Materials
As a home woodworker, you realize that the large manufacturer pays a lot less for his materials by purchasing them at wholesale prices. Typically, manufacturers spend about 25% to 35% of the retail price of a product for the materials they use to make it. In fact, many foreign manufactured items have a cost (materials and labor) of WAY LESS than 25% of the retail price! For example, a nice dining room hutch that could cost you $2,000 to $3,000 at retail, might cost the large manufacturer well under $500 to $750 in materials.
However, even though you may not be buying materials in large quantities, you’ll still be buying them for a fraction of what you’d pay for a comparable quality finished item…and investing your own labor and handiwork in its building.

Overhead
We all know that businesses have (and must pay) “Overhead” to stay in business. The two primary sources of business overhead typically include payments to buy or lease the facility and utilities costs. However, as a home woodworker, your home mortgage or rent costs aren’t going to change, based on whether you’re building projects or not. Yes, your utilities costs may increase by a few dollars each month.
If you eventually decide to go a step further and operate a woodworking business out of your home, you’ll get certain tax advantages on your shop, providing you can prove that you use your shop an established percentage of time, strictly for business. In this case, tax deductions on percentages of the mortgage and utilities will make woodworking an even better investment for you!