Woodworkers discuss the pros and cons of working out of a small shop building at your home. September 5, 2006
What are your opinions about garage shops? I work from my home, in a 1500 sq ft shop, legal and zoned, and Iíve been at it for 25 years, with plenty of overhead - only the rent is absent. I heard that a customer told somebody that I was working out of my garage, and somehow it seems like if you work from your own piece of land youíre somehow cheaper and not as legitimate as if you where paying rent in a industrial park.
(Business and Management Forum)
From contributor A:
I would make it a point to contact that customer and make your position clear concerning your business.
From contributor B:
I think it upsets some of the shops in the industrial parks that have lost jobs to garage shops, but it probably comes down to a newbie giving his work away versus where they work from. I wouldnít waste any time worrying about it.
From the original questioner:
I'm more interested in what you guys think about garage shops. There have been quite a few popping up lately, and only one that I know of gives his work away, or did. His wife made him quit and get a real job. Most charge the same as any other shop, but what drives the deal is the customer somehow thinks that since youíre working from private property somehow theyíre going to get a discount. Some of the home based shops around here are top notch and charge quite a bit, to the surprise of the customer. Many put the money that went towards rent, toward expensive machinery.
From contributor C:
I dream everyday that I will someday have my own garage shop. I would love to move away from 12 employees and those 7 day work weeks. A totally legitimate business is for the birds and I know because I've been doing it now for 30 years. Every goal I set now brings me closer to that 5000sq. foot garage with no employees, no headaches and time on my hands between jobs.
From contributor D:
That's a big garage! I run a shop in Orange County and prices range in the one dollar range per sq ft per month. My shop is just under 1800 square feet. If you figure 1800 bucks plus insurance, utilities etc., I too am living that dream. I live in an area where there are no backyards and if you work in your garage you better hope no body rats you out. You know the HOAs are a real hoot. In fact some of the hoas cost 250 bucks a month in themselves plus the mortgage. My dream is to have a shop in my backyard and a nice four bedroom house, all for the price of my current mortgage or less. So, no - I don't hate you for working out of your garage, I am jealous. I do hate the people out here who work out of their garage. It's different though. They are not running a legitimate business like I am. It sounds like you are though so I bow to you sir. Wish me luck on obtaining that someday too.
From contributor E:
My guess is most everyone who really loves to work wood would much rather be working in a shop that's on their property. Why wouldn't you want that? I'm not so much into the garage thing, as being from New England my dream is to own one of those big old barns. Get up in the morning and walk a few steps to work, walk back for lunch, and no long drive at the end of the day. And when youíre doing some little project around the house, your tools aren't three towns away. It sounds like youíre really more concerned with client's perception of working out of your garage. After all, do you really care what other woodworkers think? We're not hiring you. If your concern is perception, then you may want to spend some time marketing yourself. A client should not be thinking about where you are working but about the quality of work youíre providing. If you run your shop as a legitimate business as you say you are and you market it as a legitimate business, then the garage, barn, industrial park, or wherever should be a non-issue. It's all about providing a quality product for a reasonable price. At least that's my take on it.
From contributor F:
It's a potential client's perception of trying to get a bargain. They have in their minds (sometimes rightfully so) that if you work out of a home place then your overhead is lower, thus your price is lower for what they want. Almost everyone expects the price to be higher if you are in industrial park paying industrial prices. Therefore your overhead is higher, thus your price is higher. Everybody is looking for a bargain. So being where you are, price your work high, and then give a discount to the customer saying that because my rent is lower, etc., I can pass it on to you for a lower price. Youíll be getting what you want in the first place. Everybody's happy - they got a bargain price, and you got what you want.
From contributor G:
Itís more even than the client's perception. I've had vendors refuse to talk to me until they come by to visit my place of business. You tell them itís your house, and they never talk to you again! There seems to be a lot more hurdles for the small guy just starting out, especially in his garage. You have to dig until you find the right people to work with to do business the way you want to do it, and put together a top quality product.
From contributor H:
I'm in a small industrial park. Not a chance I could work out of the house. I think that if you are a professional shop and do professional work and you charge what you are worth, then you should not be penalized for working out of your home shop. The key here is to charge what others in your area are charging per hour. If they can get it, so should you.
I'd sell the craftsmanship of being in my home shop over the commercial shop that is there to crank out cabinets. However, I'd not charge less. Pocket the extra money. Given all that, I would love to be able to work out of my home shop. I'd build a 5k foot shop out back, buy a forklift, pour some concrete and go pick up any material that I couldn't get delivered. For the cost of rent and everything else, I could work around any inconveniences.
From contributor E:
I do think it's perception, and I guess it depends on how you run your business. Personally I work out of a 2k sq. ft. building. Does it matter - most of my clients never see it. Why would they? I build custom cabinetry and install it. I only invite clients to visit my shop if it's a bigger job like a kitchen, so they can see the progress. And that's halfway through the job. I sell by my past work, and word of mouth, not on the location or size of my shop. Also if you are a legitimate business you are renting the shop from yourself (for tax purposes) along with paying for phone, fax, internet access, a percentage of utilities, vehicle expenses, insurance and so on. Therefore your overhead, although lower, is still there. If youíre not figuring all these costs into your pricing then youíre not really running a business Ė youíre a hobbyist trying to make money.
From contributor I:
I worked in my business for 2-1/2 years in a business park. Then I spent about 3 months gutting and reframing my 200 year old carriage barn. This will be my 3rd year in my 1750 sq ft shop (1000 first floor/750 second). I still spend a couple of weeks a year remodeling the building itself not including the work space. Itís been a rocky ride, but I now kick myself everyday when I walkout the door in the morning, pet the dog and make some sawdust. No commuting. Depending on the weather or my mood I use that extra hour of my day to either get a little ahead or go for a ride on my bicycle. My only mistake so far was buying a piece of property where the barn is 50ft from the house. Itís far too easy for my wife to walk in and nag me. If you go garage, buy at least two acres and keep the two buildings out of conflict.
