How do you price a woodworking project?
Calculate The Cost Of Raw Materials
Calculating how much the raw material cost is the most pivotal part of pricing your woodcraft to ensure a profitable business. For this part, you need to add the price of the materials you used. In many cases, these materials include lumber wood, cedarwood, oak wood, etc. They are the go-to materials for furniture and table making, and you’ll most likely be working with them a lot.
Imagine you’re trying to make a coffee table, and you used 30 wood planks during this table project. If a single plank costs $5, the total cost of the material used to make the table will be $150. This alone means you will need to charge at least $150 for the table.
Calculating your price this way makes it easier for you to maintain your business instead of coming up with an inaccurate price. To avoid overpricing or underpricing, this mathematical method might save you a lot.
It will also help if you select the materials carefully. Our experts suggest that you never go for substandard materials as they will only be detrimental to your work’s quality in the long run. At the same time, try to go for a material that isn’t so expensive. This way, you can keep your raw material expenses as low as possible.
The only exception to the second rule is if the work will be for a luxurious customer who has the means to splurge on a woodworking project. In that case, you know they have the money to spend on your furniture and can easily cover your per-hour work fees, raw material prices, and more. Follow us.
Hourly rate
This is the least straightforward part about how to price your DIY woodworking projects. It’s about the finished product, but it’s also about your time—how much am I worth? It can be a really big question!
For starters, you’ll want to make at least minimum wage. Hourly rates can depend greatly on your area; in general, prices are higher in cities and lower in rural areas. If you have years of experience and fine techniques, you can charge more. Personally, I’d aim for between $25-80/hr, depending on the technicality of the job. If you’re doing some basic pine construction, it’s on the lower end. If you’re doing computer modeling or laser cutting, using biscuits and laminating, I’d go on the higher end.
Time is of the essence
Keep track of your time as best you can. Remember that things almost always take longer than you think they will. Some of the steps to include are: designing the piece (and any back-and-forth communicating about it, which can be a lot!), shopping, loading/unloading, building, finishing, cleanup, delivering, and installing.
How to factor in overhead
Your hourly rate is also where you can factor in your overhead. If it’s just a side hustle, you probably won’t have business insurance and you might be working out of your garage. But you’ve still got tools to buy, consumables like sandpaper and glue, and other things around the shop. If your customer would go to a full-time woodworking shop, they’d likely pay a starting hourly rate of around $85 or more.
If you can estimate your yearly overhead costs, you can estimate a number to add to your hourly rate. Let’s say you have $2,000 in overhead expenses and would like to work 10 hours a week on your side hustle. 10 hours per week multiplied for the year is about 500 hours. Then, just divide your total overhead amount by total hours. With our numbers, $2,000 / 500 hrs = $4 / hr. So you should factor in $4 per hour to your hourly rate to cover your yearly overhead.
Are there other ways to price work?
There are a few other ways to price your work:
Material times X – If you multiply your material costs by 2 for example, you can quickly get to a price, but this is only recommended if the material is consistently a certain percentage of your costs – very uncommon.
Daily rate to price labor – By pricing your labor per day, you can estimate your work in how many days it will take you. I only recommend this if estimating work would take weeks of labor. There’s too much margin for error for projects that need hours or a few days of work.
Copy prices of the competition – this is not a good business practice as you could work yourself into business failure. You need to know your costs!
I advocate using time and material to work out your pricing. This takes practice, but it’s the work you need to put into building a profitable business.