Do I double-down on TKD Woodworking?

I’m sure you all are aware that 2020 wasn’t that good of a year to start a new business.  Even a side-hustle has challenges, and TKD Woodworking is no exception.

I showed a lot of the steps that I went through in developing the company in my link to the right. It’s a fairly large set of postings on decisions on what to make, how much, and what to spend money on. I put a lot of thought into it, and work on the initial product line for selling.

Needless to say, the availability of craft shows and farmers markets in my local area were very small in 2020. I detailed how we did financially, and it was somewhat disappointing.

I’ve reached an interesting point in the business for year 2. I’ve put in roughly $4,100, and had $2400 in expenses for 2020, leaving me with roughly $1,700 remaining. In order to move forward in 2021, I still will have probably $1,000 in fixed expenses (insurance, webhosting, registration, etc.).

In addition, I’m interested in upgrading my website to make it more professional and be more receptive to e-Commerce. My webhosting company, BlueHost, is offering me a package deal of roughly $2,500 to upgrade my website (5 pages, up to 10 product pages, e-Commerce, Blog, etc.) and to do work on Social Media (Facebook, Twitter, etc.) to help publicize it.

I’m tempted to do this, as I think the website would look a lot better (I don’t like how it looks right now) and the potential for additional sales is tempting. Does anyone else have experience with folks helping to build their website?

Lots of fun, running a business.

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Mr. 39 Months

Measure Twice, Cut Once

In woodworking, there is an often used phrase “Measure Twice, Cut Once.” The concept is that when you do your first measurement, you should check it a second time a little later, just to make sure you didn’t make a mistake, before you cut something. When you cut a piece of wood (or metal, cloth, etc.) you pretty much are committed at that point to wherever you have measured to – and the world is full of people who measured an inch (or centimeter) too short. The result – something gets tossed out because it isn’t useful.

I was reminded of this recently while doing some woodworking in the shop. I was building a couple of doors for the kitchen island I was making. The doors used a framing joinery style called “mortise and tenon” which is very old (1,000s of years) in which you create a tenon (sort of a wooden tab) which gets inserted into a mortise (a hole you’ve carved into the wood). It results in a square frame, sort of like a picture frame. You can then insert a flat panel into the middle, which “floats” between the four pieces. This is key, because wood has a tendency to contract and expand as it releases/takes in water throughout the year. If the center panel can’t move, things have a tendency to crack.

Well, in rushing things I took the measurement for the panel and cut them while I had some glue drying on something else. Guess what? The panels are too short, on both ends. Exactly one inch too short!

I had to go purchase new wood to go into these, and the other ones will go into my wood pile, where I hope to find  a new use for them.

For many of us in the days of Tesla and GameStop, there is the urge to shoot first, then aim. While this can pay off occasionally, I would still urge others to “measure twice, cut once” and double check your assumptions and decisions a second time before acting on them. A lot of trouble in this world can be bypassed if we just take a second look at things.

I hope everyone is healthy and happy!

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Mr. 39 Months

TKD Woodworking – How did we do?

Well, it appears I sure picked the wrong time to start a new business/side hustle!

I’ve written several articles previously on my attempts to start a side hustle with my woodworking

So, the year is coming to an end, and its been interesting. As you might expect, sales did not exactly go according to plan. My sales for 2020 were $0. I believe that reflects a lack of marketing on my part.

My initial plan was to use craft shows and farmer’s markets to sell my products. As you would expect, once the virus hit, this got hit hard. In my area, they’ve had no craft shows, and the farmer’s markets have opened up with reduced volume and lots of requirements. So my major source of potential sales dried up.

I sought to use online sources (ebay, etsy, etc.) but the competition on there is pretty fierce (I’m competing in some cases with overseas low labor, and its hard to differentiate my quality online vs. folks being able to see/touch it). That competition only ramped up higher with the virus.

So here are the end-of-year financials for TKD Woodworking:

Income Statement

Sales Revenue$0.00
Cost-of-Goods Sold Expense($1,505.91)
Gross Margin($1,505.91)
Operating Expenses($951.52)
Earnings before interest and Income Tax($2,457.43)
Interest Expense$0.00
Earnings before income tax($2,457.43)
Income Tax Expense$0.00
Net Income($2,457.43)

So as you can see, I’m spending about $1K a year just to stay in business (insurance, business registration, etc.) The remainder of the money if for wood, hardware and finish, which I will hopefully get back once I can start selling items.

Balance Sheet

Accounts Receivable$0.00
Prepaid Expenses$0.00
Subtotal of current assets$2,421.78
Property, plants and equipment$0.00
Accumulated Depreciation$0.00
Cost less accumulated depreciation$0
Total Assets$2,421.78
Liabilities and Owner’s Equity 
Advanced payments from Customers$0.00
Accounts Payable$0.00
Accrued Expenses Payable$0.00
Short-term notes payable$0.00
Subtotal of current liabilities$0.00
Long-term notes payable$1.00
Total Liabilities$1.00
Owner’s Equity – invested capital$2,421.78
Owner’s Equity – retained earnings$0.00
Total Liabilities and Owner’s Equity$2,421.78

For the Balance Sheet, I had to add about $500 into the company’s account in mid-December (if the cash in my checking account drops below $1,500, they start charging me a fee every month.

