Woodworking Business Plan Template
If you want to start a Woodworking business or expand your current Woodworking business, you need a business plan.
The following Woodworking business plan template gives you the key elements to include in a winning Woodworking business plan.
Woodworking Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here], is a woodworking company that focuses on providing beautifully carved wooden decoration pieces and sculptures, wooden chests, small wood furniture and wooden toys to its customers in the surrounding community. The Company’s goal is to become one of the leading wood production brands and compete with the leaders in the industry not only in the United States but also on the global stage in the near future.
Products Served
[Company Name] will provide high-quality woodworking products for its clients, which include:
- Beautifully carved wooden decoration pieces and sculptures
- Wooden chests
- Small wooden furniture
- Wooden toys
Customer Focus
[Company Name] will primarily serve the residents within a 10-mile radius of the shop location. The demographics of these customers are:
- 42,450 residents
- Average income of $85,000
- 51% in Mgt./Professional occupations
- Median age: 35 years
Management Team
[Company Name] is led by [Founder’s name], who has been in the woodworking industry for [x] years. [Founder] is a certified and licensed designer. He has extensive experience in the arts and crafts industry, working for leading brands prior to starting his own woodworking company. He will have the help and support of his business partner, [Insert Name], who will handle the marketing and admin tasks for the company.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There has been significant growth in the woodworking industry over the past few years. In addition, the company surveyed the local population and received highly positive feedback pointing towards an explicit demand for the products, supporting the business after launch.
- The management team has a track record of success in the woodworking business.
- The Company will use high-quality and exceptional woodworking materials which are environmentally friendly.
- Woodworking companies are a proven, successful business in the United States.
Financial Highlights
[Company Name] is currently seeking $200,000 to launch its woodworking shop. Specifically, these funds will be used as follows:
- Build-out and Startup costs: $150,000
- Working capital: $50,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $200,000 | $300,000 | $400,000 | $500,000 | $600,000 |
| Total Expenses | $176,390 | $230,030 | $250,431 | $261,901 | $273,920 |
| EBITDA | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Depreciation | $0 | $0 | $0 | $0 | $0 |
| EBIT | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Interest | $0 | $0 | $0 | $0 | $0 |
| PreTax Income | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Income Tax Expense | $13,344 | $19,409 | $52,349 | $83,334 | $114,128 |
| Net Income/Surplus | $10,266 | $50,561 | $97,220 | $154,764 | $211,952 |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here], is a new, independent woodworking company focusing on producing high-quality products for its clients. The Company seeks to cater to the needs of a wide range of clients in the surrounding area.
The [Company]’s products will feature modern furniture, home decor and children’s toys. The Company will ensure that its products are of the highest standards and meet the client’s needs precisely.
[Company Name]’s History
[Founder’s Name] is an entrepreneur with a passion for arts and crafts who seeks to provide a one-of-a-kind upscale woodwork experience to the community by offering a wide selection of woodworking products in one place. [Company Name] will become a known woodworking retail shop in [Location] that will engage in all aspects of business services synonymous with a standard organization operating in the woodworking industry.
Upon surveying the local customer base and finding the potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected an initial location and is currently undergoing due diligence on each property and the local market to assess the most desirable location for the woodworking shop.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo, and website
- Determined the list of products to be offered
- Determined equipment and inventory requirements
- Began recruiting key employees with experience
[Company Name]’s Products/Services
The Company will be offering the following products:
- Beautifully carved wooden decoration pieces and sculptures
- Wooden chests
- Small wooden furniture
- Wooden toys
III. Industry Analysis
[Company Name] competes against small, individually owned woodworking shops and major regional or national companies. The wooden furniture market size exceeded $370 billion last year and is projected to expand at a steady CAGR of over 5.6% over the next five years. The wood product manufacturing industry is the 147th largest manufacturing industry in the U.S. The size of both of these markets proves very favorable to the woodworking industry.
The primary positive factors affecting this industry are growing renovation and remodeling investments along with outdoor furniture trends and the trade-weighted index. Total advertising expenditure is also expected to increase, representing a potential opportunity for the industry. In recent years, favorable government policies, such as the implementation of free trade agreements, are positively influencing the market demand. Rising foreign direct investments coupled with improving economic conditions are expected to further boost the market.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and its surrounding areas.
The area it will serve is populated mostly by moderate to affluent people; as a result, they have the means to pay for higher quality products.
