Look at new avenues to expand revenues

Americans spend more than $30 billion dollars every year on old-fashioned, printed books. Another $35 billion goes for wine. Are you building bookcases? Or wine racks?

About 40 million U.S. households rent rather than own and the vast majority of those people purchase freestanding rather than custom, built-in furniture. In those households, there are perhaps 70 million people who will never enjoy the benefits of custom woodwork. Take a walk through an average furniture store and it’s obvious that, when it comes to casework, an awful lot of those people are spending huge sums of money on shoddy design, subpar materials and artless construction. Quality boxes are almost impossible to find in a big-box store.

There’s an opportunity here.

True, the concept of using a custom shop to make spec furniture is a bit challenging. Design and fabrication aren’t the major issues. Marketing is. If a woodshop invests some downtime and inventory in building a batch of bookcases, how does it sell them? A furniture store will expect at least a 40 percent discount and more on consignment sales. Even if those terms work, well-heeled young people don’t often drive downtown to walk through stores anymore. They begin the shopping process on their phones. But building a website isn’t enough in itself to sell large, hard-to-ship items in a retail environment. Most sites, even those with shopping carts, are little more than an electronic brochure, a place to go for details. People might see what they want online, but for items such as bookcases and wine racks, most folks need to physically touch the product before they buy.

What’s the answer? Bring the work to them. For example, coffee shops are a great venue. They always need good-looking display fixtures to sell bags of beans, travel mugs or caffeine candy. What if the fixture itself is also for sale? The demographics are perfect: these are people with more money than sense ($6 for a latte?) and not enough time to drive to the furniture store.

Just being in such a venue adds a little “hipness” to casework. (I’m told the only people who still say hip are those who need a new one.) The coffee shop gets a free display case for the length of the agreement and the woodshop gets free advertising. Remember to put a sign (with an image) on the fixture that says it’s for sale, that you have more like it and that you can build custom sizes. Laminated tent signs seem to work well and they are very inexpensive. Most print shops can laminate a printed sheet of paper. And you probably won’t sell anything if you don’t publish the price.

Other hot venues are gift shops at tourism attractions, souvenir shops and even liquor stores. One tactic that also works well is offering cold hard cash to any employee who sells a fixture or who sends you a customer who buys one. It’s a good idea to get written permission from the storeowner to do that.

Thinking outside the boxes

The point here is not that every woodshop should start cranking out bookcases, but rather that an expansion in revenue doesn’t always have to come from doing more of what you’re already doing. If construction is faltering, it’s hard to sell kitchens. When municipalities are strapped for cash, they don’t usually build new schools. But a single bookcase or small wine rack is almost always affordable.

Nowadays, you don’t even need to build it. Many of the larger outsourcing suppliers will work with you on a knockdown or even an RTA (ready-to-assemble) design, where a small, flat-packed, prefinished kit can be shipped directly to the customer with assembly instructions.

Take a look around the neighborhood. Are you in a big college town? Students always need desks that they can knock down and pack home in a car at the end of the school year. If you want to get the word out on campus, offer one of the booster clubs or sports programs a small royalty whenever a desk sells and pretty soon you’ll be the epicenter of a fundraiser.

Are there lots of wineries nearby? How about rough-sawn, screwed-together cases that display a dozen bottles in the store and can be taken home, set on their sides and used for upmarket “rustic” storage?

Does the city have a recycling program? If so, a lot of people will want to hide those plastic bins in a nice piece of casework that can sit in the garage — and the bins are all the same size, so fire up the CNC and make identical multiples.

Have you heard of the Little Free Library? It’s a non-profit (located online at www.littlefreelibrary.org) that has spread through thousands of communities across the country. Todd Bol is an amateur woodworker who lives half an hour east of metropolitan St. Paul in the riverside town of Hudson, Wis. Six years ago, he built a model of a rural schoolhouse, mounted it on a post in his yard and placed some books in it. The concept was an instant success — borrow a book and replace it with another. The organization offers around two-dozen prebuilt libraries ranging from $149.95 to $1,499.95. They also provide guidelines for building your own.

As of January, there were more than 25,000 registered Little Free Libraries in all 50 states and more than 70 countries. And almost every one is made of wood. Somebody with an idle CNC should probably call these people.

Back to school

Here’s a novel idea: most shop owners or managers spend at least some of their time training new people. I ran a very successful woodworking school for six years in a tiny town in one of the most remote parts of the country. We started it because I couldn’t keep the machines busy enough with custom work.

We closed the doors two years ago for unrelated reasons, but I still get a couple of calls almost every week from people wanting to sign up.

As a shop owner, you have the experience, skills, knowledge, machinery, hand and power tools, and even the real estate and workbenches to conduct classes. Insurance is surprisingly affordable and the people who sign up are very, very respectful of machines. We never had an injury. About 80 percent had a college degree and most were close to or newly retired. A third were women.

Some callers want to learn how to run a real CNC router before they buy a desktop version for a home shop. Others want to build their own kitchen. A few want to learn basic joinery — how to lay out and chop a mortise perhaps or run a dovetail jig. But most just want to learn how to run a table saw, jointer and router table. The best way to teach is to have them build something. (Hey, how about a bookcase or wine rack?) To line up students, a good first step is to speak with a community education organization. Almost every larger town or city has at least one. They’ll pay for the advertising, sign people up, process the tuition fees and send you a check after the class is done.

Larger shop solutions

The ideas above are appropriate for small shops (perhaps fewer than half-dozen employees), but there are creative ways that large operations can expand profits, too. One of the most obvious is to cut costs. If you’re not having an annual audit of your workers’ comp premiums, then that might be a good place to start. Adjust the heating or cooling an hour before everyone leaves for the day rather than an hour after they’re gone and pop it back up half an hour before people arrive. Call the gas and electric companies once every year, early in the year, and find out what incentives are coming or already exist. In some markets, off-peak power is significantly less expensive and many shop workers would enjoy starting, and finishing, a little bit earlier each day.

Look at becoming an outsourcing supplier. If you have machines that are idle, can they make parts for other shops? The key here is to network through industry organizations such as the Architectural Woodwork Institute or the Architectural Woodwork Manufacturers Association of Canada. Such groups have local or regional meetings where you can interact with other shop owners and managers. The woodshop down the block, which you have always thought of as a competitor, might just become your best customer.

In addition to expanding the bidding process to neighboring communities, one of the least expensive ways a larger shop can boost revenue is through publicity and social media. Find somebody on staff who can spend the first 30 minutes of his or her day, every single day, posting to Facebook, Twitter, LinkedIn, Pinterest, Google Plus, Tumblr, Instagram, Flickr and Vine, among others. If they make $20 an hour, you’ll only be paying a few hundred dollars a month for all this exposure. It’s absolutely essential to post regularly. Each of these sites is based on geometric progression: you tell five people, then they tell five people and so on. Your company’s Facebook page can talk about the jobs you’ve completed and post comments from customers. Or it can mention capabilities you have such as laser engraving (even if you’re outsourcing that), non-toxic coating for children’s furniture or that you stock bronze Arts & Crafts drawer pulls. There’s always something.

This same staff member can also generate a press release once a month and send it to local newspapers, television and radio stations. If they run it, you have free advertising. The releases can be about volunteer or community action that the company or employees have performed (get the employee’s written permission to publish), new products and so on.

Perhaps you’ve started building bookshelves …

This article originally appeared in the October 2015 issue.