Start a Birdhouse Business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Birdhouse Business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a Birdhouse Business
You can promote and market your birdhouse business in a variety of ways. One of the most popular ways to garner attention is to attend as many craft fairs, farmer’s markets, and similar events as possible. Showing your birdhouses in person increases the likelihood of catching a potential customer’s attention.
You can also partner with local businesses and even incorporate their branding into your birdhouses for custom projects. For example, a local bed and breakfast may like to have a birdhouse with a sign similar to their sign – like a mini version of their B&B – to show off to guests.
How to keep customers coming back
Do your best to build quality birdhouses that can endure the elements year after year. You can’t make your products invincible, but you can use proven techniques and materials that you know will stand the test of time. The nicer and higher quality you can make your birdhouses, the more likely customers are to come back – and the more likely they are to consider purchasing more expensive products.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Birdhouse Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a Birdhouse Business?
Look for free materials. As mentioned above, you can make birdhouses out of pallets which you can get for free from local businesses. You can use small pieces of wood that won’t work for the actual houses to create signs, such as “No Crows,” or the name of the family that buys the house. You can even use old soda cans for decoration.
The less you spend on materials, the more profit you will make from each birdhouse you sell.
How and when to build a team
Most birdhouse businesses are small operations, often a one-person show. But, some birdhouse businesses may eventually need employees. If you are unable to fulfill all of the orders that keep pouring in, you probably need to hire someone to help. You can hire help for all the other things you need to get done or for assistance with constructing the actual birdhouses – it all depends on where you would like to put most of your energy.