If you’re planning to start a carpentry business, you should be prepared to face costs of around $6000 USD or £4800. But, this is only a ballpark figure — costs can fluctuate quite a bit depending on where you are, personal goals, marketing budget, insurance plans, and the tools you need to get up and running.
So, before you start to put together a business plan, brainstorm a catchy business name, or think about hiring staff, it’s critical that you consider every cost possible. Here’s what costs you need to cover:
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- 1. Tools
- 2. Stock & inventory
- 3. Insurance
- 4. Transport
- 5. Marketing & advertising
- 6. Making it official
- 7. Tradify job management software
1. Tools
If you’re looking to tally up potential start-up costs, tools are a great place to start. After all, there’s not much a carpenter can do without the right tools for the job. A good trick is to imagine a typical job and write down a list of all the tools you’d normally use from start to finish. While your mind may go straight to the stuff that’s in your tool belt, don’t forget the digital tools — these days, apps and software are equally as important to your success behind the tools.
Digital tools
There are tonnes of carpentry apps and other digital tools to choose from these days if you’re a business owner. But, if you’re just getting off the ground, then there’s no need to go crazy — just stick to the basics — we recommend a simple online accounting service like Xero and a good job management software like Tradify.
While bookkeeping software is essential for managing cash flow and keeping your finances above the board, job management software will keep you organised. Tradify will keep all your notes, quotes, and documents in one place, and can even sync with your favourite accounting software. It’s software that scraps the paperwork, so you can focus on growing your new business.
Ballpark annual subscription costs for job management and accounting software at the time of writing:
- 🇬🇧 UK — £500-600
- 🇺🇸 USA — $700-800
- 🇦🇺 AU — $600-700
- 🇳🇿 NZ — $600-700
Carpenter’s tools & gear
As a carpenter, having quality tools is a must. Buying good tools won’t be cheap, but it’ll be a lot cheaper than repairing or replacing bad ones. So, don’t try to cut costs by going for the cheap stuff. Depending on the type of work you do, the tools you’ll need may vary, but at the very least, you can expect to be investing:
- 🇺🇸 USA — $700 - $2,000
- 🇬🇧 UK — £600 - £2,000
- 🇦🇺 AU — $1,000 - $4,000
- 🇳🇿 NZ — $1,200 - $4,000
Remember, tools are considered business assets because they add to the value of your business. Here’s how business expense claims work, by country:
- 🇺🇸 USA business tax write-offs
- 🇬🇧 UK business expense claims
- 🇦🇺 Australian business expense claims
- 🇳🇿 NZ business expense claims
2. Stock and inventory
Over the past few years, many small trade businesses have felt the impact of global supply shortages. One of the best things you can do to get ahead of this issue is to stock up on supplies and materials before they run out. This will keep you out of trouble when there are rush periods, and place you ahead of competitors when supply gets held up. Your inventory will likely be unique to what’s popular in your area, but spare timber is a great place to start.
Research what’s in demand, compare prices from different suppliers and ask about deals, discounts, or loyalty programs. Don’t forget to consider gear and materials when calculating your profit margin.
3. Insurance
As a future carpentry business owner, you should have a backup if things take a turn for the worse. This is where insurance comes in — it’ll protect you from all sorts of trade-related risks, from health and safety incidents to property damage, and even tool theft.
In some cases, you’ll have to be insured by law, so check out our business insurance guide to see the requirements in your country.
The main painting business insurance plans you need to consider are:
- Public liability insurance — covers you if your company causes injury or property damage. If a claim is successful, the insurance will pay out.
- Tools and equipment cover — painters need their tools, so make sure you’re protected against loss, damage, or theft.
- Income protection — comes in handy if you fall sick or injured and can’t work for a while.
- Employer’s liability insurance — if you hire employees or take an apprentice under your wing, you need specific insurance to cover them.
- Vehicle insurance — your work vehicle must also be insured under your business.
Insurance costs vary from region to region, between insurance companies and between customers – your best first step is to sit down with an authorised business insurance broker.
4. Transport
Part of being a good carpenter is getting to the job on time, every time. This is why it’s essential to have a reliable set of wheels to get you from A to B.
We understand that a new vehicle can be a big purchase, but as your office on wheels, it’s essential that you have one for your business. You don’t need to break the bank — there are plenty of great affordable choices out there, along with some great financing options for the more pricey end of things.
Ballpark used vs new vehicle costs at the time of writing are:
- 🇺🇸 USA — $4,000 - $40,000
- 🇬🇧 UK — £4,000 - £35,000
- 🇦🇺 AU — $8,000 - $60,000
- 🇳🇿 NZ — $8,000 - $60,000
Stuck on the new versus used conundrum? This new vs second-hand guide will help you pick what’s right for your business.
Price aside, here’s what else you should consider when choosing a ride:
- Storage is key. Make sure it can fit absolutely everything that you need to transport to the work site, and then some!
- Good signage can generate new business, so make sure you’ve got it nailed with an eye-catching wrap design.
- Your vehicle is often what clients will see first, so make a good impression. Your car should be clean, tidy, and well-behaved on the roads.
- It can impact your productivity – make sure it’s fitted with plenty of internal storage, a roof rack for long objects like ladders, and non-slip rubber mats to avoid accidents.
5. Marketing & advertising
Half of running a successful business is getting your name out there. Without a solid marketing plan, you’ll reach the customers you need to get the enquiries rolling through.
- Building your brand — Get creative on Canva or find freelancers on Fiverr to create some graphic designs for your website, uniforms, vehicle wraps, business cards, invoices, and quotes.
- Creating a digital presence — If you haven’t already, get on social media and create a website — there’s no better way to get your name out there these days. Also, be sure to take advantage of customer reviews to win new business. And remember… never stop taking photos of the great work you’ve been doing!
You don’t need to spend much to reap the rewards of good marketing tactics, so don’t blow the budget on this to start with. Once you’re more established and turning a profit, you can expect to spend 2-5% of your gross annual revenue on marketing and advertising.
For more digital marketing tips, read our guide to digital marketing for carpentry businesses!
6. Making it official
To turn your carpentry business from an idea to a fully-fledged operation, you’ll need to get some legal stuff sorted — most countries will require you to prove that you’re capable of providing a genuine service. This means acquiring the necessary licences, permits, and certifications. Check local council and government websites to see what’s required.
In addition to proving your carpentry capabilities, you’ll need to register a unique business name — keep it original, professional, and easy to remember. If you’re struggling to find a name you like that isn’t already being used, try our carpentry business name generator.
The ballpark costs for registering your business at the time of writing are:
- 🇺🇸 USA — $100 - $800
- 🇬🇧 UK — £12 - £40
- 🇦🇺 AU — $440 - $530
- 🇳🇿 NZ — $115
7. Time is money, so don’t let it cost you
Getting a carpentry business up and running takes a lot of work. But, working out your costs will break the back of it. Not only will it give you a better idea of if you’re ready to start a business or not, but it will help you map out what you need to get started.
Don’t spend your time hunched over a pile of paperwork when there are perfectly good job management solutions out there. Tradify will cut hours off your admin and give your business every opportunity to succeed.
Try Tradify for free, or pop over to one of our live demo webinars to see it in action.
Please note: this article is a basic overview of carpentry business start-up costs and is not intended to be financial advice.
