ryancrowe92

Starting a very small businuess

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Hello, this is the first thread ive started in a while trying to get back in the swing of things.

Heres the idea I want to do a small business making nails, s hooks, j hooks, bbq items, etc.now I asked trent on purgatory iron works about starting in a flea market and he said that was a bad idea. question one is where do I start and what are more things I can produce enough of to sell and where do I sell them at. This is also going to be a double project for my  econ class as I'm still in high school. Now before you get all go here and there I want you to realizes a few things one is I live in the middle of nowhere I live in salem, sc 29676 look it up almost a ghost town now. I only have my permit so I cant really drive anywhere. Funding is quite short I have a basic brake rotor forge that isn't the best in the world. I don't have a really good shop set up either. the other main question is that how do I charge for things when I know the quality of my work is far less than what you can buy something for.

 

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Online, that's where you sell things. Make an Etsy page, join your local Facebook swap group, find some local businesses that will let you sell in their store, post ads on Craigslist, etc. You need to build a reputation and the best way to do that is word of mouth. Go give out free samples to your friends, teachers, and the local businesses. Make sure you have your products marked and packaged so people can tell who made it, include contact information.

I'd suggest adding keyring bobbles and bottle openers. Nails might be a hard sell because it's a very limited market that wants them.

As to pricing, you need to calculate your cost in materials and time. How much in stock, fuel, water, consumables (cut off discs, abrasives, finishing oils, brushes, etc), etc. Then decide on how much your time is worth to you, put a dollar figure to it per hour, say $10. After you have an hourly rate figure out how much time it takes to make each item you sell. Add it all up and tack on a percentage for a profit margin, not too much something like 5-10%.

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Ryan - post a few pics of some of the things you've made that your going to sell.

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well the thing about the etsy page is one you have to have a bank account,which I'm getting very soon. The other is that you pay them so much per Item which increases the price on the item. I don't know how shipping works. also I haven't got anything made yet I'm still learning but this is a start up project for econ and a business venture I wanted to do. Craigslist is a definite maybe. key rings are a good start bottle openers a somewhat of a challenge but I might can wing it. my fuel is going to be coal and I'm getting 100lbs for 79.60 free shipping but I could have gotten 3/4 of a ton of coal for 250 but tractor supply was being something id rather not say. put in an order for a whole pallet and it was a month later and they still didn't have it. well my time is worth 7.25 which is minimum wage for sc. but my items are worth $50 per item the most I could get out of a $35 knife if I made a good one which is 7.25h+m+p= total cost which it could take me less than an hour to make an item and I would still end up with a less than average quality product for full price. 

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Etsy requires that minors use their parent/guardian's bank account, so you actually don't need one yet. The fees are minuscule, and they make shipping really easy with printable labels. 

Online or not, it takes a while to build a reputation, and you shouldn't expect it to replace a good summer job. As a hobbyist, though, it's fun and gives me a chance to make a little money when I go "what do I do with ALL THESE LETTER OPENERS!!". 

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I haven't figured it all out what I'm gonna sell it needs to be in a market with a good sale price and is fast to make.

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Don't charge minimum wage. I'd say no less than $12 an hour because what you are doing is actually skilled labor. Also why are you even talking about knives? You aren't ready to make knives yet, plus that is custom work which operates on a different pricing scale. We are looking at mass production, or as close to it as you can come, not custom work.

You're doing this for an economy class, you should know that it takes overhead to make a business. In your case overhead is shipping, materials, fuel, working space, and the costs of sales. Unless you only operate on a face to face bases, you will have to spend some money somewhere to move your product.

Another thing. If you don't know what you are making then odds are you don't know how to produce it at a pace that will keep your prices reasonable.

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well what I should have said was I don't know if I'm going to make bbq items or stuff like j and s hooks. 

your right it is a skilled craft but can I really charge that for the quality of the work like if it take me 2 hours to produce lets say 5 then for those five I have to get 24 plus materials and the basic cost of the item which puts me around 30- 35 dollars which isn't bad really for a bbq fork or spoon. 

and this over head thing is it like the parts you don't know about or something like that 

 

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Don't decide what you are going to make. Let the demand for certain items decide what you are going to make. In other words, make everything and see what sells.

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American hand made has a market, you can buy Indian and Pakistani handforged (hemostats come to mind) for less because of their cost of labor. Don’t try to compete at theatre price. 

First thing is to research your market and then make 20 of any item you plan to sell. The time it takes to forge and finish the twentieth one is your labor target. The first one takes longer buy far and the labor savings of tooling and experience of the 2000 increases your income with out haviving to increase your price more than about 6% per year. 

