Taking Care of Business

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EricW
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Taking Care of Business

Post by EricW »

So, currently I work for a family business. 2 parents and their 5 kids. They equal half the work force. While most of them are cool, it still sucks.

I decided a few years back, before I started my current job, that I was eventually going to make my living making snowboards. Finally, I'm getting on it.

Unfortunately I know nothing of the business side of things. So, the router thread was a good idea, I thought I'd start the business thread.

I don't know how many people here do make a living at this or even if it's all that feasible. I know Bruce from Coiler seems to do OK and I met the guy from November Snowboards at a friends wedding. That friend was "sponsored" by Jeff but it really came down to free boards to help advertise. Supposedly it was only a break even proposition even thought his boards were sweet.

I can see it as break even for a while at least. 1st board you sell buys materials for 2 more, the 20th board buys a better router, 50th a new planar.

So how long until you make a profit?

What are you paying for liability insurance?

What did you do to advertise?

Local or internet sales?
skidesmond
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Post by skidesmond »

This could be under it's own Forum index. Maybe suggest it to skibuilders.

I think quite a few people in the forum are ski/board builders for their day job. I'm sure everyone here thinks about it including me. But the reality of it is it's just not in the cards right now.

Being self employed is tough no matter what the work. But you do get to work 1/2 days. The first 12 hrs or the last 12 hrs. :)

Perhaps start slowly. Seems like you're already experienced in wood working so you could start multiple small businesses (cabintery, furniture, etc) to make a decent income where 1 feeds the other....

Health Ins is a big money sucking hole, never mind liability ins. Our company is changing their plans from HMO based plans to a high deductible rate ($5000 max out of pocket) and higher deductible rate ($9000 max out of pocket). Sure the monthly premium can be low ($45) but don't get sick, hospitalized, etc. I don't have 5 or 9 grand laying around. So you have to plan your illnesses. :( I don't mean to sound discouraging, it's the hard cold reality.

Good luck if you take the big plunge!
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EricW
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Post by EricW »

Not so much a plunge as going in slow. I absolutely will make it work but I'm a junkie for information too. I'm also doing it as I work my regular job. No desire to put my families financial status into the gutter.

I've been self employed before and it can indeed suck, especially when it's just something to make money and you're not at all passionate about it. The tank empties out quick. So yeah, I know about all the taxes, health ins and long friggin' days. I remember sitting on the porch, blinking, and it was suddenly 4 hours later and I was still sitting up!

Still, I'd like to get a discussion on ski and board specific things. This thread may be DOA since it's aimed at self employed builders and I can appreciate not wanting to give up too much. If it goes anywhere maybe we can try getting a new section.
skidesmond
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Post by skidesmond »

EricW wrote:.... If it goes anywhere maybe we can try getting a new section.
Can't hurt to ask.
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MontuckyMadman
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Post by MontuckyMadman »

Liability rates will be very dependent on your insurer and your location. California would be probably 3 time the yearly insurance as say MT.
$2500 a year would get me liability to build skis for people up to 1.5mil, cap I think.
But no mounting. The insurance on binding mounting is ridiculous. They consider that the real failure/human error point.
So have to get a shop to do it. Not a problem here, especially if you know people in the buis.

Have a look at the open source the 333 skis guy did.
http://www.333skis.com/a-cost-margin-analysis.php

Depends on what your price point and associated overhead. Buying ski materials in small quantities is almost double the cost per set of buying in bulk.
Nightmare.

You can't really do full custom on a large scale over the web.
Local is better especially when feeling out a niche with limited time available for the project and minimal employees.

People like igneous pioneered this stuff talk to them. Have to make a trip to jackson.

Standard manufacturing profit margins are in the 20% realm if you do it well. That's pretty slim to keep your head above water. If you work for yourself intend to spend double the amount of time you really want to if you intend to be financially successful.
Its a reality that if you own your own business you will not be able to do it all. You will have to have potentially someone to accommodate for your shortfalls. Maybe a bookkeeper or some type of organizational person slightly distanced from your operation to keep a logical perspective.

Its tough to know how much that will cost and how much help you need until you take the plunge. Budget double what you think you may need and then you will still be short.

