Seeking Success in the Cabinetmaking Business

This question from a struggling cabinetmaker provides a good opportunity for some education in the basics of business success. September 7, 2013

I own a cabinetmaking business. Iím 46, married, with 3 kids living in suburban mid America. I have the skill to design, make and manage beautiful projects made from wood. I count myself lucky for having a passion for woodworking.

But my main objective now is to make a fine living at my craft for the financial security of my family. I have always just got by in my life. Iíve been blessed during the hard times, but I am so done with the struggle. Though I have created beautiful spaces for my customers, I havenít parlayed that into financial success.

It is only me, a cabinet shop that allows me to use their space for a fee, and the quality help for hire when I need it. I also outsource cabinet parts to the finest in the business, but I am still the assembler and most of the time, finisher. I have one designer that Iím working with that may lead to something wonderful, but other than that, it is just up to me to get people to know what I do and will be willing to pay top dollar for the quality product that I give, which is very limited.

My objective is to become the finest cabinetmaker in my town. That is my story. Any idea how I should do that?

Forum Responses
(Business and Management Forum)
From contributor D:
What is your question? How to make a fine living at your craft? You have your strengths and weaknesses, like we all do. You must either strengthen your weaknesses, or hire/partner with/work for someone that has strength in those areas you have weaknesses. Are you ready to study? Just want to work with wood? To make a fine living from a craft does require self-promotion, and lots of it. I see very few people that can really prosper (yes, there are some) as sole-employee craftsman.

From contributor M:
It sounds as if sales may be what you are after. Look for an agent or rep. They promote your work, be it in galleries or door to door, and you do the work. Be the best and market yourself wisely and they will find you.

From contributor P:
You need your own space. How is anyone going to believe you are the finest cabinetmaker in the area if you are working out of someone else's shop? Also, when you say you outsource parts, which parts are you talking about? If you want to be a fine cabinetmaker, the outsourcing should be very limited. You can't really call yourself a fine cabinetmaker if you are outsourcing your doors and drawers. You are basically an assembler/finisher.

From contributor S:
Your goals are resolvable though difficult. Get your own space. Concentrate on what you need to do to make your work different from others. Do not compete -exceed. Get out of the ruts and exploit a niche that few else do. Do not accept anything as "the way it has always been done." Set yourself apart. Educate your customer. Promote shamelessly. Be ready to expand with a bit of shop help, or marketing help or bookkeeping.

If you are building kitchens (today's definition of "cabinetmaker"), then you need to be an accredited designer, with awards, and the volume to do that will require more than a one man shop. If you wish to be more like the historical definition of cabinetmaker, then get your skills together, in spades, along with your tools, and produce reproductions that will bear close examination. By professionals like yourself.

From contributor G:
Your website certainly shows some great project pictures. It looks like you have much of the technical side of your business figured out.

You stated ďI havenít parlayed that into financial success,Ē and that's generally a symptom of not pricing jobs profitably, not having a steady flow of new business prospects that fill your schedule to overflowing, and not having the right sales skills that allow you to close the right jobs.

Iíve seen over and over again pricing schemes from woodworkers that allow absolutely no room for error and quite often donít include enough to cover overhead expenses, to say nothing of a profit. And no, profit isnít what is left over after you pay your direct job supply and labor costs. Itís what you earn after you have paid for all supplies, labor costs, salary and overhead expenses. Itís really pretty simple. If you donít have profit, where do the funds for things like new machinery and tools and mistakes come from?

When it comes to new business, a healthy business will always have more suspects or prospects in its pipeline than it would ever hope to sell. Those suspects and prospects come from many different sources, including, but not limited to, referrals from past clients, networking, marketing and advertising, and the like. Very few ďfinancially successfulĒ businesses rely on only one source or one method or one client for new business. And, unless you are in a very, very specialized niche where you can name your own extraordinary high price and have demand that outstrips available time and resources, you will need a multi-faceted plan to bring more suspects and prospects into your pipeline every week.

In meeting with suspects and prospects, you need to separate and eliminate those that canít or wonít buy from you for whatever reason before you devote much time to them. I see many shops going through massive amounts of time meeting and designing and drawing and pricing for suspects that canít or wonít buy, without getting a dime for their time and trouble. I call that process free consulting. Very few successful businesses do any amount of free consulting. Time is just too valuable to spend it with the wrong people. You need to have the sales techniques and skills to screen out the suspects we all get in our pipelines from the real prospects. And the sooner in the process you do that, the sooner you can get to the next suspect who might be your next profitable job.

Contributor D talked about education and credentials. The Cabinet Makers Association now offers professional certifications for woodworking shop owners and managers that teach the skills to operate an ethical, successful and sustainable business. We have over a dozen of those sessions scheduled for IWF Atlanta next month. Although you do not need to be a CMA member to attend these sessions or to become CMA certified, we do offer significant discounts to our members.

From contributor I:
I too take my craft and skill very seriously and consider it a source of pride. In fact carpentry defines most of my life.

