Working for yourself

I dont know.

Im not the most positive person in the world, I seem to always see the downside of everything.

Maybe that has something to do with the way I ran my business for 30 years. Id always expect the worse, and try to do better.

Anyway, I dont think this is an easy task, and maybe not doable for most people who are in their 50s, and have bills and need to make money.
Sure, if youre not worried about turning a profit for years, well, enjoy it. But the reality of it is, going into a business with such a limited customer base is very, very daring in my opinion.
No matter what pictures you show, craftsmen build themselves by their reputation, and by referrals.
That could take some time, and being 45, 50, 55, I mean how long are you willing to sacrifice your time without looking at any profit. One really has to sit down and discuss this very thoroughly with their loved ones or those that are influenced directly by someones decision to go down a different path.
Its certainly not easy. And noone should decide to do this because of a lack of another option in the immediate future.

Ryan Mooney said:

Please correct me if/where I'm wrong here (I often am ) but I'm seeing a handful of key points:

• Sell people what they want, not (necessarily) what they need. This is a subtle distinction, but it seems people usually pay more for want than need and are more willing to seek a craftsman for it (the kitchen example is a good one). Creating "want" by highlighting quality/differentiation is a key part of the marketing strategy.
• Find a niche, competing on the general market is hard for a soloist because you get lost in the crowd
• Leverage other companies pre-existing advertising/marketing chains where possible (need to think more on this.. seems like there are a lot of innovative possibilities here).
• Figure out your cashflow, can you survive/pay the food/rent. This seems obvious but is - for me - one of the harder items, as I really have difficulty imagining sales prior to them happening, especially in a market I'm not 100% familiar with (I've done some sales before and it usually vastly exceeded my expectations, so I suspect I'm getting caught up on my inherent pessimism). I suspect that this is one reason for the "toe in the water" approach many take; I'm beginning to believe that that has problems with follow through though...

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All very good insights by everyone in this thread. I will contribute by mentioning another example of leveraging other companies. One of my brothers had a small remodel business and got a lot of work with a relationship he had with a real estate salesperson. Many homes need some fixing up in order to make them "sale ready". The real estate person would recommend my brother because he proved to them that he could quickly response, make the necessary repairs/upgrades and all for a reasonable and fair price. A classic example of letting another business do your marketing for you. Sell them on your abilities and let them sell their clients on you.

Sorry, Allen, I respectfully disagree. Having no other option is a great motivator. Working without making a profit is simply stupid. No reason to, even at the beginning. Making a greater profit comes from becoming more efficient. Doing custom work is vastly different from retail sales where the game is numbers.

There is another thing to think about. It is not how much some kind of work is going for. It is about how much you are willing to do the work for. Costs differ for different people and circumstances. Remember the first thing was knowing exactly how much you need to get by. You may have to reduce that number by downsizing yourself, shrinking debt, foregoing new things, making do, buying used or thrift store, that sort of thing. It is NOT by working for nothing! Not even on the first job. Some jobs will work out that way and you will learn why that happened and you will learn not to do things that way again. Know what you cannot afford, including certain customers.

Ryan the issue is not so much exuberance as opposed to motivation.


I am very much what i would consider a serial entrepreneur. I have worked in more than 12 major industries. Not bragging just fact. The fundamental issue to me is so many many people do a job they hate. They have to drag their feet to that office or factory. They then have to have a heavy duty coffee to get stimulated enough to start the day. They in a vice. Wedged between doing the work because they have bills to pay.

The key to me is to be doing the very thing that you enjoy. Then its not work. It dont matter about hours because you dont care about hours. Its fun. All pure fun and you enjoy it so much you go and go and go like clockwork.

This becomes a self fulfilling prophercy. Your positive enthusiasm in a situation like this becomes infectious and the customer picks up on this confidence.

We need to recognise the system is not designed to breed entrepreneurs. Its designed to breed workers for the system. Parents too pass on all their fears so before a kid today gets a chance to think of making it on their own while they still at home and have the protection of the roof over their head, they have been pounded both at school and work with the whole seeking of security. Gotta get an education, gotta go to University.


But some of our greatest success storys today were all drop outs. Richard Branson, Bill Gates, Steve Jobs show me where they followed the systems path.

