Why Most Woodworking Side Hustles Fail

Transcript

SPEAKER_00 0:00

Welcome to episode two of the scrap pile. I'm Nick, and uh this is my new podcast talking about the everything else of woodworking, not just making stuff all the time. In this video, I want to talk about why a lot of woodworking side hustles fail. It's not to discourage you because there's some that can absolutely crush it, but a lot of them tend to fail. And uh this is usually in the beginning stages. It's usually around that point where you know you're starting. A lot of us get into woodworking for the hobby. It's therapeutic, it's relaxing, it's something de-stressing, you know, it's something to take your mind off of life. And so you're doing it just for fun, but then you start making all of this stuff and you're looking around, you're like, wow, I have a whole garage or a shop full of stuff. I need to try to make some money with this. Or that that's either the the first route, typically, or number two is people start seeing your stuff and then they start reaching out to you, and your business is kind of just born, just you know, because those that second option I just said are probably the ones that I would consider are most success, the most, you know, the highest likelihood of success. The ones that are not born that way are the ones that I'm gonna talk about. And the first thing that I would say, uh a reason as to why a lot of these fail is that people just start for the wrong reason. They see a TikTok clip or an Instagram reel or even a YouTube video where, you know, these people make it look easy, they make it look glamorous, they say, okay, you know, I can um take a $2 board and turn it into $85 and stuff. And I've made those videos, admittedly, and that is very true. You can take $2 worth of material and turn it into a big profit. But if you're just starting out, there's a long way to go to get there. Because that person that's taking that $2 board and turning it into an $85 product has the experience, has the method, the procedures, the steps to do it, the tools to do it, the space to do it, the know-how. There's a lot more. So people start for the wrong reason because social media glamorizes woodworking in general and woodworking businesses. And um, they make it look like, hey, it's easy money. You know, in a Saturday afternoon, you can go get one board at Home Depot and have $100 in profit within an hour, right? And again, you can do that, but there's a lot more that goes into it. You're not going to be able to just start on a Tuesday and by Friday have $1,000 in your pocket. There's knowledge that comes with that, there's tools that come with that, there's, you know, technique and skill that goes into that. It's not just the kind of overnight success. Another thing is that I think a lot of wood workers on social media, especially TikTok of all platforms, have almost set unrealistic expectations. They make it seem and on Etsy, you know, they're like, hey, I did a hundred thousand last month on Etsy. It's like, uh, did you or not? You know, and just even if you did, that's a hundred thousand gross. How much went into that is your material cost? And then the big one that a lot that I'll talk about here in a second is how much went into it from your time. A lot of people in woodworking business from the business side really extremely undervalue their time. And I know why they're doing it, because everyone else is too, and so it becomes a race to the bottom. You know, if someone's charging $40 for a product, they may be completely losing their rear end as far as their time goes. But if you price it what it needs to be priced at at $100, then you're not going to get the sale because everyone else is pricing it at $40. The difference is though, you're charging for your time. They're not. Anyways, people start for the wrong reason. People fall in love with the idea of selling woodworking before they fall in love with the process of woodworking and the work that goes into it. They, you know, social media romanticizes shop life. You know, just the afternoon in the wood shop. It's relaxing, it looks cool, but at the end of the day, it's a job. You know, if you're turning this into a business, you're doing it for a profit. It's no longer for fun at that point. The next thing I would say that a lot of people, the reason why they fail is they build what they want to build. And that's perfectly fine for a hobby. But again, I'm talking about business here. When you translate going from a hobby into a business, you can no longer, the the focus, the primary focus can no longer be on what you want to build. It needs to switch and become what the customer wants. If you're doing it for a business, the whole point is to get money in your hand from other people. And if someone's going to hand you money, you better give them something that they want. And what they want, there's a good chance is completely opposite from what you want. You might like cutting boards. Maybe they hate cutting boards. And you're trying to cram these cutting boards down their throat. You're trying to sell it and be a salesman and get this product out there. But if you're going to the wrong market, the wrong target audience, then you're you're gonna fail because you're making what you want, not what they want. You got to give the people what they want. Um, this, and I have a couple, I'm looking over at none of my notes, by the way. This is a big one, that especially the I have some examples here, like complicated furniture, um, the giant farmhouse tables. The farmhouse tables, my God, that's become a big thing. And they're easy to make. And so a lot of beginner woodworkers make them because they are easy. And everybody says that they make them because that's what's in style right now. No, it's not in style for everybody. It's in style because you see it on social media. It's not what's actually in style. Again, some people it is in style, but not as much as you might think. And so you see that it's easy, and a lot of people associate the size of the item to being money. They think, okay, well, you know, I can make all of this out of two by four construction lumber and put some stain and white paint on it, and now you have a you know, $800 table. Not always the case. Another thing is again, if you're doing what