Carpentry is a skill, craft, and art. It requires masterful hands and a keen mind; wooden wonders can be crafted once those traits are met in a single person. If you’re that person capable of making magic from one simple piece of wood, you have to put this skill into action and start monetizing it to make a good living.

Starting a carpentry business might seem like a long, overwhelming journey of researching, planning, thinking, working, and the list goes long. But when looking at the bigger picture, above 200,000 carpentry businesses in the U.S. have successfully made it to the market. So, why won’t you be able to do it?

Starting a carpentry business isn’t as complicated as it seems; rather, with the right skill and consistency, your business can also make it to the market and make a difference. After all, there is always enough room in the market for a newbie.

What is a Carpentry Business?

Carpentry is a woodworking business that involves everything from trimming trees to building full wooden structures. It contributes to making wooden crafts, furniture, flooring, and entire architectural skeletons. Carpenters are skillful people capable of crafting meaningful items from abstract pieces of wood.

4 Commonly Asked Questions About Starting a Carpentry Business

Starting a carpentry business and getting into the market efficiently doesn’t only stop at having professional woodworking skills. Rather, there’re many things you have to get yourself acquainted with. To make things easier, you can start by finding the answers to these questions:

What are the main carpentry business types?

The first thing you, as a carpenter, should know before getting into the market is that carpentry work is a very manifold one, which means the specializations are many. So, understanding the different carpentry types is critical to determining your business sphere and possible growth opportunities in the future.

Carpentry types could be divided into seven categories: rough carpentry, Joister, trim carpentry, cabinet carpentry, ship carpentry, framer, and roofer.

Figuring out the type of carpenter you will be and what kind of work you’re capable of is the first step that will put you on the right track and guide you through the rest of the business requirements of the budget, tools, ideas, team, etc.

Is it hard to start a carpentry business?

Starting a business from scratch, no matter how basic, requires hard work, consistency, and patience. But when it comes to carpentry, it’s a service-based business and one of the most highly skilled trades; it’s physically challenging and requires sufficient funds, experience, and definitely, a good business plan.

So, a carpenter who sets their sight on a lucrative, successful business must put the time and effort into developing a winning plan and sorting out their finances easily. And in the end, the hard work will definitely pay off.

Is carpentry business profitable?

The demand for carpentry work in the U.S. is constantly increasing, and the market is always open to new investors. No matter what specialization, you will find a place for your business to prosper and generate good money. According to the U.S. Bureau of Labor Statistics, the median annual wage for carpenters was $48,260 in May 2021.

With a market size estimated at around $41bn and almost 360,821 industry employment, carpentry seems to be boosting business-wise. In fact, according to IBIS World, an international research center, there are currently 221,146 carpentry businesses in the U.S., with a 1.3% business growth and a 2.7% annualized business growth over the last five years.

While most carpentry businesses are heavily concentrated in the states of California, New York, and Florida, there is a lot of potential across the country for more competition. According to Data USA, an open source for U.S. governmental information, carpentry is expected to witness 3.71% national growth in employment over the next ten years.

Despite the negative forecasts on IBIS World about the downstream of the construction industry, which forms 86.8% of carpentry work in the U.S., there are anticipations that carpentry businesses will compensate by boosting their contribution to other sectors like nonresidential buildings, furniture, tools, and others.

How much does it cost to start a carpentry business (startup and ongoing)?

The expenses involved in starting a carpentry business are many. And while some hidden costs might not manifest till the business is already on track, startup costs and ongoing costs must be calculated and included in the budget thoroughly.

According to Step By Step Business, an educational platform for launching businesses, a small carpentry startup costs range from $4,500 to $10,000. It includes all the basics to kick-start the carpentry business. It comes with a revenue potential of $62,000 – $250,000 p.a.

Additionally, there have to be financial considerations for the ongoing costs, including insurance fees, maintenance of equipment, vehicle maintenance, and employee salary. 

Vital Statistics to Know About Carpentry Business

• According to Data USA, the number of employed carpenters has been increasing at a rate of 0.0521%, from 971,687 in 2019 to 972,193 in 2020. 
• According to Statista, carpenters earn an average of $25 per hour in the U.S.
• According to Step By Step Business, carpentries earn an average of $60 per hour in the U.S.
• According to Zippia, the highest demand for carpentries is in Indianapolis, IN
• According to IBIS World, carpentry is the 19th-ranked construction industry in the U.S. by market size and the 269th largest in the U.S.

Introduction to the guide

Starting your carpentry business will be a long, challenging journey. It will involve many stages, phases, and steps, but in the end, if you adhere to the following steps, you will be able to nail down your business building one step at a time.

We’ve thoroughly researched all the ins and outs of starting a carpentry business. The following guide includes everything you need to know and how to make your carpentry business idea a reality.

