A vast and plentiful array of opportunities can await ambitious carpenters once they complete their apprenticeship and gain their carpentry licence (or carpentry licence Victoria. Some chippies choose to commit to a few more years working as an employee in someone else’s carpentry business.
But sooner or later the time will come for many ambitious and driven carpenters to put out their own shingle and start a carpentry company. While it does come down to the individual and their personal preference, before too long many chippies choose to strike out on their own and become the proud owner of their own carpentry business.
Switching to self-employment is considered an attractive option for carpenters, and by this stage in their careers many carpenters will have an impressive collection of tools, a sound understanding of the carpentry trade, a decent work vehicle and trailer, and, most critically, the essential skills to deliver carpentry jobs to a high skill level.
So, let’s look at what do carpenters do and what’s involved in starting your own carpentry business in Australia, and why you may consider doing so.
Five reasons for starting your own carpentry business
- Income: Depending on where you live and what your carpentry specialty is, operating your own carpentry business can provide a lucrative income.
- Flexibility: Owning your own carpentry business enables you to have complete control over your work schedule. You are the boss and can choose which projects you accept, and which you avoid.
- Choose your specialty: While you know what carpenters do, it’s worth noting that there are several types of carpenters. While some are skilled in construction framing, others are more proficient in furniture and cabinetry. When you run your own carpentry business, you get to choose which types of carpentry projects you work on.
- Work is available year-round: There are no off-seasons for carpentry work. Handymen, property managers, and construction companies are looking for talented and hardworking help with carpentry projects.
- High future demand: The Australian construction industry continues to grow rapidly and is set to continue that upward trend in the coming years given the housing and infrastructure our growing population requires.
Given all of that, it’s clear that demand for carpentry services is going to be in high for the foreseeable future. So, how do you get started with your own carpentry business? Like many things, it starts with a plan.
1. Write a carpentry business plan
While it can be tedious to create a business plan for your carpentry business, it is a crucial step in starting your own business. Succeeding as a carpentry business owner requires a solid foundation, and having a detailed business plan will help get your carpentry business off on the right foot.
Your business plan will help you become clear about your goals, and how you plan to achieve them. It is also helpful for practical matters such as marketing (for carpentry lead generation) and financing for your new business. While things don’t always go to plan, having a business plan can help you avoid common problems. Your carpentry business plan may also include any carpenter insurance requirements to reduce the risks to your business.
2. Business registration for your carpentry business
Registering your carpentry business requires that you cover off all the official admin for your new business. This can include things such as:
- Registering for an ABN
- Organising your business banking and
- Registering your business name
3. Financing for your carpentry business
To start your carpentry business, you will need to spend money. Starting a business can get expensive, but just how expensive will depend on how your business structure is set up (sole trader, partnership, trust, or company registered company) as well as what your business goals are.
Borrowing money
Where will you get the funds to finance your new carpentry business? Perhaps you have a nest egg you can dip into, but often borrowing money, whether from a bank or private investor, or a business partner (if you have one) is more common.
This will be a key factor that can impact the cost of starting your carpentry business. There are also government small business loan schemes that your carpentry business may apply for.
It is important to remember that approval for borrowing money from any institution or bank will require that you do thorough research thoroughly and understand the financial terms. These documents could include:
- Breakeven analysis: This indicates that your business is at most able to break even without making a profit.
- A cashflow forecast: This will show you how much money is coming in and going out of the company and when.
- Sales forecast: Estimate your future revenues using weekly, monthly, or annual sales projections. This is not an easy task when you are just starting out, but there are many options.
Government loans for businesses
Many small business owners have access to financial assistance at all levels of government. To get your business started, financial assistance may be available from the local, state, and federal government bodies for your new carpentry business. Carpenters who meet the eligibility requirements can receive financial assistance – funds that may not need to be repaid.
4. Purchase all essential equipment and tools
Unless you already have your own tools, this may be your biggest up-front cost when starting your carpentry business – but they’re also an investment. Your tools are your livelihood and you can’t work without them. Make sure to purchase reliable, quality products that (with proper maintenance) will last you for as long as possible.
You may also require a work vehicle. You certainly don’t need the latest truck with all the bells and whistles (not right now anyway), but you will need something reliable with enough room to store your tools securely while you’re on the go.
The good news is you may be able to claim tax back on the cost of your business-related tools and equipment, including your work vehicle.
