I too am in the hobby/retired business group. what i make does not pay any bills yet, but it provides some pin money for more toys. It took thousands of dollars to get to this point, and I have actually not made enough to cover even the accessories to the first machine, never mind the gen 2 sitting in my living room at the moment. But I am 72 and still active and functional. this to me is the ultimate health regimen. keep yourself busy thinking and planning and hoping that is my recipe for a long life 
Ask me if it worked in say 20 years. LOL
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I think it’s really nice that you found a way to dovetail (pun intended, I’m a dad, so that joke was essentially mandatory) your small business with your church, which sounds like it’s important to you.
In my opinion you couldn’t be more on the spot in regards to charging if not all of your labor a good part of it. One thing my father taught me and he still does from time to time is he writes an invoice for the whole amount then puts a line item discount for the difference between the time he spent and what he finally charges. Much like yourself he said it ensures people have at least a basic understanding of what they’re getting.
You’re probably not doing any other business harm with your practices, most folks wouldn’t be able to afford one off or small batch work from a job-shop and the way you’re doing it keeps everything positive for everyone involved.
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I’m always wondering if a new project will be business-worthy. I like to design my projects with a parametric approach, starting in CAD (Fusion for me). Sketch lines are constrained with delimited measurements. A dimension can be changed easily, and the drawer that worked at one size is now ready to cut at the new size. Take notes along the way, label sketches, bodies, and CAM paths. When a project is completed, address how it could have been better, and adjust the files and notes while it is fresh. If you love the project, and you friends see it and also like it, you’ve got a Product with easily understood values for price of materials, time to cut, construct, and finish. You won’t have to take those hours and days to design it for the next 10 editions (you might make tweaks as you learn it for production after that).
As far as competing, make something big and artistically worth your time, and only try selling it locally. Shipping, one of the biggest barriers to profit in a small business, can be skipped, and you can be in the woodshop instead of the shipper’s. It’s expensive for someone from far away to sell a big, heavy item with quality woods at a competitive price to your “pick it up today from the artist” approach. OR, redesign your awesome product for batch cutting and flat-pack, hire an assistant, and run the robot in your shop all day every day. Regardless, let the product tell you it’s time for a business.
I am now a hobbyist, but had a niche laser engraving business in the 00’s, when the machine was priced like a sedan, but was small and not very powerful. For 10 years, my only competitor did poor work, so I won the small jobs and contracts pretty easily, as I cared a little more about quality. Year 11, 40 competitors, mostly retired, underpricing their time because they were enjoying themselves, and the lasers were bigger, faster, and $3k. Etsy delivered my early retirement, as what I charged $150 for now cost $35.
I am enjoying CNC woodworking now, and still haven’t had a project convince me it has become a Product, but if that changes, my files are ready to cut and repeat. In the interim, I’m keeping my brain and my hands active, and a couple days a week, my expensive garage robot as well.
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That’s a huge problem in the maker community. The people who are trying to make a living competing against those just trying to cover their costs (or worse, not even doing that). The Etsy & Banggood & Temu and Whatever Wangdoodle shops are selling to a different market than I am with a 2” end grain multi-wood species custom inlay cutting board where the cost of the raw wood is more than their half or three-quarter inch bamboo board. My customer doesn’t ask why my board is 10X the Etsy board because they don’t want an Etsy board.
The local guy who is just trying to cover his wood costs so he can make more stuff and not “lose money" but doesn’t factor in his equipment or time is the one that can push me out of business. But (right now) the difficulty in creating a design and needing to tune the design & machine for the bits needed is keeping him from taking my market. Reaching those customers is harder than mass marketing a standard block of wood, but the price premium makes it pay as a side hustle in retirement and keeps me from filling up the house with stuff my wife can’t find room for 
Every one of us who sells just to cover materials cost or to get the stuff out of the shop are hurting the guys trying to make a living. They’re not really running a crafts business, they’re just subsidizing their hobby and driving customer perception of value to zero.
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Wow the topic is alive again 
WouldWork, I to run parametric 3D CAD models, only I use FreeCad. Doing full up assemblies with bits as opposed to wood is a lot cheaper. I am currently working on four craftsman end tables to echo a theme of three chairs. Like my church work, I want something new that looks like it has been there forever.
However I still find it takes 2-3 design iterations to get the rough feel of a piece. My brother is a “contractor” that does custom built ins. He laughs at this statement, and I am ok with that.
Getting back to the prototypes, I am thinking of starting to use maple as my prototype material. Cost wise it can be cheaper then clear pine, and it machines cleaner. Now with the order for four tables, I won’t need five or six, so they may find their way to family or Habitat for Humanity. I remember starting out I lived in early American cardboard box, so even a maple craftsman end table would have been welcome.
I have given up on the idea of competing on Etsy or with Ikea/Wayfair. All of my stuff comes out of my own head and FreeCad or VCarve Pro (about a 75% FreeCad, 25% VCarve. VCarve just does text so well)
JimHatch, like you I agree that materials matter. Qtr Sawn White Oak, Cherry, Black Walnut and now Brass. Buying it a rough 4/4-8/4 stock and milling it down. That is how you are different than Ikea/Wayfair.
Finding the right customer base is what supports that work. Now I hate to be “elite”, but poor people don’t have money and affluent people do. I have an “ex-sister-in-law” who is an interior designer / upholster … I hope to get involved with some of her work.
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I am enjoying reading everyone’s perspectives.
I didn’t believe that someone producing a handful of pieces of year at or below shop cost would harm folks trying to make a living.
I’m using ‘shop cost’ here to represent how I was taught to calculate a real/viable hourly rate for a given task/workstation, which encompasses labor, material, capital equipment costs, depreciation, taxes, physical plant, administrative overhead, professional services, all that jazz.
I think I have to change my opinion based on what I’ve read above. You all have presented perspectives that I haven’t experienced but I see your point.
I don’t know that anyone should feel bad for selling some pieces from their shop at whatever price makes them happy (and I don’t believe anyone else has indicated they should) but if someone reads this thread maybe it’ll make them think a minute and value their work a bit more highly.
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I couldn’t agree with you more regarding the value of using the computer to help model out ideas.
I also have fallen in love with parametric design. Every design I do is fully parametric, even if there is no reason it needs to be, simply because I consider it practice for those designs where it has huge value. Given that I’m a complete nerd, and if I’d been born 30 years earlier I would have been diagnosed with ADHD, designing parametrically also satisfies a psychological itch.
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Is there a middle ground? It doesn’t feel good selling at cost because you can and hurting businesses that need a margin. There maybe a makers market where you sell at cost to people trying to start a business, give them a leg up because you can; help them with prototypes before they upscale, reducing their barrier to getting going. I’ve done that for family and friends and a few outsiders where they might want to model a housing for electronics in Aluminium and iterate over the design before going for volume, tools for vacuum formers where someone wants to enter the personalised chocolate moulding business, bike parts (spacers for carrier cases, derailleur clip-like things, hydraulic contraption for brakes, I’m not a cyclist), mobile workstation for outdoor broadcasting/interviewing, brands, camera relays. Good to help youngsters that have ideas but not the assets.
I get more ideas about what I can make from others than I could conjure up myself. They’re also good challenges.
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I think you nailed it (or some better wood joining technique)! The middle ground is doing personal projects, gifts or at-cost work for friends, family, and club/church/network, and volunteer assists. That’s my focus right now, and it brings joy. And the parametric approach does, as mentioned by L.M, scratch at the OCD itch!
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The hope is the machine pays for itself. Many have done it and then started a full business (looking at you AirWeights). So much potential!
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