The cost of start up.

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watch_art

watch_art

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Okay guys - I did some number crunching tonight - lots of receipts printed off and numbers tallied up.

This year, well, since last December, I have SPENT $7342 on pen tooling, nibs, blanks, whatever.
I have made $8607, a $1265 difference.
Spread that 1265 out over the last 7 months and it's not a lot of spare cash - but it's been nice.

Just thought I'd share with folks who are trying to get started out and wondering how much money they'll end up spending. The year's not over yet and I have no idea how much more I'll end up spending. Yikes...

And yes I'm going to report this to the tax man. :biggrin:
 
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watch_art said:
Okay guys - I did some number crunching tonight - lots of receipts printed off and numbers tallied up.

This year, well, since last December, I have SPENT $7342 on pen tooling, nibs, blanks, whatever.
I have made $8607, a $1265 difference.
Spread that 1265 out over the last 7 months and it's not a lot of spare cash - but it's been nice.

Just thought I'd share with folks who are trying to get started out and wondering how much money they'll end up spending. The year's not over yet and I have no idea how much more I'll end up spending. Yikes...

And yes I'm going to report this to the tax man. :biggrin:
Click to expand...

Yeh right.

Lin.
 
You've probably built a small inventory of parts and most of your tools are paid for. Not a bad start.:wink:

I believe you'll really "take off" in the next year or two. You have a great deal of talent. Besides, people usually prosper when they're as generous as you.:biggrin:
 
Thanks!
And yes - I really am going to report to the tax man. :biggrin: I already called a tax uh... person, and she said to file a schedule C form and claim 50% as teacher expenses since 1/2 the pens (more or less) are going to be given to students and should be counted as student supplies. I said REALLY? She said, well, YES. Almost like, DUH. You knuckle head. I didn't expect to be able to do that.

And those numbers above don't count all the things that the members of IAP very graciously donated earlier on, too.

You guys have been fantastic help.
Thanks!
 
I thought teacher expenses were limited to $400 or so?

seems like you'd be better off claiming as much as you can as a "loss" on Schedule C to offset the income you have to report.
 
Wow! Does it REALLY cost that much to get started these days? These numbers just blew me away. Excluding IAP members donations? Does this also exclude the Kick Start donations generated in this thread? Custom Fountain Pens for Kids by shawn-newton — Kickstarter

Who are you buying from? I really hope our new members or future members that see this thread, don't get discouraged by these figures. It does NOT cost this much to get started in making pens. JMHO
 
watch_art said:
Okay guys - I did some number crunching tonight - lots of receipts printed off and numbers tallied up.

This year, well, since last December, I have SPENT $7342 on pen tooling, nibs, blanks, whatever.
I have made $8607, a $1265 difference.
Spread that 1265 out over the last 7 months and it's not a lot of spare cash - but it's been nice.

Just thought I'd share with folks who are trying to get started out and wondering how much money they'll end up spending. The year's not over yet and I have no idea how much more I'll end up spending. Yikes...

And yes I'm going to report this to the tax man. :biggrin:
Click to expand...

Well so far you are doing better than me! I have spent a little more than that and haven't made as much yet! By the time you make a couple hundred pens, give a bunch away, build inventory for consignment, business cards, booth supplies, show entrance fees, a few tools, etc, etc it isn't hard to spend that much. Keeping my fingers crossed that the revenue side will soon catch up to the expense side!
 
THat does include kickstarter but not the donations. - I've also lost a lot of receipts for income and expenses, so I have no clue what it REALLY is. Remember, a lot of the expense is materials being GIVEN away. And there's also $160 in ink I forgot to add in. And $400 or more of that was for 80 fountain pens to be given away when school starts. That's what all the ink is for too. 70 and 160, so 230 and 400, that's 630 just to be given to my students. Half of all the nibs, converters, and blanks are to be given away too. So you could probably knock over a thousand off that total plus the 630 I just mentioned as being given away. Before the school year was up, I tallied up what the sales would have been of all the pens given to students, and it was well over $1800. So my numbers are going to be weird b/c of all that.

So I guess it's the cost of start up if you're going to do 'business' like I am. :)

And there's no way I'm going to do my own taxes. I'd totally screw it up. I'm going to the tax lady and giving her my stack of receipts and W-2s and whatever and letting her do it.
 
keithbyrd said:
Well so far you are doing better than me! I have spent a little more than that and haven't made as much yet! By the time you make a couple hundred pens, give a bunch away, build inventory for consignment, business cards, booth supplies, show entrance fees, a few tools, etc, etc it isn't hard to spend that much. Keeping my fingers crossed that the revenue side will soon catch up to the expense side!
Click to expand...

Business cards were printed from my own puter.
No booth supplies or shows will be done. I'm purely online and word of mouth. It helps I've been in the papers twice and on TV once though. I'll be on TV at least once a year with the pen club talking up the pen show.
But yeah - tools eat that money up quick!

I will be at the next Arkansas Pen and Watch show. They want me to bring my lathe up there and turn in a separate room so people can see what goes in to it.
I think that would be fun.
 
