Popular questions to answer before you decide to engage in the trade
Ask yourself the following questions so you can avoid failures, disappointments, lose of hard-earned capital, etc.
- Do you know the trade? If you do not have a working knowledge on woodworking, don’t ever attempt to enter into this endeavor. Why? Because your chances of failure is high. Never rely on someone who prods you to participate in this arena with him as the hatchet man. Even if you know him personally to be an all-around woodworker who knows every aspect of the trade, you should think twice, perhaps, even more. Confidence kills!
- Do you have enough background? How well do you know this trade? How long have you been in this industry to claim that you are already ripe to engage in a very stiff competition?
- Do you have what it takes to be a businessman? Technical skills are not a guarantee for success. Even if you know the ins and outs of the trade technically, still you need to be conversant with running a business. I have known of many contractors who tried their luck in this business, but failed because they lack the required management know-how. There are various areas to look into. Do not be allured with the idea that woodworking is a very easy trade to tackle inasmuch as it is not so complicated compared to other trades. Remember this: Woodworking is a labor-intensive business. You need plenty of workers to carry out a project to a completion. And, if you are working on a tight financial budget, you might not be able to finish the project on time because you were not able to pay your workers their wages punctually.
Important points to consider
- Capitalization – it takes sometime before a contractor could get clients. You are lucky if even before considering to be in the business, you have already a battery of customers wanting your services. In such case, capitalization is not too much of a problem because you can fry the customers out of their own oil. Contractors normally ask for a 10% mobilization upon signing of contract and the subsequent payments are to based on weekly or periodic progress of work. But if you are just starting under a normal procedure where you have no contact whatsoever to start with, you must have adequate capital for the staff’s salary, gasoline, etc.
- Basic carpentry and finishing skills – the most important skills that a woodworking contractor should possess are in the fields of carpentry and painting. A contractor must know how to make correct estimates, not guesstimates. Material, labor, and overhead costs are to be taken cared of very prodigiously. It is in this area where failures begin. Failure to determine a real estimation of all the costs would mean great loses in operations which will lead to an early folding up of what had been started.
- Basic management skills – the would-be contractor must possess at least basic business management skills. He must have a little background of accounting. If he cannot hire an accountant immediately because of financial constraints, he can buy books on accounting or enroll in a crash course on accounting for non-accountants.
- Customer relations skills – a contractor must know how to deal with his customers. They are the very important people in the world of business. Without them, we have no business to talk about. Success comes mainly from the build-up of satisfied customers for repeat orders or even for referrals and recommendations. Our customers mostly come from recommendations by our satisfied clients. In this kind of marketing where you are highly recommended, you can command handsome contract price. Another consideration that a contractor must not take for granted is in delivering quick after-sales services. Never ignore complaints from your customers. Petty punch lists cannot be avoided. A contractor must be always ready to serve without unnecessary delay.
Woodworks contracting is a very lucrative activity provided you put your heart into it. The amount you invested could double or quadruple in just a very short period of time, especially when you have two or three contracts done simultaneously. If you see your money in the bank growing into millions already, don’t be so hasty in overspending them without first analyzing the real status of your business. It does not mean that all your monies in the bank are already yours. Think of your payables to your suppliers or creditors. Don’t be tempted to buy luxury vehicles right away when your bank statements showed millions in deposits. These are the common mistakes of contractors who are intoxicated by the success they have acquired. Contracts are not always there. You must prepare for the contingencies and future expansion of your business operations. If you have the money available, use them to buy materials in cash basis and in wholesale so that you can ask for big discounts. I am saying because this happened to us already. Experience is the best teacher, do you agree?