Hi Everyone,
I am in the process of starting my own business. I have worked for a high end cabinet shop for many years and am confident in my abilities to make a wide varitey of quality products. My problem is that I have very little experience in the business aspect of woodworking. I’m trying to define my business identity and products but am getting conflicting advice.
My main products will be tables and chairs. On one hand, I’m advised to specialize in one area and stick with it. The rationalization for this was that there is only a limited amount of time and it is best spent by concentrating on what will bring me an identity in the shortest time. Once I have an identity or reputation, I will have an easier time moving my products. If I hop around doing different types of work, I am not really going to be known for anything special and end up with no market advantage.
On the other hand, I’ve read many success profiles which advise diversification. The reasons for this are as follows: One product may be hot when one is not, thus avoiding market lulls. Diversification will present me with a larger basket to pick from in terms of a workload source.
If anyone has any experience that they would like to share, I would really appreciate it. Looking for help.
Scott
Replies
Diversification requires deeper pockets. Spreading yourself too thin is a sure-fire recipe for failure. So yes, diversification will give you a more reliable income over time, but that won't happen unless you can invest the time and effort that each product requires in order to become established in the marketplace.
-Steve
I would suggest diversify a little anyways. When I sarted I found out quick that your better to sell to designers and such than general public. Thats even more the case now with all the production furniture it is too hard to compete price wise for the general public. When you do business with designers then their customer is already looking for custom work and are willing to pay for it. Dont try to do both. The designers will think you will give away their design to someone if you sell to the public. Also for what it is worth, this site is more of a hobby type forum, for the business end of wood working, woodweb.com has a lot of information and caters to business, marketing,etc for woodworking. Just some ideas for you to throw around.
Thank you for the advice. Designers are one avenue I will add to my list. Also, thankyou for pointing out woodweb.com. It's a nice site that I havn't been to before.
I realize that FWW is more for the hobiest, but the majority of readers are wealthy hobiests with a great deal of valuable business experience.
Thank you very much.
Scott
Scott,
Like so many things in life, in my opinion, there is no one right answer. The questions of either/or may wind up misleading you.
One factor that I think is critical in your decision making as to whether to specialize or diversify is that of how big of a town/city you live in. If you live in New York City (yes I know that is not in Southeast Ohio) where there a millions of people then you could more easily specialize.
If you live in a small town, therefore having a much smaller market to sell to, then diversifying may be critical to surviving.
Clearly, the internet and a website add a big market, but the customer can't touch your products so you will have limited customers.
The 2 or 3 people I know who went into full time woodworking, hoping to make and sell fine furniture all found they had to make kitchen cabinets to survive financially. I trust you know well the market of the cabinet shop you work in. That should give you some solid ideas about what you can sell.
One of the individuals I know has survived well on kitchen's, built-in library shelves, entertainment centers, etc.
Can you do some work on the side to develop a customer base without competing with your employer or getting fired? That may help you transition.
Keep us posted as to your successes, challenges, and opportunities.
Alan - planesaw
Hi Planesaw,
I live in a group of 5 cities with a population of about 140,000. There is another metro area about an hour away with a population of about 1,000,000. With a well planned marketing strategy and a great product, I hope to do well by sticking with furniture.
I am currently working for a great person in a great company. My physical capabilities are not what they used to be. I have a tough time handling as many as 75 full sheets of up to 1-1/8 material each day. I have made arrangements with my employer to go part time for a while until I can get my business on line. The work that I will be doing will not be competing with him. I've learned a lot from him. Even direct competitors are viewed as partners. All woodworkers can help each other out in some way. We all live or die on our own merits. I hope to switch to full time on my own by the end of the year.
Thank you.
Scott
If you plan to make furniture you must diversify. Customers who want custom furniture (as opposed to cabinets) a few and far between and it is much easier to sell a furniture customer another type of furniture than it is to find an entirely new customer. After all the stuff doesn't wear out and if you specialize in for example chairs each customer needs only so many chairs. That all being said if you have develop a reputation as a skill chair maker and designer for example - with a product that people want specially for your design - you might be able to specialize in chairs - but that also requires a much larger marketing effort to sell over a larger pool of potential customers.Joel
http://www.toolsforworkingwood.com
Joelm,
Thank you for your comments.
Scott
Scott,
If I understand what you are saying, it would appear that you work for a man with some uncommon wisdom. Most view competitors as someone to fear or to try to drive them out of business. The individual that can veiw them as "partners," as you said, is someone who sees beyond today. And, someone who has the skill of turning what others see as a negative into something where both can gain.
Sounds like you also have an ideal transition situation between a great boss and the ability to go parttime in order to build your own business.
I am not a fulltime woodworker, but I do know a little bit about building businesses. It sounds like you are asking the right questions and staying open to various ideas. One of the most common observations of those who start businesses, is talking with them 6 months, a year, two years later, and hearing them describe how much different the reality is than what they thought it would be when they first got started.
May you have fun, may you keep discoverinig the questions to ask, and may you be blessed with the right number of customers.
Alan - planesaw
Edited 5/18/2008 4:16 pm ET by Planesaw
Edited 5/18/2008 4:17 pm ET by Planesaw
Yes. I do have a great boss.