5. Decide how you will price your carpentry services
You make money by charging your customers for the time, skill, materials, and labour required to complete your carpentry projects – not by plucking an arbitrary number from thin air.
Here are some important things to consider when it comes to determining how to price your carpentry services:
- Variable costs: These costs vary between projects – your labour is charged by the hour and cost of materials.
- Fixed costs: Costs associated with running your business, such as vehicle payments and business insurance such as trade service insurance. They’re called ‘fixed costs’ because they generally stay the same.
- Other costs: Your pricing should also take into consideration your skills, experience and qualifications, the quality of your materials, and where your target market is located.
6. Start building your business
Most tradespeople find that running a business or being a contractor for themselves is an ideal way to achieve work-life balance as a hardworking tradesperson.
The decisions about how you work, the jobs you do, and the amount you charge are all up to you. This allows you to spend more time with your family, or more time to do the things that make you happy, such as hobbies that you love. After all, there’s more to life than just work.
It’s not easy to build a business from scratch. Although there are many things to consider, you can get your business started in no time with a strategic approach.
This requires that you keep your goals and objectives in your mind. Keep improving your competitive edge so your carpentry reputation grows. And remember to embrace modern digital business solutions that can bring new levels of efficiency to your carpentry business.
7. Word-of-mouth marketing and referrals
Word of mouth remains one of the most effective and cost-effective forms of marketing. Tell your family and friends about your carpentry business and encourage them to spread the word and promote your business to anyone they know who is in need of a carpenter. Your carpentry business will begin growing before you know it if you can encourage a handful of key clients to spread the good word about the great carpentry services you provide.
8. Reduce your risk with trade service insurance*
Trade service insurance is the term used to describe a collection of business insurance products that can reduce the common risks that carpenters and tradies can encounter on the job, regardless of the types of carpentry they offer. Carpentry insurance that can help tradie business owners to actively reduce their risk include:
Public Liability insurance: Provides protection if someone makes a claim against your trade business. Claims from a third-party can be for personal injury or damage caused to their property caused by your business activities.
Business insurance: Insurance that can provide cover for your business’ premises and contents, against loss, damage or theft. It also provides protection against financial loss experienced from an insured interruption to your business.
Portable Equipment insurance: Also known as General Property insurance, Portable Equipment insurance covers you for loss and damage to items of portable equipment associated with your business. These can include your carpentry tools as well as items of stock.
Professional Indemnity insurance: Insurance designed for professionals who provide a specialist service or advice, providing protection for financial loss and legal costs in the event of a claim. This claim may be a result of an actual or alleged negligent act, error or omission whilst providing your professional service or advice.
Personal Accident & Illness insurance: Working as a tradie, you rely on being physically fit to get the job done. So if an accident or illness puts you on the sidelines you may require a plan B to help provide an income while you’re off work recovering.
Get your carpentry insurance* sorted without fuss with BizCover. While you are busy laying the groundwork for your new business, let us do the shopping around for you, saving you time when it comes to comparing your business insurance options. Go online or give us a call on 1300 920 864 to find out how we can help protect your carpentry business.
Carpentry business essentials
Carpentry apprenticeships
Generally speaking, the path to eventually becoming the proud owner of your own carpentry business starts with completing a carpentry apprenticeship. It takes three or sometimes four years to complete a carpentry apprenticeship, during which you will complete a Certificate III in Carpentry, or a Certificate III in Carpentry and Joinery. These Certificate III courses also cover OHS requirements, policies, and procedures for carpenters in the construction industry.
While applications for carpentry apprenticeships mostly come from school leavers in their teens, mature age individuals considering a career change can also apply.
Carpentry licences
Carpenters are required to hold a current and valid carpentry licence. Each Australian state has its own criteria and requirements when it comes to carpentry licences, so be sure to check that you meet all the current licence requirements before submitting your carpentry licence application. For example, in NSW carpenters must have a carpentry licence before they do any residential building work that is valued at more than $5,000 or more (including GST) in labour and materials.
Carpentry business ownership FAQs
Is starting a carpentry business profitable?
While there are very few guarantees in business, just about every new construction project (new build or renovation) requires skilled carpenters. As such, starting a carpentry business can be very lucrative business idea.
How can I reduce costs and improve revenue for my carpentry business?
Arguably one of the largest business expenses for any carpentry business owner is their supply chain. To reduce supply chain costs and increase efficiency in your carpentry business, consider implementing a supply chain management system that enables you to closely track inventory, including managing orders, and optimising delivery routes.
This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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