How We Priced a Coffee Table (numbers revealed!) | Woodworking Business

All right, hey, what's up? So this coffee table, it was a lot of fun to put together. So the story started, I got a random text out of the blue from my friend, he's bought a lot of stuff from us in the past, said he wanted a new coffee table. So whipped up a couple designs in SketchUp. If you guys know about the golden hour, it's something that we go through in detail in the course. But basically, when I close a sale, I spend the next hour designing something and giving them a couple design proposals with the invoice, or I guess an estimate. I did that, got approval for one of the designs, and yeah, just basically went to town. This was gonna be a dark stained oak coffee table because that's what all the furniture that they have that I've built them is, you know, oak or dark stained oak. And so I thought, great, we'll just make it in the same theme, we'll make it match the other pieces that we've made, and it'll be a great living room piece. So I got to work. ♪ I hold on to this storm ♪ ♪ Cause I need to be swept away, swept away, ah-ah ♪ ♪ I'm cornered in the cold where you left me ♪ ♪ Left again, left again, oh-oh ♪ ♪ There's a jungle in my head growing wilder ♪ ♪ And it's killing me, killing me ♪ ♪ I cannot let you go, I cannot let you go ♪ ♪ Jungle, jungle, jungle, jungle, jungle, jungle, jungle ♪ ♪ Jungle, jungle, jungle, jungle, jungle, jungle, jungle, jungle ♪ So you just watched me make the top and the budget that I settled on with this piece was around 500. This is one of our best clients. They've bought multiple things from us and I kind of knew their budget. So he said it was okay to go over the budget that we discussed, but 500 was the number that we landed on. Even though I knew there was plenty of wiggle room in there. Now, one thing that I didn't estimate correctly was just how much extra time I was going to have to spend. I don't know if I've got video footage of it. Obviously you'll see it in a minute, but my circular saw is really cheap. I need to upgrade it. It's something that I've had on the books for a while to do, but I just haven't been able to do it anyway. And it caused me some problems on this. So I ended up having to do a lot of hand plane work to get one end of it really flush because the circular saw have just always cuts at an angle. And I've tried guys, I've tried everything, so I don't need any suggestions. I just, I just need a new circular saw. So I need to take some of my own advice and just buy a tool when I'm, when I need to use it. So I bit the bullet on this one, but anyway, that's my fault. I will fix that on future projects. So I sort of made a decision on, okay, we're still going to do Oak. And I chose a really thick top. You can see in that picture, it's two by sixes squared, four sides, lumber where I buy it locally. So it was really nice to just glue up a panel together, like for the top. And that was really easy. So I knew it was really expensive. Just the top alone was, I think like, shoot, I have to look at the receipts, but it was something like $200 just for the top. And I'll get to that in a little bit when I start going over the numbers for this project. But anyway, yeah, that was the top and it was pretty uneventful. There was nothing really crazy about it. I started putting a clock and watch Matt Cremona's weekly shop updates. And one of the things he did a couple of weeks ago was he started putting a clock and a timer for his bandsaw and stuff to just to see how long it takes for him to do it. Cause apparently a lot of people have been asking. So I decided to do the same thing just to help me keep track of time. And you know me, I did not keep up with it throughout the build. So if you see the clock in the background, those are the times that I remembered to do it. And I wanted to see how long some stuff would take. So that's another tip that I've been preaching for a little while is a time, how long it takes you to do things and see if you can't do it safe, uh, safely, but just a little faster, uh, maybe a different way or minimizing your movements around the shop. So yeah, So you saw me just work on the legs and uh, Oh yeah, by the way, I'm probably going to get a lot of comments for not wearing safety glasses, but Oh my gosh, the chances of a chip of wood hitting you in the eye that's big enough to do any serious damage when you're ripping long wide sheets of plywood is next to nothing. But anyway, on that note, I have picked up a couple of extra pairs of safety glasses to put them near the tools, because there have been a couple of times where I have been sawing on something that's relatively small, uh, where it could send pieces flying back. And, uh, anyway, that's fixed. I've got several pairs of safety glasses all over the shop now, so I should be wearing them more often. Please do not involve yourself for my safety. Okay. That's just, I get that you're just trying to help, but anyway, please let me know in the comments. YouTube loves the engagement. So for all of you that don't like my videos, that the algorithm keeps serving them to you, nobody's forcing you to watch them. It's really funny to see some of these people just get so irritated that YouTube is serving my videos, but they, they watch the whole video and I comment on them. So YouTube thinks, Oh, uh, they liked the video. So anyway, it's just really funny to see some of the comments of people getting really, really upset with our videos. It's kind of funny, but yeah, you just saw, uh, I planed up the legs. I got those through, I'm about to put them through the planer in the video right now. Um, but yeah, nothing, nothing uneventful here. Uh, just started work on the drawers, got those made the drawer box drawer boxes set to the side. I don't think I filmed that because it's really not that big of a deal. Um, I'm basically at this point I'm like pushing, I'm getting done all the easy things I know to do while I'm like marinated in my brain, the ideas of how I'm going to get everything assembled and put together. So, uh, the next couple of steps after we planed the legs down is we're going to start making some critical cuts. This is where we're going to square up the top and get it ready to go. We're also going to make the drawer fronts, which I changed the drawer design halfway through. I was