Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 3, 2022 Updated on February 14, 2024
$4,550 - $10,600
$62,000 - $250,000 p.a.
Time to build
0 – 3 months
$50,000 - $75,000 p.a.
Carpenters can handle a wide variety of tasks, from woodworking to remodeling and building new homes. The US carpentry industry expanded 35% in the past decade as construction has increased. If you have carpentry skills or are just handy with tools and eager to learn, you could start your own carpentry business and make good money while helping people achieve their domestic dreams. It will take hard work and a passion for what you do, but you could build a thriving company.
But before you start hammering away, you’ll need to understand the business launch process. Luckily, all the information you need to start a successful carpentry business is nailed down in this step-by-step guide.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Average level of education –The average carpenter is high school educated.
Average age – The average carpenter in the US is 42.7 years old.
How much does it cost to start a carpentry business?
Startup costs for a carpentry business range from $4,500 to $10,000. Costs include a website, tools, and a down payment on a van or truck.
You’ll need a handful of items to successfully launch your carpentry business, including:
Setting up a business name and corporation
$150 - $200
Business licenses and permits
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
$1,000 - $1,500
Truck or van down payment
$2,000 - $5,000
$4,550 - $10,600
How much can you earn from a carpentry business?
The average rate for a carpentry business is $60 per hour. Your profit margin when you’re working by yourself should be about 80% since customers pay for materials.
In your first year or two, you could work 20 hours per week, bringing in $62.000 in annual revenue. This would mean $50,000 in profit, assuming that 80% margin. As your business gains traction, you might grow to have projects that take 80 hours a week. At this stage, you’d hire staff, reducing your profit margin to around 30%. With annual revenue of $250,000, you’d make a healthy profit of $75,000.
What barriers to entry are there?
There are a few barriers to entry for a carpentry business. Your biggest challenges will be:
Learning carpentry skills if you don’t already have them
Finding construction company partners to subcontract for
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a carpentry business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research carpentry businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a journeyman carpenter or a carpenter who builds custom wood cabinets.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as structural carpentry or furniture building.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your services
As a carpenter, you could do all sorts of projects for customers including:
How much should you charge for carpentry?
The average rate for a carpentry business is $60 per hour. Check prices in your local area to make sure you’re competitive. After your business costs, you should aim for a profit margin of about 80%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market may be residential customers or construction companies. You can market to residential customers on TikTok, Instagram, and Facebook. You can connect with construction company owners on LinkedIn or find them on Google or Yelp and give them a call.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Carpentry Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “carpenter” or “carpentry”, boosts SEO
Name should allow for expansion, for ex: “The Carpenter’s Workshop” over “Rustic Carpentry Woodworks” or “Cabinetry Specialists”
Avoid location-based names that might hinder future expansion
Discover over 380 unique carpentry business name ideas here. If you want your business name to include specific keywords, you can also use our carpentry business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Carpentry Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A brief summary outlining the core elements of the carpentry business, including its mission, vision, and key objectives.
Business Overview: A concise description of the carpentry business, highlighting its structure, legal status, and location.
Product and Services: Clearly defined details about the carpentry services offered, such as custom furniture, woodworking, and installation.
Market Analysis: Examination of the carpentry market, identifying target customers, market trends, and potential opportunities for growth.
Competitive Analysis: Evaluation of other carpentry businesses in the area, understanding their strengths and weaknesses to position the new business effectively.
Sales and Marketing: Strategies for promoting the carpentry business, reaching potential clients, and converting leads into sales.
Management Team: Introduction to the key individuals responsible for running the carpentry business, emphasizing their skills and expertise.
Operations Plan: Detailed plan outlining day-to-day activities, resource requirements, and workflow processes for the carpentry business.
Financial Plan: Projection of financial aspects, including startup costs, revenue forecasts, and a break-even analysis for the carpentry business.
Appendix: Supplementary materials such as additional market research, detailed financial data, or any supporting documents relevant to the carpentry business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to carpentry businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your carpentry business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a carpentry business.
States have different licensing requirements for carpenters. Some require a specific carpenter’s license, and some require a general contractor’s license.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your carpentry business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Jobber, BUILDXACT, Octopuspro, to manage your estimates, projects, schedule, and invoices.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
For your carpentry business, the marketing strategy should showcase your craftsmanship, attention to detail, and the range of services you provide, from custom furniture to home renovations. Emphasize the quality of your work, your commitment to customer satisfaction, and the unique solutions you offer for various carpentry needs. You should aim to establish your business as the premier choice for clients seeking skilled, personalized carpentry services. Here are some powerful marketing strategies for your future business:
Professional Branding: Your branding should communicate the quality, reliability, and artistry of your carpentry work, reflected in everything from your logo to your business cards.
