Starting a Business

[Andy Le Blanc]

Dont be put off, there's plenty of money in light manufacturing...

but its all yours....

find yourself a high margin product and go for it.

[Bob-I]

Thanks Bob-I,
I'm definitely hearing you there; that stuff isn't lost on me; I manage a business, and have been self-employed before. Been involved in start-ups (currently running one now!)
But as Charles Wright sang in Express Yourself, "everything don't mean a thing, if it ain't the thing you want'!!

Why not just jump in (and start building)? Well, Family with 3 kids, I spend alot of time on music as it is, rehearsing/ gigging/ recording. I have pretty decent recording gear etc, as far as determination; I run marathons for goodness sake, so it's not laziness!
But rather I'm trying to gather info on the real state of affairs in the hand built tube amp world. If it's not a skill that is actually making anyone any money, I have to temper my enthusiasm. I get interested in everything musical. I modify my guitars almost on the way home from the shop!...

This whole area of expertise is really drawing me in, but from what I gather it is a bit of a dying art. and from these answers and what the net throws up, it may have to be a back burner interest. It may be better I learn to speak Chinese.

Sounds like you have a good background for this. Personally I'd start with a business plan before I soldered connection 1. This is a pretty saturated market so do your market research and make sure you can fill a nitch.

Good luck.

[xtian]

After that, my output falls off dramatically.

They have drugs for that now.

[David Root]

Case studies are a good way to see what works and what doesn't. If we could get Andy Fuchs to tell us how he did it, I think you would find a few common threads to success. Personal motivation comes first, but you also need:

1) BSEE and/or very technical/scientific bent, with enough self discipline to understand the technicalities.

2) Some specialized knowledge, eg in Andy's case years experience designing and building PC boards.

3) Stick-to-it-iveness. Be prepared for it to take many years to become successful, in Andy's case more than 15 years.

4) Be careful who you trust (of course this applies in any business venture).

Or, there is the Alexander Dumble method: start when you're 12 years old. Warning: High risk of eccentric behavior patterns bordering on paranoia.

[selloutrr]

IMHO Your dream is not unreachable. You just need to go about it in a different matter. First you need a degree in electronics and specialized study / in field-hands on training in circuit design and troubleshooting.
Then you get a job working for a small amp company get your feet wet building and filling orders for a couple years get really good at warranty repair, customer service, and understand how the business operates.. better or for worse. Next you get a job with a major amp manufacture in the R&D department. You recieve credit for designing several successful models in the companys product line. Now here comes your dream.. Using that as a spring board you open your own shop and continue to make successful designs. Another route you can go is modifications for the professionals. Other then that the only way you are going to make a $Million in amp building is to start with $2Million. It's a flooded market so without something setting you apart you are just another amp or fender /marshall cloner asking more then it's worth.

[JamesHealey]

I had the unfortunate pleasure of working for Hiwatt for a summer and I made a lot of their JMI stuff also which was a great experience but not the right company.

But if they can't keep stocked up on transformers and components with the brand power of a name like hiwatt it's gottta be hard work starting a new brand.

I'd love to work at Marshall, Cornford or Matamp but the likely hood of that is pretty slim.

I know two of the Techs at Matamp really well so that could always be a possibility in the future.

I've been making amps for a number of years now and I've sold maybe 4 or 5 and one of those I'm still waiting for payment.

doing it on your own is pretty hard unless you have a big financial cushion to get yourself off the ground I guess, and even then it's pot luck.

[Marvel]

and one of those I'm still waiting for payment.

Been there, too.

But let's finally talk some numbers. A hypothetical case study:

- parts for a 50-watter plus shipping can easily cost $1000 per amp, cos we want to build a quality product
- final price should then be around $3000

- R&D for a new amp takes 18 months, including taking your prototype or two to some ampshows so that some wider public can try it out
- let's assume that the first batch would be 10 units (it's hard to finance more than 10 sets of parts)

So selling the firts batch there's $20,000 profit BUT divided by 18 months of work on the amp it's merely $1,100 per month! And it's not that easy to sell ten amps...

And then it's evem more difficult to sell the next ten, as some units from the first batch may be listed on ebay for half of the price...

Regards, Marcin

[xtian]

final price should then be around $3000

Woah! 300% markup?!?

I checked out your web site. Your Komplete Atom 18w is

647 Polish zlotys = 226.5328 US dollars (says Google)

is that right? How much is shipping to US?

[mlp-mx6]

Woah! 300% markup?!?

