Lutherie - the business.

[nnickusa]

I'd be very surprised if they didn't have to pay a fee. That'sw the mnarketing side of things, and it can cost as much as the tooling, depending on where you exhibit....

[simso]

You have to be efficient is the main key, marketing is one thing, but realistically your work will speak for itself.

Doesnt matter if you list yourself as the greatest repairer or greatest builder or you have the greatest presence on the internet as a know it all.

Your work will eventually speak for itself, the key is to make yourself efficient and economical to achieve the point where others notice you exist.

Here is a test example of being efficient, how long does it take you guys to take a guitar that has been built and sanded smooth, no pore filling done yet to a finished clear coat ready for buffing. Lets make it a spruce top rosewood sides mahogany neck rosewood head plate ??????, then Ill tell you how long it takes us.

[Ormsby Guitars]

Last years Guitar Festival here in Adelaide had a series of "Meet the Builder" events. The builders would give a presentation and then field questions from the audience. Ashley Sanders (a member here attended). This side of the festival was low key but I'd like to see it expanded and a few more builders included. I'm not sure if the presentations were by invitation or the builders had to pay a fee.

I do this, with Andrew Ellis. Not a single other guitar maker has ever asked to join us, but they certainly turn up on the day and 'suss it out'. We've offered up space to amplifier builders, pedal guys, etc. They all say "seems like a lot of effort" or some equally ridiculous excuse to not sell something.

http://guitarshow.ticketleap.com/perth/ ... _at_1200PM

[Chalks]

This is an interesting post.
I will preface everything with:
1. I am not a luthier, I just like making things that sound nice and others appreciate. I do however aspire to be one when I grow up,
2. I am not a business owner, and
3. Opinions are only worth what you paid for them. Mine obviously are not worth much.

Rhetoric said, I find in this type of thing you are either a hobby builder, like an arts and crafty thing or you have a full blown business and finally, where it seems many aspire to, one where you own your own job. All this means is that as a hobby you do it for the love of doing it and the enjoyment a small number of other people get from your crafted object. If you are in a full blown business then you don't go in to pay yourself a wage. You go in to have a balance sheet with enough asset value that you can sell it at a value substantially more than you have invested in time, effort and money. And of course the aspirational goal many of us might have is the one where we sell enough volume of our craft item for enough to pay for materials, overheads and labour. If we can do all that where the labour is a fair and commercial hourly rate and THEN also make a profit on top, well we are moving toward a business.

One of the issues, as I have heard, is that those that are in the "business" of making guitars are questioned for their quality or lake of aesthetic beauty or whatever. These are the things that are often compromised in order to get the product at a price point acceptable to the "many" in the market. Remember the "few" in the market are the ones buying high quality and the "many" are the ones buying all the volume.

Please forgive everything said. Absolutely no offence is intended. I love this place and this is a good topic. A little different and interesting to hear views many people don't like to talk about.

[kiwigeo]

Here is a test example of being efficient, how long does it take you guys to take a guitar that has been built and sanded smooth, no pore filling done yet to a finished clear coat ready for buffing. Lets make it a spruce top rosewood sides mahogany neck rosewood head plate ??????, then Ill tell you how long it takes us.

You'd put me to shame but I reckon you'd be pushed to beat the factories churning out guitars in China

[simso]

Nothing about putting to shame, its about being efficient.

China works on a different theory, we would easily paint a guitar faster than china as they work on the principle that labour is very cheap, so time is not as much of an issue, consumables are more important in factoring there costs, where as us here in australia, consumables are cheap in comparison to our labour costs.

[n~dl]

If it takes you 80 hrs (2 wks) to build the guitar then your hrly rate is $1225 / 80 = $15.31

Now as your hrly take home rate is less than the australian award wage then you are still IMO a hobby business, because you cannot live of what you are doing.

Sorry to digress but I just gotta. I just checked Australia's hourly minimum wage*, $16 and change, converted AUD to USD, and my jaw dropped: $15 and change. Minimum wage in the states is currently around $7.25 or so. I'm making just over $9.00 at my job now, which is about what the minimum is going to be raised to by 2014 here in Minnesota. How depressing! I have two guesses: A) the daily cost of living for you ozzies is considerably higher, or B) it's much harder to become filthy, stupid rich over there. (Or my third guess--a whole heap of not-so-easy answers.)

Those smilies on the left are needin' a drunk frowney face right there next to the drunk smiley face

*Australia's laws regarding this are more complicated, though, right? Split up by industry and such? Or is that no longer a thing?

