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  1. #1
    Senior Member M-theory's Avatar
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    Number crunching...... can a great frame-builder pay his mortgage?

    Hi all… been a while since I’ve posted but I still love old steel bikes!

    How much can a good, professional artisan frame-builder (at the top of his game, say 6 years in) make in a year… on average?

    I’ve seen that a one-man show typically makes only 15-20 frames a year. These frames sell for about $2000 each on average. That means around $30K to $40K gross per year assuming they sell every frame they build. Let’s say $35K a year. Well… Parts (tubes, lugs, brazons, decals) are 10%, business taxes are 25%, overhead (rent, electricity, insurance) is about 10% = $21,600 net a year. And that is not even considering initial trade tools….which are ummm… a lot.

    $22K net for a really good frame-builder selling everything he makes?

    Is this right? If so, what can he do to supplement his income? How well did Alex Singer, or Herse or Mario Confente do? How well does Richard Sachs, Vanilla, Calfee or the best small operations do? Do you have to turn into a Cervelo factory to do really well?

    Thanks in advance!

  2. #2
    Super Moderator Allen's Avatar
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    Vanilla and Calfee have employes; Sachs is a one man show. He also sells more than just frames.
    Quote Originally Posted by unterhausen
    I believe that in this case "solid meh" means "so 'meh' that it could never be anything more than 'meh', and yet also no less than 'meh' -- in a word, exactly 'meh'"

  3. #3
    Senior Member Road Fan's Avatar
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    A few LBS owners have told me they would be toast if they did not own their buildings. Perhaps the frame business needs to be tied in to other aspects of the biz.

  4. #4
    Randomhead
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    that's why people that sell 15-20 a year are part time. The guys that sell for $2k or less are either making a lot more frames than that or part time.

    I think you probably over-estimated taxes, but you didn't mention insurance, which is $2k a year

    Someone on the top of their game can build a lot more bikes than 20 a year. The issue is that time interacting with customers cuts into the time available. But if you turn off the phone for most of the day, one a week or more is possible. I'm pretty sure that I can build a frame in a day, and with a little more tooling it would be less than that.
    Last edited by unterhausen; 02-20-12 at 06:33 AM.

  5. #5
    Senior Member mudboy's Avatar
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    Yeah, my guess is that guys like Sachs make on average more than a frame a week.
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  6. #6
    Decrepit Member Scooper's Avatar
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    The cover story of the June, 1990 issue of Bicycle Guide is on Richard Sachs. The article states that Richard estimates he made 140 frames a year in the late seventies, and 80 or 90 a year in the late eighties.
    - Stan

  7. #7
    Randomhead
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    I just saw a post elsewhere in which he stated that 140 was too many frames to make in a year. Considering that comes along with 140x getting the design right plus a lot of inquiries that don't pan out, and you can see that it represents a very efficient use of time. Although that may have been when he was selling through shops given the time frame.

  8. #8
    Senior Member M-theory's Avatar
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    That's good to know that when you have the right tools, the right work ethic and the skills....you can make a 50+ bikes a year. Now the numbers look a little better. I guess I was basing my figures on part-timers.... Frances bikes out of Santa Cruz in particular. So it seems a good framebuilder producing 50 customs per year can get around net $50K a year once he is known, skilled and tooled? And then augment that with what?... event promotions, retail parts sales, whole bike sales....? Sounding more like a viable profession?

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    Randomhead
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    It's just like any other small business, although the margins are lower and it's pretty hard to get a sale at $2k for an unknown builder. Most don't make it past 5 years, and in the framebuilding business it may be less than that.

  10. #10
    Senior Member M-theory's Avatar
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    Are the margins lower than typical? It seems like it's a 100% margin - $2k gross sale yields $1k net profit. Your effective hourly is so-so - 40 hours gets you net $1K = $25/hour net

    But yeah.. that's at the top of your game.

  11. #11
    Senior Member himespau's Avatar
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    You planning on getting into the business?
    Punctuation is important. It's the difference between "I helped my uncle, Jack, off a horse" and "I helped my uncle Jack off a horse"


  12. #12
    Senior Member M-theory's Avatar
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    thinking about it. I've been restoring vintage road bikes for a while & I'm a frame aesthetic obsessive. I know there's a long ramp-up & suffering ahead but I think the market will expand as well.

