[Woodcarver] Business Plans?

[Joe Dillett]

Hi Matt,



You've asked an excellent question about business planning. I don't want to 
bore anyone but I feel this needs a long answer. Please hit the delete if I 
get annoying.



I came from a small business background, my father owning a small plumbing 
business. Out of my 6 siblings 5 made there living in their own businesses 
from plumbing, to construction as well as in the arts (music). My sister who 
taught music out of her home had no reason to write her business plan down 
because she always had a clear focus to direct her very successful business. 
I, on the other hand, have always had a need to write out a business plan to 
keep my focus, maintain discipline and structure. If I didn't I had a 
tendency to head off in too many directions resulting in being very 
unproductive. My first business as a commercial artist failed for several 
reasons, primarily the lack of business planning. I became a strong believer 
in the need for a business plan in my woodcarving business. That was the key 
to my success for the 38 years in business with about half of it being full 
time.



I retired from the Board Of Directors of SEA (Self Employment in the Arts) 
as of January 2008, when I also retired and closed the business side of my 
carving. I was on the board of SEA since it was founded by North Central 
College. SEA has expanded from Illinois to all over the country teaching 
artists how to run a successful business and helping them stay in business. 
My specialty was teaching and consulting on the Business Plan.



I feel that every business needs a plan. Not all plans need to be written 
down but I encourage a written plan. One size doesn't fit all. Every 
business must take into consideration the type of business but most 
importantly the type of individual running the business.



The elements of my Business Plan were:

1)      Mission Statement. A simple sentence of why I am in business. This 
is most important because it is the rudder that keeps the business on track. 
Hardly a week went by that I didn't focus on my mission to see if it was 
still valid and to keep me on track. Just a simple "Why am I doing this?" 
statement.

2)      Goals. What would I like to accomplish by what date. I make one 
year, two year and long term, challenging but achievable business goals. 
These are goals of things that I really want to accomplish in my business 
and very willing to work hard towards achieving them. I also include a 
wish-list of goals that may or may not be business related, such as exotic 
vacations. I keep these goals close at hand so I can read and reflect on 
them often. It is also important when a goal is achieve that it is followed 
by a celebration, especially nice with the family.

3)      Budget. What are my total resources available? Cash flow and credit 
line is only one portion of the budget. I plan for Capital expenditures and 
other major expenditures by calculating an ROI (Return On Investment in two 
years or less). Fixed expenses not only include utilities, insurance, taxes, 
FICA, but donations to charity. My variable expenses include advertising, 
show expenses, travel, small tools and supplies. Material includes 
consumables like wood, finishes, etc. One of the most important items in the 
budget is to put a small percentage of gross sales away for retirement and 
another small percentage for venture capital.

4)      Business Operations. This defined how I was to run my business 
within my budget. A major portion is marketing. This is the area that many 
people fail. Much of marketing is trial and error, finding out what works 
for you and what you are comfortable doing. Marketing doesn't begin with 
looking for places to sell your work. It begins with looking at your work, 
the stuff you are passionate about making, and finding out how to put that 
same passion and creativity into marketing it at a price you deserve to get 
for it. My business operations include looking professional to the public, 
especially customers and potential customers. Remember that when you're in 
business you are not your own boss, you've got hundreds of bosses. I found 
that I could get much higher prices if I looked professional. To look 
professional I used professional looking quotes, drawings and regular 
updates on the progress including photos by email, invoices and accurate 
record keeping (all being made very easy with computers). Doing good work on 
time at a fair price is only half of the reason that I have no dissatisfied 
customers in the past 38 years. The other half being good communications and 
better value then they expected. I always made the customer feel like they 
were getting more then what was originally agreed upon, which was always 
planed for when I took the order. Business operation includes the discipline 
to budget time, make sure calls are returned promptly, put in a good days 
work even if the chisels are not speaking to you, make quick accurate quotes 
and taking the time to make every customer feel that they are special.