going to do four drawers, two on each side, but I decided to do one long drawer on each end of the table, which you saw in the intro picture. We'll go over again at the end of the video, but, um, two drawers, one on each side of the table that are extra deep. And, uh, yeah, so I was just kind of figuring out in my head how we're going to get all that to work. So another thing I knew I wanted to do the whole thing out of solid Oak, uh, with the exception of the drawers, I made it with plywood, but everything else is solid Oak and I think it turned out really nice. So I made the legs out of solid Oak too, which you'll see here in a little bit, but I went and bought all the material at once. I don't like to make multiple trips. I like to think through the entire project and sort of estimate how much time, how much material, how much time, how much material, how much time, how much material. And I really only allow myself one trip to the hardware store on every project. That's a new thing that I'm trying to do just to limit the number of times you guys have no idea how close I live to two hardware stores in my town. So it's, it's nothing for me to, to just jump in the car and drive over there. So even, even with calculating that into the price, it really doesn't raise the price. If I take a cup, another couple of trips, the thing that kills me is the time, how long it takes me to get a list and get everything and go over there and find it and check out and then come back and then, Oh shoot, I use the wrong credit card. So now I've got to go into the QuickBooks and manage it. So it's just, it's a nightmare. So I'm trying to really limit the number of trips I make to the hardware store per job. And I think you should do the same thing too, just to make it cheaper on your customers. I mean, obviously like you, you shouldn't be giving your customer anything that they're not paying for, right? You want to make them feel that they got a very valuable piece, but you should not be giving them a super duper high quality piece or super duper chunks of your time that you could be spending with your family or getting paid, you know, at work when your customer is not paying for it. All right, now it's time to talk about the sponsor of this week's video, which is me. I don't have any sponsors on the channel. I do not want sponsors anytime in the future. I just want to provide value to my subscribers. I'm not about cashing out. I'm not depending on YouTube for any sort of money. All I really want you to do is win. And the reason that I sell programs, which if you really want to learn how to run a business and price your stuff and go from a hobbyist to someone making some money to make a truck payment, buy something nice for your spouse, buy something for your kids or whatever. If you want to make this hobby profitable or at least break even, I really, really want to encourage you to take a look at our programs. After you sell your first two or three products, if you're halfway to following my advice, you're going to make enough money to pay for the courses. Absolutely. No problem. A lot of guys, we get messages every single week. I'm blown away by the number of people that have started taking action on our advice and they're winning. They're making sales. They're earning more money. They're not just trying to break even anymore. They're actually profiting by making furniture. So, uh, I understand I'm not the best woodworker in the world, but you know what? I've learned how to make a sale with woodworking to your sphere of influence wherever you are. So please take a quick look at the link in the description. You can check out our programs. Again, we're always going to put out free content on YouTube, so don't feel like you absolutely have to buy them. The reason I charge money for those programs is because I want you to have some skin in the game. Okay? If you, I was reading a book a couple of weeks ago and there was a story about a guy who got some advice for free and he didn't listen to it, but then he paid an enormous amount of money, you know, in the story, right? And he paid for advice from this other person and it was the same exact advice and he didn't follow it until he put some skin in the game and had something invested in it. Then he started to take it seriously. And I don't want to share all of this super valuable information with someone who's not going to take it seriously. So, you know, the whole pearls before swine thing. So please take a look down in the description. That's my sales pitch. It's done. And now it's time to go over the numbers of the project. So first off, a very quick overview on how we do pricing. Number one, you got to figure out how much your materials cost was. Number two, you got to figure out how much your labor cost was. And number three, you multiply whatever that those two added together is by 1.4 and that gives you a 40% margin. And all I mean by margin is wiggle room. Technically it's called markup. That's not super important until you start talking to your accountant. You add your materials costs to your label labor cost, and then add another 40% to that. And that is what you should charge for your projects. And the way that I do things, I establish a budget with my customer first, and then I work backwards from the budget to figure out, okay, how much can I pay myself for labor? How much materials budget do I have? And go backwards from there. Uh, that being said, we started with a rough budget of about $500, which I kind of knew once I was at the checkout line with the, at the hardware store with all the lumber that I was not really going to come close to that number. So like I said, the top was like 180, 160 some odd dollars just for that thick Oak at the top. And yeah, I could have not gotten squared four sides lumber, but they didn't have any that was that thick where I go. And I don't really want to drive a few hours to the closest hardwood dealer. So there's that. Yeah. Materials all in all, uh, worked out to be about $300. That's glue screws finish. Um, everything, everything that I have is about $300. Uh, I'll be writing this up here too. So you can keep track of it all. So materials was 300 labor. I estimated, uh, eight hours of labor. I estimated this was going to take me about eight hours to build in reality. It took about 10 hours of actually working