    Tossing about the idea of going to UBI but yeah... $2500+ for 2 weeks. I'd love to apprentice or intern but it seems so would everyone else. Thinking about welding & brazing classes at local college..... not sure.

    my bikes: http://www.picturetrail.com/sfx/albu.../user/m-theory

  13. #13
    Senior Member squirtdad's Avatar
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    M-theory you sound as though you are in or close to Santa Cruz. If so it might be worth you while to head up to Sacramento to the NAHBS.... you might be able to get a feel from builders and ideas on ubi as a good investment or not.

    and here is a list of bay area builders

    http://yojimg.net/bike/sf_framebuilders/

    4130 Inc., San Francisco
    Ahrens Bicycles, San Jose
    Black Cat Bicycles, Santa Cruz
    Broakland Bicycles/Montano Velo, Oakland
    Bruce Gordon Cycles, Petaluma
    Caletti Cycles, Santa Cruz
    Calfee Design, La Selva Beach
    Cleaver Bikes, Oakland
    Ed Litton, Point Richmond
    Eisentraut, Oakland (unsure of current status?)
    El Camino Fab, Emeryville
    Francis Cycles, Santa Cruz
    Grognard Bike Co, Sacramento
    Halekai Machine, Pleasant Hill
    Hunter Cycles, Watsonville
    Inglis/Retrotec, Napa
    Innerlight Cycles, Davis
    Mikkelsen Frames, Alameda
    Miles Bicycles, San Francisco
    NTP Bikes, San Francisco
    Patrick Cycles, San Jose
    Rebolledo Cycles, Glen Ellen
    Rock Lobster Cycles, Santa Cruz
    Rock the Bike, Berkeley
    Saso Custom Bicycles, San Jose
    Shawver Cycles, San Carlos
    Silva Cycles, Campbell
    Soulcraft, Petaluma
    Steelman Cycles, Redwood City
    Steve Potts Bicycles, Point Reyes
    Steve Rex, Sacramento
    Sycip Cycles, Santa Rosa
    Tallerico, Lodi
    '82 Nishiski commuter/utility
    '83 Torpado Super Strada ... cafe commuter
    '89 Miyata 1400
    Soma rush Fixie
    '78 Univega gran turismo (son's Fixie/SS)
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    looking for: De Rosa 58cm ELOS frame and fork internal cable routing

  14. #14
    Randomhead
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    You will occasionally see someone go from being in your position to making a living at framebuilding, so it can be done. If you choose to try, good luck.

    I think anyone that wants to get into any business should go to one of the small business incubator classes. I think you'll find that your calculations are pretty far off. There is always a bill to pay. A manufacturing rule of thumb that seems to be a constant is that if you can't sell an item for 4-5 times what it costs to make it, you are not going to stay in business long-term. Sure, it looks like pure profit, but it isn't, and you should be able to pay yourself. The main issue is your assumption that the market is growing. It may be, it may not be. All I can say is there seems to have been a shakeout of builders that weren't selling that many frames and not nearly as many new builders that are being pressured into going into business by their friends. One experience I have had many times is telling people that you are starting a business building frames, and they say "I want to learn how to build frames." Never seemed real promising.

    There has been a lot of discussion about this, but it seems to me that there is a pretty significant investment up front, at least the way I want to do things. The people I've known that went to UBI spent years before they were making a living at it. I'm not sure I would have ever really gotten competent enough to build frames to sell if I hadn't gone to work at Trek. Those types of opportunities are pretty much gone. If there are 5 apprentices working in this country I'd be surprised. Most people that stick with it can become competent framebuilders, but there are some that never get that good or are horrible at business and are out there scaring off your potential customers. Warms my heart.

    I got revved up to go into business a couple years ago, and then I got some work opportunities that made framebuilding look a lot less attractive, at least in the short term. There are a lot of details to work out, even if you are skilled at building frames. I decided I didn't want to throw any more money at the problem right now. The main issue for me is that if you start selling frames, you effectively are saddled with insurance payments for the life of those frames. The way I see it, the present value of those insurance payments is a significant pile of cash. To make that kind of commitment with no guarantee of success just made me rethink the whole thing. I still intend to sell frames, but I have to get over that hurdle somehow.

    I think it takes most people a while before they can build a frame they would be happy with in a week. You also have to sell the frames. It's not easy.

  15. #15
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    It is still amazing that larger companies can have frames churned out by builders who probably have zero interest in bikes and people are lining up to throw thousands of dollars down every year or so for them and yet a frame equivalent of a Stradivarius sits gathering dust.
    How does the insurance thing work for obsolete brands? There are a lot of bikes out there that have probably long since lost any tie to the original company.

  16. #16
    Randomhead
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    My suggestion is to go read Richard Sach's blog, he's had a lot of posting about this subject recently.

    Quote Originally Posted by Canaboo View Post
    How does the insurance thing work for obsolete brands? There are a lot of bikes out there that have probably long since lost any tie to the original company.
    once you dissolve a corporation, there really is no recourse, so no insurance required. You could try that as a lone framebuilder, but I don't think that is fair to your customers, and the corporate veil has been shown to be fairly thin when it comes to corporations that look like a sole proprietorship to a casual observer. I don't expect anything that I build to fail, but it does happen, and I'm not in full control of the quality of the parts that I use to build a frame. And if there is a bad outcome to a crash, it's not hard to come up with a way to blame the framebuilder. My thought is that I owe it to my family to protect against novel legal theories that involve taking large sums of money from us.

