The woodworking business can be lucrative. However, just like with any other business, doing a full-time job with your woodworking skills requires some planning. Here is our expert guide on starting a woodworking business to let your handmade products start earning for you.

How to Start a Woodworking Business

Getting started,  woodworking business is far more than registering your business with the state.

While not everybody wants to make the shift from hobby to business, here are a few steps on how to start a wood craft business.

Costs and expenses needed in opening a woodworking business

The first thing to consider is the cost of starting a small woodworking business. The total cost and expenses can vary based on your location, materials, equipment and tools you need. As a small business owner you will also have many miscellaneous expenses like printing business cards, registration and filing, taking photos of your items, and building a website, which may amount to around $6,500.

workshop with assorted tools inside

Aside from the startup costs, there are also maintenance expenses which include materials costs and overhead. Material costs cover the many types of materials you might use such as wood, sandpaper, nails and finishing materials like the best semi-transparent deck stain

You’ll also have replacement and repair cost for your tools. Overheads [1] include the cost of renting or leasing space for a shop. 

Business owners need to consider these costs when setting prices if you want to break even.

Target Market for the Woodworking Business

The next thing to consider is your ideal target market. If you know your target audience and sites to sell your projects who is likely to have an interest in your wood products and have the money to pay for them, you’ll be able to identify the right marketing channels and promotions that work best for reaching them to make your products will sell. But it’s not all just about products that sell well. 

woodworking project

Offline advertisement for furniture and woodwork is also valuable. Word-of-mouth, business cards, and brochures that highlight your goods are all powerful ways to promote your business away from the internet.

If you’re just starting, take the time to get high-quality photographs, as these photos can sell your goods digitally when consumers can’t see your products in person.

You might need to do more research or ask questions to learn more about your target audience.

Business Name & Brand

The next step involves choosing the name and brand for your home business. You can search online to find a name for your small business, or brainstorm with friends and family.

woodworking class

You can verify that your business name has not been taken by doing a name availability check with the state, searching social media platforms, and checking that the web domain name is available. 

Avoid business names that are difficult to spell or remember, or names that may limit your growth potential in case you decide to expand your products line later on.

Workshop Options & Area Restrictions

Considering the nature of the work, you will have to build a workshop with space large enough to accommodate materials, tools, and finished wood products and leave room for working on new ones to sell. To cut costs, you may choose to use your garage or a spare room for your work when you’re still starting.

easy woodworking projects

Power tools can be noisy, so you may want to consider soundproofing your workshop. Some areas may have restrictions on noise pollution during a particular time of the day, especially in residential neighborhoods.

Wondering what to sell for your business? Here are some of the easiest woodworking projects for beginners you can consider selling. 

Woodworking Business Formation

You will need to consider setting up a legal entity for your business as the great way to protect yourself from legal liability and other risks. 

Forming a Legal Entity

Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most common business structures. While the sole proprietorship and partnership business formation may not protect you from personal liability, the LLC or corporation business formation would protect you as an individual from being held liable in case your business is sued.

You can decide to handle your business formation yourself or seek advice from reliable incorporation services for a small additional fee. Some people prefer to find an online business formation company that is the best at filing all the required documents instead of learning to do it themselves. Some of the best companies include ZenBusiness and LegalZoom.

two pairs of hands and one holding a blue ballpen

Next, you need to check state and local business requirements to find out whether you need a business license. If you choose to operate as a home-based business, you need to consult the local business license office.

When you register your business as a woodworking business from home, you may enjoy tax exemptions such as cost reductions on your equipment and workshop. However, you would need to get the right licenses and permits to operate once your home business is organized. It’s usually easier and more straightforward for a home business to get the licenses necessary.

Register for Taxes

Before you can launch your business, you would have to register for state and federal taxes. The first step to registering for taxes is to apply for an employer identification number (EIN). You can apply for your EIN via the IRS website, mail, or fax for free.

Business Accounting

To understand the financial performance of your home-based business, it is very important to record your sales, cash inflows, and expenses. Keeping a detailed and accurate business account will also make things easier when you have to do your annual tax filing.

business accounting

Monitoring your financial position also means that you know if your business is performing well and whether it is breaking even. You may even opt to hire an accountant to help you stay organized. It is a good practice to do so as they can often help you with annual tax filing.

Business Insurance

Business insurance is something that every business should have to guard against unexpected mishaps in your home business. Some of the business insurance coverage areas include business ownership policy, commercial auto insurance, general liability insurance, property coverage, and workers’ compensation insurance. 

A business owner will minimally have general liability insurance to protect their family, home, and savings in case of an accident. One thing that general liability insurance can protect you against is bodily injury in case you or your employees get injured, so it is a great idea to have it covered. 

Other Things to Consider when Creating a Woodworking Business

Here are some other things to consider when creating a home-based business.

How Does a Woodworking Business Make Money?

A woodworking business’s primary way to generate income is by creating wood items such as furniture and selling them. Many people continue to seek out good craftmanship. 

woodworking class

Another way that woodworking businesses can increase their income is by researching things that people like well and ensuring outstanding quality.

To have a competitive woodworking business, you can read our guide about how to price woodworking projects here.  

How Much Should You Charge Your Customers?

You should charge your customers according to the materials used and the skill required. The price at which you will sell your products can also depend on your overhead costs such as your shop rental, transport costs and your competitors’ pricing.

One may choose to offer services at affordable rates initially to grow a customer base and raise prices with more skills you eventually learn. Custom furniture also often warrants higher pricing due to the higher skill set required to do the work well.

How Much Profit Can Your Woodworking Business Make?

The profit from your successful woodworking business really depends on how skilled you are, your years of experience, the type of wood products, the number of wood items you create, your customer base, and your location. Some business owners selling only small wood products locally and may make revenue similar to the income made from part-time work. 

woman in woodworking class

Some business owners may be highly skilled and experienced so they sell custom products and are in high demand. If done right, you can generate a sizable income from your woodworking business while building something meaningful.


How much can you make as a woodworker?

You can make an average of $14.40 per hour as a woodworker if you have 1 to 4 years of experience, $17.59 with 5 to 9 years of experience, and $21.50 per hour if you have more than 10 years of experience. 

Your profit potential is largely dependent on many factors such as your skillset, years of experience, the kind of work you do, and whether the wood products you craft are of high quality. You may know how to start woodworking as a hobby, but it can take some time before you start making a full-time working income from your hobby.

How do I start a woodworking business?

To start a business, you will have to get tools and equipment, find space for a workshop, determine the target market for your products, and register your business. You will also need to plan the marketing strategy for your products including custom furniture.

When you start your business, you may be a one-person home business and not hire an employee. However, once your new business begins to grow after a few years and you start making enough money to support an employee’s salary, you can decide to bring more people on.


If you would like to know how to start a woodworking business, this guide has laid out the steps you have to take to get started.

If you love woodworking and are skilled at it, you can turn your hobby into a successful full-time work. One thing that holds people back from starting a business is the profit potential, but you can be making good money with hard work, creativity, and skill.

Fancy creating your own audio equipment? See the best wood choices for speaker boxes, next!