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How NOT to start Full Time Knifemaking

Hankins

Hankins

Joined
Dec 7, 2008
Messages
2,936
How NOT to start Full Time Knifemaking
Every Knifemaker out there has wanted to do this at some point... Many have tried few succeed
What is your advice on how to avoid the mistakes a first time Full time Maker makes???
If you are a full time maker what would you do differently when starting out?
 
Set it up so that you have everything you need and have no payments, no debt, mo big equipment purchases.


You can live pretty cheaply if you have no payments, no mortgage, no car payments, no credit cards,
If you have to produce and sell to make the mortgage payment, that's pretty high pressure.


Marry well.
Get a wife with steady income to cover the lean times and good benefits / health insurance.


Don't take deposits or payments ahead of finishing your goods.
If you do take deposits, treat that as segregated funds - don't spend it until you have earned it.
The GBU is full of makers that spent all their deposits and can't afford the time or money to finish the orders, the customers get mad and things go bad.

develop relationships and orders with dealers to develop cash flow.

Have a real job, make knives pt, go ft when you retire.
Military careers seem suited to this as you can retire relatively early.

Invest in rental property when you are working so it's paid for and giving you income in your knifemaking retirement.



diversify.
Make knives, make other stuff, sell classes,
 
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Every guy that comes into my shop to learn to make knives wants to be full time in two weeks. The thing is that you have to be able to sell a lot of knives to support a full time knifemaking business. Revenue is critical, constant sales keep you afloat. That means you have to SELL the knives, not just make them. That means you have to have a well established brand when you go full time. If you're making 10 knives a month as a part timer and having no problem selling them, it looks like full time is going to be easy. Then you go full time and have to sell 10 a week. 4x the market. Be prepared for this, and expect it to be stressful. Revenue in a business ebbs and flows. Also make sure your knives aren't selling quickly because they are underpriced. Underpriced knives won't support the business. Raise the prices to 'fair market value' before flooding the market with 4x the supply. Supply and demand, revenue revenue revenue.

A few questions:

Is your shop in your home? If so, you situation is called gross negligence and your homeowners insurance won't cover a fire. If someone dies in a fire, you may be in trouble.

ALSO, you are likely not going to get a manufacturing business license in your home. At least, I couldn't. They only give 'domestic in nature' business licenses in homes in my city. Any tool not domestic in nature ruled me out. Curtainmaking, cake baking, ironing laundry etc are acceptable in the home in S.Hill Ga.

Insurance is hard to get underwritten. Be prepared to do some searching. Your lease will require both the business license and insurance.

Be sure when you're looking for a place to rent that there is a LOT of room in the electrical panel and then expect to run out.

Is your full time business going to function only as your income, or are you building a brand/company with a value that is sellable. To build brand value, your business has to be legitimate and above board. Taxes, licensing, insurance, and a good marketing/google strategy are critical.

The amount of regulation that a small business has to endure is like a 1 year old wearing a 50 lb lead jacket. The taxes are UN-understandable. A good trustworthy and cheap accountant is critical.
 
12345678910 said:
Set it up so that you have everything you need and have no payments, no debt, mo big equipment purchases.


You can live pretty cheaply if you have no payments, no mortgage, no car payments, no credit cards,
If you have to produce and sell to make the mortgage payment, that's pretty high pressure.


Marry well.
Get a wife with steady income to cover the lean times and good benefits / health insurance.


Don't take deposits or payments ahead of finishing your goods.
If you do take deposits, treat that as segregated funds - don't spend it until you have earned it.
The GBU is full of makers that spent all their deposits and can't afford the time or money to finish the orders, the customers get mad and things go bad.



Have a real job, make knives pt, go ft when you retire.
Military careers seem suited to this as you can retire relatively early.

Invest in rental property when you are working so it's paid for and giving you income in your knifemaking retirement.



diversify.
Make knives, make other stuff, sell classes,
Click to expand...

Everything here is good advice. While I do have a mort, car pmt, and student loan, there is no debt for the business. My wife has a good career and she gets our health insurance through her job (for now).

Never take orders or deposits. Both things can kill a knife business.
 
I would say a good wife that is understanding is also key (not just the income part).

Count I agree with everything except the military part. If you dont want to start making knives till your out yeah but ever try having a hobby while your in the military? It is a attempt in futility not to mention it is very difficult to build any type of customer base while your in since your ability to meet dead lines is a 50/50/90 shot in the dark, depending on your job and position ofcourse. That being said after your out yeah getting a pention helps to move onto what you want to do.


Fiddleback brings up some good points. The business side is what usually kills new small business's which is what you have to treat it as if you want to go full time. Maybe take a couple of classes at the local college. Dont need a degree but a few classes and maybe one or two in accounting will go a long way. I know when my parents started there small business 20 years ago that was a big struggle for them. They did fine because they made it past the first couple of years and ended up selling it after 15 years or so and made a little money off that as well due to there large repeat customer base.
 
Pretty well covered already. To wrap it up in one sentence, remember that most "overnight successes" that suddenly "burst on the scene" put in around five years before that...
 
I have had a few hobby businesses over the years, and the most important thing to me was realizing that turning a hobby into a business makes it a lot less enjoyable. Running your own business is a LOT harder than getting a degree and getting a job. It isn't the "easy way" to make a living. On the other hand, there are people who NEED to do what they do. They are driven and passionate about what they do. They are willing to accept the down sides to running a small business because of the drive. AND: I agree, an understanding wife is very important.
 
I'd make sure I had room to grow. A cramped facility and no easy better options is a drag. It's a problem that would have been easy to avoid but a lot of trouble to fix at this point.
 
I'm not a knife maker, but I've ran a business and I understand what sells and what doesn't fairly well.

