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How to Start a Woodworking Business

Written by:

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.

Edited by:

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.

How to Start a Woodworking Business

Fast Facts

Investment range

$5,050 - $10,100

Revenue potential

$90,000 - $360,000p.a.

Time to build

0 – 3 months

Profit potential

$54,000 - $108,000 p.a.

Industry trend




There’s nothing like the feel of a woodworking shop, with sawdust and polish in the air and cutting tools in motion. If you have your own woodshop at home, you could start your own woodworking business and get in on a growing $8 billion industry. Best of all, you’d be making people gorgeous handmade chairs, dressers and tables that could last their whole life. What could be more gratifying than that? 

First, however, you need to build your business knowledge and understand the entrepreneurial process. Luckily, everything you need to know can be found in this step-by-step guide, designed to put you on the path to creating a successful woodworking business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a woodworking business has pros and cons to consider before deciding if it’s right for you.


  • Share Your Passion – Do what you love and share it with others
  • Good Money – People pay dearly for hand-crafted goods
  • Flexibility – Work from your home shop, set your own hours


  • Skills Required – Excellent woodworking skills are a must
  • Pricy Tools – Specialized tools are expensive

Woodworking industry trends

Industry size and growth

woodworking industry size and growth

Trends and challenges

woodworking Trends and Challenges

Trends in the woodworking industry include:

  • With more people working at home, multifunctional wood furniture — like a coffee table that doubles as a desk — is becoming more popular.  
  • Natural woods, rather than stained woods, are in demand, as are lighter colored woods.

Challenges in woodworking industry include:

  • Wood shortages are increasing the prices of materials for woodworking businesses, cutting into their bottom lines.
  • The proliferation of woodworking businesses has created an oversupply of wood products, reducing the prices of wood products.

Demand hotspots

woodworking demand hotspots
  • Most popular states – The most popular states for woodworkers are Connecticut, Rhode Island, and Massachusetts.((https://www.zippia.com/woodworker-jobs/best-states/))
  • Least popular states – The least popular states for woodworkers are Texas, Wyoming, and Montana. 

What kind of people work in woodworking?

woodworking industry demographics
  • Gender – 9.8% of woodworkers are female, while 88.1% are male.((https://www.zippia.com/woodworker-jobs/demographics/))
  • Average level of education The average woodworker has a bachelor’s degree.
  • Average age – The average woodworker in the US is 44.8 years old.

How much does it cost to start a woodworking business?

Startup costs for a woodworking business range from $5,000 to $10,000. Costs are for tools, materials, and a website.

If you’re not already a woodworker, you can take a course of study through the Center for Furniture Craftsmanship. It’s a 9-month hands-on program and costs $23,000. Alternatively, you can take online courses through Udemy, generally for less than $50 per course. 

You’ll need a handful of items to successfully launch your woodworking business, including: 

  • Hand saws
  • Power saws
  • Planes
  • Sanders
  • CNC router
  • Files
  • Hammer
  • Mallet
  • Drill
  • Screw Gun
  • Tape Measure
  • Square
  • Sawhorses
  • Workbench
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$150 - $200$175
Business licenses and permits$100 - $300$200
Business cards and brochures$200 - $300$250
Website setup$1,000 - $3,000$2,000
Woodworking tools and equipment$1,500 - $3,000$2,250
Woodworking materials$2,000 - $3,000$2,500
Total$5,050 - $10,100$7,575

How much can you earn from a woodworking business?

woodworking business earnings forecast

To price your items, you should take the cost of making the product, including materials, and mark it up enough to make a healthy profit. Prices might range from $500 for a small side table, to $3,000 or more for a dining table. You should aim for a profit margin of at least 60%. These calculations will assume that your average product will be priced at $1,500. 

In your first year or two, you could work from home and sell five products per month, bringing in $90,000 in annual revenue. This would mean $54,000 in profit, assuming that 60% margin. As your brand gains recognition and you get referrals, sales could climb to 20 items per month. At this stage, you’d rent a commercial space and hire staff, reducing your margin to around 30%. With annual revenue of $360,000, you’d make a tidy profit of $108,000.

