In a previous post, I provided a detailed description of Jim Morgan’s WoodProfits method for those interested in turning a woodworking hobby into a business. In this post, I offer some additional advice from Jim Morgan about learning to control your costs.
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In a previous post, I provided a very extensive description of Jim Morgan’s WoodProfits program. Below, I have included some of Jim’s advice for learning to control your costs as you get your business started.
If you’re interested in starting a woodworking business, I encourage you to check out Jim’s program. These are Jim’s claims, not mine, so I encourage you to consider his offer and decide for yourself whether it is right for you.
Learning to Control Your Costs
Learning to control your costs is an essential part of starting any business, particularly if you want to see profits.
First, you need a proper way to calculate your costs. If you don’t, you may find yourself putting a final price on a product, believing you are making money when you are actually taking a loss.
You have to have a defined way of calculating your costs so you can get the best out of the business. Here are some of the things that you should consider if you want to earn a good income in the woodworking business.
Cost of Materials
The cost of materials will include everything you use on the project. Learning to control your costs starts with recording all of your expenses when you incur them.
Start with the obvious costs like lumber, hardware, and plywood. Please take your time and include the costs of the materials that you may otherwise consider as miscellaneous. Such expenses can include varnish, sandpaper, and more.
Overhead costs include all the other expenses that you incur even when you do not work. Such costs include things like rent, office expenses, advertising, and insurance, among others. Make sure you also include the costs of shop supplies that may seem too minor to track separately.
Learning to control costs is vital to maintain a good profit margin. You need to make sure that you make a profit. Your profit margin ought to be the amount that you deserve for taking the entrepreneurial risk.
Finally, if you are going to include for shipping costs in your sales price, make sure that you factor that in.
And remember, if your products are of high quality, you will attract customers who won’t complain about the price. You just need to ensure you are providing a value equal to what you are charging.
If you’re interested in starting or improving your woodworking business, take a look at Jim’s program. Consider what it has to offer you, and make up your own mind. If starting a woodworking business is a desire of yours, you should at least check it out.
You’ll be glad you did.