you want, you might be into a specific style of woodworking, particularly in like art. Like, think about wall decor or um uh wall decor little hangers, you know, wall art, door hangers, mantle, shelf pieces, knickknacks, that kind of stuff. Um and or it really expensive items. For example, if you're building a I don't know, um a $4,000 kitchen table. I just got done doing one, a $4,000 kitchen table. You if you do that in hopes of selling it, you're gonna have a rude awakening in a bad way. You you're not going to, again, you're trying to sell and make what the people want. If you're doing all of this for a hobby, then you can essentially forget everything that I'm saying. Because I do a lot of what I'm talking about. I make stuff that I like to make, and then I hope it sells. The difference is I don't beat myself up or get disappointed when it doesn't sell because again, it's what I like to make. If I wanted to do what the people want, I would be that that's why I don't do woodworking as a business because I don't want to make some of the things that people want me to make. Nothing wrong with that if you do, nothing wrong if you don't. I just, that's me personally. You need to do what the market is demanding. And in your area, it could be some of the things I'm talking about. It could be cutting boards, it could be trays and clocks and uh wall decor, but it needs to be what the people want. And the area you live in is gonna be different. You can you can't, if you're taking this seriously as a business, you need you have got to stop focusing on what you like doing and what you like to make, because that's not how you're gonna get money out of this. That's how you're gonna relieve your stress and enjoy the hobby, but it's not how you're gonna turn it into a business that can scale. You also need to consider practicality and shipping, especially if you're doing shipping orders. It needs to be something that is able to be shipped or at least, you know, figure out how to ship it. If you're always doing kitchen tables and you're on the East Coast and you're always selling them to California buyers, you're gonna have a rude awakening with shipping. Not just the cost. The cost can typically be passed off to the customer, but the logistics of it. Do you know how to pack up and ship a $4,000 kitchen table? You can't just take that to the post office, right? Um, and then the repeatability, because the repeatability is a big one because if you find something that does work and customers start reaching out and stuff starts flowing in, you need to make sure you can keep up with that demand. And as a one-person business for the time being, and especially if you're in a residential garage or a hat, you know, single-car garage, you need to make sure you have the space, the tools, the layout, be able to repeat something. You could have a winner product and it takes off and all it takes is one and it goes viral, or you know, you have one and it turns into 10 customers and those 10 turn into 30. That's amazing. But now you have to deliver. It's amazing that you got the sale. The sale is the first part of it, money in hand. But now you have to deliver. And if you're not set up to be able to batch parts or be repeatable, again, rude awakening from a business standpoint. You don't want some somebody to be waiting six months on every single order that you ever do. And as a craftsman, as a maker, as a woodworker, we all have tendencies to be perfectionists. I'm the exact same way. However, sometimes it's best to stop overcomplicating something. Sometimes you have to just quit touching it and walk away. And where I'm going with this is that we all want to add that extra little flair, that extra pizzazz, that extra little touch onto a project. And we think that by doing that, we can charge more for the product. And that is true sometimes. However, a lot of times the market demand, what the people want, is simple. A lot of times we overthink it. And I say we because I do this all the time. I'm thinking of the next new invention that can go viral and sell and make me a million dollars. And in reality, we may just be better off to keep it simple. Maybe cutting boards are the answer. Maybe little trays, little doodads, little, you know, door hangers are the answer. Stop overthinking it depending on what the market is demanding. The next thing, and I touched on it a minute ago. Most people, when they're starting out, underprice everything. And this is not just in the woodworking business. This is pretty much every industry. When you're starting out, you're trying to figure out your pricing. You're trying to figure out who you are, what stuff costs, what you should charge. You don't want to charge too much because you're afraid you're going to lose business. You don't want to charge too little because you want to make money. What I see though is most people err on the side of safety by pricing too low. And it feels good at first. It feels like, oh man, I, you know, I'm pricing it here and I'm I know I'm making money, and I just got 10 orders. Well, now you're going to burn yourself out and you're not charging enough. You think you are, because that board or that sheet of plywood or those parts for that thing, you know, they might have cost $30. And you're charging $45, and you think, well, you know, I only have $30 in it. Takes me about 10 minutes. So I'm making $15 every 10 minutes to profit from $45 to $30. Yeah, but what about paying your power bill? What about your time as an hourly employee if you look at it like that? What about buying all your saw blades and the drill bits and the wood glue and the sandpaper and the screws and the fasteners and the paint and the stains and the finishes? Like most people underprice this. They forget their labor cost. As an individual, as a person, treat yourself like an hourly employee. Would you work for $4 an hour? Probably not. So why are you charging $4 an hour on the average to sell something for someone? This needs to also include your time from start to finish. If you talk to the customer and you're working through designs, coming up with ideas for their project, that starts the clock. You need to account for that time. That's time you cannot be doing something else. You need to account the time for driving and getting and buying the