We’ve all heard the saying, “Time is money.” This phrase is more applicable in some cases than others, but it couldn’t be more true in woodworking. In this blog, we identify why your time is valuable and how to calculate it’s value.
Why is Time Valuable?
Everyone values time differently. Some people value their time at work, while others value their time at home with their family. What I’m getting at is the time you don’t spend in the shop is spent somewhere else. For example, let’s say you put aside 15 hours a week toward woodworking. These 15 hours are spent getting supplies/materials, talking with customers (or whoever the project is being made for), and working on projects in the shop. From here, we can identify what tasks are actually turning a profit, which is working on projects in the shop. The other areas are needed to run a successful business, but the time spent on those areas doesn’t bring any profits.
How to Make the Most of Your Time?
Now that we’ve identified the areas that time is spent, we need to address how to make the most of your time. The easiest way to do this is to reduce time spent on tasks whenever possible. There are simple things like working efficiently, keeping away from distractions, and having a good game plan that can save some time, but not a significant amount. Customer relations are very important, so it’s not necessarily a good idea to cut back on time spent here. You also don’t want to rush projects because quality might become an issue. That leaves us with one area; getting materials.
This might seem like an area that you can’t remove anytime from. You need lumber, glue, screws, stains, finishes, and other supplies to complete projects. But once you start looking at it, the amount of time spent getting materials is substantial. So if there are ways you can remove time getting supplies, it might be worth looking into.
What is Your Time Worth?
Knowing what your time is worth is probably one of the most important parts of woodworking. At some point in your woodworking career you will be asked to complete a project for commission. Businesses use formulas to price out how much to charge for a project. They probably use something similar to materials + time + overhead = total cost. Some vary a bit, but they all follow this basic principle.
So by using the formula above, you can start piecing together how important your time is and you need to charge accordingly for it. Most custom woodworkers charge an hourly rate for labor. It might be a different rate based on skill set, but they always make sure to charge something.
I look at this very simply. If I want to make $20/hour, then I would charge $20/hour. But I personally would only charge for the time of actually making the piece. So if a project start-to-finish took 20 hours but seven of those hours were spent on sourcing supplies and working directly with the customer, I would only charge for 13 hours of work. This means you would charge 13 hours of work + materials + overhead to find the total cost of the project.
The numbers start to show how much your time is really worth. So what if we took the same 20 hour project but somehow found a way to communicate with the customer and source materials in four hours instead of seven. The cost for the finish product would still be the same. It would work out to be 13 hours of work + materials + overhead. But the biggest key to this whole thing is that you reduce the time from a 20 hour project to a 17 hour project. This would potentially give you three more hours of shop time, which in turn, would turn into more profits. You can look at this even more simply. If you only charge for hours of manufacturing, why waste time on labor you aren’t getting paid for. Not only that, if you are a hobbyist and have a limited amount of time to work on your hobby, that three hours of spared time is three more hours you can spend in the shop.
Ways to Actually Save Time
Like I’ve mentioned multiple times, the best place to save a substantial amount of time is sourcing and getting materials. I like to look at what materials take the most time to source. Usually the answer to this question is lumber. Finding and getting lumber takes time and it takes more time than what people realize. It isn’t uncommon for woodworkers to travel one hour one way to pick up lumber. Once you get there, you still have to pick out your lumber, which would take approximately one hour. This means it would take three hours just to get your lumber. If you value your time at $20/hour, that means you could have potentially made $60, and that doesn’t even include money savings from gas or possible trailer rental.
What I’m getting at is if your supplier can ship lumber to you, whether that be LTL or UPS, it might be worth the investment. Don’t get me wrong, sometimes the numbers work out to where it makes sense to pick up the lumber. But many times you’ll realize that you are saving very little to no money by running around after the lumber.
This is something that makes Fine Craftsman Lumber different from other suppliers. We can sell and ship small quantities of lumber right to your door. This service provides a substantial amount of time savings to any woodworker, whether you are professional or a hobbyist.