The better you are, the harder it is to improve. To the point that if you are the best around, you will likely become complacent and stop developing your craft. Relocating yourself to a place where there are others you respect is a great way to improve. Working in Europe changed everything I thought I knew about carpentry. The one man finishing/cabinetry guys in Germany are amazing. Using only Festool and other high end power tools, they make amazing things with no shop. The woodworking hobbyists in the UK are amazing also. These guys can cut dovetails by hand faster than you can do it using a router and jig. There are some super skilled guys out there in the states as well, but they mostly work in small shops and only do 3 or 4 jobs a year.

Good at cabinetmaking/woodworking can mean a lot of things. I am good because I can make an amazing amount of very high end cabinetry in a small-medium sized shop with no machines that cost more than $10,000. This is something I have learned to do very well in the last 10 or so years.

But I do not think that I can manage a shop producing 1 million dollars a month. That is a different kind of "good at cabinetmaking."

If you want to be the most skilled craftsman around, you need to study the craftsmen that are better than you. Look at the Japanese and other places. Every new technique you learn will add to your abilities.

As for making money, I do not think you should try to make a lot of money because it simply goes against your attitude and interests. I am horrible at making money despite my knowledge and skill on the shop floor. I simply don't care enough about the profitability of a job. I care more about the results, the comments of the clients and my friends when they see the pictures. This causes me to make poor business decisions.

Maybe it is just me. Sam Malloof made a bunch of money, so I guess you can have your cake and eat it too. But I do not believe that Sam was trying to make money. He was making his craft.

From contributor R:
I'll just share my story on how I was able to achieve financial security for my family. I worked as a mechanical designer for a major construction equipment manufacturer. Hated the job, loved the security. Left after 15 years to start a one man shop, working mainly on residential furniture. After 8 years, I knew I was running myself into the ground by often working 7 days a week, missed a lot of my second born's early life, and was making about $25,000 a year (1994), I closed the shop and went to work for a woodworking magazine. Great job, great benefits, but unstable. Magazine was sold in 3 years.

I went back to the corporate job, and was able to get a job in the industrial design model shop. That was 14 years ago. They gave me back the earlier 15 years of service, and I will be retiring next year (30 years) with a nice pension, and fairly nice 401k nest egg. Moral of the story, work for someone else as a patternmaker or modelmaker if you must work wood. One or two man shop is not the way to financial security, as is the case for almost all the artist/creative careers. By the way, my company no longer provides pensions to new employees, there are only 2 modelmakers in a company with 125,000 employees, and about 1/3 of the patternmakers they once had. I am extremely blessed with a good job. Good luck to you, but I really suggest getting into a new career.

From contributor A:
Sam Maloof made a lot of money because he had an incredible marketing machine. He was certainly a good craftsman but that was just an admission ticket. The country is filled with hundreds (maybe thousands) of really good woodworkers toiling away in their studios who are every bit as talented as Mr. Maloof. They just don't have the videos.

Another great example would be Gustav Stickley. At the time he was in business there were 400 other companies making a similar product. What set Stickley apart was that he became a publisher and printed a regular magazine. It was the publishing that made him The father of the Arts & Crafts movement.

Both of these guys and James Krenov were great craftsmen, but it took the MadMen to sell the world on this idea.

From contributor E:

My question is, what is the best way to tell the public what you do best? Word of mouth is really the best if you have some good jobs going on - when you are done, they can tell their friends. Where do we invest our money to get to the right target market?

From contributor G:
I don't disagree that word of mouth will deliver some of your best sales prospects, but there are very, very few businesses that can grow and thrive on un-managed and unorganized organic word of mouth marketing alone. The biggest problem with word of mouth is that you can't crank it up to deliver more sales prospects when you need them the most. And if someone has a bad experience with you, watch out! Their negative experience will spread many times faster than any positive word of mouth you may have working for you.

From contributor A:
You have the portfolio. How are you getting the jobs in those large McMansions? You may be giving away much of your income. I doubt there are many shops capable of that type of work.

I started making money when I had enough good referral sources, but more importantly I constantly pushed my pricing higher as I got busier. In retrospect the first year I gave away a lot of income.

The worst thing one can do in business is to be unaware of the pricing in his market. It is more difficult in your market where everything is custom and complicated. Try adding 10% to your next project. Do not think of it as padding your pricing. You need to better understand profit and contracting in order to make money in this game.

From contributor C:
You said it in your second sentence. Can design, make or manage - that is what it is going to take (manage mainly), along with you own shop, capacity, cash flow, capability and the versatility to turn the product out fast. You are going to have to manage at least 2-3 people and keep the momentum up.

What has got to come in has got to cost out at a much lower rate than what you are charging, especially if you are going to hit your numbers for overhead and profit. One man shops usually have a hard time doing this unless you can outsource quite a bit, especially the install.

I made a great living for a long time by myself, then moved gradually to a 5 guy shop (7 years). Now we are getting ready to build the office staff that can help bring the work in with bid work, negotiated and past customers and handle the bills and all the other paperwork.

From contributor L:
It's a tough racket! Very few make it big as small shop crafts types. To do so you will need great PR (and maybe luck). Most small shops price too low to make a decent living. In my small shop, generating a constant work flow is hard. Boom and bust.

We've got a niche in curved work, but it isn't filled all the time. I find small jobs difficult to make a buck at with all the upfront time.