From contributor J:
Sixteen years ago, I quit running a 25 man shop. I went to my 1100 sq ft backyard shop and started toughening up my hands again. I worked in this shop doing one-of-a-kind things and marketed myself as an artisan. I always had more work than I could do. I had quite a few people who were looking for that garage discount guy, and expected me to be far less than the furniture store or architectural shop. They would often get angry when they found out I would not budge on my pricing - "you probably don't even pay any taxes out here, you can work for a lot less than those big shops." Some people would show up anytime - Saturday evening family barbecue once, and tell me they'll just "bother me for a minute, to rip this board down and plane it and..." $65.00/hr was not enough for them.
I moved to a larger space with employees for the following reasons:
Build a business that will grow and be saleable as a retirement strategy;
To do larger more profitable projects;
To charge what my labor and experience are worth;
To be financially able to provide health insurance and top benefits and pay to the best woodworkers I can find;
To have the security of a shop that can continue production if I'm off sick or on vacation;
To get rid of the consumers and shoppers
After 7 years all goals are accomplished except for retirement/sale (10 years), and things have never been better. Our work is taken far more seriously and is more profitable than ever, and we still have more than we can do.
From contributor K:
I have a 1000 sq. ft. garage studio. I'm on top of a hill with nice views of a horse ranch and an ocean breeze. My office is a 1945 Missouri Pacific caboose with ocean views. The work environment is pleasant, but I could use a bit more space. These days you can out-source just about anything from doors to drawers to cabinet boxes, so the garage shop can handle quite a variety of jobs. Of course there are always people who think that you are going to be cheaper if you don't have a large operation, but you have to gently weed them out. It's the same people who think that furniture from a custom shop should be cheaper than from a chain store because my overhead is lower.
From contributor L:
There are a couple of suppliers around here who want to visit my shop. I don't have one. I do all of my work in the field, mostly installation, but that doesn't mean I don't need to buy lumber, hardware etc. If they don't want to play ball I just drop them. There are plenty of others to choose from. Most of them don't care who you are if you are buying product from them, but a couple still have that field rep/shop visit/credit application thing going on. I never buy on credit, and I get a materials deposit on every job, but there seems to be less respect for the COD customer. Strange behavior, but they can run their business anyway they want to. I'm just not one of their customers.
From contributor M:
The only way I can make it work is to work out of my garage. I do it part time - licensed, bonded and incorporated. I charge the same as the bigger shops with very few complaints. My suppliers know my situation, and they cater to my needs. My neighbors tolerate me. I do not run the shaper at 11 pm. Yes, my overhead is cheap, but I had to put in a bigger panel, get 3ph power and learn how to optimize my mere 1000 sq. ft. That is my drawback, but it works. It is not for everyone, but it works well if you are not trying to undermine the bigger shops. You have to have a relationship with them too. You never know when you will need their services. I never want to screw them over.
From contributor N:
I am going to build my new house with a 22 x 24 shop off the back of the garage. I designed it this way so that there would be low overhead. I also will have an office with a small bathroom and a storage closet. The shop is about 528 sq. ft. and the office is only 288. I am just wondering though how exactly you figure out how to charge for your work.
From contributor O:
I have no problem at all with garage shops, as long as they pay taxes, insurance, etc. I do have a major problem with shops that don't pay overtime, employ illegals for pennies, and sell a high quality piece of garbage product for half of what I can sell a real high quality product for.
From contributor P:
I'm jealous of you who can legally manufacture in your garage or in any residential area. In most southern California areas it is just plain illegal to do so because of city zoning laws. You are totally the mercy of a complaining neighbor. One call to the city, Building and Safety, fire department or the AQMD and you are screwed. Insurance is also a huge problem if caught. I stated a printing business in my parentsí garage 40 years ago. I was 16 at the time. One complaint from a union printer who lived half a mile away caused a ton of problems. I guess they were worried about the garage guys stealing their work even back then!
From contributor I:
Everybody has to start somewhere. As long as we are all paying taxes, insurance, etc. itís a level playing field. Garage shops are by no means free. Everyone in our business hates the part-time do-it-for-the-cost-of-materials kind of guys. When it gets right down to it the bigger shops should be charging less because of all that cheap labor. I'm at least as good as any shop's best guys. So why on earth would I charge less?
From contributor N:
One of the reasons why I wanted to go that route is because when I was a kid I would build small projects for people like bird houses and other small things like hat racks. But what really got me into it was the fact that I would only have to go a few steps to the shop every day instead of the 45 miles one way. How much do you do in a month - a few kitchens, entertainment centers, desks? I am having a hard time trying to figure out exactly how much I will be able to do.
From contributor Q:
Interesting diversity of backgrounds in this thread, also lots of good information for the home shop guy. The discussion has veered off a little from the original "perceived value question, but it's a good topic so I thought I'd chime in.
I've had it both ways, and now find that I'm generally happier working out of my own shop (about 1,200 sq. ft. detached) than driving to work. That said, there are days where I wish that I had separate places called Work and Home. Customers seem to care little about where I do it, and I charge the same. The difference is that the money I would pay the landlord can become my equity, and I don't commute. I can include the pets and eat lunch cheaper. A home shop isn't for everyone, certainly not the more ambitious personalities who want to build a business they can pass on or sell to retire. It's really about your goals.
I once took a car to a local garage for an all day repair, and asked the owner for a ride home. He pulled up to the house and commented "So you never have to go to work!" My reply, "Or I'm always at work."