You gotta do x you gotta do y. So the sense of adventure is knocked out of them and the substitute is you gotta get this to get that you gotta buy a house for your family. Yeah you gotta have a mortgage. That ensures you become shackled and obedient to the system.

An entrepreneur has to have a little rebel in them. You gotta have some arrogance to believe you can do it as good if not better than the next man who may be your competitor.

I am sorry i dont see the aspect of having a home that ties all you own to one spot on the map and liability of mortgage payments to go with it as security. Today the market is mobile. From a economic point of view and job point of view. When you are liquid and have your assets or savings in a manner that they can be leverage to take advantage of opportunity then you have security. You cannot exactly move from say Seattle to New York to a new job if you got a house in Seattle and the property market tanks and you cannot find a buyer. That severly restricts your ability to earn an income. But we all been bread with way way too much fear not to follow this path that generations before us have.

Sure a certain amount of fear is healthy and we have it naturally if we tune in to our own mind, but way too much of it is coming at us to keep us compliant. This is not conducive to being confident and motivated as you need to be to sell something.

Coming from where i came from we had fear up to our eyeballs. We lived with bombs and terrorism before you guys learnt about the word. Eventually you get to the point where you say enough and shrug it off and get on with living.

I dont agree with Carol that you need luck. To me there is no such thing as luck. You make your own luck.

I have proved time and time again that if you get enough balls in the air then one is bound to land where you want it. This is what i was refering to the other day about keeping doors to opportunity open. But you also need to be prepared to step through the doors. Some opportunities will work some wont. Its not a matter of luck, its more a matter of perseverance.

Just think of the great inventors. A guy like Thomas Edison. By the standards expected today he would have been exepected to become the next high school nutcase shooter. He was considered a dunce at school.

But he coined the phrase 99% perspiration and 1% inspiration. He did not mean sweating either he just meant applying oneself perpetually.



Faced with unemployment at 50 ish is today becoming very common for a man and as Carol has said for ladies too. But by the same token we are being kept alive through improvement in health services and standards of living for a good further 30 years. If you examine this the very idea that we gonna get by on the savings and social security payments for those 30 years then in my opinion this is a joke. No meaning to be political or offend. In my view this has nothing to do with politics and everything to do with pure mathematics. We have already seen civil servants heck even firefighters in countries across the globe being layed off. Who would ever have thought it possible. It makes a mockery of the value add of the service industry in my view. BUt i am a biased manufacturing man.

I dont see that one can get by on Walmart greeter pay either.

I will argue that seeking other work if you have been layed off at 50ish is just putting off the inevitable. When it no longer suites the company that hires you, well you now might be 53 ish or 55 ish and be out of work again. Each one of these instances at this age takes more from you in spirit than the tough times of paddling your own canoe in my view. There is way more that is lost each time this event takes place than simply the income. Each time its a mental kick in the head. A reminder that you getting old and a rejection by the system of your abilities to add value to suite the system.


When i am paddling my own canoe at least i know that no one other than the customer or the almighty is going to give me the chop.

Jim D made a good point in another thread in reply to some of my comments. Our parents grew up with a world where you had somewhat job security if you kept your nose clean and showed up and did your work. Today thats not the case.

Our kids will probably have so many jobs in their working career they will not even bother counting. The key is if they dont add value and their company does not make a healthy return they aint gonna have a job.

Whats the difference between that and being self employed. Being self employed i am not dependent on the boss screwing up the deal or not showing up at the right time or showing up drunk as happened to me once on a very important overseas business trip and deal. (yeah he thought it was funny I was subordinate to him at the time but i did not. ) The participants in our meeting did not appreciate his state of mind.

I hear Jim about regulations and hiring people and keeping up with technology. BUt some of it you faced with having to do anyhow if you need to earn a living.


I still believe in a free market like the USA and Canada especially a market where you still have a very large economically active population, self employment and ones own business is the way to go in my view as scary as it may seem.

Carol - in marketing yourself, did you use a web site? If so, do you still maintain it as a woodworking site (since you're now a minister)?

