![How to plan and track the budget of your woodwork contracting service [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-6_b6f0dac6-b63b-453c-93b7-1e9685dd4a50.png?v=1715856604&width=1100)
If you don’t plan and track your woodwork business budget properly, you're setting yourself up for failure.
When we developed our strategy pack for woodwork business owners, we saw a lot of woodworkers struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial orders and projects.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your woodwork business's finances around and set you on the path to success!
Get the budget tracker tailored for woodwork companies
Most woodwork company owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for woodwork companies
Here is an example of a (very) detailed budget for a woodwork company, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for workshop space | $3,000 | $36,000 |
| Electricity | Power consumption for machinery and lighting | $1,200 | $14,400 |
| Water | Water usage | $100 | $1,200 |
| Gas | Gas for heating | $200 | $2,400 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $150 | $1,800 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Master Carpenter | 1 | $4,500 | $4,500 | $54,000 |
| Journeyman Carpenter | 2 | $3,000 | $6,000 | $72,000 |
| Apprentice Carpenter | 2 | $2,000 | $4,000 | $48,000 |
| Office Manager | 1 | $3,500 | $3,500 | $42,000 |
| Sales Representative | 1 | $3,000 | $3,000 | $36,000 |
| Delivery Driver | 1 | $2,500 | $2,500 | $30,000 |
3. Material & Supply Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Wood Inventory | Hardwoods, softwoods, plywood, etc. | $8,000 | $96,000 |
| Finishes & Stains | Varnishes, paints, stains, etc. | $1,500 | $18,000 |
| Hardware | Nails, screws, hinges, etc. | $500 | $6,000 |
| Tools & Equipment | Hand tools, power tools, etc. | $1,000 | $12,000 |
| Safety Supplies | Gloves, goggles, masks, etc. | $200 | $2,400 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $100 | $1,200 |
| Office Supplies | Stationery, printer ink, etc. | $100 | $1,200 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $400 | $4,800 |
| Print Advertising | Flyers, posters, newspaper ads | $150 | $1,800 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $100 | $1,200 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of woodworking machinery | $500 | $6,000 |
| Uniforms | Staff uniforms and safety gear | $200 | $2,400 |
| Licenses & Permits | Business licenses, safety permits, etc. | $100 | $1,200 |
| Software Subscriptions | Design software, accounting tools | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
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We have studied the strategies of the best woodwork companies in the world. Replicate them now!
What are the biggest expenses for a woodwork company?
Be mindful of these critical expenses. Here are five major costs every woodwork company owner needs to consider, along with some tips on how to manage them effectively.
- Material costsWood, hardware, and finishing supplies can take up a significant portion of your budget. Prices can vary based on quality, availability, and market conditions. To keep these costs under control, focus on efficient material usage, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by purchasing more than you need or opting for premium materials that don't add enough value to your projects.
- Labor costsYour craftsmen and support staff are the backbone of your business, but their wages, benefits, and training can be costly. This expense is always high because skilled labor is essential for producing quality work. You can optimize labor costs by scheduling efficiently, cross-training employees, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and decreased quality of work.
- Workshop rent and utilitiesPrime workshop locations come with high rent, but they can attract more business. Utilities like electricity, heating, and water are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient machinery and lighting. Overspending often happens when you choose a workshop that's too large or too luxurious for your needs.
- MarketingYou need to promote your woodwork company, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we recommend. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Tools and equipment maintenance costsThis includes everything from saws and drills to sanding machines and workbenches. These are expensive because quality tools and regular maintenance are crucial for smooth operations and high-quality output. Optimize by investing in durable, energy-efficient tools and maintaining them regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your woodwork contracting service?
Here are practical tips to help you, as a woodwork company owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Partner with local sawmills for high-quality, sustainable wood at competitive prices. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install energy-efficient lighting and machinery to reduce electricity costs. |
| Marketing | Run social media contests for your woodwork pieces and collaborate with local influencers for free exposure. |
| Workshop Supplies | Train staff on efficient use of supplies to reduce waste and costs. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers bringing their own containers. |
| Tools and Hardware | Purchase high-quality, durable tools that can withstand frequent use. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a wood waste tracking system to minimize waste and recycle excess materials. |
| Technology | Invest in multi-functional woodworking machines and utilize project management software for efficient workflow. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Client Entertainment | Use a streaming service for background music in the showroom and host local artists to showcase their work. |
Copy the tactics of the best woodwork companies in the world!
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Expenses that are just useless for a woodwork company
Yes, some expenses for your woodwork company are just unnecessary. They don't contribute to increasing revenue or improving customer satisfaction.
| Woodwork Company Expense | Reason It's Useless |
|---|---|
| Exotic Wood Types | Using rare and expensive wood types can inflate costs without significantly enhancing the final product for most customers. |
| High-End Machinery | Top-of-the-line machinery is not always necessary and can be cost-prohibitive. Mid-range options often suffice. |
| Excessive Tool Inventory | Maintaining a large inventory of specialized tools can lead to unnecessary expenses and storage issues. |
| Premium Finishes | Unless catering to a high-end market, most customers are satisfied with standard finishes. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your woodwork company. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or software often go unnoticed by customers. |
| Custom Packaging | Personalized packaging is a minor detail that most customers overlook, and it can be expensive. |
| Costly Office Furniture | High-end office furniture is not always appreciated by customers and can be a significant expense. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most employees are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating the workshop layout can be costly and disrupt operations. |
| Expensive Showroom Displays | Elaborate showroom displays are often ignored by customers and add to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Marketing Materials | Frequently redesigning marketing materials is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Workshop Equipment | Specialized workshop equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your woodwork contracting service!
Managing a budget for a woodwork company when funds are tight can feel like a nightmare. It's like being trapped in a workshop where any unexpected expense can throw your entire operation off balance.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your craft.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of woodwork companies just like yours. Get them now!
Make your woodwork contracting service more profitable
We have studied the strategies of the best woodwork companies in the world. All their tactics are explained in our pack!