materials, bringing them back to your house or to your shop. You need to account for the time of doing, you know, all the cutting, measuring, milling, the assembly, the sanding, that takes a long time. The um the staining, painting, finishing, whatever it is, you need to account for that. Delivery if you're delivering it. If you're not, you need to account the time for shipping it. There's a lot of time that a lot of people are just forgetting to include and they're looking at it as a hobby. Again, great, but the whole purpose of this video is as a business. If you ever want this to become a real business, you have got to account for your time. You cannot afford to pay an employee $3 an hour. So why would you pay yourself $3 an hour? If you ever want this thing to scale, you have got to include that. Again, I talked a minute ago that people are not including their tools. Not only the consumables. Consumables are anything that gets worn out and you regularly buy. That would be wood glues, screws, nails, sandpaper, um, saw blades, even though are a little bit slower timeline, but router bits, I mean, all that stuff, but then also just the tools themselves. Eventually, you might have to buy another thousand dollar table saw. You need to be building that into your price of your projects. And I can make a separate video on how to price projects, how I would price projects, or how I have priced projects, but um the the biggest thing I would say is that on average, and I'm generalizing with this statement I'm about to make, I would say that 99% of woodworkers are not charging enough. Think about what you're charging now and possibly double it. And again, that's a bold statement. But if you're working to make a dining room table for $6 an hour, is it worth it? I mean, at that point, $6 an hour, you could do a lot of other things to make some more money. So underpricing is a is a reason why I see some people fare fail. Um the next thing is people get destroyed by custom orders. This happened to me 1000%. And I'm gonna probably make another video about custom orders and why it kind of destroyed me. Um, but with custom orders, some people call it commission work. What that means is that you're not selling one product all the time. You don't have an inventory. You're not, you know, you're doing furniture is the big one, you know, custom furniture. That is commissioned work. That is truly custom. Every single project is different. You're never going to make two of the same thing. The issue is, and the reason I say people get destroyed at doing this is because there's always revisions with the customer. This customer knows they're getting something custom and they're should be paying you well enough to where it is custom. But there's always revisions. And a lot of people back themselves into a corner with this customer. They do handshake deals, they don't collect deposits up front. And then the customer changes something, and now you're out, maybe material, but definitely out time on the design, on the planning, on the making your cuts. Yeah, there's just always some sort of revisions with a customer. And if you do not plan to have that conversation with the customer up front, you're gonna burn yourself out. You're gonna be destroyed, as I'm saying. You're um, you have got to anything over a certain dollar amount. I don't want to say what I would recommend because it's truly different for everyone. Um, I would say anything over about two to three hundred dollars, I would have some sort of contract. And I'm not saying like get an attorney to draft this up where it has to be notarized, but just something, at minimum, an email, a text message, something in writing where you guys agree that, hey, after this date, no more changes because I'm starting your project. And if I have to do a change after this, there will be time and money associated with that. I'm not trying to price gouge you, Mr. Customer, but you have to understand where I'm coming from. I am trying to make money doing this. And if I lose a bunch of time with revisions, I'm gonna be losing money. Also, I would absolutely collect a deposit up front. My rule of thumb was 40-60. I collect 40% of the the price of the project up front before I ever start working. They can keep 60. Some people do 50-50, some people do more, different, you know, whatever. Me, it was 40-60. 40% would cover my material cost at the minimum. So if they back out, if there's changes, if something goes wrong, I am not physically out of pocket for money. Now I am out of pocket on my time, um, which equates to money, but I am not physically swiping my card and buying anything at that point because I have the 40% up front, which covers the material cost. And you can tell that to the customer. And I have had some hard conversations with customers where customers say, well, um, 40% in just materials, that means you're up, you're you're charging 60% on top of what I'm paying for materials. Like, yeah, there's time in that. There's also profit on the business. There's, you know, all the consumables, all the stuff we've talked about. Customers just need to understand that. Um, and then sometimes you can get bad customers. Let's just be honest. You can get pain in the butt customers, and they will wear you out and exhaust you and burn you out. They're wanting updates every day, every minute, every hour. Like, hey, what'd you do this morning? What'd you do this afternoon? Have you stained it yet? Have you cut it yet? Like those customers will burn you out and destroy you with custom orders. The next thing, a lot of woodworking businesses fail because they don't have some sort of system. Now, I'm not talking about, you know, a woodworking business that does app development, software development. I'm not talking about like systems like that. You don't need to be punching a time clock or anything, but some sort of system that it and and I wrote down notes on successful woodworking businesses, what I see those guys do. Repeat products, repeatable products, batch products. If you're making 10 of one thing, do not, and this probably goes without saying, but it is not the most efficient to do start to finish of 10 of that item. Do one start to finish, two, start to finish, three, start. No, batch your products. Do all of your cutting at one time, do