[Craig Bumgarner]

I must admit I spend what I think is an inordinate amount of time finishing. Typically 16 hours from pore filling to final buffing. I pore fill the b/s and neck twice with troweled epoxy, varnish seal the cedar top, no stains, spray 5 coats of KTM9 one day, sand out and 5 more coats the next, a week later I wet sand to 2000g, dry buff to a high gloss with 14" bench mounted buffers. I build to order, and usually finish only one guitar at a time. Lots of room for improvement I think. Better prep is what I keep working on.

Okay, how long does it take you?

[n~dl]

That sounds pretty standard. Only done this in a school environment so far, but roughly this was our process:
Spray a coat of vinyl sealer, wait 1hr, scuff sand using 320 or 400 to take care of the raised grain (this only takes a minute) and maybe reseal if you feel you might have cut through anywhere.
Apply oil based pore filler and wait at least a day to sand it off (depending on the weather this could be a few days). Sanding this stuff off for me is usually an all-day affair. I hate this part but really prefer the look of oil based fillers over the no-shrink drywall stuff I've seen people use--unless you're filling them with jet-black, which doesn't get that grayed/powdered-over look other colors seem to, but still black pores are not my personal preference. (The clear UV gel stuff looks awesome to me, but I don't see myself springing for one of those lights; $$$$$).
Then it's four build coats of lacquer a day for two days, unless I decide I've sprayed light and sneak in a 5th. Check dry mils and make sure you've got at least 5. If not keep building.
Then I level the finish with 400 grit or so and spray three or four coats of laqcuer thinned by 35%. This flows on really nicely and allows me to start with 1000 grit for final sanding and buffing (seems I can never chase out 800 grit scratches). This also takes me approximately one (1) eternity. Then it's chasing your tail at the buffing wheel until it's so shiny you have to wear shades (which is fine as it's the only way you look half as cool as your new guitar).

Probably at least two full days of sanding for me, spraying and waiting for at least 11 coats (8 build, 3 reduced), then maybe half a day finish sanding and fussing at the wheel. Maybe a whole day.

When I lay it all out this doesn't sound very efficient!

[liam_fnq]

If it takes you 80 hrs (2 wks) to build the guitar then your hrly rate is $1225 / 80 = $15.31

Now as your hrly take home rate is less than the australian award wage then you are still IMO a hobby business, because you cannot live of what you are doing.

Sorry to digress but I just gotta. I just checked Australia's hourly minimum wage*, $16 and change, converted AUD to USD, and my jaw dropped: $15 and change. Minimum wage in the states is currently around $7.25 or so. I'm making just over $9.00 at my job now, which is about what the minimum is going to be raised to by 2014 here in Minnesota. How depressing! I have two guesses: A) the daily cost of living for you ozzies is considerably higher, or B) it's much harder to become filthy, stupid rich over there. (Or my third guess--a whole heap of not-so-easy answers.)

Those smilies on the left are needin' a drunk frowney face right there next to the drunk smiley face

*Australia's laws regarding this are more complicated, though, right? Split up by industry and such? Or is that no longer a thing?

A little from column A and a little from column B. Everything but health care is cheaper in the US. A mate of mine just got back from Vegas. He happily told us that he got a six pack of beer plus a pint size can for the misses plus a large bag of chips from the corner store for under $10. If there was a single place in Aust where you could pay matching over the counter prices I"d be amazed.

[P Bill]

"Rivers " Liam. Same Chinese clothes, same US prices. They seem to be the only ones. I've been to the US 3 times in the last 7 years. I arrive with a change of socks and undies and come home with a full suitcase.

last time I bought a bow for my fiddle, $100 ,$300 here. At WalMart I found a double barrel 410 for $89. I couldn't bring it back of course, very useful for the odd bit of antiquing around the place.

[simso]

Typically 16 hours from pore filling to final buffing.

Probably at least two full days of sanding for me, spraying and waiting for at least 11 coats (8 build, 3 reduced), then maybe half a day finish sanding and fussing at the wheel. Maybe a whole day.!

We have refined it to a fine art, dont ask how much money has been spent to get to this stage.

Starting point - Raw guitar sanded and ready to be pore filled

Finish Point - Pore filled - sanded - Finished with three double header coats of clear ready to be final sanded and buffed (under 2 hrs) and Im talking example start at 1pm and by 3pm all done, not 2 hrs of work put in over a longer time period

[Ormsby Guitars]

Efficiency is great.
Reputation is great.
Having wonderful suppliers you can trust, is great.
Having a flash website, is great.
Having the skills of a zen master, is great.

But it's useless without sales.

You can never have too many sales. You can have too little though.


