be possible to earn a living as a cabinet maker - this not being my field i couldnt sensibly comment (i'm principally a turner) but it is possible to make a living as a general woodworker - for that you dont need the showroom and your advertsing is far less (my general woodwork is done in clients homes , whilst turnings are out put through craft fairs and shops)
> 
> the key is to keep your costs reasonable and not to take on the trappings of a bigger buisness (such as showrooms, large advertising budgets etc) if you dont need to - as some one said higher up , "keep it small and keep it all"



I said that! 

It doesn't mean that you can't aim high in terms of earnings, however!






bug bear":1zhhdsvl said:


> My (horrid) suspicion is that the sort of person who is willing to pay 800-1000 quid for an oak refectory table in M&S or John Lewis or Habitat doesn't KNOW that a cabinetmaker will do bespoke (sized) work for around the same money, and thinks thinks that commissioning a cabinet maker is for oligarchs only.
> 
> For example - if I were a 'umble customer, who'd seen a table in Habitat, but wanted a similar table 1 foot longer, how easy is it to explore the possibility of having a furniture maker do it?
> 
> ...




Judging by the amount of emails I get from all over the country making just such enquiries plenty of people are searching for cabinetmakers on the internet. You've just got to make yourself visible and explain in your website what you can do. 

My slogan is 'You draw it - I'll make it!

It works a treat. It also saves on the amount of time I spend drawing designs!

Cheers
Dan


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## Digit (5 Jun 2008)

The original question was about making a living from woodwork but seems to have wandered from the general to the specific, furniture making.
The answer to the general is 'yes', to the specific, 'very difficult'.
I know two people who work full time running such businesses and their bread and butter seems to be doors and windows in hardwoods.
Here in west Wales I think the original population must have been 4ft 8 high and 5ft 8 wide judging by the very non-standard door and window sizes.
Faced with a doorway at 5ft 6 high and 3ft plus wide timber costs are less of a problem than labour costs.
Windows can of course be PVC but frequently the planning authorities prefer timber in the older properties so these two have found a niche.

Roy.


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## big soft moose (5 Jun 2008)

mister henderson":3lxhaqi0 said:


> I think you have misunderstood the difference between gross profit and net profit, whether something is tax deductible of not is irrelevant. Gross profit is simply put, the difference between what you buy the material for, and the money that you get for the finished article.
> Net profit is the amount of profit which is left after all the overhead has been paid. This is all in simple terms, of course.
> 
> _Something _needs to be allowed for the WW's pay, how much would you suggest?



According to the tax office - gross is your buisnes's total income (ie the total ammount of money paid to you by your customers), net is your income minus the costs of your material and everything else which is deductible , depreciable etc - your tax is then worked out on the net ammount.

the fine detail of overheads , costs of sales etc have largly passed me by but the tax office seem happy with my simple breakdown (possible because i'm not making wads of cash , and the biz isnt my only source of income anyway)

Also being a sole trader not a ltd company which may keep things more simple

i'm not looking for a dispute about this , and am happy to agree to differ - i just feel that

a) the person starting out needs to adhere to the KISS principal (keep it simple, stupid) 

and

b) there are more options to making a living from wood work than making fine furniture (turning, carving, scrolling, greenwoodwork, garden furniture, fitting out boats, fitting out vans , making widows and doors , subbing as a chippy.... to name but a few)


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## BradNaylor (6 Jun 2008)

Without getting bogged down in pedantry, *gross profit* is your selling price less the cost of materials, and *nett profit* is what is left after you have deducted all your overhead costs.

So if you sell a cabinet for £1000 and the materials cost you £200, your gross profit is £800.

If your overhead costs during the time it took you to make were £150, your nett profit on the cabinet is £650. If you are a sole trader this is your 'earnings'.

If you trade as a limited company then you will be paid a salary by the company of say, £500. The company will also pay NI contributions on your behalf to HMRC of around £50.

So the company's nett profit on the cabinet is £100.

All this is very dull, but anyone starting their own business needs to have a grasp of it.

Cheers
Dan


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## lurker (6 Jun 2008)

A few years ago - I was earning a salary of £22K and was considering going freelance. This is not woodwork, as I would not stand a snowballs chance in hell of earning a living at that!

I sat down with an accountant friend to cost up my hourly rate and we came to a figure of £60 per hour to bring home the same money.

I needed no tools & equipment, just an office at home + a car.


