Carpenters make up the largest trade occupation in the USA. They are currently estimated to be 1,025,599 carpenters in the carpenter business. The job market for the carpenter business is estimated to grow by 8.2% by 2026. Factors that promote the carpenter business include more new home construction projects, and the need to repair and upgrade existing infrastructure.
People are building new offices, hotels, recreational centers, factories, and power plants. All these are improving job opportunities in the field. There’s great potential for general carpenters and those specialized in fields such as restorations, interior design, and building conversions.
Population increase is propelling more demand for carpenters too. If you’re considering starting a business, becoming a carpenter is a wonderful idea. You can join the industry regardless of your experience and background.
Here’s a step-by-step guide on how to start a carpenter business.
Plan Your Business
Starting your own carpentry business is a wonderful way to earn top dollar and be your own boss. However, failing to plan is planning to fail. You have a few things to do before you open your carpenter business including writing a plan.
The plan is the first step to offer an overview of your current business, where you intend to go, and how you intend to reach there. You have to portray your current financial position and how it’s likely to change over the years. Moreso, a plan is more than a document to financiers.
It’s a roadmap for your small business growth and success you refer to for guidance and direction. The business plan establishes your list of preferences and a benchmark to measure your success. Most business owners fail to write a plan because they are too busy or don’t know how to write one.
Devoting time to write a plan is an investment that pays substantial dividends. It increases the value of your small business, attracts funding and partners, and allows aligning your business strategy with action. Planning also makes decision-making easier.
The five key components of planning how to start your own carpentry business include:
- Description of your business, its products, and services.
- Clear description of your competitors and their share of the market.
- Highlight the marketing techniques you’re planning to use to reach your goals.
- Management team and resumes of key personnel.
- Illustrate current financial position.
Calculate The Necessary Costs
Planning your finances has the highest chances of success as a carpenter. Calculating the startup and ongoing costs such as insurance guarantees having sufficient funds. Rent is likely to be the most expensive expense when planning to have a brick-and-mortar location.
How much does it cost to start a carpentry business varies by location and specific area of town. You must also budget for business formation fees such as setting up a Limited Liability Company (LLC) and getting trademarks, copyrights, or patents sorted.
Carpenters need job management software such as Field Complete to operate efficiently. This saves time and automates various tasks to grow your small business while protecting you from hefty personnel costs. You also have to budget for a website, insurance, and other marketing and advertising costs.
The average carpentry business start up cost is about $19,267, while the amount can go up to $35,923.
You can save when starting a carpentry business using ideas such as:
- Lease equipment instead of buying.
- Acquire equipment using your savings.
- Postpone unnecessary expenses
- Learn what the market wants.
- Minimize wastage of materials.
- Keep accurate records.
Register Your Carpentry Business
After writing a business plan and understanding the necessary costs, it’s time to make your carpenter business legal.
Choose a business structure
You must choose whether your business operates as a sole proprietorship, LLC, partnership, or corporation.
A business structure will determine how you file tax returns when the tax season comes. When forming a partnership, ensure you choose those that align with your business goals. Additionally, assign appropriate responsibilities to each partner.
Determine how much control and ownership you want in the business when choosing a structure. Equally important is to choose a structure that matches your strategy to manage risks and liabilities.
Choose A Business Name
You need a business name that must be unique, catchy, and relevant to your business. After getting a name, you can check if it’s available before you begin using it. You can use a business name generator to brainstorm potential names.
Each state has its own requirement. So, be sure to check what applies in your state.
Register for Taxes
An Employee Identification Number (EIN) is mandatory to register for taxes. You can file to get one by email, mail, or fax. When working as a sole proprietor, you can just use your social security number.
Afterward, you choose your tax year. A business usually operates in a calendar year running from January to December or a fiscal year with 12 months that may start any month. So, you determine your tax cycle and your business structure determines the taxes to pay.
A good idea is to consult a professional accountant to ensure compliance with taxation requirements.
Get The Necessary Permits And Licenses
You must learn the requirements to get the necessary permits and licenses in your state. Knowledge of how to start a successful carpentry company includes understanding how to comply with all state and federal regulations.
