Announcement

Re: Very sad but

steve knight

>I talked to Kark for a couple hours. he does make a decent living but he is not getting rich. he seems to have said he only sells a plane a month or 1.5 months. his prices reflect how many planes he wants to sell and what the market will bear.

Re: Very sad but

Todd O. Cronkhite Maine Native now in Jax Fl.

>Thanks for the add'l info Steve. I find it interesting that Karl* is making his planes as his primary occupation. This does created quite the balancing act no doubt.

He needs to fiqure how much $$$ he needs to make a year to live his particular needs, wants and lifestyle in general, than how many planes at what sale price he needs to sell a year to maintain that income level, than how much time and money he can afford to put into each plane. Quite a trick to pull off in such a tiny niche market I'd say.

Obviously he has studied a great deal about the workings of business and developed a winning Business Plan, which is key to a successful business venture. Winging it by the seat of your pants in destined for failure.

*I simply pulled Karls name out of the hat to use as he is also a small operation that sells High Dollar planes to a very small niche market. I did think he was doing it "on the side" tho and am astounded that he is doing it as a primary source and is making it work. This is all the more proof that it can be done with the right "Plan". Have to wonder what safeguards that he has in place should he be unable to work, which was a big reason in the failure of Sheperd Tools.

I am also kinda curious to hear from other tool makers who do it "on the side" and see how they fiqure their time and skills into the final selling price of a particular tool.

I find this all to be very interesting because I beleive with the proper Business Plan anybody who is motivated enough can be sucessful at business, even in a small niche market.

Todd O.

Todd O.

other makers *LINK*

HC Sakman @ Victoria, BC

>Hi Todd,

Don't forget Sauer & Stainer planes. They're not any less than Holteys.

Chico...


Sauer & Stainer

Re: Very sad but

Pam Niedermayer - Austin, TX

>I think it's impolite to speculate about someone's financial condition online and without knowledge. It may well be that Karl is rich and doesn't really need any income from planemaking or he could be hanging by a shoestring or anywhere inbetween. Fact is, we don't know anything.

Pam, who's very leery about even placing backorders with anyone except proven exceptional vendors like LV and LN

Sorry Chico

Dan Clermont in Burnaby

>I refuse to click on your link.

Everytime I go to Konrad's site I drool all over my keyboard

THanks Anyhow

Dan Clermont

Re: Very sad but

Dave Anderson Chester, NH

>Hi Pam, I understand your reluctance to place prepay orders or have backorders with tool vendors. I've always been a bit leery myself. Having said that, the shoe is often on the other foot if you are a toolmaker like me and accept custom orders without payment in advance or at least a substantial deposit. Unfortunately it's a chicken or egg situation and there is no right answer except to go by the reputation of the builderor if you can find out, the buyers reputation. Even then there's no guarantee either in the buying or the selling. Realistically it comes down to how much you can financially afford to take a risk. weighed against the desire and benefits of what you are buying or selling. How's that for a real waffle answer?

Well Todd.....

Dave Anderson Chester, NH

>I'm a part time toolmaker and "profit" is something that can be defined many ways. I've had a positive cash flow for well over a year and a half. I have been careful not to make a profit yet, but have plowed back my potential profits into upgraded tools, raw materials, and expendable supplies. I can afford to do this since I don't have to depend on the income to put food on the table and keep a roof over my head. If I had an illness or injury which prevented my from making tools there would be no impact on my lifestyle except for losing the chance to have fun. I would though have to inform my dealers that I couldn't supply them for X length of time and I'd have to insert some form of strong disclaimer on my website about operations being suspended for Y length of time. It's the only fair and honest thing to do.

In terms of absolute profits as the IRS views them, it will be a struggle this year to not make a profit. Don't worry though, somehow I'll manage to lose money. I fully expect to be profitable in conventional terms in 2007 however and it should continue after that. I'm in this for the long haul and fully hope to continue the business into my retirement years as an income supplement. I'm having a great time and while there are some onerous chores and parts of the business less fun than others, it's still very enjoyable.

Re: Very sad but

ThomD

>"Then start doing some math on what a fully equiped machine and wood shop should get paid for an hour of work, and see where that gets you.

"-I feel that if you are doing something as a hobby, and or for supplimentary income than what a Machinest would make per hour[while on the job] is complete immaterial"

Yeah but this was your reference to Hotley, whom A) you regard as pocketing quite a bit of cash: B) Do you think it's a hobby? So what a machinist, or more properly a the machine shop charges, has some relevance.

Having gone heavily into this kind of Hobby stuff, while it explains motivation, I;m not sure it exists on some different economic planet. If we are talking about an underfunded business, and then hop over to a hobby analysis, why does that all of a sudden make what was ruinous just fine. The scale one, of course, but hobbies should think like businesses, at least to the extent of having some control on what the whole thing is costing.

"A good deal of his [Tom Lie-Nielsen] planes are solid value for money, or they were when he started out".

Kinda curious as to what you meant by this. Are you saying that you feel his Quality is slipping, or that you're not up to date with his current offerings?"