One of the reasons I took a job there was to learn from him. As the owner he and his children still take out the garbage, clean the restrooms, etc.. He believes that his job is to serve his employees to make sure that they have what they need to make things run smooth. He treats his customers and fellow woodworkers just as well. I have worked many jobs on both coasts and most states in-between and belive that I would never find a better place to work and learn.
Thanks for you time.
Scott
Scott,
Happened to see this in the regional Central Penn Business Journal from this past week. My guess is that you have already know or have talked to someone like the Small Business Administration for some business planning ideas. The article at this link does a good job of some overview advice.
http://www.centralpennbusiness.com/article.asp?aID=66219
Let us know how things go. You are probably doing what a lot of people would love to be able to do.
Alan - planesaw
Thank you very much. I have started a business and marketing group consisting of 6 woodworkers from my geographical area. Members will be helping each other by sharing our business and marketing workloads, learning from each other successes and failures, sharing tools and other resources, combining resources to pull in larger jobs and providing technical and moral support. It is our hope that the relationships developed within this group will turn out to be lifelong. I will be sharing the website that you provided here with them tonight.
Thanks again.
Scott
Scott,
Wow! Sounds like you have a great group and some great potential. I like the model if I ever try such an endeavor.
Alan
About 20 years ago, I visited Colonial Willamsburg's leather shop. They interpreter there said something that has stuck with me since. He said he was British (in real life). He then went on to say that if he was a leather worker in England (in CW times), he could afford to specialize. If he did luggage and someone came in and wanted saddle bags, he could afford to send them away. But in CW, if someone came in and wanted saddle bags, a belt, or luggage, the answer was yes.
You can over-diversify and kill yourself or under-diversify and go broke. Your customers will determine where you need to be. If you can make a go on chairs alone, go for it. Otherwise, you'll need to be a bit more flexible.
I would say that if you're looking to limit your product line to tables and chairs then you've already established your business as somewhat of a specialized operation. Diversification would mean adding chests, cabinets, stands, entertainment centers, entry doors, etc.
Scott,
You've already gotten some good advice. I'd add just a few words -
In addition to creating your "identity" (as you say), the advantage of specializing is that you get quite efficient at what you do. This adds up to more profit at the end of the day. However, there are very compelling reasons to be flexible, some of which have been already stated here. I've been in the business for almost 40 years. My general trend has definitely been to specialize more and more as time goes by. That said, some large opportunities have come down the line which meant stepping deep into uncharted territory. These projects have turned out to be both the most profitable ones, or else the ones I've lost money on.
Bottom line - strive to create that niche but keep an open mind. In all probability the niche is NOT what you think it should be right now.
David Ring
http://www.touchwood.co.il/?id=1&lang=e
Woodmaster:
The answer to your question is unknowable at this point, until you get some experience in the market and a better understanding of what your customers really want.
However, you are right to be concerned about establishing a "position" in the minds of your target audience. When marketers talk about positioning, they think in terms of distinction from other competitors and meaning, or importance, to customers. Like a projector, a narrow focus provides for a brighter and sharper image, i.e., it's easier to establish a position, but it also restricts the size of your target market. In practice, you will need to balance these competing interests.
Your area of focus or desired position, does not have to be product-based, you might want to think in terms of customer service, or delivery times. Many specialists provide a lousy customer experience! And at the end of the day that is what it is all about. You need to step away from a product-focus mindset (tables and chairs) and in to a customer-focus mindset.
In the early days, you can afford to try things and see what works. In other words, let your business model evolve. But, keep in mind that at the end of the day, you had better have a position!
In reading through the replies you've received, I see that there seems to be some disagreement/confusion over what "diversification" really means. Some people are equating diversification with flexibility. I think the two are completely separate concepts.
Flexibility is always important, especially so when you're just starting out. You need to be able to change horses in mid-stream without skipping a beat. In fact, you need to be able to change streams in mid-stream.
Diversification, on the other hand, is when you are capable of producing a variety of products at the same time. That's where you need financial depth in order to support what are, in effect, multiple parallel ventures.
-Steve
Scott, that is an excellent question.
Personally, if I look at those who have succeeded (IOW, they can pay the bills), they have a style and an identity. If you don't have a style or specialty, you're only being compared to what they can buy in Wally World.
The days where a significant % of the population gets furniture custom made are gone: it is only now the top 1%. The VAST majority of people haven't a clue as to quality anymore; they only care about how it looks NOW and on the surface. Additionally, three quarters of those who do recognize quality, won't pay for it most of the time.
If it were me, I'd specialize, all the while keeping my mind open to "other" works in case I needed them to help fill the time and pay the bills.
If I said, Sam Maloof. What would you think of? Follow His lead. With a few other pieces for kicks.
Work Safe, Count to 10 when your done for the day !!
Bruce S.
Simple yet to the point. Thank you very much.
I have a friend who was just out to visit Sam last week. I plan on looking at Sam's model as well as many others. Two that come to mind are Robert Erickson and Thomas Moser.
Thanks again.
Scott
Love, KISSWork Safe, Count to 10 when your done for the day !!
Bruce S.
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