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.
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
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