I'm glad I'm just setting up for learning the hobby right now, because I'd never be able to come up with that much money to get started. I'm still collecting tools and equipment, and so far have spent a little less than $1,000. That doesn't include the lathe, which was a gift from my brother, or a very generous gift from a forum member of a box of blanks to practice with. Once I've collected everything for bare-minimum start up, I'll probably have spent around $1,200. I've raised money for this by selling some of my nicer pens and inks that I will never use.
 
That's part of how I got my starter money as well. I sold off my pen collection and earned around $1200 I think. Believe me though when I say I have enough blanks to make a couple hundred pens. Will I keep buying them whenever I see one that's pretty? YES. :) Do I NEED any more. NO! :D
 
I gotta think a bare minimum for start up cost is $1000. When I first started I bought a lathe $400, gouge $45, Grinder $125, Wheel for grinder $75, a drill press $400, and then a few pen kits and supplies $200. Just my 2 cents.
 
jj9ball said:
I gotta think a bare minimum for start up cost is $1000. When I first started I bought a lathe $400, gouge $45, Grinder $125, Wheel for grinder $75, a drill press $400, and then a few pen kits and supplies $200. Just my 2 cents.
Click to expand...

I think you are right to just start making pens. Actually to make my first pen, I alrady had a lathe, so I spent $68 for a starter kit at rockler amd cut some blanks from wood I already had . So to make my first pen Iw as in for $68 plus tax - but the sucking sound had started!!
 
Start up doesnt have to be THAT high...i got a jet mini from craigslist, a bandsaw from the schools shop, a drill press from the father-in-law, and a mini tool set from woodcraft and i was running for less than 300. Bare bones but it made for a great start for a small business.

That being said, my total numbers are much higher than that now! As was stated before...the sucking noise comes really fast!
 
jj9ball said:
I gotta think a bare minimum for start up cost is $1000. When I first started I bought a lathe $400, gouge $45, Grinder $125, Wheel for grinder $75, a drill press $400, and then a few pen kits and supplies $200. Just my 2 cents.
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If you think bare minimum, kick out the $200 for grinder & wheel, sharpen your skew on a diamond file. Get a $200.00 drill press. Buy good used lathe,$150, band saw, $50 That leaves a bunch of $$ for centers, drill bits, sand paper, glue. NO where near $7,340 Numbers are way off. And I didn't see mention of show fees, tables, booths. Just saying! :wink:
 
keithbyrd said:
But you can get to those numbers pretty quick when you add up all the blanks kits, etc etc. After 1 year I am at those numbers!
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Keith, we were talking about start up....not what we can spend after a year.

Anyway, I think I made my point, and will drop it. I have a pen to make.:wink:
 
So, the money you have spent so far, that's not just the money you spoent on the items you have sold/given away, right? You say you still have enough blanks to do several hundred pens, so that "start-up" money has also built up a nice inventory as well, right? That's pretty good to still come out in the black...
 
By the way no-one congradulated you on making a profit your first year. That is quite an accomplishment. Very few start ups make a profit in the first couple years (mine included). Also $8600 is pretty impressive for sales your first year probably 4X my first year.

So job well done, now tell us how you are selling them (shows, online, etsy etc). inquiring minds want to know.
 
Thanks!
And I guess I should have worded my post differently. I say start up, but to me starting up IS the first year. All the money you make or lose that first year is your start up. I guess.
???

How am I selling them?
I'm not doing anything.
I have a website (clickable link in my signature) and I put pics of what I make here and on FPN and my facebook page. So I guess that and word of mouth.
 
Guess I'm the cheapo here... (I blame, or credit depending on how you look at it, the Scot in me)

Lathe - $110 + 2/3rd tank of gas, off of Craigslist (came with a cheap set of tools)
Bandsaw - was supposed to be $50 got it free (they lost the safety key), from CL
Drill press - already owned
Belt/Disc sander - $50, CL again (plus got some free spalted sweetgum)

Spent about $2k on supplies, materials, tools, etc.
Close to another $1k on booth and sales materials.
 
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This year is doing great. Although this July is the worst since 2008. I have spent a little over 100k. over six years. Figure start up cost with basic equipment to be around 10k. I only do the pen shows. Most of my time is spent getting new business. Over the last six years I have built up a nice business but my boss still has not paid me yet.
Alan
 
There's no way I would do a drive like that. Not worth it unless the lathe was FREE. And I mean a brand new Delta 46 460. Otherwise forget it.
Plus I really needed something that I knew would have good tolerances. I don't have to worry about turning something and then get finished only to find out it's all wonky and out of round b/c of tail stock slop.
 
I like Alan Shaw have well over and I mean well over $100,000.00 invested in the last 5 years. The biggest difference is he does "Pen shows" and I did "Art shows" I averaged 22 shows a year and the average booth fee was $400 ($8,800)and the average Jury fee was $35 and I would apply to around 40 shows so that was another 1400.00 so just in fees I had $10,200 a year for the last 5 years =$51,000.00 .
Now lets add travel expense, hotel expense, display replacement expense, stock expense, insurance and I haven even touched machinery.
But with all these expenses if you do the right shows, are a good salesman ...yes you can make money, not get rich but put $30,000 $40,000 in your pocket..
Is it worth it. you need to be the judge, after putting in 60-70 hours a week even when not doing shows just to catch up on inventory.
 