in the garage on the project. Um, I did not charge for those last two hours because it was all my fault. Now, I want to be very, very clear on this because I do not want you to start like giving free hours of work into something. These were mistakes that I made. These were problems that I set myself up for to fail. And I should have charged more. I should have not spent as much money on the materials to make up for this amount of labor. So that's on me. That is a fault. I should have fixed it. I'm not saying that you should have permission to do this, but I screwed up. There were an extra two hours. I spent one. I told you was planning the end of the top to get it flush and nice and pretty. And then the other hour was spent just pulling my hair out with those soft clothes, drawer slides. I just need to break down and buy the little Rockler jig again. I need to take more of my own advice. Uh, I'm starting to do more drawer slides. I just need the simple jig to get it and get it right the first time. So that's on me anyway. So I'm only going to build eight hours on this project. So if you add the materials and the labor, you get a total of $540. You multiply that by a 40% markup or margin. And all I mean by that is just wiggle room. You want to make sure that you're making more money than it's costing you to build these things in labor and in, uh, materials because if you ever want to hire an employee, you got to be able to pay them, uh, pay them their hourly rate wage. In addition to the materials and you've got to make the business make money. So you've got to add a little bit of a markup, uh, which I call margin from time to time. Again, don't get too confused about all the technical terms. You do not need to understand accounting to start selling things. That's why you pay an accountant. Just make sure you're making more money than you're losing on each project and you'll be totally fine. Yeah. So you multiply $540 by 1.4 and that's going to pop you out a nice price of $756 which is what I charged and what I got paid for plus tax of course for your area. Um, yeah, it's that simple. Uh, I, you know, I talked to him when I knew I was going to go over budget. I gave him a call and said, Hey, this is where we're at. This is how much I've got left to do. Do you want me to change something about the design or can we go ahead and press with it? And he was totally fine that to go ahead and press at the higher rate. So, um, clear communication with your, with your clients is really going to help you there. Um, it also helps just to just to find decent clients. Spend more time finding the people you want to build for and sell to and that's going to save you lots of heartache down the road. All right, so this is the coffee table. Jenny doesn't want to deliver it. No, I want it. I really like it. I like the light colored Oak. I like that they didn't want to go stain it dark. I mean, it would have matched some of the other stuff in their house, but I think it looks so nice light and I like the design and I'm like, can we just do a coffee table swap? This is the same couple that bought the, uh, the bookshelves from us. Let's remember the Moroccan pattern in the shelf. So I think this will work really well with that in the same room because the shelves were the same color Oak. So I think it'll, they'll compliment each other nicely. Uh, this is probably the last thing that we're going to be able to make for these friends of ours before our big move. So we wanted to make sure that we gave them an extra special project that, um, they were really going to love. So I sure hope they like it. Pack this up and deliver it. But yeah, this just turned into a way nicer piece than what we originally planned on doing and the customer is willing to pay for it. So that's the thing is like, if you get wrapped up, if you get too emotionally attached to a project, so like I am right now, I'm pretty emotionally attached. Yeah. You got to make sure that your client is willing to step up. You know, you don't want to pour hours and hours and hours into something because you like it or you, you know, you want to do fine craftsmanship if your client's not willing to pay for it. So before I spent too much time on this, I kind of called him at the halfway point and said, Hey man, is your budget really that flexible? Can we go up a little bit on the labor? And he was totally cool with it. But had he said no, emotionally, I would have had to been okay with just, you know, finishing it, you know, according to the price of what we settled on. So, you know, you should always do a good job, but you should always do a job commensurate with the amount of money that they're paying you to do. So don't cut corners. Don't be a poor craftsman, but if they're not paying for your finest work, you should not be doing your finest work. I cannot stress that enough. That's how these woodworkers, they open a shop and they never make any money because they're, they're so, they do their like highest level skill on every single project. And then your customers don't even get it. They're like more to some 10 and what? So the table went together. Cool. Now if you're a good salesman and you work on those skills like we have in our programs, we can show you exactly how we charge, you know, and you know, an extra couple hundred bucks for labor. Cause some people want that and some people do understand the quality of that, which is awesome. Right. But you got to understand that that doesn't like craftsmanship alone will not sell the piece. You have to sell the piece on your own. And if you want to know how to do that, obviously we have programs to help you. Otherwise you can just subscribe to the channel, keep following us. We're going to keep putting out content, um, regardless. So we're just super excited. You watch this build. Thank you so much. We'd love it if you left us, left us, left us. No, good Lord. No. So we would love it if you left us a comment or a like, it's absolutely free to you and it helps us out a ton. So thank you so much for watching. Um, yeah, we hope you got some value on, uh, maybe the next time you can go to price something, you have a little bit better of an understanding of how you need to price your work based on what you saw from our stuff. So anything else? I think that's it. All right. Thanks again. See you later. So jealous.