Direct Outreach: Network with local construction firms, interior designers, and real estate agents to build partnerships and referrals.
Digital Presence and Online Marketing
Professional Website and SEO: Develop a visually appealing website showcasing your portfolio, services, and customer testimonials. Use SEO best practices to optimize your site for relevant local and trade-specific search terms.
Social Media Engagement: Use platforms like Instagram and Pinterest to post high-quality images of your projects, works-in-progress, and the unique aspects of your carpentry work.
Content Marketing and Engagement
Carpentry and Design Blog: Share blog posts about DIY tips, trends in carpentry and design, and detailed showcases of your projects.
Customer Success Stories: Feature detailed accounts of how your services have transformed a client’s space, focusing on the problem-solving and creative aspects of your work.
Informative Video Content: Create video content that demonstrates your skills, provides insights into the carpentry process, or offers quick DIY carpentry tips.
Experiential and In-Person Engagements
Workshops and Demonstrations: Offer local workshops or live demonstrations at community events or in partnership with hardware stores to engage with potential clients and showcase your expertise.
Local Home and Trade Shows: Participate in home improvement, local trade shows, and craft fairs to display your work and network with potential clients.
Collaborations and Community
Partnerships with Local Businesses: Collaborate with local hardware stores, home decor shops, and design studios for cross-promotional opportunities.
Community Project Involvement: Engage in community projects or charity work that allows you to showcase your skills and give back to the community, enhancing your local presence and reputation.
Customer Relationship and Loyalty Programs
Referral Discounts: Implement a referral program that offers discounts to customers who refer new clients to your business.
Loyalty Incentives for Repeat Customers: Provide incentives or discounts to repeat customers to encourage ongoing business relationships.
Promotions and Advertising
Targeted Local Advertising: Utilize local advertising in community newspapers, local online forums, and home improvement websites to reach potential customers in your area.
Email Marketing: Send regular newsletters with updates on your latest projects, carpentry tips, and special offers to keep your audience engaged and informed.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your carpentry business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your carpentry business could be:
Custom handmade kitchen cabinets to fulfill your dreams
Structural carpentry for your basement rec room
Upgrade your home with custom wood trim and crown moldings
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a carpentry business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in carpentry for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in carpentry. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a carpentry business include:
Carpenters – assist with carpentry work
General Manager – scheduling, accounting
Marketing Lead – SEO strategies, social media
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Carpentry Business – Start Making Money!
Carpentry is an art as well as a trade and can be very gratifying work. It has all sorts of applications, so starting a carpentry business is full of opportunities. The market for carpentry services has grown and should continue to grow, so there is definitely good money to be made. It will require hard work and a passion for your craft, but you can build a lucrative business in just a year or two.
You’ve got business knowledge in your toolbelt now, so it’s time to start building your future by launching your successful carpentry business!
Carpentry Business FAQs
How profitable is a carpentry business?
Carpentry businesses charge about $60 an hour for services, so it can be very profitable. You just have to have a passion to do great work, and you can grow your business.
How can I learn to be a carpenter?
You can take inexpensive carpentry courses online through Udemy. However, some states require a carpentry license and have their own approved educational providers and other requirements. Check with your state government to learn the requirements.
Does carpentry have a future?
Yes, carpentry has a future, as it is a skilled trade that is essential to many industries, such as construction, woodworking, furniture making, and home improvement.
Where do carpenters earn the most money?
Generally, carpenters in urban areas or regions with high construction activity tend to have more opportunities and potentially higher wages. Major cities with booming construction sectors or areas with a high demand for custom carpentry work, such as luxury housing markets or commercial developments, often offer higher earning potential.
How can I differentiate my carpentry business from competitors in the market?
To differentiate your carpentry business from competitors, consider strategies such as specializing in a niche area of carpentry, such as custom furniture or woodworking, to attract customers seeking unique craftsmanship. Emphasize the quality and craftsmanship of your work, highlighting your attention to detail and precision.
How to Start a Carpentry Business
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Carpentry Business Name
Create a Carpentry Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Carpentry Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Carpentry Business - Start Making Money!
Carpentry Business FAQs
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