Section I: Research and Planning

Step 1: Consult with a professional

Starting your own business is a very risky venture; you have limited resources, a strict budget, and poor experience. However, someone has been in your shoes before and managed to figure out all that might now be puzzling you and made a success out of it, a business mentor!

A business mentor is an experienced professional in the field who has all the knowledge, lessons, and advice you need to start your business on the right foot. A good mentor will guide you through difficult patches and help you make all the decisions regarding your future business.

Step 2: Calculate the initial budget

An initial budget for any business is the cornerstone that will put everything in place and lay the groundwork. The easiest way to set a business budget is by dividing costs into fixed and variable.

Fixed or initial costs are regular and recurrent costs, including insurance expenses, vehicle rentals, labor costs, and tools and equipment costs. However, ongoing costs, also known as operating costs, are the money required to complete daily projects. 

Step 3: Calculate initial costs for starting a carpentry business

Labor costs

Since carpentry work is very challenging and physically demanding, starting a solo carpentry business isn’t the best idea and might even hold back the business’s success. Instead, you have to lay out a team of specialized professionals, and your initial budget has to involve the costs of hiring laborers, foremen, project managers, etc.

Material costs

Proper equipment is key for producing fine and high-quality caliber work. And even though material and equipment differ depending on your carpentry specialization, the basics are univariable. The basic tools you have to include in your initial budget are a workbench, tape measures, a tool belt, saws, levels, a claw hammer, a nail gun, and power drills.

In addition, you have to include the cost of direct materials that will go into the finished products. These direct materials include wood, concrete, steel, nails, screws, etc.

Step 4: Calculate ongoing costs

Ongoing costs are the expenses required for the day-to-day continuity of your business. These costs include maintenance of tools, utilities, workers’ salaries, license and bonding fees, shipping and transport fees, and insurance for transporting supplies.

The ongoing costs must be calculated carefully and accurately, as they will make up a significant portion of the expenses sheet.

Step 5: Research the market

The carpentry market is a very crowded and competitive one. Statistics have stated there will be 200,397 carpenters businesses in the U.S. by the end of 2022, an overwhelming number of carpenters to compete with.

Standing out among the crowds requires understanding the market structure and the demand for the products your startup has to offer. So, you better conduct comprehensive market research before officially launching your carpentry business. Market research will assist in understanding existing clients’ needs and new areas for expansion, identifying changing trends, and setting targets.

Step 6: Define your niche

Market research plays a vital role in dominating your business niche as it helps detect the gap in the market and how you can beat your competitors. But market research is not enough on its own to define a carpentry business niche that wins.

Instead, you have to consider your passion and skills and what type of carpentry work you excel in the best. Because carpentry is a trade that requires patience, proficiency, and passion, once all those are achieved, your products will stand out and make a difference in the market.

Step 7: Define your ideal customer profile (ICP)

The perfect customer is the one that will benefit from your products the best while providing you with the most value. And having a clear idea about the ideal customers will help you direct your efforts in the right direction and gain the best benefits and revenues.

To be able to define a perfect customer profile, contact current clients who are already familiar with and satisfied with your carpentry work. They will be able to enlighten you on why they chose your products over many other offers. From there on, you can indicate the pain point and establish an ideal customer profile.

Step 8: Determine your UVP and competitive advantage

A unique Value Proposition is a form of brand messaging that communicates your product’s value to possible clients. The UVP shouldn’t exceed two simple sentences; it must convey a strong message and influence possible clients’ buying decisions.

Let your UVP tell you why your carpentry business is unique and why clients should choose it over competitors. Be creative and unique as much as possible, and try to capture clients’ attention by highlighting your business benefits and not features.

Step 9: Figure out your prices

Prices vary depending on your specialization and the state where you’re operating. If you want to set fair prices for yourself and your clients, it’s recommended to calculate fixed costs, ongoing costs of producing the carpentry work, and the time and energy consumed.

Step 10: Financial planning

The financial planning of a startup is very complex and doesn’t end up outlining a budget for fixed and ongoing costs

Bookkeeping and payroll services

Tracking cash flow, paying employees’ salaries, and paying regular law taxes will become a monthly routine once your business is launched. And with a lot on your plate, from managing your business to completing clients’ orders, arranging this kind of finances will be a waste of time and a headache. So, you better use the help of some of the popular software for business solutions, bookkeeping, and payroll service software.

A bookkeeping service records and keeps track of all business transactions, providing you with fast financial analysis, good tax predictions, and instant reporting. Bookkeeping achieves all the latest by providing the business with many services, including data entry, bank reconciliation, accounts payable, and monthly financial reports.

The best bookkeeping software is Quickbooks Online, Xero, and Freshbooks.

On the other hand, payroll services manage employees’ hours and send their payments at the required time. Payroll services save you, as a business owner, from delays in salary distribution, contribute to employee satisfaction, and save both time and money.

