Hobby to business – follow your dream
Who doesn’t? Let’s face it, if you’re reading this magazine, you probably have a passion for wood and woodworking. And there is no better dream than turning a hobby you absolutely love, into your daily work. Wouldn’t it be great to walk into your workshop each morning, ready to make some sawdust and create with your hands?
What makes the concept even more tempting is that many careers are somewhat “artificial”, in the sense that one works with computers, insurance policies, statistics, or in areas where a “tangible” result at the end of the day simply doesn’t exist. This doesn’t make those careers any less important, but it can be hard to stay motivated without tangible results.
In a woodshop, one can point to the results of the day, even if it’s only a jig or a template. And every once in a while, you have a spectacular creation that seemingly came out of nowhere, something that might very well survive for decades or centuries, with your mark on it.
In this 6-part article series, we will explore your motivation for starting a woodworking business, and whether you have what it takes to survive. I will also review some of the technical requirements in terms of legal obligations and taxation.
My hope is that you can analyze your own financial and emotional needs, as you’ll never ride such a rocky road as when launching a start-up business. Just as quickly as you can “hang out your shingle”, you can start to dread your hobby-turned-business due to financial pressures and deadlines. Think hard before you take the plunge.
We all have different goals in business, but all businesses share one; to be profitable. If you’re not profitable, you’re not a business. Call it a hobby, a pastime, or anything else, but not a business. Money is a thorn in our sides when starting up a new business. It’s hard to be creative while recording every minute that you work on a project. And it becomes very stressful as bills pile up and nobody wants to pay enough for your “hand-crafted” wares.
Just keep in mind that while money is necessary and important, there are other goals that define success. (See the sidebar on “Examples of Success”.) Not everyone has to make their living entirely from their business. For some, it’s a way to pass the time in retirement, while making a few extra dollars and financing some new equipment along the way. There’s nothing wrong with that, but be clear and honest with yourself about what your goals are. A part-time business person will operate differently than someone who has to make a full-time living from the same business.
Myth And Reality
Myth: When you run your own business, your time is “yours”. You can flex your time any way you like.
Reality: Your time belongs to your customers, not you. And there is no time to flex if you’re already working 60 plus hours per week.
Starting a new business is not a walk in the park. It takes guts, energy, and commitment like you may have never needed before. If you intend to make a full-time living from this venture, don’t expect to go golfing every Wednesday and sleep in every other day. Even people who devote everything to their new business may fail; the failure rate is even higher if you aren’t committed. One of the reasons so many people start their own business is because they want to “have control” over their lives. Don’t confuse “control” with being able to take time off whenever you want. It isn’t so simple, and you may work harder and longer hours than ever before. Most people agree that a new business won’t turn a profit for at least 3 years. Some say 5 years is more realistic.
Examples of Success
1) Financial wealth
4) Creative expression and growth
5) Controlling your own destiny
Tips for Success
1) Start small.
2) Even when you can’t control revenue, you can always control spending.
3) Concentrate on “conquering” your neighbourhood or city – not the world.
4) Have a second income to support you (e.g. from a spouse), or start your business on a part-time basis only.
5) Be ready for a tough uphill climb. Think before you act and don’t do anything that doesn’t reflect well on your business.
Supporting Yourself During Start-Up
In my opinion, it’s vital to have some kind of a back-up source of income to pull you through those first years. Plan ahead and be patient about when to launch your business.
Back-up sources of income:
1) Spouse who is willing and able to support the household.
2) Severance package from past employment.
3) Parental support or support from another family member who believes in you.
4) Part-time employment (which leaves you with only a part-time business).
5) Inheritance money (giving you an opportunity to reassess your life).
6) Lottery winnings (we can always dream, but don’t count on it).
Nothing Good Comes Easy
In my opinion, the single most important reason that businesses fail is overspending. This includes borrowing too much or just buying a lot more capital items than you need to get started. Others have the opposite view – that most businesses fail because they are undercapitalized. But the way I started my own business was to be completely self-financed and take things slowly – one step at a time.
Grow slowly, and keep your overhead low and then, if your business fails, then you will not have a mountain of debt, or face bankruptcy. If you can walk away virtually debt free, at least you can say you tried.
Slow and steady is my preferred method of growth. We live in an impatient society, where we expect instant gratification. But nothing good comes easy.
In the next article in this series, Hendrik will review the nuts and bolts of organizing the business, insurance, zoning, and sales taxes. In future articles, he will tackle questions like “What will I build?”, “How will I price my work?”, and “What do clients want?”.
If you are serious about starting your own woodworking business, start thinking hard about these questions. Only you can decide if this is the business for you and whether you are likely to succeed.
While some luck might be involved, you can also make your own luck through good old hard work.