A woodworking business plan is a written description of what you will make, who will buy it, how you will sell it, what it will cost and how it will earn money. Writing one is like running the business on paper first. It shows the gaps and weak points before you spend money on tools, wood or space.
This post covers why a plan helps, the two main types of plan, how to write each section for a woodworking business, a sample plan for a small home workshop, and how to keep your plan up to date.
Why Write a Business Plan
- It tests the idea. Working through costs, prices and sales shows whether the numbers can work.
- It shows weak points. Gaps in your research, tools, skills or selling plan become clear, so you can fix them before they cost money.
- It guides decisions. When you are unsure what to buy or where to sell, the plan reminds you of your goals.
- It helps with funding. Banks and lenders usually ask for a plan. Family and friends who invest or lend will also want to understand the business.
- It gives you a starting point to measure against. Comparing results with the plan shows what is working.
Lean Plans and Traditional Plans
The US Small Business Administration describes two types of business plan:
- A lean startup plan is usually one page and focuses on the key points. It can be drafted quickly and revised often, which suits a small or simple business. Some lenders may still ask for more detail.
- A traditional plan is longer and more detailed, and is what lenders and investors commonly ask for. It takes more work but covers every part of the business.
Most home woodworking businesses can start with a one-page plan and expand it into a traditional plan if they seek a loan or grow.
A One-Page Plan to Start
On a single sheet, in plain language, write short answers to these questions:
- What do you want to do? What you will make or offer, how much you want to earn, and why.
- What is the product? What you will make, the tools needed, how long each piece takes, what it costs to make and what you will sell it for.
- Is there a market? What research shows that people want it, and at what price. See check demand before you build.
- What will it cost? Startup costs, and the money needed to keep going until the business makes a profit. Most businesses take time to become profitable, so plan for that stage.
- How will you sell? Locally, from home, at fairs, through shops, online or by commission.
- How will people hear about you? Word of mouth, social media, a website, flyers, fairs or ads.
- How will you present the business? A business name, logo, packaging and signs.
The SBA’s lean plan format covers similar ground under nine headings: key partnerships, key activities, key resources, value proposition, customer relationships, customer segments, channels, cost structure and revenue streams.
The Sections of a Full Plan
The SBA lists these sections for a traditional plan. Here is what each means for a woodworking business.
1. Executive Summary
A short overview of the whole plan: what the business does, who it serves, how it will earn money and what you need to start. Write it last, once the rest of the plan is done.
2. Company Description
What the business is, where it is based, its legal structure, and what sets it apart. A vision statement says what you want the business to become. A mission statement says what it does and for whom.
3. Market Analysis
Who your customers are, how many there are, what they buy now and from whom. Include your research on local demand and online demand, and on competitors, including mass-produced and imported products. See how to find a woodworking niche.
4. Organisation and Management
Who runs the business and does the work. For most home woodworking businesses, this is one person, perhaps with family help. Note any skills you will need to learn or hire, such as photography or bookkeeping.
5. Products and Services
What you will make, the materials, the time per piece, the cost to make and the price. Include services such as custom orders, installation, repairs or classes.
6. Marketing and Sales
How you will reach customers and where you will sell. See how to sell woodworking projects and free and low-cost ways to advertise a woodworking business.
7. Funding Request
Only needed if you are seeking a loan or investment. How much you need, what it will pay for and how it will be repaid.
8. Financial Projections
Your expected sales, costs and profit over the first one to three years. Base them on your production capacity, prices and sales channels, not on hopes. Keep the assumptions clear, so you can compare them with results later. See the cost to start a woodworking business.
Sample Plan: A Small Home Workshop
The plan below is a made-up example to show how the sections fit together. Replace every detail, especially the figures, with your own research.
Business Summary
Cedar Row Garden Woodwork is a one-person business run from a home garage. It makes planters, plant stands, garden benches and nest boxes for gardeners in the local area, and sells smaller items online. It starts part-time, using tools the owner already has, and reinvests early profits in equipment.
Vision and Mission
- Vision: To be the local name people think of for well-made garden woodwork.
- Mission: To make sturdy, attractive outdoor pieces from durable woods, built to last for years in the garden.
Products
- Cedar planters and raised herb boxes in three sizes.
- Plant stands and potting benches.
- Two-seat garden benches, made to order.
- Nest boxes built to Cornell Lab NestWatch guidance. See how to make and sell birdhouses.
Market and Competition
Local research found few makers of solid wood garden pieces nearby, and home stores sell mostly lower-priced planters. Garden centres and the spring farmers’ market draw the target customers. Online, small items such as nest boxes and herb boxes can ship nationwide, but compete with many listings.
Customers
Local homeowners with gardens, patios or balconies, who value quality and are willing to pay more for durable pieces. Gift buyers in spring and before the winter holidays.
Sales Channels
- Sales from home by appointment, and at local farmers’ and holiday markets.
- Consignment or wholesale with one or two garden centres.
- An Etsy shop for small items that ship easily.
- Made-to-order benches and planters for local customers.
Marketing
- Word of mouth and referrals from early customers.
- A Google Business Profile with photos and reviews.
- Instagram posts showing builds and finished pieces in gardens.
- Flyers at garden centres and community boards.
- A stall at the spring market, with an email sign-up sheet.
Operations
The garage workshop has a mitre saw, circular saw, drill, router and sander, with a shop vacuum and dust separator. Production is planned in batches, with jigs for planter sides and bench parts. Wood is bought from a local lumberyard. Weekends and two evenings a week are set aside for production, with one evening for photos, listings and orders.
Legal and Setup Checklist
- Register the business name with the state.
- Get a sales tax permit for direct sales.
- Check local rules for running a business from home.
- Open a business bank account.
- Arrange general and product liability insurance.
- Set up a simple bookkeeping system.
Startup Costs
List each item with its cost: tool additions, dust collection, wood for the first batches, finishes and hardware, market display and canopy, card reader, business registration and permits, insurance, and a website or shop setup.
Pricing
Prices cover materials, time at a set hourly rate, a share of overheads, selling fees and a profit margin. Prices are checked against similar local and online products. Benches and large planters are priced as premium items, while nest boxes and herb boxes are priced to sell in volume.
Sales Forecast
The forecast is built from production capacity, not targets: the number of pieces that can be made each month, multiplied by price, split by channel, with slower months in winter and busier months in spring.
Risks
- Limited time and space cap production.
- Sales are seasonal, with a slow winter.
- Other local makers may enter the market.
- Wood prices may rise.
Responses: build stock over winter for spring, add indoor items such as plant stands for the winter holidays, keep a clear style and quality, and review prices twice a year.
Growth Plan
- Reinvest early profits in a table saw and better dust collection.
- Add a second garden centre account.
- Offer installation of raised beds for local customers.
- Hire help for busy spring weeks if orders justify it.
Keep the Plan Current
A business plan is not written once and filed away. Review it every six months or so. Compare actual sales, costs and time with the plan, update the figures, and change the parts that are not working. Many small business owners find that even an informal plan, updated regularly, helps them make better decisions.
Free help with business plans is available through the SBA and its resource partners. For the next steps of starting out, see how to start a woodworking business from home and the cost to start a woodworking business.
Sources
- U.S. Small Business Administration, Write Your Business Plan