all of your milling at one time, do all of your assembly at one time, all of your gluing at one time, all of your, you know, do batch stuff out if you're making multiple repeat products. Is a system that can do very well in a woodworking business. Standardizing dimensions. That kind of goes along with repeat products. If you can standardize dimensions, if you make cutting boards, your standard products should be standard dimensions. They should be 12 by 24, 18 by 20, whatever it is, but a standard dimension. And if someone reaches out to you and they ask for a cutting board that is outside of those dimensions, I would explain to them, hey, my standard dimensions are this by this. If you want something different, we're gonna have to consider that a custom order, a custom product. The time, the efficiency, the money is gonna have to be talked about at that point because it's no longer within my realm of what I consider standard. For example, if you're making cutting boards, I would recommend doing standard dimensions. Now you can still do custom boards, you can still add the groove, the handles, the feet on it, their engraving if you're doing that, CNC inlay and whatever it is, custom woods, but standard dimensions because your shop, your efficiency, your workflow is gonna be set up for those standard dimensions. And if somebody wants something outside of that, that's gonna change you. It's gonna change your time, it's gonna change your way of thinking about it, it's gonna change your flow and your processes. This all ties into one thing that I have last on my list here, which is just simplifying production. The best businesses that have the biggest chance of not failing, of succeeding, simplify your production. Again, that goes with standard dimensions, that ties into the repeat products, that ties into batching out orders, batching out methods and systems and you know, kind of steps in the process. If you are the guy that builds anything for anyone, and and we've all been there, I've been there. Most people start that way because you're trying to just earn the business and get the business, you're trying to grow the business. So you you can make anything and everything, but you will probably fail. That's harsh, but that's true. That just becomes chaos, and that is not sustainable. You will burn yourself out mentally, probably physically, and definitely in terms of your shop flow and efficiency. Next thing social media false expectations. Again, I've talked about this a minute ago, but everything on social media is just giant epoxy table and viral, you know, epoxy tables, elaborate $13,000, $15,000 tables, and they make it look like, yeah, I did this in a weekend. No, those guys have teams of people, they have professionals, they have an entire million-dollar shop potentially. Um, I don't there's not much to talk about here. I just wrote it down and I did talk about it a minute ago. It's just social media creating the false expectations with people, is a reason why some woodworking businesses fail. Um, burnout. That's a big one. I've I've kind of talked about that a little bit. Just when you're doing a full time job and And then, you know, this was your hobby. So you when something is a hobby, you get to choose when and you do and do not do something. You get to choose that. If you want to go out and work, excuse me, in your shop and then go in and sit on the couch, you can absolutely do that. If it's your business, though, you have got to do it. You there it's work. You're getting paid to do this, right? It's eat what you kill. You have got to work to make money. Um, and that can lead to burnout, especially doing it as a side hustle. Again, this video why woodworking side hustles fail. Um they typically don't fail because people quit. They they fail because people get burnout, and that causes you to quit. So, what actually works? I've talked about what doesn't work and why people fail. What does work? Start smaller, start with repeatable products, lower quantities, easy stuff to ship. Simplify everything. That can be simplifying your materials, your sizes, your finishes, your processes, simplifying materials. Instead of offering a product or a project in every single species of wood known demand, be the guy that only offers it in cherry, walnut, and maple. Or maybe you only do pine for the time being. I hate pine, but whatever it is, simplify. Charge more. I've talked about that. You've got to have confidence in yourself. You have got to include the labor value in that. And if you're going to make this sustainable and not get burnt out, you've got to be compensated accordingly. If you're always working for $4 an hour, you're going to burn yourself out and quit sooner than if you're working for $25, $30, $50, $100 an hour. That's going to motivate you more to not get burnt out and quit. Build it around your life. I kind of talked about that. Um, and don't try to get too big too quick. That's another thing I see a lot of people do is they're trying to become either too big, quick, too quick in terms of be the guy that does everything for everyone, but then also the guy that wants to build like a furniture empire overnight. You don't need to do that. Start with one product. Start with end tables, start with coffee tables, start with kitchen tables, whatever. But don't start with all three. You know, don't be a full flip. Start with one thing. See how it goes. Don't, you know, don't um don't try to be everything to everyone. Find your niche, stay there. I don't think woodworking side hustles are impossible. I'm not here to discourage you. I just, these are some things that I've found that I think the internet makes it seem easier than what it actually is. And this is me from experience. Um, I'm not been doing this 30 years, but I have been doing this almost 10 years. So um, yeah, that's my advice. Let me know in the comments what you have, what your thoughts on all this. I read every single comment. If you'd like to be a guest on this podcast, I am actively looking for guests and would love to get on here and talk to you. We can set something up. You can reach out to me, comment, email me, whatever it is. And let me know what else I should talk about on future episodes of uh the scrap pile podcast here. Until next time, thanks for listening. See ya.