Have a name that people will understand or like.. don't have your name, place of birth, SS#, steel type, and whatever else as your trade mark... Make it accessible, catchy, simple, and not too long...

Don't make ugly knives.. You might think they are good, but that doesn't matter.

Customer service is paramount. Be good to your customer. Wait times of half a year to more is.. a sign you did something wrong or did something very right, but now need to shorten that time.. It's a knife, nobody wants to wait that long. And those that do, well, are there enough of those clients to keep you afloat?

Always keep your name out in the public eye. If your product isn't being reviewed/talked about or shown off, you might not be a knife maker that will make it past the initial "newness" factor.

Buy in bulk. Cut costs on quantity if you are really in this for the win.

Know your market. This could also be, create a niche that you know is in need and will continue to be in need for your product. AND offer new products to keep your name/product line fresh and exciting.

Always be looking to increase visibility and continue to grab more clients.

This is a start... GL!
 
If you're not ordered up at least 6 months ahead you're not ready to go full time. Bill Moran told me 20 years ago that he was ordered up about 20 years ahead and had quit taking orders. He didn't live long enough to fulfill all of his orders. It takes a LOT of knife sales to support a full time maker.
 
Use your business as a front for a drug-dealer's empire. Constant in-flow of cash, low expectations of a return on capitol. :))

J/K obviously... but in the event you do... give me a call. I can give you a place to live rent free for the next 15-20 years...
 
Set it up so that you have everything you need and have no payments, no debt, mo big equipment purchases.


You can live pretty cheaply if you have no payments, no mortgage, no car payments, no credit cards,
If you have to produce and sell to make the mortgage payment, that's pretty high pressure.


Marry well.
Get a wife with steady income to cover the lean times and good benefits / health insurance.
Click to expand...

This is good advice for anyone going into any independent business. I know quite a few guys who would have suffered without simple tastes and a good wife. And none of them were knifemakers....
 
FS/T - 1 nagging old cuss of a woman. Can't cook, can't sew, goes on bank burning shopping sprees for shoes and cosmetics, complains a lot, isn't interested in any of my hobbies and doesn't listen to anything I say.

Willing to trade for : Any homosapien of the female variety provided can cook, sew, and is absolutely loaded. I mean, old family money kinda loaded. The 'rest on my laurels, make knives and play with old cars all day' kinda loaded. Good looks a plus but not a deal breaker. Upon reply, put bank account balance in the subject line.

Cheers!
 
Terrific thread, especially since my name now appears in orange. That's because of the link in the forum to my Photography site. However, making knives is an endeavour I hope to become involved with and I've been researching equipment and viewing tutorials etc. I have the offered support of several very talented makers here but there are hurdles for me to overcome.
I have an ample work space, and my wife is very supportive, but...I lack equipment and more important...I have zero experience. I also have a degree of trepidation because I'm an active guitarist and I'm not convinced that sharp hot steel and finger-style guitar go well together.:eek:
I will continue to follow this thread with interest! Thanks to all for the advice and suggestions!
 
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Lots of guys who do hand-heavy activities are musicians, too. I was a luthier before I started making blades.

That's a field to never go FT in. I made that mistake. I hardly even play guitars anymore, I just pluck some bullshit to make sure all the frets are good, and the electronics work, and back to the case.

Musicians are also ridiculously flaky (and notorious) for nonpayment.
 
Well, I'm not gonna lie... If my fiance was not an RN, and if she didn't love me unconditionally (still trying to figure out her logic there) then this would probably not be happening.

I think the biggest things are don't screw with the tax man, and make sure you understand the legalities involved. As said above, a good cheap accountant is very important, unless you are naturally gifted with that type of thing.

I think many makers have a "calculated risk" period where they are just getting started, and not quite above board yet. Make sure this period is absolutely as short as you can manage.

If you want to work from home, you most likely will need to live in an unincorporated area that has very liberal views on zoning, or look for a property that is near a business area and was grandfathered in to combo business/residential zoning.

Another option is to have (or make) a friend that owns their own shop and is willing to sublet, so that you can be on the up-and-up while you save for your own.

Make sure you count each and every expense and KNOW what you really are making on each sale. Save your reciepts, even if you just throw them all in a box, it's still better to give your tax guy that, instead of a wild guess that may or may not get you in trouble with the tax man.

There are many other aspects, but I think the ones above are the ones that can land you in jail or very hot water, so I would say they need to be addressed before anything else.



SunnO))) said:
Lots of guys who do hand-heavy activities are musicians, too. I was a luthier before I started making blades.

That's a field to never go FT in. I made that mistake. I hardly even play guitars anymore, I just pluck some bullshit to make sure all the frets are good, and the electronics work, and back to the case.

Musicians are also ridiculously flaky (and notorious) for nonpayment.
Click to expand...

I had a somewhat similar background, I built my first guitar long before my first knife. I've been playing bass for about 20 years, and the extra hand strength definitely doesn't hurt, especially when hand stitching a sheath. I also have been tig welding for most of that time, and excessive heat on the fingers hasn't stopped me yet. ;)
 
Thanks for the replies so far guys are painting a kind of Bleak but Realistic picture.
This sounds like it would hold true for many start-ups not just knifemaking...
Thats right you can make a bunch of knives but they must "Sell" at market value or your just chasing your tail
Also KEY is your secondary market needs to be there so people can "invest" their hard earned money
Being honest with yourself and asking would I buy this Before offering it up for sale is hard to do but necessary
 
Hankins said:
Thanks for the replies so far guys are painting a kind of Bleak but Realistic picture.
Click to expand...

You can do whatever you want with your time.
If you want a certain outcome, that's different- you have to do what you have to do to make it happen.
Helps to have a good idea of what you want out of it.
 
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