More a case of not knowing. I bought most of the LN planes I own quite a while back. At the time his stuff was certainly more expensive than Record etc... (bought most of mine from LV, before LV was heavily into their own planes) but good solid value for money.

"Thom, please don't feel that I'm trying to be argumentative as I'm not."

Same here Todd, I'm just interested in the economics of this stuff.

Re: Very sad but

ThomD

>While I would hardly call it a "rule", if you can't afford to loose the deposit...

I don't see any harm in speculating on the hypothetical aspects of a businees. I have no idea about specifics. It does raise the interesting point of confidence in the market place in the absence of good information.

I don't think that plane makers ought to take deposits if they are making mostly stock items. A lot of craftsmen argue about deposits, and what consensus there is, seems to be that deposits are legitimate to cover materials, but overall it is better not to take them if one can afford not to.

Custom orders are completely different. However... I know of one business that was run along these lines and defrauded a lot of people. They set it up so that many custtom options were free, thereby ensuring that almost all orders were "custom". They then took lots of money up front, were notorious for non-deliveries, and eventually went bankrupt. The owner had done this on a few occasions, and nearly made a plane out of the country, but was arrested.

Re: Well Todd.....

ThomD

>As most people know far better than me, profit and income are two different things (though I could be wrong since I find accounting rather odd, and anyway Canadian accounting is still not identical to US)(and I'm not interested in what the IRS calls profit, though an American would be wise to be). One could run a business that pumps out incomes to various people, but is not really profitable; or is profitable without providing incomes. At the one person level the "my money" category sometimes gets confusing.

Re: Very sad but

Pam Niedermayer - Austin, TX

>Hey, I totally empathize. For 25 years I did software consulting and required a substantial down payment, even more after 9/11 and smaller clients started stiffing us on the final payment (how about a $17,000 stiff). However, I don't consider things like tools consulting unless that is the agreement. The very nicest thing about products, whether software (we did the consulting to support our product development) or tool, is that you don't pay until it's shipped. We only ever had to refund one product sale, and that was because we were being nice, the customer simply changed his mind.

So, I would suggest that everyone enter into contracts for custom built tools. Typically you'd have a down payment and an agreement about delivery dates and what defines a deliverable item and how the customer will pay on delivery. Of course, I can be a little lax about this since getting to know so many of you online, I would have no compunctions about paying you, for example, for a promised shipment of a certain date. The problem with backorders is that if I need a tool, I need it right now or next week or month. Therefore, if a promised tool is not delivered on time, I have to find a substitute.

Also, my main point in my reply was that it was impolite to speculate on Karl's financial status in public for no reason.

Pam

Re: Very sad but

Pam Niedermayer - Austin, TX

>Yes, Thom, it's the product vs custom designator that's important. And if custom, there should be a contract.

Pam

Re: Very sad but

Dave Anderson Chester, NH

>I agree with you Pam. For those I know, and for my dealers, I sell on terms. However for folks I've never heard of I ask for payment before shipment via either Paypal or check or money order. Custom stuff is all paid in advance. I give a ship date for custom stuff and I actually stock for immediate shipment my standard products with the exception of the bowsaws which are made to order.

I agree also about not speculating about KH or anyone elses income. Very tacky.

Re: Well Todd.....

Dave Anderson Chester, NH

>Hi Thom, That's why anyone who is running a business either full or part time is wise to keep a separate checking account for the business. Co-mingling of funds is almost certainly a no no in almost any tax jurisdiction in the world.

Re: Announcement

Doug Littlejohn

>While I haveonly monitored the voyage of your company only occasionally and without any personal risk (no order) I can speak up and verify one of your statements.

I have been involved in several startup companies over the years. It has always amazed me that with all of the political talk about the SBA and how it helps small business, I am here to confirm what Ben has said.

I know from first hand experience that you cannot get a loan from and banking or other SBA source without signing over absolutely everything you have or have any interest in as colateral for the loans. The only way I know to fund without that exposure is either via Ventre Capital or by way of what is commonly referred to as "Angels".

I suspect the intent to to make sure that you are truley 100% behind your business idea, but when you fail, you loose virtually everything. THere are a few holes to hid afew things, but hard assesta have to be put up.

I am sorry to hear of your downfall and know that as someone who was willing to take the risk in the first place, you will recover. However, the journey will be painfull.

Good lcuk to you, you did more that most, you put it on the line and gave it your best shot. Very few are willing to do that.

Sherwood

RJ where are you?

Doug Littlejohn

>I am also eastern Sierra - just east of Fresno. PM or respond hereif you wish. It's always nioe to find somewhere "in the neighborhood".

Sherwood

Speaking from Experance

Todd Hughes

>I was in the bussiness of making tools, mostly axes and knives , for over 10 years and think I did pretty well at it.When I started I knew only a little about how to make what I sold having only done blacksmithing for a little over a year, had never run a bussiness like this at all. One thing to know is that I consider myself to be pretty lazy so my succes I don't feel was from being a hardworker really.When I set out I decided what I wanted to make and how to make it looking for a specific nich market, mostly 18th century reinacters.I do think I promoted myself very well as I do feel I have the the gift to talk people up...this is a most important trait if you are in this bussiness. I have a good friend who makes great flintlock rifles and we would do shows together and I would have to smack him up side the head to get him to get out there and "Sell" himself and his work.Finaly after many years he is doing a bit better but was painful for me to watch him.