That's my 20 cents.
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EricW
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Post by EricW »

well that's a good 20 cents worth and holy crap that spreadsheet looks awesome.

And I could go for some of Marry Piglet's tacos. Soooo good. It's a mexican restarant in Jackson.
doughboyshredder
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Post by doughboyshredder »

short answer is you're never going to get rich selling boards. You might make a decent income if you sell a shitload of them. You might make a decent income if you can sell them for a real high price.

Main thing is that if you love doing it then the money you make or don't make won't matter.

I plan on building about 40-50 boards next summer and trying to sell them for the 2011-2012 season. Purely because I get stoked when I see someone riding something I built.

I have ran all the numbers all different ways, and from a financial standpoint building skis/boards on any sort of a small scale is just not a good financial venture. Unless you can develop a product and a reputation that allows you to sell a board for 1k and up like some of the custom builders.

Of course this depends on what you consider a good financial venture. Purely from a business standpoint there are many better options.
skidesmond
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Post by skidesmond »

DBS - I think we've all run the numbers at some point.... I'd like to make 10-20 a year for people who would appreciate a hand made ski and to have something different on the slope. If each ski paid for itself and time invested I'd be happy w/ that.

But if I have to shell out 5k or more for liability to have peace of mind that pretty much shuts it down.

I keep meaning to look into my home owners insurance to see if there's some kind of rider I can add to my policy that would provide enough protection w/ out breaking the bank.
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RoboGeek
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Post by RoboGeek »

I have 4 businesses and none have gone into debt. One of them is paying for a startup my friends daughter is doing, because she is the graphic artist for another one of my companies and I know her skills.

If you build and sell ski's, you will need a LLC or a sub-s with lots of E&O insurance. A ski breaks and someone gets hurt.. you want coverage from big time lawsuits
I used to be a lifeguard, but some blue kid got me fired.
skidesmond
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Post by skidesmond »

See it's not all gloom and doom (doom and gloom?). On another positive note, last season I was skiing on my home mades and I let another guy try them. He liked them an showed them to a friend. He was blown away. Thought it was the coolest thing he'd ever seen. Wanted to know if I was in business and he was willing to get investors for me on the spot. This all occurred on the slope. It was all very cool and flattering, but in my mind the quality isn't there yet, but almost. Plus I have a pretty good paying day job (not out sourced yet) and I'm not in a position to walk away from it.

So there are people willing to lend/invest into ventures. Just need to be careful. Keep us posted on how it goes, even if it a ways off.
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MontuckyMadman
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Post by MontuckyMadman »

E & O is for money handling not if someone gets hurt in my understanding. Liability is what you need for injury.
wtblank
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Post by wtblank »

Where are you all getting liability insurance, I would like to start building some skis, however, this is the biggest hurdle. Building skis looks all fun and all, however, if I go build some skis for some friends I better be protected, even if I sold them at cost. The quotes I am getting are outrageous. I would like to set this up as a mini buisness, however, even with an LLC you are still exposed. Right now, the way I see it, if all you small builders want to compete with the large companys who have most of their product made in china your costs got to come way down. And the big one is insurance.
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MontuckyMadman
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Post by MontuckyMadman »

when was the last time someone got hurt because the ski delammed/failed? It doesn't really happen to the average or even above average skier.
Its most always the binding ski interface, either the lack of attachment to said ski or too much attachment.
Talk to the same people who do your homeowner/business/car/barn/dog insurance.
lex
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Joined: Fri Apr 09, 2010 4:49 pm

Post by lex »

Biggest thing for boards is the inserts, there are iso standards you have to follow like insert depth, number of screw rotations, pull strength.

You have to have a warning information posted or noted for the customer...well you don't have to, but you really need to.

Insurance sucks! Well, paying for it sucks...
COsurfer
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Post by COsurfer »

I just got done reading some articles about ski/snowboard building as a business. The final advice from Jake Burton "Plan lots of lead time for starting any business. It will take longer than you think, and it will cost more than you imagine." Ya, no shit!

Here are the articles: http://money.cnn.com/2010/12/06/smallbu ... /index.htm

http://www.denverpost.com/business/ci_11595664
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