As part of your marketing scheme link your advertisement to a video of you forging and finishing the item, both proving you hand make your products and showing what it takes to do so. Tho you might not use any labor saving tooling in said video. 

 

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Try reading through " the business side of blacksmithing" since there is a wealth of info there. 

Here is one good post of Many to start reading. 

Dig in and start reading. 

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Market Research: out here BBQ is big as is horse stuff and stuff made from horse shoes. You are looking to be an adjunct seller---like a wood stove place with a couple of your fire sets; a bbq place that sells tourist stuff with a branded steak flipper. A table set up at the county fair selling key rings, bottle openers, etc.  Find the market then see what you can make for it and calculate your price point---and never base your price point on "free scrap" as at some point you will have to buy new steel and if you have been selling cheap the price increase can kill your market---or your profit margin.

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we don't have a lot of fairs and the only big event we have is in Walhalla which is the October fest and it is basicly rides, beer and food nothing more. Trent said that people who are going to these places are looking for deals. Getting paid is the hard part who would want to buy stuff for these prices. I'm also going to experiment with a gas forge to reduce cost and time for heating. but like I said take a look at google maps the farthest I could get would maybe westminister if I'm lucky

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Probably have some farmers markets around you could try. There are many simple to make items that would be marketable at those. 

Also there are many smaller art/ craft shows that go on that are not as well advertised all over the Internet. Talk to people, get a newspaper and look through it. They are out there. 

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Stop focusing on why things won't work and get to thinking how to make things work.  My wife once helped out an old blacksmith who couldn't drive anymore by driving him from hardware store to hardware store selling the stuff he made---he told her about doing the same thing by horse drawn wagon along the same route that is now an interstate.( Isaac Doss)

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I would recommend practicing your blacksmithing, reading up on your market, and biding your time until timing and opportunity align.  "Just do something" business plans don't work.  Etsy, Ebay, Amazon, etc. don't exist to make individual craftspeople famous or prosperous.  Just because it's technically possible to be successful using them, doesn't mean it's even remotely feasible for the vast majority. 

Online marketing is discussed like it's easy, obvious, and effective.  None of those things are true.  Building a functional website that's aesthetically pleasing, technically functional, and easily found by potential customers is an incredible burden for anyone who hasn't studied web design.  

Even if all of the above wasn't an obstacle, the truth is that most people haven't got the money to spend on non-essential stuff.  Amazing marketing, perfect product, excellent value, none of that can put spending money in your client's pockets.  

Spend some time trying to link up with businesses that do what you're interested in.  You'll get a lot further, a whole lot faster if you're building on a good foundation.  Good luck.

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I think one basic problem is that this is for a class and so he has to do something "business like". Sometimes school projects are to show kids the difficulties of real life and they can get a tad strange.  (In my Senior year in HS I had a  coed class trying to show us how hard it would be to marry young with only a HS degree and have to support ourselves, rent a place, get transportation and insurance, buy food; etc.  Unfortunately for the instructor we had an odd number of students in the class; so I ended up in a mock menage a trois.  So our income was 1/3 larger than the rest of the class while our expenses were not... I spent that semester referring to my co husband and co wife  as we ran into each other in the halls. IIRC we blew most of the extra money renting an apartment on the beach...we were amused; the instructor not so much.)

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i think you are putting the cart in front of the horses.

Anyone that wants to start a business needs first to establish what is the purpose of setting up a business. if the person gives a string of airy fairy answers that wonder in the philosophical and the esoteric, I say find yourself a job.

If you want to start a business you must understand that the purpose of a business, any business is to make a profit, make money. 

If you agree with that, and you would be surprised how many do not ... think now where is the business opportunity, the novelty, the approach that makes your idea feasible and profitable and the right choice above all the others out there. Why is making hooks and selling them on CL or ebay, a better business than buying chinese dolls from Alibaba and selling them online.

 If your answer is that you like blacksmithing and want to turn your like into a business to fund your hobby, I say you are going about this the wrong way.

A friend of mine that is a very smart fitter and turner and hydraulic technician, liked boats. He really wanted a nice big motorboat but had no money to buy it nor for the upkeep. So he thought ... I get a nice big boat and charge people to take them out at sea to fish. I can so pay for the boat and make a business out of my hobby.

Not very smart idea. he had no idea about the business of fishing charter, nor about keeping a boat and ended up making no money and the boat is now stranded and in need of lots of repairs. 

if you want to start a business do so with the idea that you need to find a way to make money that is different from what others do. 

If you like blacksmithing by all means take it up, or if you like oil painting by all means start painting landscapes or portraits. 