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## Mcluma (6 Jun 2008)

lurker":4s6j6hw3 said:


> A few years ago - I was earning a salary of £22K and was considering going freelance. This is not woodwork, as I would not stand a snowballs chance in hell of earning a living at that!
> 
> I sat down with an accountant friend to cost up my hourly rate and we came to a figure of £60 per hour to bring home the same money.
> 
> I needed no tools & equipment, just an office at home + a car.



TBH your accountant needs to go back to school, 

£60ph by 8 hours a day by 5 days a week by 50 weeks of work (2 weeks hols is a total income of £120K

single office at £500 per month (business centres charge you 375 per ws per mnth all inclusive) £6k
You buy a bloody beemer a 50K resale value at 20k after 3 years so tax depreciatelble value 10K

so income before income tax (as you are a sole trader) £104K at lets say 40% is a net income of £62.4K 

I take it you never became self employed then??


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## Karl (6 Jun 2008)

Mcluma

You've missed out VAT - as his turnover would (on your calculations) exceed £67k. A nice (extra) slice to go to the taxman. 

But I don't think it's as simple as saying "8hr days, 5 days a week, 50 weeks a year, all at £60 per hour".

Lurker may have had 6 weeks holiday entitlement in his salaried job. I doubt his accountant would have assumed full productivity, 8hrs a day. Probably half that. He may not even work 5 days a week. And he would have to start his new biz from scratch.

Without knowing what line of biz L's in, its hard to make such sweeping generalisations.

Cheers

Karl


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## Mcluma (6 Jun 2008)

karl":2s68b2oj said:


> Mcluma
> 
> You've missed out VAT - as his turnover would (on your calculations) exceed £67k. A nice (extra) slice to go to the taxman.
> 
> ...



sorry karl but when he say he charges £60 per hour then it plus vat (that is how accountants work :wink: )

so vat is no issue here

ok we charge at 1650 billable hours, (as selfemployed you reckon on more) so income is 99K les the 16K costs

still the accountant made an error


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## Karl (6 Jun 2008)

Mcluma - I know how accountants treat VAT - I used to be one (specialising in Insolvency matters). So I have a pretty good handle on how businesses work.

I don't think it will do this thread any good to get bogged down in Lurkers post. 

Cheers

Karl


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## Mcluma (6 Jun 2008)

karl":2ynncmrb said:


> Mcluma - I know how accountants treat VAT - I used to be one (specialising in Insolvency matters). So I have a pretty good handle on how businesses work.
> 
> I don't think it will do this thread any good to get bogged down in Lurkers post.
> 
> ...



I agree


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## Tierney (6 Jun 2008)

I'm an accountant, and I've been dreaming about becoming a cabinetmaker; but, from reading this the idea of sticking with my day job and being paid a set wage everymonth is more appealing.

Hopefully when I retire I can try my hand at earning a living from woodworking; hey, if it only pays for more tools then it still sounds like heaven.

David


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## Escudo (7 Jun 2008)

Jolly interesting thread this.

The two things close to my heart Accountancy / Tax and Woodworking. I am an expert on the former and wish I was on the latter.

It is a funny old world. 

T


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## BradNaylor (7 Jun 2008)

Escudo":1zi1tdsq said:


> I am a practising Chartered Accountant





Karl":1zi1tdsq said:


> I know how accountants treat VAT - I used to be one





Tierney":1zi1tdsq said:


> I'm an accountant, and I've been dreaming about becoming a cabinetmaker



There seems to be a theme developing here!  


Seriously, I don't think a cabinetmaker has any more a precarious existence than any other self-employed person. The important thing is to view one's business as a _business_, not an outlet for one's creative flair.

If one gets the opportunity to flex one's creative muscles now and again, once all the bills have been paid, then this can be viewed as a bonus.

The other bonus is that that all those lovely tools and machines can be set against your tax liability...













...but get a good accountant!

:lol: 

Cheers
Dan


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## greybeard (22 Jun 2008)

Not wishing to imply anything about the cognoscenti that people this site, and admitting to being a part-qualified accountant myself......many moons ago I had occasion to refer to the regular (monthly?) UK national bankruptcy publication (listed all those made bankrupt in the pervious month, the name has long since disappeared from my memory)....anyhow.....it always amused me that there were two categories of business that seemed to jointly achieve the most number of appearances in said list.

Yes, you've guessed it of course, one was aerial erectors (?!) and the other was accountants.............I also seem to recall taxi firms and book-keepers weren't too far behind


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## Digit (22 Jun 2008)

> Yes, you've guessed it of course, one was aerial erectors (?!