Mike

One thing I need to point out in Carols post.
"If you do get a positive response, they will want to know your pricing. You will have to know your total costs for a sample full size piece. But custom has many variables. You will need to point them out. Keep the list short. So don't directly answer that question just yet. You will first want know what they feel their customer will pay. Receive this information positively. It is very easy here to get negative and decide the price is too low. You don't know yet if you can build to that price point. The interior decorator will also have a commission built in. Find out that commission. What's left is your 'wholesale' price. It is what is coming into your bank account."
The designers I work with do not under any circumstances want you/me to contact there customer. Some even have clauses in the contract stating that you are not to discuss work with the owner. We have that clause in our contracts with all of our subs. The reason being is the owner needs not know how much each fitting is they just need to know how much the job is going to be. This also keeps the subs from changing things with out the proper paper work being done for said change. The designer is my customer not the end user. The commission she tells of is added to my price by the designer. I sell to them at retail and they sell it to the end user with a % added on. That being said there is also "quality grades" The designer knows that she can sell a 6k book case to X She has a plan for a book case that is going to cost 10K your job becomes how to get that same book case to her at 54 hundred so she can sell it at 6k and make her profit. There are many was to do this with out losing the quality of the end project.

Chuck Thoits said:

The designers I work with do not under any circumstances want you/me to contact their customer.

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That's my experience, also. I believe it's because they don't want the customer to know who's doing the work, because if the customer knows the craftsman, the customer can go directly to the craftsman next time, bypassing the designer.

Couple of jobs I did through an interior designer, the designer gave me the specifications and I built it. The designer picked it up and delivered it. I never knew who it went to.

Mike

@Rob - "I dont agree with Carol that you need luck. To me there is no such thing as luck. You make your own luck." I did not say you need luck. I said don't plan on it. But dumb luck happens sometimes.

@Mike - web site? Yes, but not for furniture building. Sold router jigs and my book and no, it is no longer up.

With regard to being separated from the customer. I guess I was able to convince the designer I was a honorable person and that it was in their best interests to let me directly deal with the customer. Contract included a period of time for future work to be done through the designer. Included referral work from the customer. There was no money to be saved by not going through the designer. Maybe that can no longer be done. Sad. Don't think I'd like working with someone who did not trust me. Tells me they can't be trusted.

Is there really any such thing as trust in the business world.
It has more to do with the whole changing the designers vision than trust. But trust is also a big thing with them every time the owner talks to the horse the designer gets cut out. They actuality teach up and coming designers not to let any subs/suppliers have contact with owners. After all my customer is the designer I really don't care what she does with it after she has bought what ever it is she is buying. In that world if I keep her happy she tells her designer friends that she has this guy that does fabulous work and keeps his mouth shut. Next thing you know I'm working for her designer friends too. The only other thing she needs to add into that sentence is "His a bit arrogant but well worth the money" Also when one has subs talking shop with the owner things change and no one is responsible for the extra charges that may incur with said change.

Well said Chuck. Very well said.

The designer is essentially a project manager a good project manager will never allow the client to get communication going with anyone outside of themselves.

Chuck has raised a further point i believe is worth expanding.

You starting out........so ........what is your customer strategy....

Wholesale or Retail.

There are pros and cons here to both. The thing is to understand the differences and how they impact your business.

Chuck is as an example telling us he works with designers. In my view this is an excellent approach for small business. Why?

You need to recognise what it costs to secure a customer. Not what you think it costs what it truly costs.

In a retail situation you need to spend or come up with some method to have a continuous stream of of customers. This takes away from your available hours and pocket book. Why? Just think of the tire kickers. But the offset is if you have the intuition for it you make a bigger margin. But the competition at that end of the scale is intense and not for the faint hearted.

Wholesale you give up margin to the person that retails the product but you now work with a few wholesalers that you can build a relationship with over time and have a continuous supply of work. They inccur the cost of dealing with the tire kickers and marketing costs etc in finding and securing a contract with the clients.

The key to me is dont try do both and certainly not at the same time.

This strategic decision fundamentally affects the cost structure of your business.

At the same time recognise just what it takes to develop and maintain these wholesale relationships.

But think on this from a marketing point of view. People that use a designer have already passed a certain criteria. They recognise they not getting the cheapest price they getting what they want. This means the designer is doing the work of finding those people that want custom work. They know how to manage these clients.
Chuck is 10000% right in pointing out its also about change.
People in this league can waste money on whim. I would bet a $1000 that Chuck could tell us stories of waste that would make many have their hair stand on end in respect to waste in this regard.
The "project manager designer" ensures they who create the waste eats it.