P Bill is correct. I've just come back from a month in the states. We've done that 6 times in 7 years now, love the place.
Food is roughly half the price. Booze is less than half price. Cigarettes are $4.75 a pack, here, $20. EVERYTHING is much cheaper. We bought some 'Darrel Lee' licorice. Australian made. $2.85 there, $6.50 here... and it's made here! Hell, I bought my 2003 Monaro for $59k, over there, rebadged as a Pontiac GTO with the same specs, $36k (and they have to ship it there!). Nurofen/Panadol/etc are what, $9 for 10-20 capsules? We bought a 160 pack of Advil for $12. Jack's is $45 for 700ml, over there: $19 (or $32 for 1.5 litres).

[kiwigeo]

P Bill is correct. I've just come back from a month in the states. We've done that 6 times in 7 years now, love the place.
Food is roughly half the price. Booze is less than half price. Cigarettes are $4.75 a pack, here, $20. EVERYTHING is much cheaper. We bought some 'Darrel Lee' licorice. Australian made. $2.85 there, $6.50 here... and it's made here! Hell, I bought my 2003 Monaro for $59k, over there, rebadged as a Pontiac GTO with the same specs, $36k (and they have to ship it there!). Nurofen/Panadol/etc are what, $9 for 10-20 capsules? We bought a 160 pack of Advil for $12. Jack's is $45 for 700ml, over there: $19 (or $32 for 1.5 litres).

I'd still rather live in Australia/New Zealand.

[Ormsby Guitars]

P Bill is correct. I've just come back from a month in the states. We've done that 6 times in 7 years now, love the place.
Food is roughly half the price. Booze is less than half price. Cigarettes are $4.75 a pack, here, $20. EVERYTHING is much cheaper. We bought some 'Darrel Lee' licorice. Australian made. $2.85 there, $6.50 here... and it's made here! Hell, I bought my 2003 Monaro for $59k, over there, rebadged as a Pontiac GTO with the same specs, $36k (and they have to ship it there!). Nurofen/Panadol/etc are what, $9 for 10-20 capsules? We bought a 160 pack of Advil for $12. Jack's is $45 for 700ml, over there: $19 (or $32 for 1.5 litres).

I'd still rather live in Australia/New Zealand.

Id rather live in Australia, with our wages, but their prices Except, errr, still keep MY prices

[DarwinStrings]

G'day Perry, I am curious and as my curiosity regards you personal and financial situation feel free to decline to answer. You are one of those "guys that seems to be doing ok" as I look from where I stand. Annual month long trips to the U.S.A. can't be cheap even if the beer is. You are at a point where you can sell a electric guitar for 10k. So are you doing okay? Have you ever had to pay business tax on profit? or is your business more of a, pay the wages build up assets and break even situation (which certainly would be classed as doing okay to me". If someone is seeking to take on lutherie as a business and they have some of the attitudes you pointed out then I reckon for them to be able to see a model functioning successfully could help with those attitudes.

Jim

Life is good when you are amongst the wood.

[Ormsby Guitars]

Yep, my tax bill last year was equal to my years wage when I was working for 'the man'. I've only sold a couple guitars over $10k, but it proved to me the money is there if you want it. I've got a fantastic accountant, and managed to carry some losses over from previous years. I've always managed to live the lifestyle I wanted, but I think I live fairly cheaply.

I don't pay myself a wage, I just work and take out funds as needed. I'm a sole trader with no employees. I have a $400k mortgage and no other debts. I spent $8k in the last year on advisors, and they are worth every cent.

I have weeks with no income, and weeks that are five figures. It's all over the place but that just comes down to money management. I don't buy anything without planning for it. Want a new car? Save for it.

I've got 50-60 commissions signed up. That's two years work. I'm not taking more orders until feb 2014 but that doesn't mean I stop marketing. Client interaction never stops. Advertising is $30 a week. I used to spend $800 a month. It wasn't effective.

I look at what I can do to fill gaps in the market. Then fill them. Branch out. That constantly changes. Eight years ago that was repairs. Six years ago it was parts and kits. Three years ago was guitar courses. Two years ago multiscales.... Now it's 'an experience'. Next year will be something else. All related, all meeting a demand. Even if the demand isn't there, I try and force it to be there

[Ormsby Guitars]

Yep, my tax bill last year was equal to my years wage when I was working for 'the man'. I've only sold a couple guitars over $10k, but it proved to me the money is there if you want it. I've got a fantastic accountant, and managed to carry some losses over from previous years. I've always managed to live the lifestyle I wanted, but I think I live fairly cheaply.