The precise demographics of the town in which the retail location resides is as follows:
| Total | Male | Female | |
|---|---|---|---|
| Total population | 1,644,518 | 778,476 | 866,042 |
| AGE | |||
| Under 5 years | 5.20% | 5.60% | 4.80% |
| 15 to 19 years | 4.30% | 4.20% | 4.40% |
| 20 to 24 years | 7.20% | 7.00% | 7.30% |
| 25 to 29 years | 12.10% | 11.90% | 12.40% |
| 30 to 34 years | 10.60% | 10.90% | 10.30% |
| 35 to 39 years | 8.00% | 8.30% | 7.60% |
| 40 to 44 years | 6.70% | 7.00% | 6.30% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Individual Buyers: The residents and visitors in the vicinity will patronize the company’s store for wooden decoration pieces and small and large sculptures for their houses as well as for gifts.
- Businesses: Businesses will look to the company for furniture pieces and office decor. These customers prefer unique, high quality pieces.
- Restaurants and hotels: Restaurants and Hotels need modern and unique ideas to furnish and decorate their establishments.
- Production Designers & Art Directors: The Company will work with production designers and art directors to provide items for sets and props.
V. Competitive Analysis
Direct & Indirect Competitors
Woodworkers USA
Woodworkers USA is one of the leading providers of RTA kitchen cabinets in town and has been in business for xx years. Woodworkers USA specializes in accommodating all types of home improvement projects. Woodworkers USA offers kitchen designs, bathroom vanities, and affordable cabinets. Woodworkers USA deals only in kitchen cabinets, but the company will have a wide range of independent design works.
Imperial Wood
Imperial Wood has been in the industry since 1967, catering to various groups of customers. Imperial Wood was designed with state-of-the-art facilities and technologies, and in turn, has been the store of choice by buyers. Imperial Wood focuses on the creation of truly custom, fully functional, highly aesthetic pieces of unparalleled quality and everlasting beauty of the designing works.
Custom Woodworking
Custom Woodworking was established in 2002. Custom Woodworking offers custom design and fine furniture and is also a cabinetmaking shop located in the US. Competitor 3’s provides the best material with the best finishing along with the warranty of 10 years for structural defects. The company’s strategic insightful approach for every project is to incorporate sustainable and safe materials or create a fully green cabinet installation.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Management: The Company’s management team has x years of business and marketing experience that allows them to serve customers in an improved and sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all of the local community, media, and other influencers. Furthermore, he will be able to draw from his existing personal and professional relationships to develop an initial client base.
- Great products at an affordable price: The complete array of woodworking products offered by [Company Name] nearly equals the most premium positioned competitor, [Competitor Name]. However, [Company Name] will offer these products at a much more affordable price.
- Location: [Company Name]’s location is near the center of town, giving the company access to individual buyers, businesses as well as production designers and art directors.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the woodwork market. Customers can expect a high-quality and best woodworking designing experience.
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering a wide collection of high-quality woodworking products
- Convenient location
- Comfortable, customer-focused environment
- Moderate price point
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be residents living within a 10-mile radius of the location. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening the woodworking company, [Company Name] will organize pre-opening events designed for prospective customers, the local community, and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its company offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its products in various media outlets like podcasts, television stations, radio shows, etc.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of various forms and technologies of woodworking and post customer reviews that will increase audience awareness and loyalty.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base to encourage their friends to come and try their products for the first time.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
Pricing strategy is one of the most important functions that any business can plan for attracting customers. Prices are a foundational element of a company’s revenues—if managed carefully, they can generate high profits.
[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the woodworking products. The customer can expect to receive quality woodworking products at a more affordable price than what they pay at an ultra-premium woodworking company.
VII. Operations Plan
Functional Roles
To execute on [Company Name]’s business model, the company needs to perform many functions, including the following:
Service Functions
- Design and Conceptualization
- Woodworking
- Sales manager
- Customer service
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Hiring and training staff
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s name], who has been in the woodworking industry for [x] years. [Founder] is a certified and licensed designer. While [Founder] has never run a woodworking business himself, he has been active in the industry as he has extensive experience in the arts and crafts industry, working for leading brands as a designer and managed it for xx years prior to starting his own woodworking company.
[Founder] graduated from the University of ABC, where he majored in designing.
Hiring Plan
[Founder] will serve as the store manager. In order to launch the woodworking shop, the company will need to hire the following personnel:
- Sales and customer service: [Number]
- Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
- Woodworkers [Number]
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from its custom, handmade wooden products. The major costs for the company will be the cost of goods sold (supplier costs), salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high to establish itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $200,000 to launch its woodworking shop. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of Clients per month | Average |
|---|---|
| FY 1 | 42 |
| FY 2 | 63 |
| FY 3 | 96 |
| FY 4 | 101 |
| FY 5 | 127 |
| Monthly Rent | $3,600 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