The best payroll software is Quickbooks Payroll, Gusto, and OnPay.

Tax planning strategies

As a startup, your business’s financial performance might not be at its best, and giving away the limited revenues your fresh carpentry business generates for taxes might break the bank. According to TechCrunch, an American online newspaper, capital gains tax can reduce your gains by up to 35%. So, a clear tax planning strategy is critical even before the business launch.

Tax planning strategies revolve around reducing tax amounts as much as possible. Consequently, reducing tax liabilities, making the best of tax credits, and gaining more decision-making power. 

Top tax planning strategies for startups include gathering tax forms, charity contributions, and analyzing tax returns. 

Step 11: Write a carpenter business plan

A business plan is a guide that will define your business goals and lead it to success.  A survey conducted by Go Business Plans examined 223 new ventures and reached the result that business planning helps founders improve their decision-making, balance their resources and turn their goals into operational roadmaps.

A winning plan should be customized and include the following:

Executive summary

An executive summary is a short introduction to your business plan. It must include a brief description of the business, the business end goals, target clients, and competition.

Business overview

A business overview provides a general idea of your company. The business pitch, name, location, legal structure, product details, and goals must be included.

Products & services

The products and services section must provide an overview of the kind of carpentry work your business offers. This section must include a portfolio of the products or services, features of these products, their life circle, and some visual aids to capture readers’ attention.

Bear in mind that spending the time and effort nailing this section is worth it in case you want to raise funds from investors.

Operations

The operations section is the one that outlines physical necessities for your business operation. In other words, it spotlights the basic processes needed to produce client carpentry products. So, it must include the supply chain that identifies suppliers, facilities, equipment, and workforce. It must also highlight the production process describing the exact steps for making the product.

Industry analysis

Comprehensive industry analysis enables you to understand your place in the market and clarifies the threats and opportunities your business is about to experience. An industry analysis must identify industry trends, calculate capital requirements, and spot business risks.

Strategy

A strategy section indicates the steps your business needs to take to reach its goals. The main components of the strategy section are business vision, values, tactics, and measurements.

Financial plan

A financial plan is an overview of your business’s financial projections and must include the cash flow statement, balance sheet, sales forecast, income statement, and profit and loss statement.

Marketing plan

The marketing plan section is among the most significant ones in your carpentry business plan, as a well-thought-out marketing strategy aids in achieving company objectives and contributes to business growth and expansion.

A marketing plan must outline a mission statement, create a client persona, and determine a marketing plan scope and budget.

Step 12: Choose a business structure

A business structure stands for the legal structure of your business, and it contributes to defining ownership, liability, taxes, and future growth.

What are the main types of business structures for carpentry businesses?

• Sole proprietorship
• Partnership
• Corporation
• Limited liability company (LLC)

How and which one to choose?

The business structure is a deal breaker for your startup. Not carefully choosing it might result in many complications, including insufficient legal protection, cash flow hindering, and embroilment in overwhelming taxes.

So, you must research and be upfront with yourself regarding your carpentry business position and to which level you want to take it.

For choosing a suitable business structure, you have to consider the ownership control you want to have over your work, the level of protection against lawsuits you need, in addition to the time and money you’re willing to invest. Never underestimate the importance of selecting a suitable business structure and take enough time to review this point in detail.

Step 13: Choose a business a name

A business name is the first and most important component of your communication with the market. A good business name has the power to influence the reputation, branding, and even growth of your carpentry business.

So, you better pay very close attention to the first impression that name will leave on the audience and ensure it’s a positive one.

How to select a name for your carpentry business?

Since the business name is most likely the first thing to communicate to the market, you must make this name stick. To make your business name last long in everyone’s mind, you must make it unique, memorable, and meaningful. Remember that the name should also be relevant or descriptive of the products you manufacture.

Section II: Forming a Legal Entity

Step 14: Register your business

Business registration is the first step towards making your carpentry business official and getting it up and running. Registering your business will get your work right with the law, enhance your reputation, attract funding opportunities, and allow you to establish a business bank account and hire employees.

Register your business name

The unique business name you’ve come up with will now come into action. However, for registering a business, the name must be new and distinctive, which means it’s not already taken. So, once you settle for a business name or names, you better ensure no one has brainstormed the same name by using an online free tool available on the United States Patent and Trademark Office (USPTO) website.

Choose the state you will register in

Once you ensure that your business name is available, it’s time to decide where you want to register this name. The business location has many impacts on taxes and legal requirements. So, you better choose the location carefully.

Keep in mind that U.S. laws don’t require business registration in the business’ hometown. Instead, you’re free to register in any other state that imposes fewer taxes and fewer legal requirements. However, if you’re planning to operate in many different states, registering your business in each is a must.

Step 15: Get the carpentry business permits & licenses

Issuing permits and licenses come as a subsequent step to registering your business. Licenses and permits could be federal, local, or state-issued. They prove that you work in compliance with laws and are crucial to your business’s continuation and legal health.

