Retirement Income Business

This is REALLY cool stuff:

This past weekend I held my first annual meet & greet for CNC folk, mostly the Vectric crowd.

I have maybe 20 - 25 people and Michael Mezalick also attended.

WOW - what a VERY VERY informative group - it was AWESOME.

ONE VERY IMPORTANT topic - at least for me - retirement business.

One guy I was talking with has been retired 15 years and does a business in his cellar. His best year was $72,000 Many years he turned over in the mid $50's Now he is slowed down and making $15,000-$25,000

Another guy retired 5 years didn't say much about annual income but he did say he is making $60.00 per hour, regularly.

On my last few jobs I have turned $50-$60 per hour - so I am in line with others.

None of the income is required to support living expense - it is "hobby money?", if it's OK that I say that.

Both of these guys file their taxes and follow the guidelines as set forth by the IRS pub535.

We talked about the methods of marketing and how they got the work. VERY VERY doable and VERY within reach.

Their work is generated via CNC and Laser - mostly laser.

The reality is there.

Leo in my opinion, the real key to generating income from a private business is having a plan / goal and making sure that plan includes consistent attention and spend on marketing.

They say in retail the issue is location location location.

Well in any other business you cannot secure work if nobody knows you exist and if in these short attention span times you fail to remind people you exist.

Its not hard. Guy with your skills and machinery should easily be able to make good money.
Never mind doing the work with all the years of experience u have in cnc u should be able to make money just consulting.
There is a dearth of pure common sense in business out there. Dont over think the issue.

Key is one has to spend a consistent amount of time networking like u did this past weekend except with people who could lead you to prospective clients.

Rob,

I do have a plan, though not written, and I do have a marketing plan.

There are many avenues to the marketing, mostly sweat equity and generous levels of elbow grease.

3 years --- I really do NOT want to get started for 3 years. This is an AFTER retirement business, NOT before, but planning can be done now.

1) BNI - This is an organization for small business owners and entrepreneurs in early stages to help get started. I was involved in this 10 years ago and it does work. I will do it again.

2) I do the small stuff. Big sign companies don't want the small stuff. I will be visiting companies like Poyant Sign and other large companies 4 times a year to solicit the small stuff that I do.

3) It seems that EVERY person I talk to wants to talk about signs and stuff I make. Even my financial advisor wants me to make a Compass Rose carved into Blue Stone for him. Every person wants me to give them a business card.

4) Work of mouth certainly DOES work. I just sold a sign that way.

5) Ohh there is more., Facebook, Tumbler, Etsy, Ebay, Craigslist - these are exposure, not necessarily sales venues. Then there are mailings and mail lists. I would target interior decorators, and crafters. Lots of options.

Aside from the shop level stuff, for teaching - Local Colleges that I graduated from from, one has a program to hire people like me, the other also hires people from industry. The local vocational schools are seeking consultation from industry.

I am not too much worried about getting the work. I just need to wait 3 more years, to get my house in order. I am getting excited about it though.

Really, though my point was that the money is there.

Looks like you have already thought about this quite a bit Leo, one thing I would say is don't look on it as a Hobby Business or just a way of funding your Hobby, if you are going to do it properly then look on it as a true Business.
The best thing about something like this is that you are not dependant on the income to pay your bills or feed the Family, if you don't want to do something or you give someone a price & they then want to try & batter you down it is easy to just stick your ground & walk away rather than do a job cheaply just because you don't have much else at the time
I am pretty limited with what I can do due to my health/disability problems but if I were more capable then I could find a lot of work. Word of mouth/referrals are probably the easiest ones to deal with, the customer has already been told how good you are so as long as your pricing is fair they won't even look elsewhere. That's where most of my work comes from.
When I first started I bought a franchise, I was far to expensive & did very little work, once the franchise ditched me I started on my own & went completely the other way. Was far to cheap & just became a busy fool which led to me becoming pretty ill. When I eventually started to get better I went back to doing a bit of work but this time round I was better with my pricing. Customers who I had done work for started to ask for prices & then proceeded to go elsewhere because someone else was cheaper, I ended up with very few of the original customers I had who were all looking for the cheapest they could possibly get. I now have customers who appreciate quality & are prepared to pay a bit extra for a quality job. I make more money, work less but most of all feel good about what I am doing. Getting your pricing right will go a long way to ensuring you have the right sort of customers.
Apologise for the long post but I wouldn't want to see anyone make some of the mistakes I have made over the years. Plenty more of them I can assure you

Sounds like it was a great time Leo. Also sounds very promising for the future endeavors, I hope it goes even better than you've planned.