If you are uncomfortable with selling this can be a very attractive way to go. But put yourself in the shoes of the retailer to examine what they want and need. They dont want to deal with incompetence or the very ordinary.

So the next strategic decision you need to think about is just what is your value add going to be.?
Just hours of skilled labor added to wood? Not a great "value proposition."

Put a great deal of thought into this. What is it that you are prepared and not prepared to do? What are you offering that is special and great about you. Because this has to come through in your output whatever it is, product, or service.

I hope Chuck dont mind but if i had to have another deck built, i would love to be living close enough to Chuck to have him do it.
Why?
Once he posted a point about how he put screws down in a deck.
All in a straight line. That said it all for me about his work. Period.

Then consider his posts on his experiences on the job. He gets uptight with inchs where they count. Because they affect his work.

Thats a guy that knows what he is doing and can do it properly. Naturaly he gets uptight dealing with others incompetence but i would argue if you in Chucks hands your job is safe. Can you say that in your business?





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Another factor in working for yourself is actually getting the work done.

Many people don't have the needed work ethic. Working for yourself - and especially working from home - takes a special ethic. You've gotta look at it as a "real job" and drive yourself to keep working. The TV, or the golf course, or a nap might seem inviting, but hey, you've got work to do. Do that first!

Another nasty factor in being your own boss is the "feast or famine" situation. You might go for a couple months without any work, then overnight you get so much work that you're swamped. A month later, you're outta work again...then swamped again... then...???... That means you might be putting in a lot of 20+ hour days, then twiddling your thumbs for a while, then more long days...then... It can be frustrating and or exhiliarating. Financially, you'll need to put money in the bank during the feast, so that you can survive the upcoming famine. All this takes both a strong work ethic and discipline and a financial discipline as well. Many new 'entrepreneurs' never figure that out.

Carol Reed said:

Having no other option is a great motivator. .

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Right you are Carrol. I've been SE for 30 years now. Small and staying that way.

My biggest motivator is fear of not having any work. When work is slow I am most active. On the phone talking up work with old customers , Thinking of new ways to diversify.To me SE you need to have a very active mind , not necessary originated LOL I delegate a lot

The last 2 weeks with me being out from the accident, Jarrod has been running the show. He stepped in and is getting it done on all fronts and aspects. I not surprised. Very active mind , very talk-a-tive, personable, pulled in the work ethic when it was needed. And is working good with 2 full time employees.

My only concern at 1st was , he decided to revamp the old system and go with a Quick book system. OK great system but to much info for me to learn over night.

I also talk him he will need to get his girlfriend into a good county job for the insurance. lol

Well, I just discovered that what worked 12 years ago doesn't work anymore with regard to interior decorators. Lest we forget, this all came up in an example. It is but one way to get a contract signed. I tried to specialize in church furnishings not including seating. I learned that those customers insisted on insurance and seating is among the highest premiums. Aside from which seating is also mass production. So ruling that out wasn't hard. I got a magazine article in a church magazine written by a friend of mine who was a professional article writer who simply submitted it. I learned about hooks in articles and used that many times. Those articles always brought in at least one large job. I collected testimonies after the job was finished and tried to get a local newspaper article printed announcing the new furnishings. The more publicity, the more inquiries for work.

That said, marketing efforts took 15-20 hours per week of a 60-80 hour week. I had to just plan on it.

It is true that there is feast or famine in self employment. You have to know when you can take on a job to meet your contracted competition date. That was one advantage to giving exclusive commitment to one customer at a time. They knew when it was their turn. Regular updates kept them excited. I always took pictures of the delivery/installation and made copies available for their in-house publications, keeping a set for my marketing purposes. I also learned to get signed photo releases for everything.

To know when you will be able to take work and meet the contracted deadline, you have to keep time records of every operation. I gathered that information a bit at a time and created a spreadsheet to track it for each job. Once I had a dozen jobs in it, it was amazing how accurate the time estimate had become.

Another job that took 15-20 hours per week was paperwork. Making spreadsheets and tracking costs and labor times and rates went along with keeping the bills paid and tax records from becoming overwhelming. That let 20-25 hours a week for woodworking, which included chasing materials, doing designs and shop plans, cleaning the shop, sharpening tools, etc.