A carpenter’s license is a certification by the state to demonstrate proficiency in the industry.
The license requirements vary by jurisdiction at the state, city, or county level. Most requirements at the state level apply to professionals, not people working from home.
Some states need one license while others require licenses for particular services you offer or according to the size of the project you’re working on.
An example is Alabama where you need a subcontractor or general contractor’s license to work on projects over $50,000. Other states, such as Illinois, don’t require a license at all. You may also need to get registered and certified.
Maryland requires a license for home improvement projects. You must register with the state in New Jersey but don’t need a license. Texas has no state license but requires licensing at the local government level.
Getting the license may involve paying a fee and possession of on-the-job experience. You may also need to pass written carpentry and business management tests. A good idea is to contact your local building department for the appropriate requirements in your area.
Open A Business Bank Account
Having a bank account is necessary before you start making money in your carpenter business. The business account allows for separating personal and business finances. It also makes filing taxes and tracking income from your business easier.
Using the same bank account for your personal and business finances pierces your corporate veil. It puts your personal assets such as your house, car, or other possessions at risk in case your business is sued by creditors.
How To Open A Business Bank Account
Opening a business bank account is a simple process and requires possession of an EIN, business legal documents, and articles of incorporation. The options for business accounts include:
- Checking account
- Savings account
- Credit card account
- Merchant services account
Apart from limiting your liability, a business bank account offers an option to apply for a line of credit during an emergency. A merchant services account allows accepting debit and credit card transactions.
When choosing a bank, consider the minimum balance requirements, account management fees, and access to ATMs. The ideal bank must also offer online and mobile banking for convenience. Additionally, choose a bank with extra features including integrations and invoicing.
Create A Net 30 Accounts
Net 30 accounts allow paying credit to vendors in full within 30 days including weekends and holidays after the date of invoice. The accounts build business credit and boost cash flow. You can purchase supplies and equipment and pay for them within 30 days.
Information from your Net 30 credit suppliers to business credit agencies such as Experian Business allows for establishing business credit. This can get you approved for credit cards or other lines of credit.
Hire Professionals For Your Carpenter Company
Getting professionals is inevitable as your business grows. However, getting well-trained and dependable carpenters for any project is not an easy process. You need people who understand their craft and can work seamlessly with subcontractors, building owners, or other parties on the project.
Hiring professionals for your carpenter business affects your existing team and bottom line. The roles of professionals on your team include:
- Produce and install cabinetry
- Shape and cut materials to specified measurements
- Assemble and fasten materials
- Remove damaged or defective parts
- Ensure compliance with safety rules and regulations
- Move materials on the job site
- Cleanup job site at the end of the project
Full-Time Vs Freelance Carpenters
When asking yourself how to start your own carpentry business, you can choose full-time or freelance professionals. Full-time carpenters are always in your company for ongoing projects. These are ideal when having multiple projects whose completion may take weeks or months.
Alternatively, you can work with freelance or independent carpenters whenever your current team is overwhelmed. These work for any business and usually come with their own tools and cater for their transportation to the job site.
Skills When Hiring Carpentry Professionals
Carpenters vary by rank including carpenter’s helper, master carpenter, apprentice carpenter, and journeyman carpenter. The ideal candidate must possess skills including:
Extensive knowledge of safe and appropriate use of equipment
- Highly innovative thinker
- Knowledge of lumber styles and grades
- Precise and safe use of power tools
- Comfortable with ladders and heavy loads
- Hardworking grit
You can find candidates by asking for recommendations, using a staffing agency, posting on your website or social media channel, offering an internship program, or contacting local vocational schools.
Find Business Partners
The carpenter business is highly competitive but collaborating with other businesses can make you thrive. It allows working with partners to solve business problems and achieve goals that seemed impossible when working alone.
Working with business partners combines perspectives, skills, and expertise. Reasons to find business partners include:
- Achieve mutual growth
- Expand product and service portfolio
- Share knowledge
- Expand business network
- Fuel innovation
- Solve business problems
People To Partner With For A Carpenter Business
You must partner with the right people for the success of your carpenter business. The ideal partners for carpenters include:
Carpenters work with powerful tools and sometimes injuries happen. You need an attorney to help you handle workers’ compensation claims. The lawyer also advises you on other legal matters while managing your business.