Overall, I’m disappointed in sales not being able to at least cover the operating expenses. With the items I’ve built, I think I’ll be in a good enough position to recover in 2021. I’ve got one other item that I want to make some of, and then I will probably stop until I can actually start selling product.

Let’s all hope 2021 is a good year!

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Mr. 39 Months

Getting started on a new project

Woodworking – getting started on a new project

Well, with the Christmas presents made and other projects complete, it’s time to prep the shop and get started on the next one. Whenever I start a large new project, I take the opportunity to clean up/prep the shop. A lot of that consists of cleaning up, and then sharpening/prepping the tools.

  1. Start with a thorough Thinning
    1. Empty waste cans & Dust Collector
    2. Throwaway wood <12” long
    3. Straighten up woodpile
    4. Shop vac (with bag) to Vacuum/clean up
  2. Tools: Don’t use ‘em, then lose ‘em
    1. Collect not using and get rid of them (ebay, give away, etc.)
    2. Clean Table saw blades
    3. Clean/spray cast iron surfaces of tools (table saw, band saw, etc.) – Topcoat or Wax
    4. Clean putty knives with random orbit sander
    5. Clean glue off of clamps with putty knife, then wax
    6. Touch up/Sharpen chisels & plane irons on 8000 grit water stone

Once that is done, it’s time to start laying out and cutting up the wood to start the next project. In this case, it’s a small kitchen island than Mrs. 39 Months wants. It’s going to look like a craftsman piece of furniture, with lots of mortise & tenon joints. I’ll try to shoot you guys some updates in the weeks ahead.

Hope your holidays are going well!

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Mr. 39 Months

New Product for TKD Woodworking

Well, part of a company’s marketing and sales effort is the development of new products to sell. I’ve got five products selling on Etsy at this point, and wanted to expand this by offering a nice hinged wood box, perfect for keeping items in. Its called “Tery’s Tea Box” because it was made for my wife, and used to store her various tea samples in. Its made with Cherry and Mahogany, with a Poplar tray.

Like I discussed before, in preparation for this, I had to determine bill-of-materials, assembly process, and Economic Order Quantity. I then had to time myself during the construction to determine labor hours. With all this information, I price my labor ($20/hr) and then I am able to determine a price per unit. Throwing in overhead costs, I can arrive at a final price per piece.

This particular item needed $44.40 in materials (the high-quality Brusso hinges are $28.80 for each box), and took 2.6 hours @$20/hr. With a 40% overhead, this works out to:

  • Materials: $44.40
  • Labor: $52.00
  • Overhead@40%: $38.56
  • Total Sales price: $134.96

Note that this does not include shipping costs.

Again, one of the primary purposes of TKD Woodworking is for me to do the paperwork and calculations, so I can better understand how to run the business. I just had to do my taxes for September, which luckily were $0, because I haven’t sold anything yet. I can see that being difficult in the future.

So far, its been an eye opening experience, and I have enjoyed (somewhat) the process.

Stay Healthy!

Mr. 39 Months

TKD Woodworking is “Open for Business”

Going on Etsy for TKD Woodworking      

Well, I’ve gone through a lot of steps to prepare for selling my product as part of a side hustle

As per my planned timeline, its time to put my product online and begin selling. I started with Etsy, going online with my store on July 9th . I’ve got four (4) items in the store (two cutting boards, two picture frames) and I’m working on a fifth (tea box). So far, no sales (its been a week, and competition on Etsy is pretty fierce), but we’ll see.

Getting setup on Etsy isn’t hard and the costs are fairly moderate to market online. Unfortunately, the Chinese Corona Virus has put a “crimp” on any craft shows I might have been able to attend. We will see how this goes.

Overall, a positive step, in my opinion.

Hope things are going well with your plans for the second half of 2020.

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Mr. 39 Months

TKD Woodworking – Liability Insurance

Is getting close to the time when I want to start trying to sell my product online via Etsy, Ebay, etc. In order to protect myself and the financial assets I have as an individual, I’ve done a couple of things:

  1. Created an LLC – TKD woodworking. The idea is to create a “Limited Liability Company” and sell through this vs. selling as myself. It will provide some protection of my personal assets, provided there is no “gross negligence” involved
  2. Created a separate checking account for running the business, with a separate credit card for charging items. Since I do not mix my personal and professional assets, it will provide a little more of a shield against a lawyer “piercing the veil” and getting at my personal finances
  3. Purchased Liability Insurance, charged to the company (TKD Woodworking). In this case, I went through my regular insurance company (USAA) and though they do not insure small companies, they connected me with the Hartford Co. which does.