What barriers to entry are there?

There are a few barriers to entry for a woodworking business. Your biggest challenges will be:

  • The skills required to be a professional woodworker
  • An adequate space for a woodworking shop

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.
How to Start a Woodworking Business

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How to Start a Woodworking Business

How to Start a Pallet Manufacturing Business

Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting a woodworking 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 woodworking businesses in your area to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a woodworking business that makes wooden toys, wooden cutting boards, or custom furniture made to a customer’s specifications. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as wooden dining tables or wood armoires.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine what kind of wood products you’ll make

There are many items that you could make in a woodworking business depending on your skills. These could include:

  • Custom wood furniture
  • Wooden toys
  • Cutting boards
  • Wood signs
  • Decorative wood items
  • Kitchen cabinets
  • Frames
  • Wood trim
  • Doors

How much should you charge for handmade wood products?

Your prices will depend on the cost of materials and the complexity of the product, as well as what the market will bear. You should aim for a profit margin of at least 60%.

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 will be broad but will probably be more established people who can afford custom-made furniture. You can find those people on Facebook or LinkedIn. You could also try to partner with local markets and retailers to sell your items. 

Where? Choose your business premises

In the early stages, you may want to run your business from your 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 a larger shop or even a storefront. 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
woodworking business idea rating

Step 3: Brainstorm a Woodworking Business Name

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 “wood products” or “woodworking”, boosts SEO
  • Name should allow for expansion, for ex: “The Wood Wizards” over “Cabinetry Crafters”
  • A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

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 Woodworking Business Plan

Here are the key components of a business plan:

what to include in a business plan
  • Executive Summary: Present a brief overview of your woodworking business, focusing on crafting high-quality, custom wood products and furniture for a diverse client base.
  • Business Overview: Describe your business’s specialization in woodworking, including creating custom furniture, cabinetry, and unique woodcrafts.
  • Product and Services: Detail the range of woodworking services offered, such as bespoke furniture making, wood carving, restoration, and personalized woodcrafts.
  • Market Analysis: Evaluate the demand for custom woodwork, identifying potential customers like homeowners, interior designers, or commercial clients.
  • Competitive Analysis: Compare your business to other woodworking shops, highlighting your unique strengths like craftsmanship, custom design capabilities, or use of sustainable materials.
  • Sales and Marketing: Outline your strategy for attracting clients, using methods like showcasing work at local galleries, online marketing, or participating in craft fairs.
  • Management Team: Highlight the experience and skills of your team, particularly in areas like carpentry, design, and business operations.
  • Operations Plan: Describe the process of crafting wood products, from design and material selection to production and finishing.
  • Financial Plan: Provide an overview of financial aspects, including startup costs, pricing strategy, and projected income.
  • Appendix: Include supplementary documents such as portfolios of past work, client testimonials, or detailed market research to support your 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 woodworking 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 woodworking business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

types of business structures
  • 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. 

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Step 6: Register for Taxes

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.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

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:

types of business financing
  • 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 woodworking business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Woodworking Business Licenses and Permits

Business Licenses and Permits

Starting a woodworking business requires obtaining a number of licenses and permits from local, state, and federal governments.

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. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

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 woodworking 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:

types of business insurance
  • 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.

Step 11: Prepare to Launch

Launching a Business

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 Cabinet Shop Maestro, MRPeasy, or shoptech, to manage your workflows, ordering, inventory, invoicing, and payments.


  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • 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 services like WordPress, Wix, or Squarespace. 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.