I thought they usually ended up falling off the roof. Two I knew did.

Roy.


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## Escudo (22 Jun 2008)

London Gazette.

Most interesting read, ..........well, after British Woodworking and F & C of course.

Tony


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## recipio (23 Jun 2008)

8) I think there is a clear distinction between the professional and the enthusiastic amateur who would like to earn 'a few bob' from his hobby.
The pro will have built up his clientele but the guy in the shed hasn't a clue where to start.
Anybody remember 'Hade and Moss' a few years ago.? They were two guys who had the bright idea of asking people to make good furniture which they would sell at a once off auction. ?
I still think its a great idea but it flopped leaving them about 20k out of pocket.
Otherwise the hobby maker has to market his wares as best he can and personally I'm going to try *bay to see if there are any takers.

cheers.


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## ginsters (23 Jun 2008)

start small and build it up,your work will sell its self

I finished working for a handbuilt kitchen company last year,there where 3 directors only 1 had any woodwork/engeniring background the other two were financial inputs,they had the more power attitude they spent so much money on p.r you wouldent beleave ,there way of working was to take 90% or so up front.They were there to make money first and it showed when problems started appear in the ferniture when it came to fit.

good luck with you venture,and if you ever need a good fitter 

:wink:


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## bluezephyr (23 Jun 2008)

Luckily i had a shop start me off, I get £1000-£1800 worth of furniture orders a week, I have 3 other shops i deal with now. A letter from shop no1 guaranteeing this amount per week got the bank manager into action, Someone with no experience in running a business Ive been in full production since the start of March and turned over £26k.

I worked like a dog for other companies and i do the same and more for myself, 7-7 somedays. Im not allowed to make any noise after then but im sure i would stay later if i could sometimes.
My drawings are £150 a week, Luckily im in the position to not need huge amounts of money to keep my life running, Plus why take loads of money out of a business if youre always working!. Im taxed on my profits not what i pay myself as i am sole trader.

It was a big decision for me to start up in Business, Like i said im lucky to be given a start which i couldnt refuse, Ive learned alot in the last few months and soon looking to take on a trainee, I can then look for more work and a bigger unit with more retail prospects and hopefully supply timber cut to size for people with DIY projects.

If your work is good, word of mouth soons gets you business too, If you like to bimble about in the workshop and enjoy it keep it for a hobby, If you want to make some money give up all your time and go for it.

If you dont try youll never know


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## BradNaylor (23 Jun 2008)

bluezephyr":24uyd5rp said:


> Luckily i had a shop start me off, I get £1000-£1800 worth of furniture orders a week, I have 3 other shops i deal with now. A letter from shop no1 guaranteeing this amount per week got the bank manager into action, Someone with no experience in running a business Ive been in full production since the start of March and turned over £26k.
> 
> I worked like a dog for other companies and i do the same and more for myself, 7-7 somedays. Im not allowed to make any noise after then but im sure i would stay later if i could sometimes.
> My drawings are £150 a week, Luckily im in the position to not need huge amounts of money to keep my life running, Plus why take loads of money out of a business if youre always working!. Im taxed on my profits not what i pay myself as i am sole trader.
> ...



I'm glad its going well BZ, but I think you can guess what I'm going to say!

I can well understand the attraction of working with a retailer when you are getting started; he can guarantee you a core level of business enabling you to get your enterprise up and running and allow you to concentrate on making furniture.

However, as a long term business model, forget it!

I got into cabinetmaking through the pine furniture trade, in which I spent over 20 years. In that time I got to know well an awful lot of small manufacturers who started off just like you supplying a few local shops. Even when pine furniture was very fashionable, only the shops made any money out of it!

The small manufacturers have now all gone bust. Even the guys who grew their businesses into big concerns have virtually all gone bust. Those that survive now mainly import oak furniture from China instead of making pine furniture here.

IMHO the *only* way forward for a small furniture maker is to sell direct to the public, and to specialise in one-off, custom-made pieces or fitted projects.

You are making £1000 worth of furniture a week at trade prices and paying yourself £150. That is £2000 worth at retail prices!

If we split the difference and said that you could sell and make £1500 worth a week retail, I am sure that you could be paying yourself at least £500 a week and still be retaining profits in the business.

I would retain the shop that you are dealing with, but look to expand via commissions from members of the public. I promise you that within six months you will be explaining to the retailer that unfortunately you will not be able to supply him any more as your own retail business is flying.