For the insurance company, they had a good idea of what I was trying to do (small craft company, selling online) and had some interesting questions to ask before providing me a quote:

  • Was I making furniture, or just small items (cutting boards, boxes, etc.) – I assume furniture would mean more liability
  • Was I making anything with stairs, ladders, etc. – again more liability
  • Was I making anything specifically for children (toys, etc.)

There was a host of other questions on the product the business would be producing. All of these items point to additional liability issues which I would need to consider if I chose to move my business in that direction.

In the end, with an assumed sales of roughly $2,000/year, a $1M liability policy is going to cost me $458.78/year. While that may seem a little steep, it will help me sleep at night, knowing I’ve got some protection for my personal assets.

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Mr. 39 Months

Marketing and Sales with TKD Woodworking

In my timeline for TKD woodworking, May is when I needed to start doing some research on potential e-Commerce and marketing/selling my product on the web. This is in addition to the potential of attending local craft shows and selling my wares face-to-face with customers.

For woodworking craft items (picture frames, boxes, etc.) the standard online sites are Etsy, Shopify and potentially e-Bay. Some other options include Squarespace, Wix.xom, and Woocommerce. There are pluses and minuses to each, and the internet it filled with commentary on which is best (and what are some other options). Do a search, read and make some decisions.

For me, I wanted to look at my sales plan for 2020 (items I expect to sell in 2020, in what quantities, and the associated marketing & sales costs for each option. So what are the costs for each option?

  • Etsy: Etsy has a $0.20 fee for 4 months for each item, a 5% transaction fee, and a 3% + $0.25 payment process for each sale
  • Shopify: Shopify costs $29 per month, with a 2.9% +$0.30 payment processing fee, and a 2% cost for using payment other than Shopify payment system (note: this is the cost for the basic plan)
  • E-Bay: Ebay costs a $1 “insertion fee” (i.e. cost to publish for bid) and 8.75% for sale

I proceeded to take each of my items and the expected quantity sold, assumed each item would be “listed” twice in six months, and that I’d use the website’s payment system (and hence get charged their transaction fees). Based on this, I came up with the following results:

ProjectTotal Selling PriceTotal Sales for 2020Etsy Cost to sellShopify Cost to sellEbay Cost to sell
Live Edge Cutting Board$77.003$19.53$12.22$23.21
EndGrain Cutting Board$89.383$27.29$14.04$26.46
Breadboard Ends Cutting Board$127.883$31.74$19.70$36.57
Japanese Picture Frame$70.233$21.35$11.22$21.43
Small Standing picture Frame$25.823$9.14$4.69$9.78
Tery’s Tea box$174.163$49.12$26.50$48.72
Arts & Crafts Bookshelf$297.503$72.45$44.63$81.09
Campaign Collapsable bookshelf$249.733$67.26$37.61$68.55
Custom cutting boards – face grain$36.173$13.17$6.22$12.49
Keyed, Mitered Box$137.123$40.23$21.06$38.99
Low Tech Box with Insert$77.803$19.72$12.34$23.42
Monthly Fee$0.00  $174.00 

It appears the selling & marketing costs are pretty close. I’ve heard that Shopify is the easiest to get started, but I’m not sure it’s the first place folks go to purchase. Most folks can type in, and start shopping – but its not as easy to find product on Shopify unless you know what you are looking for.  

Based on this, I think I’ll need to do more research in the realm of marketing and which is the best source to get my product out in front of people. I’ll let folks know how its going further on.

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Mr. 39 Months

What are the next steps for TKD Woodworking?

As many of you are aware, I’ve been developing a “side hustle’ to sell my Woodworking items (see contents to right under “TKD Woodworking”). The idea was to sell both online and at craft shows, starting in the second half of 2020. While the Wuhan Corona Virus has placed some limitations on life in general, I’ve worked hard to keep the process moving forward

  1. Laid out my initial plan
  2. Worked out how to build and determine costs for the items I was going to build
  3. Identified how many to build
  4. Began working through my fixed costs (insurance, marketing, etc.) and product costs
  5. Starting tracking my numbers
  6. Created my website to help communicate & advertise my products

So where to next? What is my timetable?

As I see it, over the next two months (May & June) I need to accomplish the following:

  1. Build 2-3 more project prototypes (already identified), price them, and place them on the website
  2. Finalize shipping costs for the items, so I can price everything correctly
  3. Purchase any insurance necessary, prior to opening for business (costs already identified)
  4. Advertise product for sale online (Etsy, Craig’s List, etc.)
  5. Begin looking into potential craft shows, and how I’ll setup my stall

Again, the objective is to have everything ready to go-live July 1st, no matter what the status of the Wuhan Flu is. Plenty to do, and not a lot of time to do it in. Wish me luck!

Mr. 39 Months