Here are some powerful marketing strategies for your future business:

  • Customization Workshops: Offer hands-on customization workshops for individuals or groups, allowing them to create personalized wood products under your guidance, fostering a sense of connection with your brand.
  • Collaborate with Interior Designers: Build partnerships with local interior designers to showcase your unique woodwork in staged homes or commercial spaces, increasing visibility and attracting potential clients.
  • Local Craft Fairs and Markets: Participate in local craft fairs and markets to directly engage with your community, allowing customers to touch, feel, and appreciate the craftsmanship of your products.
  • Social Media Tutorials: Create engaging and shareable content on social media platforms, offering simple woodworking tutorials or highlighting the craftsmanship behind your products, establishing yourself as an expert in the field.
  • Loyalty Programs: Implement a loyalty program to encourage repeat business, offering discounts or exclusive products to customers who make multiple purchases or refer others to your woodworking business.
  • Collaborate with Home Improvement Stores: Partner with local home improvement stores to showcase and sell your products, reaching a broader audience and leveraging their established customer base.
  • Online Marketplaces: Utilize online marketplaces beyond your website, such as Etsy or Amazon Handmade, to reach a global audience and tap into the growing demand for handcrafted wood products.
  • Showroom Events: Host periodic showroom events where potential customers can explore your latest creations, interact with the craftspeople, and gain insights into the artistry behind each piece.
  • Corporate Gifts and Awards: Target local businesses for custom corporate gifts or awards, providing a unique and personalized touch that sets your woodworking business apart from traditional gift options.
  • Referral Incentives for Clients: Encourage satisfied clients to refer others by offering incentives, such as discounts or additional services, creating a word-of-mouth marketing engine for your woodworking business.

Focus on USPs

unique selling proposition

Unique selling propositions, or USPs, are the characteristics of a product or service that sets 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 woodworking 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 woodworking business could be: 

  • Custom wood furniture to your specifications
  • Unique wooden toys your kids will enjoy and treasure
  • Custom kitchen cabinets to match your style


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 woodworking business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in woodworking 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 woodworking. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

If you’re starting out small from a home shop, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a woodworking business include:

  • Woodworkers – assist with wood product production
  • General Manager – scheduling, ordering, 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 Woodworking Business – Start Making Money!

Running a Business

It’s time to turn your woodworking hobby into a business! It’s a great opportunity in a large market worth $8 billion. You can work from your own home woodshop on your own time and make good money using your skills. You’ll be making hand-crafted beautiful wood furniture and other items that people will treasure for decades. Now that you’ve got all the business insight you need, go ahead and launch your brilliant new woodworking company.

Woodworking Business FAQs

Can a home woodworking business be profitable?

Yes, custom wood products are very much in demand. If you have the skills to make great quality items, you can be very successful.

What woodworking items sell best?

Woodworking items that sell best often include practical and decorative pieces such as furniture, cutting boards, picture frames, and home decor items. Unique and customized pieces tend to stand out and attract more customers.

Is wood carving profitable?

Wood carving can be profitable, but it depends on various factors such as the demand for your specific carving style, the cost of materials and tools, and your ability to market and sell your work. It may take time to build a customer base and establish a reputation in the industry.

How much space do I need for a woodworking shop?

The space needed for a woodworking shop depends on the size of the projects you plan to undertake and the tools and equipment required. A small shop can be set up in a garage or basement, but larger projects may require a standalone building or warehouse.

What is the rarest wood woodworking?

There are many rare and exotic woods used in woodworking, but some of the rarest include Dalbergia cochinchinensis, also known as Vietnamese rosewood, and Diospyros spp., also known as ebony. These woods are highly prized for their beauty, durability, and rarity, but they are also endangered and protected by law.

What's the strongest type of wood?

The strongest type of wood is often considered to be lignum vitae, a dense and durable hardwood native to the Caribbean and Central and South America. It is known for its resistance to impact, wear, and moisture, making it ideal for applications such as tool handles and bearings.

What is the best type of wood for woodworking?

The best type of wood for woodworking depends on the specific project and desired characteristics such as strength, durability, and appearance. Popular woods for furniture making include oak, maple, cherry, and walnut, while woods such as cedar and redwood are often used for outdoor projects due to their natural resistance to decay and insects.


  1. bayoulign says:

    very helpful and encouraging points I found.

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How to Start a Woodworking Business