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If you enjoy it then HELL YES it's worth it. :D
I'm not doing shows - I want to stay a high school art teacher. So for me it's just a fun on the side hobby that pays for the kid's daycare and helps put food on the table. :)
Being a teacher doesn't pay that good. ;)
 
watch_art said:
If you enjoy it then HELL YES it's worth it. :D
I'm not doing shows - I want to stay a high school art teacher. So for me it's just a fun on the side hobby that pays for the kid's daycare and helps put food on the table. :)
Being a teacher doesn't pay that good. ;)
Click to expand...

This is a real passion for me and everything I do is for sale; however, I really like what I do for a living, too, and have no intention of leaving my current profession.
 
watch_art said:
Thanks!
And I guess I should have worded my post differently. I say start up, but to me starting up IS the first year. All the money you make or lose that first year is your start up. I guess.
???

How am I selling them?
I'm not doing anything.
I have a website (clickable link in my signature) and I put pics of what I make here and on FPN and my facebook page. So I guess that and word of mouth.
Click to expand...

Just in FYI Shawn, but I just clicked on both images and both took me to where you uploaded them to IAP. No website.

I'm not even going to try and tally up my start up costs bc besides the major $ in the pen turning I also decided I wanted to get into casting and spent even more $ that same year! :eek:

I don't want to try and debate one side or the other on your startup costs Shawn. But one thing that still amazes me today is thinking back that you've ONLY done custom/kitless pens. None of that startup $ went towards kits. Kits alone can really take up funds if you're doing more than your slims/cigars.

When the school year gets going again shoot me a PM. I'd like to contribute some more FP's this year. I keep the student's thank you notes in my desk and read them often. Make me smile every time. :biggrin:
 
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Ah crud. Thanks Brooks.

And thanks! That would be awesome if you put in some pens for those turds... I mean students!
:biggrin:
 
One of the critical points one needs to consider as far as "start up" expenses are the TYPES of writing instruments you are planning on focusing on. I was making ball point and rollerball kits for almost a year before I made my first fountain pen.

I see most all of your photos on this site are fountain pens . . . and not just run of the mill "kit" fountain pens - but kitless, closed end needing tap and die and all that extra stuff that I never considered as I spent money to start up . . . and I was planning on making it a business. I can understand how your expenses easily climbed there way up to thousands.

I spent less than $200 on lathe, mandrel, bits. another hundred on finishing products, sandpaper and some lumber yard wood. (Of course I was given a great "Newbie" package, too.) But a lot of my wood I gathered from around town after the winds blew trees down. Business cards et al I made myself. My buffer system used wool paint roller refills. (still do.) I'd say I spent less than $500 to start up. But my market target group didn't know how to hold a fountain pen!

It's going to vary a whole lot!
 
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My start up was not that high, but I have a small fortune in it. I have the taps to do kit less but am terrible at it. All I managed to do was destroy perfectly good blanks. Congrats on getting a good start.
 
watch_art said:
Okay guys - I did some number crunching tonight - lots of receipts printed off and numbers tallied up.

This year, well, since last December, I have SPENT $7342 on pen tooling, nibs, blanks, whatever.
I have made $8607, a $1265 difference.
Spread that 1265 out over the last 7 months and it's not a lot of spare cash - but it's been nice.

Just thought I'd share with folks who are trying to get started out and wondering how much money they'll end up spending. The year's not over yet and I have no idea how much more I'll end up spending. Yikes...

And yes I'm going to report this to the tax man. :biggrin:
Click to expand...
Hmmmm - My best advice - look again. If you have kits/etc. in stock, you made more than that because when you determine the cost of goods sold you need to subtract what you still have in have in inventory. A tip, you can buy kits in December 2012 for delivery in January 2013 and show the expense this year but not add the kits to your inventory until next year and that will reduce this year's income -- And if you are using the cash method of accounting it is perfectly legal.

Also, if you didn't declare any income last year be careful how you show any expenses for December. You might have to capitalize them.
 
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watch_art said:
Thanks!
And yes - I really am going to report to the tax man. :biggrin: I already called a tax uh... person, and she said to file a schedule C form and claim 50% as teacher expenses since 1/2 the pens (more or less) are going to be given to students and should be counted as student supplies. I said REALLY? She said, well, YES. Almost like, DUH. You knuckle head. I didn't expect to be able to do that.

And those numbers above don't count all the things that the members of IAP very graciously donated earlier on, too.

You guys have been fantastic help.
Thanks!
Click to expand...
I'd make sure she's right about that number. Teachers can take certain deductions for teacher supplies but I believe there are limits. At any rate I question that you can deduct 50% on your pen business schedule C as "teacher" expense, particularily if you are employed as a teacher by a school.
 
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