I don't pay myself a wage, I just work and take out funds as needed. I'm a sole trader with no employees. I have a $400k mortgage and no other debts. I spent $8k in the last year on advisors, and they are worth every cent.

I have weeks with no income, and weeks that are five figures. It's all over the place but that just comes down to money management. I don't buy anything without planning for it. Want a new car? Save for it.

I've got 50-60 commissions signed up. That's two years work. I'm not taking more orders until feb 2014 but that doesn't mean I stop marketing. Client interaction never stops. Advertising is $30 a week. I used to spend $800 a month. It wasn't effective.

I look at what I can do to fill gaps in the market. Then fill them. Branch out. That constantly changes. Eight years ago that was repairs. Six years ago it was parts and kits. Three years ago was guitar courses. Two years ago multiscales.... Now it's 'an experience'. Next year will be something else. All related, all meeting a demand. Even if the demand isn't there, I try and force it to be there

damn, hit reply too early... here is what i was trying to say...

Yep, my tax bill last year was equal to my years wage when I was working for 'the man'. I've only sold a couple guitars over $10k, but it proved to me the money is there if you want it. I've got a fantastic accountant, and managed to carry some losses over from previous years. I've always managed to live the lifestyle I wanted, but I think I live fairly cheaply.

I don't pay myself a wage, I just work and take out funds as needed. I'm a sole trader with no employees. I have a $400k mortgage and no other debts. I spent $8k in the last year on advisors, and they are worth every cent.

I have weeks with no income, and weeks that are five figures. It's all over the place but that just comes down to money management. I don't buy anything without planning for it. Want a new car? Save for it.

I've got 50-60 commissions signed up. That's two years work. I'm not taking more orders until feb 2014 but that doesn't mean I stop marketing. Client interaction never stops. Advertising is $30 a week, and I'd get 3-5 quote requests a week. I used to spend $800 a month. It wasn't effective.

I look at what I can do to fill gaps in the market. Then fill them. Branch out. That constantly changes. Eight years ago that was repairs. Six years ago it was parts and kits. Three years ago was guitar courses. Four years ago multiscales.... pickups, cusotm hardware, etc etc etc. Now it's 'an experience'. Next year will be something else. All related, all meeting a demand. Even if the demand isn't there, I try and force it to be there These arent my main line of business (building kick arse guitars is), but sidelines. Extras. Diversification. Work it until it doesnt work any more, than BANG, switch over to something new and exciting. Keep it fresh. Get feedback, adapt.

I have to be honest at this point. I started this thread to gain insight into how others feel about the business. Real world feedback, from others I havent met. One of my plans for next year is assistance to other luthiers. There is enough room for EVERYONE. There is enough business for EVERYONE. Some people just need a little kick up the butt, or some constructive REAL criticism on how they are doing things. Change this. Change that. Work on that, rather than this. Here are some jigs that are more suitable. Here is another way of handling that situation. Here is a group that have got together, to help each other out as a whole. Here are ideas that worked for me. Im working with a couple guys now as a 'practise run'. I want to build awesome $10k guitars. I want to have students here learning how to build their first hand made custom, because NO-ONE would help me in the beginning. I want to advise luthiers how to turn their businesses around, because Im sick of the "there isnt enough money out there". I want to see us all succeed. As a whole, we'd only have to sway 1% of the value of musical purchases towards small luthiers, to make a massive change. Sometimes it just takes us putting ourselves in uncomfortable positions, doing things we wouldn't normally do. Ive been there.

I just took an order (despite not officially taking orders, sometimes you HAVE to) from a guy that owns his own island. A fucking island!

[Allen]

I've run across several in the business that treat it like a secret society and wouldn't divulge anything that they do.

Me, I'm the exact opposite. I firmly believe as Perry seems to that our only competition is the big box instrument companies. Wherever and whoever they are. Someone who is hell bent on buying a big name brand is going to do that no matter what, and good for them. But there are a significant number of people wanting something personalised, or just built to a different standard. And there are plenty of of them to go around for everyone.

In fact, the more people who buy a boutique built instrument, the more people will be aware of what's available, and drive sales for everyone.

My mortgage is bugger all. I own everything I have. Never buy anything on credit. Have a very healthy bank balance. Have a wife who has a really good job (much better than mine). And absolutely love what I do. That doesn't mean though that I underprice myself....at least not intentionally. That does a disservice to everyone out there that is trying to make this work as a business.

Right now I work a full time job during the day, and put in between 25 and 40 hours a week on actual luthier work. If you count the emails, website updates, conversing with clients, taking and sending photos and other associated marketing then it could easily run into the 60 - 70 hours a week.