    The way that framebuilding insurance works, it is what is called "claims made" insurance. In other words, it protects against claims made during the period of the insurance. Medical doctors can buy what is called "tail" insurance, which protects against past misdeeds, but it is really expensive. I don't think you can buy that for general liability, although an umbrella policy might work.
    Last edited by unterhausen; 02-21-12 at 04:34 PM.

  17. #17
    framebuilder
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    I think the question is more complicated than what a simple answer can give. Pro framebuilders vary a lot in how long it takes them to make a frame. We all have a different level of craftsmanship that meets our objectives. The fastest American builders making lugged frames average around 18 - 20 hours not including paint. It can be done in 10 but that standard is lower than what the market expects. When I was apprenticing in England in the 70's, I asked around and it was more common to be able to turn out at least one frame a day if not more. Of course these frames are not nearly the equal to the standard of what the best Americans can do today. If the frame is entirely custom and the lugs and other joints are finely filed it is going to take more than 40 hours to build and maybe even closer to 100 if there is any other fancy stuff going on. On the last frame that I made for my daughter, I wanted to make sure it passed any best of any best test so I took a day filing each lug (in other words it took a week to just file the lugs and bb shell). A complicated paint job can easily take me a week to do as well. I can tig weld a frame together in less than a day. Some of the most financially successful builders know how to make a frame look nice enough but don't overdo it since that little extra doesn't tend to be noticed and will cut into their profit margins. Most customers base their evaluation of their frames on how it rides, was it delivered in a timely manner and how good the paint job looks.

    Another adjustment that needs to be made in simplified hourly rate estimates is that 1/2 a builder's time or more can be spent doing business related work that isn't making a frame (answering emails, accounting, etc., etc.).

    I tend to get a very serous student in my framebuilding classes since I'm a real teacher with educational degrees, apprenticed in Europe and have been doing it the longest. Most of them want to take it beyond the hobby stage but not become full time builders. Somehow they keep a portion of a some kind of day time job that is less than 40 hours a week but still allows them to not rely on framebuilding itself to pay the bills. This is the most common formula although their are a few that are full time. It is possible for builders to get certain types of subsidization through family members. The parents have some kind of work space available or the wife's job can provide health insurance.

    Taking a framebuilding class is the most likely route to becoming a framebuilder today. There aren't builders that want to take on an apprentice. Do-it-yourselfers can make a pile of rubbish compared to today's standard that can hang around a long time stinking up their reputations long after they've improved. A community college welding course can be helpful but I find that those that have already done this before taking one of my classes have little advantage over someone that hasn't. In other words it can be useful in a general way rather than put them at the head of a framebuilding class.

  18. #18
    Randomhead
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    Quote Originally Posted by Doug Fattic View Post
    Do-it-yourselfers can make a pile of rubbish compared to today's standard that can hang around a long time stinking up their reputations long after they've improved.
    I think this is pretty important for people to consider. If you really have ambitions of being one of the few framebuilders that makes their living from framebuilding, it doesn't make too much sense to expose the learning process to the scrutiny of history. I wish you had told me this 35 years ago. Some people get annoyed with me for saying stuff like this, but I think it would be a luxury well worth the cost if the first 4 frames I built were under my control today. The rest of the frames I built as a beginner say "Trek" on them, so it's not even sensible to worry about them. I don't think it makes sense to try to have sales fund the learning process.

    When I tried to start back up again a couple of years ago, I really got ahead of myself on this score. I should have spent more time trying to figure out what I wanted my identity as a framebuilder to be. Still confused about that.

  19. #19
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    If you set up as yet another roadbike builder you will have plenty of competition from other framebuilders as well as the premium factory brands. If you seek out a niche and become the GoTo guy for that, you will probably make better sales.
    Zinn is the goto for big frames, Luna do small, womens's frames, ANT does utility bikes, Bruce Gorden does touring and racks and also sells Taiwanese frames to his design.
    Some niches are too complicated or labour intensive unless you have a really good design, eg folding and recumbent. Are you plain old builder in dungarees or a polo-neck-wearing designer?

    If you have an exit strategy of selling out your brand to a big maker, consider your brandname. Do you want to sell YOUR name or a company name.

  20. #20
    Randomhead
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    Possibly reinforcing my point, Luna is now out of business.

  21. #21
    Dog is my co-pilot 2manybikes's Avatar
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    Three years or more you will lose money and still need to support the family. Even with %150 mark up most bussinesses make about 5% to 10%. Don't guess. Make a good accurate list of every little part needed for one frame. Even paint, welding rods etc. You will need good market research to show what
    people will buy. Market research is very important, know what all the other frame makers are selling. Make sure there are plenty of customers at the price you need to sell a frame at.