Once you see that you are exceptionally good and can do it with your eyes closed, you may check into the market and see if you can find your niche.

If you have not even started and you tell yourself ... "I would like to start a blacksmithing business" what you are really saying is that you like the idea of being a professional blacksmith.

Become a professional blacksmith first and then, may be you can make money at it ... or you realise that there are easier ways to make money. 

Most people that like boats, really only like the idea of having a boat. And so with many other things, blacksmithing included. :)

Besides ... everybody knows that blacksmithing is making swords and very large combat knives ... :P

 

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7 hours ago, Marc1 said:

If your answer is that you like blacksmithing and want to turn your like into a business to fund your hobby, I say you are going about this the wrong way.

A friend of mine that is a very smart fitter and turner and hydraulic technician, liked boats. He really wanted a nice big motorboat but had no money to buy it nor for the upkeep. So he thought ... I get a nice big boat and charge people to take them out at sea to fish. I can so pay for the boat and make a business out of my hobby.

I would interject that this is a bit of an extreme comparison and not quite applicable.

A boat would be a huge capital investment, and as you mentioned, the friend couldn't afford the running costs and upkeep in the traditional 'hobby' sense.

In contrast, we know blacksmithing can be done on a very tight budget, so in most cases, people can happily run it as a hobby on a small amount of disposable income from their regular job.

There are only so many leaf keyrings, and fire pokers you can make for family and friends... you make them to practice, and because you enjoy hitting hot metal... so after a while, running your hobby on the small budget, you end up with 'stock'.... sell it on for a low price, and suddenly you have a little extra disposable income for the hobby. Maybe buy a new hammer, coal, gas, upgrade the forge, buy more materials... who knows.

Not a business plan, but it is one of the few hobbies with a realistic prospect of funding itself to some degree.

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hey guys I'm still looking at the post I'm very tired today I went to bed early last night around 5:30 and woke up at 930 and didn't go back to sleep and I'm going to the BANK today yay so I can get my very own checking account set up as I move my way towards being more independent and just wait till next year then I can vote and do other stuff. but I'm not feeling to well so I'm gonna skim over them and read them fully in detail tomorrow. but JustAnotherViking I agree this is not like buying a boat which Is a colossal investment but this this craft can pay for itself by making nails if you need them etc, etc but to those who run a successful shop how did you get started and how did you become successful and what are you opinions on this new imported steel tax has it affected your business any and the reason that I'm asking that question is because that may affect my means of getting new steel at good prices and is a good econ question that we might can get points for. 

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There have been threads on both of your last questions if you take the time to look. 

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For most of the small stuff the new tariff will increase the materials cost by less than one cent per item. For large items and projects then the costs for materials will go up.  But for most smithing it's the labour cost that is the controlling  factor. (and don't forget the finishing costs, they often exceed the materials cost greatly!)

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2 hours ago, ryancrowe92 said:

to those who run a successful shop how did you get started and how did you become successful

This is a very subjective question and without understanding how an individual measures success, its almost impossible to give a meaningful answer to. 

Is successful being able to put food on the table and paying your bills on time, or is successful owning your home, workshop, boat, having a team of employees under you and vacationing in the tropics twice a year in your second home. 

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Ryancrowe92,

I read your response, especially the part about circling back to fully read what's been posted.  Something in your response jumped out at me.  You're framing your situation exclusively in terms of money.  I probably would have done the same thing when I was younger which might even explain a few of my mistakes.

Young people are often encouraged to sink their time and  energy into their interests so they can sort out what they're going to do with themselves.  Being young, it doesn't seem like a big deal to sink a few years into this or that.  If it doesn't pan out, there is still have time to try something else.  Especially if family is supporting the whole venture.

All of the above is treating a substantial portion of your life as though it's happening in a consequence-free vacuum.  Life does not work that way.

If you're not applying yourself to something that's rare, difficult, and useful to others right now, it's highly unlikely to provide a living wage later on. 

A lot of younger people will reply that they're willing to accept a lower wage to pursue what they love.  Sure, but what happens if you decide to get married and have children?   How do  provide for your combined goals, dreams, and desires? 

Perhaps more importantly, how will you provide for the needs of people you care (or will care) about?

There's an entire generation of Millennials who've spent tons of time and money pursuing education related to their interests that was/is completely at odds with the available jobs on the market.  A whole lot of Millennials can't afford to support a family so they're waiting.  Meanwhile the biological clock of their fertility is running out.   

They followed bad advice and we are all suffering the consequences.  

Spending a few years pursuing a dead-end can have life-changing consequences for everyone you care about.  Your time is incredibly valuable.  

Choose wisely.

 

 

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