I was lucky that I had most of the tools I needed for my bussiness and also this type of work doesn't really require much...maybe had $700 invested if that.I talked to other blacksmiths and they wanted to do production work and needed power hammers, welders and etc.They told me you have to do this to stay in bussiness.I never wanted to do anything like that that is for sure...and didn't. I advertised in a few magazines, drew up a catalog with drawings I did myself and printed at Kinkos. Had many people tell me they liked that my catalogs was not "flashy". After the first couple months I always had more then enough work.

I was also lucky that I lived in a rural area and that my wife worked as a nurse [though I probably made more then she did] so I didn't need a bunch of money to survive.Not like I lived in Southern California or New York city. Around here $10 an hour is considered pretty good money I think. My goal was to make $100 a day which was plenty enough I thought.Never had trouble doing this. On most days I worked maybe 6 -7 hours.Was lucky that what I sold was almost 100% profit as the materials for the axes and knives I made was very cheap. I also did more then a couple shows selling what I made and always did well usually selling everything that I took and of course made lots of contacts with people to buy stuff later.If I had made more I could have sold more but I never wanted to get to busy...why? I was happy doing what I was doing. I was always having dealers want me to make a bunch of stuff for them. Once had one buy a $250 axe off me and then asked me what I would charge him if he bought 10 of them off me. I told him $350 ea.! I priced my stuff to sell and did reserch on what others charged and then undersold them.In my opinon most craftsman think to highly of what they make and over price it.Have seen at many shows others would not sell anything and I went home with nothing ....other then a fat wallet! Again what I made cost me nothing but time and with experance I got much faster and better at what I made.Because I had all the bussiness I wanted I could sell it cheaper. Had friends that charged high prices and they thought they had to because they didn't have the bussiness, probably because they charged the high prices. In the end I made much more $ then they did.

I think the reasons people fail in bussiness like this is because they don't think out what thier market is, confuse success with getting big and charging big prices, not talking up thier custermers and not promoting thierselves. I think there is a very large demand for certain custom tools today,...much larger then the axes and knives I used to make. I would think somebody could make a good living making planes,saws chisels etc. along the lines of the work i did. If I hadn't got into selling antiques and tools on ebay and enjoying it more I think I would be......Todd

My Summary and an Apology

Todd O. Cronkhite Maine Native in FL. Exile :~(

>First off, let me say that I apologize to Karl, and to anybody else that I may of offended with my statements of speculation on what Karl may be making per plane. My intentions where certainly not to discuss his finances in any shape form or fashion, but to merely point out that he is selling high dollar planes and has been for numerous years now and that he is making ago of it. In hindsight I should of left it at that, and I do see where I was wrong, and agree with thise that chastised me for it. I hope there is no hard feelings on Karls' part or anybody elses.

I'd like to thank the small business guys that chimed in such as Steve Knight, Dave Anderson(Why I keep calling you Wayne I'll never know)and Todd Hughes for their valuable business insights.

In summary:

In an attempt to illustrate that with the proper approach a successful one/two person plane/tool making business can succeed I continued this thread probably a bit longer than what it should of gone on for, but I really can't say that I'm to awfully sorry for it, but am a little. I think allot of good info has been brought out in this thread and I hope others find it as useful and enlighting as I did.

Todd O.

Still rooting for Doug and Ben

Re: My Summary and an Apology

Bob Hackett(Mainely,Bob)

>Those of us who know you fairly well(and that would be 95% of the folks here) know you meant nothing harmful by anything you said Todder.

I see no need for an appology or to qualify anything you said.

Maybe some folks just like to pull your chain.Wouldn`t be the first time chummy,you`re just too easy.

Mainely,Bob

Re: Very sad but

ThomD

>The main speculation was whether the kind of planes he made were a high margin product, and whether he was full time. I don't see the problem with either of those lines of enquiry.

Re: Very sad but

paul womack

>Don't forget that when Karl Holtey charges for a plane he has to cover his time, his materials (probably the cheapest factor) and the amortised cost of his workshop, equipment, and design time.

Anybody pricing an infill by material cost is missing (quite a lot of) factors.

BugBear

Very Well Said Bob

HC Sakman @ Victoria, BC

>

Re: Doug and Ben

Steve Bisson

>Hi Ben,

Well, that's some welcome news, for me anyway.

I'll try and do justice to the plane as and when it arrives.

Wishing you well.

Regards from Melbourne.

Re: Very sad but

Steve Bisson

>Hi Steve,

We've "crossed swords" a bit, but you make wonderful planes, and your prices are very fair; I hope that you continue to do so, and have fun whilst doing that.

Warm regards from Melbourne!

Steve B

Re: My Summary and an Apology

ThomD

>You didn't do anything wrong. Anyway all this stuff about privacy is even more quaint than hand tools.