    Untill you have at least a three year bussiness plan with all these details you won't know what anything will cost. The lack of the above information is why most small bussinesses fail. You can make the best frames in the world, that does not mean you will make money. Even a patent does not insure profit.
    Don't forget that you need to buy inventory to get started. You need to buy many things in bulk to get a decent price. Call now and get answers first. You need to pay taxes on inventory. All the pieces of the puzzle need to work to make money. Not just a good frame.
    If you get all the information together you probably will be very dissapointed. Maybe not, I don't know anything about your plans, or your finances. Even doing it as a hobby
    will cost a lot more than you think.
    After including the labor cost, make sure you add on the profit, not just your labor.
    [SIGPIC][/SIGPIC]

  22. #22
    coprolite fietsbob's Avatar
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    your trust fund from a previous generation,
    would help bridge the start up time, until you have a Name.

  23. #23
    Dog is my co-pilot 2manybikes's Avatar
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    Quote Originally Posted by fietsbob View Post
    your trust fund from a previous generation,
    would help bridge the start up time, until you have a Name.
    Exactly! Even the trust fund might not be enough.
    [SIGPIC][/SIGPIC]

  24. #24
    Senior Member M-theory's Avatar
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    Wow.. some great advice... thank for that. I totally agree that a business plan is indispensable & I intend to create one and analyze it. I have Business Plan Pro software and they make it fun. It's also needed to secure funds from kind-hearted and perhaps naive souls... It's also your road-map, blueprint and something to fall back on when everything collapses into chaos. Artistic types (like me) have traditionally had problems with business logistics and structure and so the real key here is the integration of both disciplines.... It's harder to do than most people think because creativity and structure seem to come from different parts of the brain.

    I think niche building is a good idea too...as long as it's the 'right" niche! Researching the industry and the market to find that need may be part of a process however. Bike trucks, food vendor bikes and rickshaw bikes seem to be an interesting avenue for that.

    It does look difficult to undertake....and quite a journey...... but then I see a guy like Sacha White who started in his early 20's, has only been doing it for 9 years and has a 5-year waiting list. Same with Richard Sachs.... (7 year waiting list). But yeah... If there are only a few guys out of 500 making it..... then its bad. I'll do a little market research to get a better picture of whose getting the money and what percentage of the total industry they represent.

    "There aren't builders that want to take on an apprentice" OK... Maybe this is a way for builders to subsidize their income? I'd be happy to pay (a reasonable amount) to apprentice for a month at a builders shop......while doing grunt work, office work, web site, sales, advertising and all related company work. Isn't that a profitable accord? I'm sure I'm not the only one either.

    Really though, if anyone knows any San Francisco Bay Area builders that could benefit from this..... I'm very serious about it. I have tons of experience I can bring to the table as well... and I'd be willing to pay to share in it.

    Anyway.....I really appreciate the candid advice here. It holds true with most start up businesses but the primary driver in this must be the love to build & create things.
    Last edited by M-theory; 02-22-12 at 03:54 PM.

  25. #25
    Randomhead
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    Quote Originally Posted by M-theory View Post
    It does look difficult to undertake....and quite a journey...... but then I see a guy like Sacha White who started in his early 20's, has only been doing it for 9 years and has a 5-year waiting list. Same with Richard Sachs.... (7 year waiting list). But yeah... If there are only a few guys out of 500 making it..... then its bad. I'll do a little market research to get a better picture of whose getting the money and what percentage of the total industry they represent.
    I have seen Richard Sachs express discomfort at people talking about his waiting list, I'll guess that Sacha White feels somewhat the same. I would think it would be an issue that would cause a certain amount of stress. Go look at Richard Sach's blog (link above) to see what he thinks of your chances. You have listed two anomalies in a fairly large field. My understanding is that Sacha White blew everyone out of the water at the first NAHBS, and that was when his orders expanded. In any event, he got into the business at the right time in the right place. There is not going to be anyone else that copies his path and makes it. Richard Sachs seems to have achieved what he did by being an incredibly interesting and helpful person on the internet. That and working hard for 30-odd years. There were lean years.
    Quote Originally Posted by M-theory View Post
    "There aren't builders that want to take on an apprentice" OK... Maybe this is a way for builders to subsidize their income? I'd be happy to pay (a reasonable amount) to apprentice for a month at a builders shop......while doing grunt work, office work, web site, sales, advertising and all related company work. Isn't that a profitable accord? I'm sure I'm not the only one either.
    David Bohm has an open offer for an apprentice. He has thought about what he needs in order to trade his time for the apprentice's time. What you describe is going to his school twice, not an apprenticeship. I make a living training people, it's not easy

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