Certified Public Accountant
You need a professional accountant who understands the mechanics of your business. The expert will solve your complex record-keeping process and good cash flow management. A CPA will help you remain competitive by giving you time to focus on other essential tasks.
Builders And Real Estate Companies
Partnering with builders and real estate companies is another wonderful idea to grow your business. These partners will let you handle every project they get before completion.
Carpenters install, construct, and repair building frameworks and wooden structures. Other duties include shaping, cutting, and installing wood for buildings.
Create Your Carpentry Business Website
Success for your carpenter business depends on many things including having a website. An interactive website allows engaging with potential and existing customers without them visiting your office.
A well-designed carpenter website has several benefits including:
- Give your business an online presence
- Improve customer engagement
- Enhance marketing efforts
- Make your business look more professional
- Differentiate your business from others
Features Of A Quality Carpenter Website
A website is a part of how to run a carpentry business. Here are the essential features it should have.
Easily Recognizable Logo
The logo must be easy to recognize and feature prominently on the website. Potential customers must immediately recognize your logo from others. An effective logo builds brand awareness and attracts new customers.
A website is usually the first point of contact potential customers have with your business. Therefore, you must include everything to entice them to book your services and products. A portfolio section showcases your skills and experience on past projects to show potential customers what to expect.
Your website shows potential customers what you can do. So, include dedicated pages for your services. Ensure to include information about the service and what makes you the best company to handle related projects.
Potential customers need information on how to book your services or products. You must include your physical address, email, and telephone number. A good idea is to also include links to your social media channels.
Licenses And Certifications
Potential customers must know that you have what it takes to handle their projects. Include your licenses and certifications on your website to stand out from the crowd. Showing potential customers that you have the credentials increases your chances of getting hired.
Market Your Carpentry Business
You need a consistent flow of jobs to grow your carpenter business. Here are some ideas to market and grow your business.
Establish A Presence On Social Media
Apart from having a website, you must also have a presence on social media. Target customers can find you here. You can also use it to showcase your work. Regular updates and quick responses to customers help boost engagement.
Listing your carpenter business in business directories boosts searchability while complimenting your social media presence and website. Claiming your Google My Business profile boosts local searches.
Another idea to market your carpenter business is using branded items. You can brand your company vehicle and work wear with your logo and official color. It makes your team look more professional while creating awareness about your brand.
Recommendations And Referrals
It’s worth the effort to ask current clients to recommend you to people they know. People are more inclined to support a business recommended by their loved ones. Alternatively, offer a reward to people who refer their friends and family to your business.
What Tools Do I Need To Start A Carpentry Business?
Having the right tools is essential to start a carpentry business. The list of hand tools includes a hammer, chalk line, tape measure, nail puller, tin strips, speed square, carpenter’s pencil, utility knife, wood chisel, and levels.
You also need essential power tools including drills, circular saws, extension cables for corded tools, and reciprocating saws. It’s also a good idea to have nail guns for framing, finishing, and roofing. An air compressor and hoses are also necessary for pneumatic tools.
What Are The Types Of Carpentry?
Carpenters can do rough work or finish projects. The types of carpenters include trim carpenters, cabinetry carpenters, green carpenters, residential carpenters, and commercial or industrial carpenters.
What Type Of Carpenter Makes The Most Money?
A carpenter foreman is the highest-paid carpenter job. The position pays an average salary of $58,922 or $28.33 per hour. A foreman in the carpentry industry supervises other professionals. The professional also inspects buildings for repairs and estimates appropriate time and materials for completing the project.
Use Our Carpenter Software For Your Business
Apart from planning, hiring the right people, marketing, and registering the business, management determines how much a carpentry business makes. A good idea is to use our carpenter software.
With this tool, tasks such as job scheduling, dispatching, and invoicing become easier. It gives you free time to invest in essential business tasks. Join other successful carpenters today who save time and streamline workflow on desktop, laptop, mobile device, or tablet.