VAT?
The 2015/16 VAT threshold is £82,000. An independent furniture maker working as a sole trader is unlikely to get anywhere close to that. My turnover is less than half that level with very little prospect of ever hitting the VAT limit...there simply aren't enough hours in the day for one man to produce enough individually crafted, hardwood furniture to exceed that hurdle!
Of course if someone is the main family breadwinner or has a recent mortgage or is paying rent on a workshop, then things will likely be different. Not because they'll suddenly get their finger out and start working
harder, but simply because financial imperatives mean they'll start working
differently. In essence they'll almost certainly migrate their business towards fitted furniture or joinery packages. And then they'll be processing larger quantities of raw materials, chiefly sheet goods, softwoods, or cheaper African hardwoods, so the VAT limit will start to become relevant.
Maybe it's time to start layering hard numbers onto this abstract discussion.
If the plan is to produce high quality, individually crafted pieces of hardwood furniture as a sole trader then I'll bet pennies to pounds that the maker ends up with a gross contribution of between £15,000 and £25,000 per year (that's
after deducting all raw material costs but
before deducting any fixed overhead costs, but whichever way you cut these numbers VAT simply doesn't feature). Someone in the lucky position of having almost no overheads, no mortgage, a supportive partner with a proper job, easy access to a wealthy customer base, a pension, or a part time lucrative job, can make this modest scenario fly, and if so then a very pleasant occupation it is too. This is where I reside and I've absolutely no desire to be anywhere else.
But if a maker needs or wants to earn more then they'll almost certainly have to do something differently.
Fitted furniture work is the most obvious candidate. But as any of the people on this forum active in fitted work will tell you, it's no walk in the park.
What I hear from furniture makers who have gone this route is that you outgrow your bespoke furniture workshop very, very quickly. You need lots more space for finished cabinets, spraying, storage of sheet goods, etc. You need the bigger scale equipment capable of processing sheet goods accurately and efficiently. You need to be able to schedule your work in with that of the other trades involved (which means yet more storage space when delivery dates get changed). You need to be able to show prospective customers what they'll be getting for their money. And what happens in almost all the cases I've seen is that fitted work tends to crowd out the bespoke furniture making, perhaps not completely, but the ratio of fitted to bespoke work is generally much larger than makers originally envisaged, maybe of the order of 10:1 rather than the 1:1 they often hoped it would be. My advice to anyone considering fitted work would be don't think of it as a second best option for keeping the wolf from the door, but throw all your creative energies into it and go for it whole heartedly. Here's a role model worth emulating, a seriously talented furniture maker (and by that I mean a time served cabinet maker capable of making virtually any hardwood furniture to the very highest standards) who decided that bespoke furniture wasn't viable and focused his strong design skills exclusively into kitchen work,
http://www.houzz.co.uk/pro/johnnygreyst ... ey-studios
Another obvious route is joinery packages. So taking on the subbed out contracts to realise an architect led development project. This might get the maker closer to bespoke free standing furniture work, but it's within the commercial framework of a larger architectural undertaking. An example of a successful business model along these lines could be this one,
http://www.cimitree.co.uk
However, you'll immediately see that both of these examples are
real businesses! Gone is any sort of bucolic dream of pottering in your own small workshop while communing with the timber; this is about scheduling, deadlines, productivity, managerial decisions, and the endless search for greater efficiency. These are not stress free options!
Now there are other options for the maker who is determined to be purist about creating original furniture, but still wants to take a bigger wage. I mentioned earlier in this thread the Studio Furniture movement and six figure prices, as I said at one time that market really did look like the solution, but it's struggled badly since the 2007/8 recession and may never fully return. In any event it's an option that's only open to makers genuinely capable of marrying extraordinary original designs with extraordinary cabinet making skill. Another possibility is using teaching to cover the workshop overheads and make a profit while freeing up enough of the maker's time to produce masterpiece works. This business model is growing all the time and you don't have to look far to find examples, here are two but there are many more with new entrants arriving all the time,
http://www.marcfish.co.uk
http://www.watersandacland.co.uk
Finally, it's worth saying a word about sharing overheads in a joint workshop. I know a few of these that seem to work okay, but I know more that have foundered, generally because of silly personality clashes that have escalated. And it's easy to see how things can go horribly wrong. Maker A has a client visit the workshop, who then sees something they like that Maker B has made and wants one. Who then takes on that job? Or Maker A starts to take on more joinery work and needs the spindle moulder a lot more, Makers B and C get frustrated that they can't access that particular machine. How do you resolve that? Or Maker A is constantly "borrowing" bits of "scrap" for his chair making jigs, but never seems to actually order any MDF, Ply, or Poplar. What's the solution? So shared workshops have enormous advantages, but to succeed they need exceptionally civic minded craftsmen or very clear rules...probably both!
Anyhow, from where I sit in this business that's how the world looks to me. Whatever you finally choose, I wish you luck, success, and a great deal of pleasure along the way!