I don't think you're thinking correctly about this. His *TIME* is worth something. His *skill* is worth something. His *knowledge* is worth something. If he is hand-building the innards then it is absolutely reasonable to sell the amp for 3x the cost of the parts.

You're only talking about the cost of the *parts*!

[VacuumVoodoo]

final price should then be around $3000

Woah! 300% markup?!?

What do you think makes up TCM (Total Cost of Manufacture) ? Components only? At best, manufacturers mark-up (if that's what you want to call it), is around 25-30%.

BTW shipping to USA costs roughly the same from any of the EU countries.

[dartanion]

There is more to building a successful amp business than just designing and building the amps, meeting regulatory requirements, insurance, etc.

More items to consider:

Building a reputation
Sales and distribution channels
Branding/Marketing
packaging and logistics
warranty and repairs
customer service
QA/QC

The list goes on. If you foray into this industry that you start with a significant savings as you will surely not turn a profit for the first few years if ever. It's a hard business for sure. Even if you make great stuff, your brand may never take off. Consumers are hugely fickle in this market, so your stuff needs to stand out.

Anyway, lot's to consider before jumping in.

[Bear]

Lifehacker happened to have an interesting post last week about the "dream job delusion." Worth reading in full here: http://lifehacker.com/5675010/the-dange ... b-delusion

You hear stories about the guy who quit his job to do X that sounds cool and awesome and was a smashing success. Typically the folks who succeed in doing this are leveraging skill and expertise that they already had developed in their day job. (The other takeaway from the article, possibly more important, is that having a dream job is often more a matter of the person's attitude than the job.)

The best way to be successful is to play to your strengths. Mine don't take me towards building amps or playing guitar for a living. The upside is that those things get to be unadulterated fun.

[daydreamer]

cost of living is relative to where we live, but so is the market. It's difficult to talk $$ being spread out around the world like we are. I'm interested in hours per build. that way I can do the sums on how much it costs relative to living here. the markup on gear coming into Perth is pretty high ( distance and opportunism). for example;

I recently bought a traynor darkhorse from proaudiostar (ebay), and thanks to the help I received here, I have been able to sort out (and learn why) I was getting a lot of buzz. It was listed on ebay new for US$499, cost me about $100 in shipping plus $145 for step down transformer (which turned out to be crap). As the Aussie $ is close to 1:1 now with the US$ thats $744 . They are not available in Oz yet, but they have a projected list price of $1200!! so basically for the convenience of a warranty and no step down I have to pay $456 extra. assuming the real street price is $950 it's still $200. You can see how I'm looking at what we pay here and start thinking, sure I have a lot to learn, most likely would have to team up with EE or at least contract one in, but I really don't know the hours it takes to build, which is the question.

Again, I'm listening to the advice, and wouldn't want to do it half arsed. So the question is , how long does an amp take to build?. I.e fender Champ clone, 10 hours? ( assuming full competence of course, all advice and laws followed!)

[selloutrr]

the time it takes to build an amp depends on the style in which it is built and the number of amps you can assemble at one time. i.e. populating a PCB or turret card is faster then most mil spec point to point. It's often faster to build several cards at the same time then a complete build and start over from scratch. Are the chassis pre punched or do you do it all by hand? are the cabinets built and tolexed or will you do that too?

Your example of the Traynor. For the increase in $ you have to think about import taxes, licensing trademarks in your country, additional packaging, franchise/distribution, and stocking the special transformers so a step transformer is not required.

Just to make a point. You are scoffing at buying a $950 name branded amp but it would cost you $1000+ in parts to build an amp what has no reputation. how is the consumer going to handle a $3000+ price tag?

Lets say I'm a customer.. How would you convince me to buy your amp. who are you and why should I spend over 3 times as much?

[daydreamer]

Sorry ,that last post didn't quite make sense, I shouldn't add in the shipping and the step down trannie; the real comparison is $499 vs $950 (street price in Perth)=$451 difference. This amp strikes my as a good comparison , though PCB, it is assembled in Canada using 'free country' labour. Then again it is a Yorkville product and just one of many brands in the stable.

It was the look that appealed to me, which is the angle I'm thinking, gear that isn't run of the mill 'look and sound alike'. I tried the Egnater amps, and frankly for all the switchs and options, just looked boring, probably sounded OK if I could stop yawning long enough to notice.. i also have a long unusual last name, but i would put it on the front of an amp, makes me wonder if the marketing angle is the real killer of the tube amp market.

if I wanted boring, I would by a Marshall or Vox like every other sucker, no offense intended, but for all the 'creativity' that musicians proport to have...sometimes I wonder. but in their defense I guess it is marketing dollars that are lacking to actually provide the real choice.