5)      Review the Business Plan and update it regularly. Many times the 
investment is made to create a business plan but not followed. I was 
president of a fine art school (volunteer position) where we invested much 
time in updating our business plan, especially marketing, to qualify for a 
501C charity organization. After we qualified they had little interest in 
following the plan. When I saw they were content to struggle from grant to 
grant without changing I resigned. When you make a new business plan there 
are many areas that are not real. To make the business plan work you must go 
back revising the plan to make those areas real and profitable. The only way 
to fix it is with regular reviews. There are times that you want to take 
your business in a whole new direction. That begins with a new Mission 
Statement, new goals and everything else. If you find that your business has 
changed but you've not changed your plan you are flying blind with no plan 
at all. I did quarterly reviews and annual reviews with my banker and my 
financial advisor.

6)      Plan for Fun. Not planning for fun is the reason many 'already 
successful' businesses fail. I always say that when you are in business for 
yourself you can work half-days, any 12 hours of the day you want. Long 
hours result in early burn out. Burn out is a real disaster, especially for 
an artist because their creativity goes away. I plan for fun by rewarding 
myself with a trip, seminar or throwing a big party like the GOW. Just 
knowing that your business is rewarding you is all the more enjoyable. 
Buying extra tools if fun but it doesn't get you away from the routine. Fun 
keeps your business fresh, your creativity fresh and your customers happy.



When I left my electrical engineering job I promised my wife that I wouldn't 
make the family sacrifice, that I would maintain the same level of income, 
which I did. What made me confident was that I already had grown a 
successful part-time business with a large enough customer base and backlog 
to go full time. The business needed to go full time right away because the 
job I had in house was over $50K and had a deadline for an open house that 
was fast approaching.  It was a happy but also a scary time. Over the years 
to maintain my goal of six figures or almost six figures and not work so 
hard I used my venture capital to invest in stock, bonds and commercial real 
estate. My financial advisor played a key role in my early retirement.



To answer your question, I was a serious professional business man who 
happened to  do carving as a business. I limited my teaching to no more than 
10% of my time which was less than 5% of gross income. Companies came with 
offers to endorse or sell tools but I always considered that as taking away 
from my carving time.



Retirement for me means shutting down the business. This also means that I 
can shift my thinking of where I thought of myself as first a business man 
and second an artist to where I can play as an all-the-time artist at 
carving, drawing, working with clay or writing and not worry about the P&L 
statement. I can take on jobs like the one I have now, working on a large 
5-foot Last Supper for a new church altar. I will be doing the carving for 
their pulpit and the Stations Of The Cross over the next year or so. They 
just broke ground on the church so I have time and don't have to worry about 
making wages. I owe my thanks to God and good business planning.



By now I've put everyone to sleep so I will leave quietly.


Joe Dillett
The Carving Shop
645 E. LaSalle St. Suite 3
Somonauk, IL. 60552

(815) 498-9290 phone
(815) 498-9249 fax
http://www.thecarvingshop.net [business web site]
http://www.carvingmagazine.com ['Ask Joe' column]
http://community.webshots.com/user/joe_dillett
******************************************************************

----- Original Message ----- 
From: "Matt Kelley" <celtcarver at me.com>
To: "Woodcarver List" <woodcarver at carverscompanion.com>
Sent: Thursday, March 26, 2009 9:46 PM
Subject: [Woodcarver] Business Plans?



> Friends in Carving: Please support our List - visit the Carvers' Campanion 

> Shop at http://cafepress.com/woodcarving

>

>

> Here's a question for those who carve with the intent of selling - do  you 

> have a formal business plan?

>

> If you respond, please tell us if you are:

> A). A professional carver (earn all or most income from carving)

> B). A semi-pro (earn less than 50% from carving)

> C) A serious hobby carver who sells the occasional piece.

>

> If you teach in addition to carving, please include that info as well.

>

> Carve On

>

>

> Matt Kelley

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