You need to be planning your exit strategy from supplying shops. Why sell at half price?

I speak from experience. I've been there myself - and gone bust doing exactly what you are planning!

If you want a chat PM me for my phone no.

Cheers
Dan


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## Oryxdesign (14 Sep 2008)

ginsters":13t1ttb3 said:


> start small and build it up,your work will sell its self
> 
> I finished working for a handbuilt kitchen company last year,there where 3 directors only 1 had any woodwork/engeniring background the other two were financial inputs,they had the more power attitude they spent so much money on p.r you wouldent beleave ,there way of working was to take 90% or so up front.They were there to make money first and it showed when problems started appear in the ferniture when it came to fit.
> 
> ...



Ginsters, you should really let us all know where you are, somebody here may be looking for a good fitter and may just presume that you are west country making pies!

Dan Toovey
Sorry I missed this thread I would have been along earlier to support you. I do as you said earlier make a living from woodworking, I am vat registered as I am way over the vat threshold but I do understand all your comments and kinda agree (I think I just charge more). I think really that being in business is exactly that and it doesn't matter what you make/ sell it's always the same, you work hard sell well get some lucky breaks and make a good living or you could just do a 9 - 5 and jointhe masses. I think Mister Henderson is probably right in some ways but why is he so completely negative.
Simon


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## MikeG. (14 Sep 2008)

Interesting Dan..........very interesting. Every time I get bored of drawing I wonder about trying to sell a bit of furniture for a living instead. I reckon that making the decent furniture is probably the easy bit.......it is the selling of it, and the dealing with customers, which would be the difficult side of the business.

I should read your post out loud every time I have this thought.......

Mike


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## Oryxdesign (14 Sep 2008)

Mike Garnham":6b8t46qb said:


> Interesting Dan..........very interesting. Every time I get bored of drawing, I wonder about trying to sell a bit of furniture for a living instead. I reckon that making the decent furniture is probably the easy bit.......it is the selling of it, and the dealing with customers, which would the difficult side of the business.
> 
> I should read your post out loud every time I have this thought.......
> 
> Mike



You're right, great design, however, will sell itself.


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## lurker (15 Sep 2008)

Yesterday, I went to an "arts festival" there was a bespoke cabinet maker there.

His designs were beautiful and I spent time chatting to him between "prospective clients".

He was selling stuff at a very high price - 6 chairs & a dining table for just under £10K!!

Now.........I reckon I could have made the stuff to the same "finish quality" as his (and as others would attest I ain't very good!). But what I could not do is "sell" like he did to the type of people with that sort of money to spend. Nor could I come up with the designs. 

Watching him with the "clients" was quite an eye opener. Not once did he mention the time that went into the job nor "you get what you pay for". His ability to read timewasters and real thing was amazing.

My guess is the best craftsman in the country would not survive without the other skills.


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## Digit (15 Sep 2008)

As I mentioned on another post I once hired my daughter to sell re conned domestic appliances. She can't handle a screwdriver, but she could freezers to Eskimos!
Everybody can learn, but as in woodwork there is the difference between those who have a flair and those who don't.

Roy.


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## quickthorn (17 Sep 2008)

What about chainsaw carving, then?

http://arbtalk.co.uk/forum/showthread.php?t=3432

I find it very hard to believe, but a lot of these carvers reckon a mushroom like the ones in the thread would sell for £50-100 or so. Smaller ones, which can be done in 10 minutes with a bit of practice, would go at £20 each, as fast as you can make them. Some of the other sculptures there look ok now, but they will all split within a year. The material he's using is tree surgery waste, and would only ever go for firewood..£25/ton or so.


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## big soft moose (17 Sep 2008)

ive done a fair bit of that kind of thing and i'd tend to agree that they sell tho its more realistic to reckon about 30 mins per mushie rather than 10 - taking into account tool downtime , blade sharpening, refuelling etc.

so thats only £40 per hour gross - which when you take into account all the other things you have to do (selling, admin, cleaning the workshop, machinery maintenance, travelling to shows, days off, sick time etc) and all your deductions and tax isnt going to be that great.

there arent many people who earn a living soley from selling chainsaw carvings - most are either tree surgeons, foresters, arborists, countryside proffesionals (that's me) doing a bit on the side , or if they do carve full time they are also being paid for doing demonstrations and courses etc.

like everything else mentioned on this thread it can bring in a bob or two but it isnt an easy life or a cake walk that it may first appear.


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