What business license is needed and how to get one?

Since the permits & licenses required to start a carpentry business might differ from state to state, we will list an example of the licenses and information requested by the California Governor’s Office of Business and Economics Development for regulating a carpentry contractor business in Glendale city, Los Angeles county, C.A.

1. Builders and construction permit
2. Business License – Business Tax Certificate
3. Land Use Permit/Zoning Clearance
4. Business Personal Property
5. Fictitious Business Name – Doing Business As Statement
6. Hazardous Materials / Waste Management Program
7. Authority to Construct/Permit to Operate
8. Asbestos Certification
9. Asbestos Registration
10. Construction Related Permits
11. Contractor’s License
12. Corporation, Company, or Partnership Filings
13. Occupational Safety and Health Information
14. Registration Form for Employers
15. Sales & Use Permit (Seller’s Permit)
16. State EPA Identification Number
17. State Income Tax Information
18. Workers’ Compensation Information
19. Employer Identification Number (EIN or SSN)
20. Proof of Residency Requirement

Step 16: Fund your business

No business can start generating revenues without investing some money in it. So, to start your carpentry business ball rolling, you must secure financing.

Financing options for your carpentry business are many. But the implications of going for the wrong one are also many. So, you better put some good time into researching potential financing options and getting to know each option’s pros and cons and whether it suits your startup or not.

The most popular ways for raising funding include personal savings, crowdfunding, SBA business loan, and venture capital backing.

Step 17: Open a business credit card and bank account

Separating personal expenses from business expenses is essential to keep your finances organized and avoid mix-ups. That’s why you must get a business credit card and open a business bank account.

A business bank account will help you avoid tax issues, simplify your accounting, protect your personal funds, and accept credit cards from clients.

On the other hand, a business credit card offers great benefits that personal cards might not offer. In addition, it reduces cash-flow issues, helps categorize your expenses, and builds company credit. Remember that business credit cards differ in qualifications, features, and reward points. Types of business credit cards include cash-back cards, travel rewards cards, and charge cards.

Step 18: Get carpenter insurance

Accidents, damages, and injuries are uncontrollable by anyone, and as a new business owner, covering for damages of any type will break the budget. So, you better be prepared for the worst-case scenario by getting carpenter insurance.

Insurance can cover the costs of property damage, employee injury, and liability claims. There’re many types of carpenter insurance you can select from, including general liability, professional liability, professional owner’s policy, business property, etc. But what is the best insurance, and what suits your business the best? That’s the question. There’re many steps to follow to determine the best insurance policy. First, you have to acquaint yourself with the different types of insurance. Next, you should define your business insurance needs, goals, and plans. Finally, do the math and review your budget, how much it affords, and compare it with the business insurance costs.

Section III: Growing the Business

Step 19: Build a Website

Clients behavior has dramatically changed in the last two decades; they now don’t turn to friends and family for product manufacturers’ recommendations. Instead, they consult Google. So, you better have a very good presence there. An easy-to-navigate, professional website will communicate credibility, save time and money, and gain popularity.

Step 20: Invest in Local SEO

Your humble website will disappear among the above 2 billion websites on the world wide web. Clients won’t, by no means, be able to find your fresh business website without the help of Search Engine Optimization. Collaborating with a professional SEO expert can contribute to your business website’s reach and rank high in search.

Step 21: Acquire client reviews

The more positive reviews and rates your website contains, the more clients will be triggered to try your products. And that’s on you to encourage clients to write their reviews by asking them directly via email or offering high-value incentives.

Posting reviews in a section where website visitors can see them might also encourage other clients to write their own. 

Step 22: Leverage social media

Social media has become a lifestyle; people nowadays check their social media accounts the minute they open their eyes. And among all the social media platforms, both Instagram and TikTok are the most popular.

Americans spend an average of 28 minutes on Instagram and around 52 minutes on TikTok. So, you better make your business account prominent on these two. 

Start a business account on both platforms and follow the following tips:

• Set killer profiles
• Create strong strategies
• Work out distinctive contents
• Use hashtags to reach a wide scale of audience 
• Engage with the audience
• Adapt trends
• Collaborate with influencers

Step 23: Get business cards

Even though business cards are an old marketing trend, nothing will ever be able to replace them. Business cards communicate professionalism and seriousness. Statistics have shown that sales level up by 2.5% for every 2000 business cards given out. 

For creating an effective business card, ensure you hire a professional printer, including the essential information, be creative, keep it simple, and utilize a Q.R. code. 

Wrapping Up

Nothing is impossible with efficient planning and consistency. Your business name can make it to the top and become one of the most prominent in the market. The above-mentioned steps for starting your carpentry business are more than enough will help you enter the fast-paced, growing industry as a pro.