I don't try to make and sell finished boats for a living so many of my numbers are pulled out of pretty thin air, but I feel you have left out many of the costs of selling boats which should be included.

> Finding customers is the biggest problem. If I could solve that I'd give
> up the day job (actually a night job) and build boats full time.

Even a inexpensively priced beautiful boat will not generally sell itself. The marketing is a major expense. Whether you buy ads - $600+ / issue for 1/8 page ad in WoodenBoat; or attend shows - $200 for 10' x 20' land site at WoodenBoat show plus hotel and travel expenses; or a web site $30/month, it will cost you something. Just driving around in a car with a boat on the roof, while worthwhile, will not sell many boats. Word-of-mouth is great, but you need to sell boats to generate word-of-mouth. At the very least it will take time away from building your ambitious goal of building lots of boats.

> Since Eddie Bauer is able to sell similar craft for $2500, I must insist
> it is quite possible. Certainly my costs, other than labor, are far below
> $3000. In my area you can hire good workmen for well under $20 an hour.
> (We are not talking Canadian dollars here, are we?) With a 2000 hour work
> year (50 weeks of 40 hours a week) that would give a gross salary of
> $40,000. A very livable wage. Nearby farmers looking for work they can do
> during those days when they are not in the field, are quite happy to take
> on such tasks. They have high skill levels and excellent work ethics. You
> can literally `farm out' work to them on a job basis. They usually have
> their own work shed or barn, too.

Just because Eddie Bauer has boats in their store for $2,500 does not mean anyone can successfully build a boat for that cost. The builder may be selling at a loss to generate sales or just to get the boats out of the garage or the builder may just be stupid.

A part time farmer coming in on rainy days does not a skilled worker make. Plus if you are force to hire someone, you can count on paying the equivalent of his salary in workmans comp., social security, and unemployment, plus the paperwork required to keep track of same.

Once you take care of the costs of hiring an employee, you need to train him. This takes you away from doing your work. Once he is trained, the corn ripens and he heads back to the field just when you have a rush order for 3 more boats. So you need to hire and train someone new. More time, more money.

If you can't make the business go on your own (maybe your spouse helps with paperwork), don't count on making it work by hiring someone.

> If you are building 20 boats a year this means your power tools last just
> 1 year. I expect much longer life from my tools. Ripping strips for 20
> boats would take about 20 hours on the saw. The router would be used about
> the same to make the bead and cove edges. Probably I'd get a shaper
> instead of a router, though. For that $1000 I'd get tools that would last
> 5 to 15 years. If they lasted 10, my 200 boats would each use up only $5
> worth of tool cost. By the way, add on the cost of sharpening the blades
> and router or shaper bits. Also add a planer, and the cost of sharpening
> its knives. You'll be around $10 a boat.

I don't disagree with your costs, but things like sharpening your planer take time. Any time away from building is time you are not earning.

> Better advertising would be paddling it around. This part of the job would
> be great !

Forget about ever getting in a boat. You will be spending ALL your time building. If you want to keep your prices down, you need to build a lot of boats. Any time spent on the water is money dripping out of the shop, tools, forms. While you will get a lot of people on the water saying "build me one", 99.99% will turn away when you tell them the price is over $3,000. The only way to keep it below $3,000 is to get back in the shop.

> I thought my business PAID taxes.
> Certainly the IRS thinks it should.

For accounting purposes you can count any expenses as 60 cent dollars. You can writeoff approximately 30% of you expenses. This is an advantage of doing it as a business instead of a hobby.

> Advertising and marketing: I would prefer to sell these on consignment
> through a sporting goods store. The store can display it and take a
> commision when it sells. Meantime it costs them nothing. While I have no
> obvious costs for advertising and marketing with this approach, (and I
> don't pay for gas to drive the thing around) my money is tied up until it
> sells, so I should figure in the amount that it costs me to tie up those
> funds. If I take out a bankloan for my company I have that amount fixed by
> the terms of my loan. If I use cash from my savings, these out-of-pocket
> costs are costing me the interest I could be getting if I had left those
> funds in the bank, or invested in mutual funds.

If you sell on consignment you can count on giving the shop at least 20% of the retail price. In order to successfully sell the boats, they will want a demo boat. (few people will buy a kayak without trying it) You can count on this demo boat only selling at a deep discount because it will be all beat up. You may be able to get material costs out of the demo boat eventually.

> This cost of funds is something to think about with labor, too.

> Anyhow, if you are building 20 boats a year in a 40 hour work week ( or
> 2000 hours a year) you can only spend 100 hours on each boat. That is a
> reasonable time for building a single boat, but considering that you are
> PLANNING on building more than one boat, you'll save time on EACH boat.
> How? well, your forms are just cut once (or maybe twice) a year. If you
> want to have three boats in the works at the same time, stack three sheets
> of plywood and cut three identical sets of forms at the same time. Mount
> them on three strongbacks. While the glue is drying on one boat you can be
> adding strips to another.

The additional strong-backs cost time and money which must be depreciated. Probably worth it, but you need to count it.

> If I could speed up my process so that it took me only 66 hours to build a
> boat I could build 30 boats a year instead of 20. Staying with a standard
> shape and cutting multiple parts at the same time might enable me to do
> this without any loss of quality. In fact, making so many might increase
> the precision as I could make a part, fit it, and then use that as a
> pattern for the same piece on the next 29 identical boats. I could then
> cut my wholesale price by 1/3rd, bringing the price per boat to about
> $2000 and still make $40,000 a year.

You can make 30 boats in 50 weeks of 40 hour days if you do nothing else. Who does your taxes then talks to the IRS auditor, buys your materials, delivers your product, answers the phone, fixes returned boats, goes to shows, develops your advertising and takes care of unexpected problems? Obviously, you do. You work 80 or 100 hour weeks. What was your hourly rate again?

Forget about trying to standardize many parts on a stripper. Wood is too variable to make stanardized strips practical. Maybe with very good tooling you could pull it off. For example templates for each of your pieces accurate to +/- 0.0005" and a precise tool for reproducing these at +/- 0.001", read $$$$ to be depreciated.

> Now, this puts the wood boats at the top end of the competitive market,
> instead of in the stratosphere. With the good looks, light weight, and
> great strength, long life and ease of repairs you should be able to make a
> strong sales presentation. Anyone with the bucks to buy a kevlar boat (for
> the weight savings) will be in your market. If you can hire someone to
> work fast and pay them less your profitability will improve. College
> students working summer jobs are a possibility.

You would spend 2 months training a college student to maybe get one more month of solid work before he goes back to school or takes a few weeks off to go paddling. You might be able to get a few hours a week out of him during the school year if he lives nearby. You could probably do this under the table, so you could avoid the standard employment costs, until he cuts his finger off in the table saw.

After you have your system worked out to the point where you can make the boats at a price that will sell at the rate you can build them, you need to be prepared to operate at a loss for 5 to 10 years while your market grows to the point where it will sustain you. If you can survive the growth period you are home free. You can start cranking out boats.

Bottom line: I'm sure it is possible to make a living building boats. People have done it for generations. It is probably even possible to make a living building wooden kayaks in this age of plastic kayaks falling out of a mold every couple minutes. However, it ain't easy. And there is always some retired Wall St executive out there with extra boats he made which he is willing to sell for next to nothing.