Question(s) for Those Who Build Furniture for a Living

[handi]

As soon as you sell something you now require commercial insurance for your tools and may for liability.  Big $$$

Not so much. USAA will sell a rider on the homeowners policy to cover commercial tools on your property. 

And I pay $400 per year to insure my rented shop. That covers all the tools and any damage to the property as well.

[Don_M]

I retired from my full time job a few years ago and so now with some spare time on my hands – I have been approached by several “acquaintances” to build them furniture. So I have a few questions for those of you that do this for a living. Rather than just giving me the general pros and cons (which of course you are free to do) I will throw out some specific questions:


1. Do you charge anything for the initial design process? (i.e., initial consultation, sketching up plans, material take-offs and pricing, etc.)
2. Deposits. Yes/No and if Yes; how much
3. Final payment. Prior to delivery; upon delivery?
4. Warranty from Defects? The extent to which you offer this and for up to how long?


Thanks in advance

Thanks everyone – all great points/observations/suggestions.


As to pricing – totally agree with the consensus view to quote fair pricing. Fortunately my financial situation is such that I don't need this work “to put food on the table” so I can be a bit more selective about the projects I agree to and what I am willing to work for. IMO – for me the price is the price. If that results in fewer jobs – so be it.


For general burden (i.e., materials and supplies, glue, sandpaper, finishes, wear and tear on equipment, etc.) I ‘m thinking of just charging a “burden” fee fro each project. Something like 5 or 10 percent of project total cost. Delivery, handling, materials (including time to procure) – would all be separate.


As far as commercial insurance – that is a great suggestion and I have reached out to my insurance agent to get a better handle on this. I won’t be employing anyone and I am not especially worried about me getting “injured on the job” - so I suspect either general or product liability insurance should suffice.


I have a pretty extensive business background (ran a small RE development company for about 25 years) and have negotiated more sales transactions than I can count and so I am fairly sensitive to dealing with third parties. Unfortunately, my company was party to at least half a dozen lawsuits and even named personally in one of them! I would never enter into any business arrangement without a fairly extensive contract, which would include limitations on liability – including indemnity, releases and hold harmless clauses. We used to say that in the current environmental there are no longer mistakes, unfortunate accidents or happen stance – there are only compensable events! (wait – was that political? Sorry!)

[Don_M]

Don, just a few starters questions.

Is your relationship to these acquaintances based on an affable friendships or are these people used to having you provide for them some type of goods or services that you would normally receive payment?

Generally not close acquaintances  - some may be total strangers

Are these projects more artistic/custom/bespoke than normal items in their category?

I would say fairly traditional pieces - tables, desks, etc.

Will you be building items you already have vast experience?

Yes

Have you sold commissioned work in the past and what was the price range?

I have made a number of pieces for others - but only charged nominal amounts (basically enough to cover cost of materials)

Just wanting to learn more about the subject if you’re willing to share.

[Scoony]

I was building furniture as a side gig, but my full time job is getting in the way now. As for insurance, talk to your agent. Also see your county on a business license and zoning requirements. As long as I did not have a store front displaying goods, I did not have to worry about any zone/ordnance issues. I also did not need any additional insurance as my home owners insurance covered my attached garage/shop and I don't keep an inventory of goods.

[Arlin Eastman]

One thing I just remembered is contact a Lawyer to set up a disclaimer letter or general letter for bidding or I forget the main one I was trying to say and maybe someone here can help me out.

[Don_M]

I would suspect you are doing this as a sole proprietorship – and in that case I believe you are correct that normal homeowners insurance would cover you (not sure it would necessarily cover product liability however unless you have an umbrella policy). I am considering forming a special purpose company (single member LLC – and as such my agent indicated that I would need commercial business insurance. Homeowners insurance wont cover activities of the LLC

[Cian]

And make sure your customers know that they are not saving any money getting you to build that bookcase/table/whatever. Many people have no idea what materials, finishing, hardware, etc. cost and think you can build something for less than what Ikea sells it for.

Yup.  Real woodwork ain't cheap and neither is your time.  One of the reasons I could never do this professionally.

[DFJarvie]

My suggestion is to make and sell a few pieces for close friends and see how you like doing it before investing in licenses and commercial insurance. Once you start charging you need to meet deadlines and other time consumers you retired from.

I have shifted my focus to turning and did a craft show at my daughters school. I spent 2 months making enough pens, bottle stoppers and pepper mills. The wife was supportive but she couldn’t wait until it was over. I was spending every sat getting ready. I sold 3 pepper mills and 1 bottle stopper. I made my money back and cover the table cost. I plan on doing a few more shows before I get a tax ID etc.

I guess my point is go in the gradually before diving in. I do wish you the best what ever you do. We need more people making furniture.

[Don_M]

My suggestion is to make and sell a few pieces for close friends and see how you like doing it before investing in licenses and commercial insurance. Once you start charging you need to meet deadlines and other time consumers you retired from.

I have shifted my focus to turning and did a craft show at my daughters school. I spent 2 months making enough pens, bottle stoppers and pepper mills. The wife was supportive but she couldn’t wait until it was over. I was spending every sat getting ready. I sold 3 pepper mills and 1 bottle stopper. I made my money back and cover the table cost. I plan on doing a few more shows before I get a tax ID etc.

I guess my point is go in the gradually before diving in. I do wish you the best what ever you do. We need more people making furniture.

 I have built a number of pieces over the years for friends, acquaintances and institutions (schools) – some of these are on my web-site. I did not charge excessive amounts – enough to cover materials and supplies and a little extra for my time. My initial thought is to start off staying “local” (probably no more than a few hours one way to a client). I have looked at shipping times out of state – not cheap!


Have any of you ever looked into Etsy to market your items. Just wondering how that has worked.

[packerguy®]

I retired from my full time job a few years ago 

Ill throw my .02 in.

Are you looking to work full time again? Do you want a job again? If not, don't form a business. 

If "acquaintances" want something built, be up front you dont do this professionally, barter a fee for doing it and just do it for a case by case basis. Don't make it harder than it needs to be. I did that 12-15 years ago a few times when I was a hobbyist. I made a little pocket cash, had fun, and learned a lot. 

Now if you want to have a full time or close to full time job, thats another story. 

Over the years it has driven me nuts watching guys not want to be a "business" yet try to charge like you were a professional but not have to act like one. Thats why I think its the first question that needs to be answered.  

As many here know I have made urns for more than a decade. I don't know how many wholesale customers have told me in the bidding process they found a local "guy" that can do it cheaper, or a cabinet shop. I always tell them that is all fine and good until you grow and they don't want to grow with you. I have a handful of customers that within a year came back to me and paid my asking because the "guy" got burnt out or the cabinet shop stopped because there was no profit in it for them. 

As far as eBay and Etsy....eBay is almost a complete waste of time for me.....its cheap marketing (thats how I view it) Etsy, because of the very low listing costs, if you have a product that is easy to handle and people want....give it a go, but for me, its largely a bust, but I never put the time into it to get the reward. Just posted random urns over the years. Again, its about the time and effort you put into it. Likely you will make a fraction of what you would want selling through a website like that.