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The Business of Knife Making A forum dedicated to all aspects of running, managing and legal operational issues relating to the custom knife making and custom knife selling industry.

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  #1  
Old 12-04-2003, 12:38 PM
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Laredo7mm Laredo7mm is offline
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How do you know when it is time?

Howdy all, I was just reading through the other threads on dealers undercutting the maker's retail and it got me to thinking again about a long time standing question that I have, but I didn't want to off track the other discussion.

I am a new maker. I have been making knives for about 18 months now. I think some of you have seen my work here on the forums. I am a part time maker with a full time job to pay the bills. Right now, basically everything I do is at a loss. I sold two knives about a year ago and nothing since. My time is spent making display cases (to hopefully drive in some orders) and making gifts for family and friends.

I love the idea of going full time, but I am also leary about turning a hobby into a job and for whatever reason losing the motivation to make knives. I have no problem being patient and getting better at the craft, paying my dues, learning, etc.

My question(s) is how do you know when it is the right time to start getting a table at shows, submitting photos to magazines, promoting your website, contacting dealers, etc.?

I feel that my work is getting to that level, but I don't want to jump the gun.

Any advice would be appreciated.

TIA

-Sean


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Last edited by Laredo7mm; 12-04-2003 at 12:40 PM.
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  #2  
Old 12-04-2003, 09:04 PM
DC KNIVES DC KNIVES is offline
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Sean, I have seen your work here only, and it is great.You should be going to shows right now as well as submitting pics.But that is the easy part.Shows tell you where your knives are at in the buyers mind. Shows are a learning experience every maker must go through.Most of us go, learn, adjust your ideas and then enjoy them.I have had some of the best times at shows just learning from customers or other makers. You will notice that while many buyers look at the "package" makers tend to look at the craftsmanship involved because we all do it.So go have some fun.
Once started making, many of us desire to do this fulltime, but I think you answered your own question.If you are not selling alot right now then obviously you would not be paying bills.Please wait until you have gotten out in the market and built a loyal following before you attempt it.I have been doing parttime for over ten years and still don't think I am ready for fulltime.You are still new to this, enjoy yourself , sell some knives, gather some experience, meet some great people and you will know when its time.Just my $.02, and hope it helps.Dave
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  #3  
Old 12-05-2003, 10:17 AM
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striper28 striper28 is offline
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I have talked to other makers about this subject and the general consensus is that you have to get out there. You might make the most beautiful knives in the world but if no one knows who you are they won't sell. It's all part of public relations. Even if you have 3 knives on your table it is good for customers to be able to look at your work and feel them in their hands. A lot of people buy based on that, a picture is only worth so much. I know a maker who sets up at every local show and usually has 2-5 knives on his table all of which are usually sold, but it gives people the opportunity to look at them and maybe place an order. It's also an opportunity for customers to get to speak with you and they sometimes buy based on that, espically if they place an order down the road. They want to know if you will be flexible and open to ideas or designs when designing them a knife.
A show is always inspiration fo rme, makes me want to go home and grind!


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  #4  
Old 12-05-2003, 10:47 AM
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Les Robertson Les Robertson is offline
 
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Hi Sean,

After 9 years of being a part-time dealer, I decided to go full time. Everyone around me, to include my wife thought I was insane. At the time I was 6 weeks away from receiving my MBA.

My recommendation would be to stop thinking like a knife maker for awhile. You need to think like a business man.

Find a good CPA and take your idea to him/her. They will help you with assests and liabilites. They can prepare a tax plan and show you ways to grow your business even when you are showing a loss (on paper)

Probably finding a good financial planner would help as well. Not one who wants to sell you insurance and a IRA. One who will sit down with you, go over your financials and tell you if you can realistically become a full time maker and pay your bills. Look for a Certified Financial Planner who you can hire by the hour. As you are only seeking advice not finanical products.


Yes, you need to get "out there". But more to the point you need to be realistic about your chances of "surviving".

Working for yourself is not for everyone. dedication, self-discipline, and a decent knowlege of business. If you can't put together a basic P/L Statment you could be in trouble. If you don't know what a P/L statement is, don't go full time.

It is true that a good CPA, Financial Planner and Tax Attorney are a tremendous help. However, if your struggling to come up with th emoney to attend a local show. You can't afford for other people to do everything for you.

I spend on average 5 hours a week on accounting and financials. I have an MBA, a CPA (who I met in my MBA program) and have been offered several jobs as a financial planner.

So I have a pretty good back ground in this area. I still sit down with my CPA at least twice a year and plan "strategy". This is with almost 9 years full time as a custom knife dealer.

Point to all this is, take care of the business end first. When your doing it for a living, it is no longer just about making knives.