I've got it to the point in pricing and sales that what I sells pays me as much or more than the day job if you just count the hours spent building. This drops significantly when you factor in the other "marketing" work. I want that part to change. I'm all ears for ways to turn those numbers to something more favourable.

[DarwinStrings]

Thanks Perry. I agree Allen "the more the merrier" I would have given my lefty if I could have got the amount of information I can get today when I built my first instrument. I reckon I can get more information today cause there is more competition and more people willing to share knowledge, that's a positive for me.

Jim

[simso]

Efficiency is great.
Reputation is great.
Having wonderful suppliers you can trust, is great.
Having a flash website, is great.
Having the skills of a zen master, is great.
But it's useless without sales.

And here in lies the problem perry, which I believe is the crux of many aspiring builders

We all start out as a hobby business doing it from home, making a few guitars trying to get a name for ourselves or purely for the enjoyment of the building.

Then we see the bank account looking really good and think wow I can make a living from this, but we are working a full time job and building on the side.

Now comes the issues of most aspiring builders, we got a small reputation we have builds booked and we say goodbye to that full time cushy job we had and build or repair full time. Now most people as you and I have probably seen in a mass have come and gone, why, usually not because there no good at there job but because realistically they never assessed whether they can be efficient enough to actually draw a wage, if your not efficient enough then you will always be scraping by, much alike those that you talk about at the start who say you will always live by the scrap of your pants. You will if you dont make yourself efficeint, and if you then take on employees you really got to have it down pat or go bust

[demonx]

I've run across several in the business that treat it like a secret society and wouldn't divulge anything that they do.

Same here. I remember about twenty years ago calling up a local luthier and I asked him one question, he litterally screamed down the phone at me.

There is another local luthier I have befriended (David Churchill) who is nearly 70yo, he also has been very closely guarded with his methods to everyone over the years, but I must have met him on the right day as he's been very open with me when he usually doesnt have people at his workshop. A lot of his methods don't fit with my process, but its still good to learn other ways. He's also acoustic only and I'm solid body only and as he suggested I dont pose a threat to his business as we're not in competition, there is also only a small amount of cross over skills from acoustic to solid body.

I do wish though that there was a decent local course where I could have learned everything (like what Perry does) rather than my years of trial and error and expensive firewood screwups. I still have many areas in the build process which I could use improvement, but these are things that cannot be learned over the net or from reading books. Hands on tutorage will win every time. I've had this discussion with Churchill who also says he himself is still learning all the time even after being a master luthier (my words not his) building for five decades. He is very humble. The first time I met him he asked to see my work, I said I'm just a kid tinkering in a shed, he replied "So am I".

[Ormsby Guitars]

I've run across several in the business that treat it like a secret society and wouldn't divulge anything that they do.

Same here. I remember about twenty years ago calling up a local luthier and I asked him one question, he litterally screamed down the phone at me.

"Hey mate, I need 100ml of shielding paint to finish of a guitar Im building for a client. Can either buy some off you at whatever price, or replace it with 500ml next week shipped direct to you. Can you help me out?"

"why would I want to help you?"

Im sure Steve has a few stories too

[Allen]

We all get them.

I've had them rock up and ask to use my tools for a bit of a backyard repair. Won't be no trouble....and no beer or $$$ either.

[ProfChris]

Luthiery is clearly one of those businesses where the emotional attachment to the work is more important than the business aspect, at least for many people. I say this both because many luthiers seem to be working for very little income, and because most of the posts here never mention financial planning.

If you were planning to set up in business on a purely rational basis then you'd surely want to do some basic calculations, which might look like this (all numbers in AUD and purely guesses):

Required income before tax: $70,000 (twice minimum wage, and you'd surely hope to do better as a skilled craftsman or craftswoman)
Operating costs for workshop: $20,000
Materials per instrument: $200 (or much more, depending on what you're making)
Output per year: 25 instruments

This means you must sell each one for $3,200

If you can only make 15 per year you must sell each one for $6,200

Then you ask the question, could I expect to sell that number of instruments for that price? If so, you have a business. This kind of planning takes 5 mins with a spreadsheet, and you can mess around with the numbers to model all the possibilities.

This is one of the reasons I'm a purely hobby builder (plus I love the day job) - it's clear that I couldn't sell enough ukes at a high enough price to make even the UK minimum wage (well, I could, but I'd need to use techniques more like mass production, and so it would definitely be less fun than the day job).

But the emotional deal works with me too, so I won't sell my ukes. They're presents, or raffle prizes, or whatever. If I sold one it would put a price on my effort, and that price would be low enough to devalue that effort. So currently my ukes are priceless, which makes me feel good!