How to Start a Birdhouse Business

Start a Birdhouse Business by following these 10 steps:

1. Plan your Birdhouse Business
2. Form your Birdhouse Business into a Legal Entity
3. Register your Birdhouse Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Birdhouse Business
6. Get the Necessary Permits & Licenses for your Birdhouse Business
7. Get Birdhouse Business Insurance
8. Define your Birdhouse Business Brand
9. Create your Birdhouse Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Birdhouse Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a Birdhouse Business?

You can start a birdhouse business without spending an arm and a leg – especially if you already have tools. But even if you don’t have tools, you can purchase them used at pawn shops for a reasonable price. You can even get your materials for free. Many birdhouse business owners use pallets which they get free from businesses looking to dispose of them.

You can probably start a birdhouse business for $1,000-$2,000 or less, depending on what you are starting with.

What are the ongoing expenses for a Birdhouse Business?

The ongoing costs of a birdhouse business include materials, tools, shop space, store maintenance (online and/or brick and mortar), and possibly employee wages. You can do a lot to keep your costs down (like using found materials for building), but some costs are unavoidable, like tool maintenance.

Who is the target market?

The target market for your birdhouses includes homeowners and birdwatchers. Many homeowners are interested in attracting more birds to their yards and want birdhouses for this purpose. Birdwatchers want to attract birds as well, and your birdhouses can help keep birds around the neighborhood. Depending on where you are located, tourists could be another market segment worth considering.

How does a Birdhouse Business make money?

A birdhouse business makes money by selling birdhouses. Sale channels can include your company website, auction sites like eBay, online marketplaces like Etsy, craft fairs, and brick-and-mortar stores. Many craftspeople find that it’s easier to sell less expensive products online and more expensive products in person because customers are willing to spend more when they can see the craftsmanship in person.

How much can you charge customers?

Some birdhouse businesses charge as little as $10 a birdhouse. Others build elaborate birdhouses that sell for $500. You will probably have to sell products on the lower end as you establish your reputation. But if you can develop a strong customer base and create birdhouses that justify the cost, you can eventually start charging more.

How much profit can a Birdhouse Business make?

Some companies earn substantial profits selling birdhouses, but they tend to be larger corporations that get their products in big box stores. While you may eventually grow that big, it’s probably wise to have modest expectations. Most birdhouse businesses are side gigs. It’s difficult to graduate to the point where you earn enough to quit your day job. However, some entrepreneurs do it. Depending on your angle and your motivation, you could too.

How can you make your business more profitable?

You can make your business more profitable by improving your carpentry skills. The more refined you can make your birdhouses and/or the more elaborate you can make your designs, the more you can charge. If you want to charge $500 for a birdhouse, you need to be capable of creating something that most other birdhouse makers cannot easily replicate.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Birdhouse Business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

This business is right for entrepreneurs who have a passion for carpentry or who are interested in learning basic carpentry skills. A lot of successful birdhouse business owners do most of their sales at fairs and similar events, so it is also helpful to have people skills and to enjoy talking about your craft with others.        

What happens during a typical day at a Birdhouse Business?

There are two “typical” days at a birdhouse business. The first is the type of day that is focused on crafting birdhouses. This process can include drawing up plans, acquiring materials, making measurements and initial cuts, as well as performing finer and more detailed work. It can also include basic joinery and painting.

The other type of day that is common in the birdhouse business is fair days. You will most likely want to rent space at crafts fairs, farmers’ markets, and similar events to sell your products. These days start with setting up your displays and then talking with potential customers in order to sell birdhouses.

What are some skills and experiences that will help you build a successful Birdhouse Business?

Carpentry skills are important when you are starting a birdhouse business. You want to make quality products and good carpentry is part of that. However, it’s also worth pointing out that birdhouses are not complex carpentry projects. You don’t have to be a master craftsman to make high-quality birdhouses. Strong communication and sales skills will also help you get your business off the ground. The better you can charm customers, the more likely they are to buy your birdhouses.

What is the growth potential for a Birdhouse Business?

It’s difficult to find market information specifically for birdhouses, but the overall North American handicraft market is expected to exceed $400 billion by 2024. Researchers attribute the market growth to increased tourism – tourists like to purchase local handicrafts – and to online marketplaces. There has probably never been a better time to start a handicrafts business because of how easily you can reach customers online, and birdhouses are no exception.