It ain't all sawdust! If you have a spouse or family that can help you with some of those things that is a wonderful resource and good on you. I had no such support.

I could get more into the paperwork side of business, but this is so subjective as applied to each individual business and individual situations, that it would hardly be helpful. What is more helpful on this forum is sharing marketing ideas and contacts. Recognize that this is an essential part of your business. Even though you may want to delegate this, you still have to stay on top of it. If there is only you to get the work done, you cannot afford to allow someone else to overbook you. Everyone loses. Remember, no customer, no business.

Bottom line. Can this be done? Sure, but it is not a path to riches. It is also better if you have support like a significant other who has a job with family health insurance. I never met a successful professional woodworker who did not have income coming in from other sources as well. I taught woodworking. I designed and manufactured jigs and sold them on-line. I did hands-on workshops and eventually demonstrations and talks at shows, on TV and radio and in print. Like Dave said, you have to be thinking all the time. Like Jim said, you have to be very well-disciplined in every area with a very strong work ethic. It is not for everyone. But it is the most rewarding way to make a living, in IMHO.

This is a bit off subject but Sam Maloof told a story one time when I was visiting him. He said he did a table and chairs through an interior designer. The designer insisted on a certain stain on the furniture, although Sam recommended against it. He said the designer told him, "I'm the designer and she'll (the client) take it."

So he delivered the furniture and the client hated the stain and insisted it be re-done. He said the customer told him, "I don't care what the designer wants, I have to live with it!" He took it back, sanded it all down again and did a natural finish. "I never worked with a designer again" he told us.

Mike

Mike Henderson said:

So he delivered the furniture and the client hated the stain and insisted it be re-done. He said the customer told him, "I don't care what the designer wants, I have to live with it!"

Mike

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And that right there is when the money really starts to roll in. Every time the end user changes there mind it's just more cabbage in the bank.
Last house remodel (still on kinda) the guy changed the paint in the whole house 4 times. Each time after it was finished.

Also just a thought with Sam. I would bet that when he delivered the piece Instead of working the designers idea he went in with the I don't like it attitude. Might even have said this would have looked better just natural. Thus changing the owners mind. (#1 reason designers don't want any shop talk with owners.) Instead of walking in with the I love it, it came out so awesome. The owner would have loved it and the designer would have hired him for more work. One thing to keep in mind is you are not in charge of the end users taste there is no accounting for it.
Oh and while Sam may have not like the color of the piece it may have been a perfect match with the rest of the room. He/you have no idea what else is going in that room or what color the walls will be.

Mike Henderson said:

"I never worked with a designer again" he told us.

Mike

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While he may not have wanted to work with any more designers, he also shot him self in the foot by getting the customer to change the finish. That one move may have put a big black mark on his name in the design world. I can hear that designer now bad mouthing him to all her designer friends over coffee. Oh and yes they all know each other and talk about how good or bad a job went.

One other thing one must be willing to do as SE is work all night to make said dead line. Ok so all night all weekend well lets just face it when the work needs doing you just have to spend all of your time doing it. Like Jim said the upcoming famine is around the corner.

But Chuck, That wasn't Sam's way. I remember one time while taking a workshop at his place one time someone asked him if he would make a pieceout of any kind of wood the client wanted and his answer was "If I like the wood"

Don Baer said:

But Chuck, That wasn't Sam's way. I remember one time while taking a workshop at his place one time someone asked him if he would make a pieceout of any kind of wood the client wanted and his answer was "If I like the wood"

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See "If I like the wood" is not good business practice for the everyday woodworker. As I believe it was Carol said you may try and guide the client into the right wood or finish you will be shooting your self in the foot to refuse work because they want maple and you think it should be oak.

Don Baer said:

But Chuck, That wasn't Sam's way. I remember one time while taking a workshop at his place one time someone asked him if he would make a pieceout of any kind of wood the client wanted and his answer was "If I like the wood"

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Yeah, but Sam was in a pretty unique position. He had a backlog that was years long. He once said - at one of his exhibitions - that "People used to say they wanted me to make them a chair before they died...Now they say they want it before I die." Even so, "the Boys" are still working off Sam's backlog, and probably have a couple more year's worth to go. Not many, if any, shops could ever say that.