You will be a business and the bottom line of any business is not to make money...it is to make a PROFIT to maintain POSITIVE CASH FLOW.

Good Luck.

Edit: P.S. Perhaps the best people to talk with are Full Time custom knife makers. Well wishers can offer just that, but nothing more. Those who walk the walk, will be able to talk the talk. That is what you really need.


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  #5  
Old 12-06-2003, 11:42 AM
RJ Martin RJ Martin is offline
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Sean: You'll have to make the decision when and if it is right to go full time, but, here is the progression I went through before it "worked":
Set up at as many shows as you can. This is the best way to get exposure to customers, and to find out if your knives are as good as you think they are. If you're selling, and, if you get repeat business, you're on the right track. You're not going to make any money, and, if you do make some, you should probably re-invest it in your business.
If you're attending major shows, the dealers will see your work. When they're interested in buying, you'll know it. Les walked right past my table for 3 years before I made knives that grabbed his attention.
If you set yourself up as a business, you get a tax break on anything you buy for your business, so, even if you're spending more than you make, you're getting a write-off on your taxes. If you can make enough knives so you have always have some available for sale, you should definitely post pics on the forums and set up a website.
When you get to the point that you're BURIED with orders-I mean, a 2 year backlog as a part-timer, you can think about going full-time.
I don't know what your income is at your regular job, but, you're not going to get rich making knives. Unless youe spouse works, and has insurance and benefits, you're taking on a lot of expenses, and, relying on sales to pay the bills can be nerve wracking. Don't lose your house because you want to make knives!!!!!!!!!!!
Remember, there are VERY FEW knifemakers who make a comfortable living making knives. And, they have all payed their dues. Most knifemakers have a pension, or, have low living expenses-Mortgage paid off, kids out of the house, etc.
Remember, to clear $40K, you'll need to sell about $80-$100K of knives, assuming you're going to be honest and give Uncle Sam his cut and play by all the other rules. It takes a wicked good shop and a lot of hard work to make $100K of knives in a year. And, you have to have them all sold.
As an established part-timer, you can be satisfied making 80 knives per year, and, netting yourself $25K gross. You might end up with 10K to play around with for your hard (but enjoyable) work.
Now, I'm not an accountant, and my numbers may be off considerably, but, the point is that you've really got to have your stuff together with every part of the business plan working before you're going to turn a profit.
I hope this helps-


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  #6  
Old 02-03-2004, 07:58 PM
IamMatt IamMatt is offline
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I hope you don't mind my jumping in on this thread since I am just a collector, but I was emailing a favorite (big-time) knifemaker about my acquiring some mid-1970's American Blade Magzazines that had some full-page full-color ads of his. He had only been making knives a few years, so I joked about how that must have cost a struggling knifemaker a pretty penny. His reply was:

"I remember that ad very well, an ad salesman from the American Blade Magazine said he could put me in the knife business full time with this ad and
he was right. It cost $600.00, and I had to sell a car to pay for it, but it paid for its self many times over."
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  #7  
Old 02-03-2004, 08:09 PM
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I'm guessing that things were different in the 70's.


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  #8  
Old 02-03-2004, 08:39 PM
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Les Robertson Les Robertson is offline
 
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Hi Matt

When I decided to go full time I ran a 1/6th of a page ad in Tactical Knives. Off that one ad I sold over $23,000 worth of knives. That is a big reason why April 1st this year will be my 9th anniversary as a full time custom knife entrepreneur!

The best thing you can do for your competitors is to not advertise and not have a web site.


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  #9  
Old 03-20-2004, 06:16 PM
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Steven Licata Steven Licata is offline
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If you can do what you love for a living then happiness is yours. Of the fifteen years I have made knives eleven have been full time. It is a decision that my wife and I have come to many terms with. It means that I do not always get to make the knives I want to make. I have to make enough knives that I know my steady customers and dealers will take. This does not always satisfy me creative needs. I try and do at least one peice for me a year. One of the main reasons I stay full time is I am home. I spend a great deal of time with my wife and son. I would not trade this time for anything.
I have seen allot of young knifemakers come and go from the knife shows. A few of them have asked me why it just does not seem to work for them. Most of the time I have the same answer for them. If I put my thumb over your signiture, how do I know you made the blade. You have some very nice lines and curves to your work. Sometimes a subtle sophistication is all you need to have your own style. If you make knives just like averyone else you will have a lot of competition. What I mean is when I look at your knife from three tables over I should know you made it.
I also do not limit what custom orders I will take. I have made guitars, branding irons, rings, armor, chain mail, motorcycle parts and anything else a client will pay me for. If you do eventually go full time, have a backup income. Things can go wrong, business can be slow and overhead can be high.


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