[Woodcarver] Business Plans?

[Larry Yudis]

>>>>>>>>>I owe my thanks to God and good business planning.


It's good to see you've got your priorities straight!  :o)

Lil' Joe ... you are never boring ... a bit long-winded at times, but never
boring.

Thanks, once again, for your astute observations on a subject that needs
addressing.

BIG DOG
 

-----Original Message-----
From: woodcarver-bounces at carverscompanion.com
[mailto:woodcarver-bounces at carverscompanion.com] On Behalf Of Joe Dillett
Sent: Friday, March 27, 2009 11:36 AM
To: [Woodcarver]
Subject: Re: [Woodcarver] Business Plans?

Friends in Carving: Please support our List - visit the Carvers' Campanion Shop
at http://cafepress.com/woodcarving


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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> Woodcarver at carverscompanion.com

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> 


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