Rob, I'm not disagreeing with you, but offhand I can name a half dozen of my friends who are very busy one-man "shops" who've not done a speck of advertising or marketing. This includes contractors, remodelers, a journeyman electrician, an art installer, and a computer repair guy who also does drone photography, audio engineering, and plays drums professionally. They have no intention of expanding their businesses and adding employees, and they have as much work as they can handle (or more). They are all making comfortable livings. None are retired yet. Perry the art installer (and my former employer) is making a six-figure income, driving a Toyota Tundra and a pair of new BMWs (three if you include his motorcycle), and over the course of 20+ years has built up a client list that numbers in the thousands. He spends zero time and money on marketing, aside from business cards. If you provide a good service or product at prevailing market rates, word of mouth can bring in a lot of business.

What Vaughn said!

Vaughn McMillan said:

...If you provide a good service or product at prevailing market rates, word of mouth can bring in a lot of business.

Click to expand...

I've been trading 15 years now and have not spent anything (beyond maintaining a website) on marketing or advertising for the last 12. I have no ambitions for growth and stay as busy as I want to be. I'm never gonna get rich but neither shall I starve. Every now and then it gets a little quiet and I run a short term discount. About a third of my sales in any given year are to people who I have dealt with previously or their families. I could not agree more with what Vaughn says above.

All of this extra income after retirement sounds really nice, I think. I suppose I might be a little weird. I'm doing what I am doing because it is fun. I DO like harvesting the wood and the work it takes to do that and haul it to my shop. I DO like cutting it down into blanks and then the roughing and drying and all the rest that is needed to put out a nice looking finished product. What I really like is hearing back from folks who have bought my pieces and how much they enjoy using them. I can live quite comfortably with my retirement income and not have to worry about anything. I live within my means and currently owe nobody. I started investing 10% of my pay in the Marines all the way back to Viet Nam in the Navy Federal Credit Union and still do that with my retirement. What I make doing my turning is fine. This year has been kinda bad, but that happens now and then. If my turning business goes belly up I ain't worried about it. I'll just figger out something else to do with wood to keep me occupied and go from there. All of this sounds interesting but I always thought that after you retired you were supposed to enjoy life, take it somewhat easy, and have fun with a hobby. If you make some extra money doing it fine. If not, so what? Sounds like someone is trying to take all the fun out of retirement. But, then again like I said. I might be just a little weird.

I agree with Vaughan, Ian, and Dave. My only advertising is business cards and my web site, and I have all the work I want. Like Dave, I saved all my working life, so don't need to do anything now except sit on the sofa, watch TV, and wait to die, or I can build things in my "paid for" shop, and enjoy what I do, and enjoy the reaction of my customers.

I could call it a hobby, except the IRS has a bias against hobbies, so with little extra effort, it is legally a business, and I can deduct a higher portion of the expenses (ultimately pay less in taxes on this income). (As a hobby you should still pay taxes on any income, but the expense rules are biased against hobbies.) I get hit with lots of salesmen who want me to expand and hire helpers. Absolutely not, I was a manager for too many years. I got an interesting call yesterday from someone who wanted to talk to the person who hired the service for my dumpster. No, I don't have a dumpster. I use things until they are small enough to go in my residential trash.

For a couple fun stories see www.solowoodworker.com/why/recliner.html

I have to admit, Leo, I was quite surprised by some of your remarks regarding the income potential using CNC. Then I did a little (very little) research. I looked at the "job board" on Custom Made. There are hundreds of things people are looking to have made by woodworkers, but fully 60 - 70% are requests for signs. I was really surprised! So many people looking for wood signs. A few people want to pay too little, but it seemed to me that most were reasonable. But then, I have no real experience in this area so I could be way off.

I am going to sidestep the "hobby" just a little bit.

Business is business - YES.
It's not all that hard to be a bonified business as Charlie attested.

Hobby is Hobby - yes.

Can we do both?
Some say no - some say yes.
I say yes - BUT - there ARE clear delineations.

What is Hobby?
This is what we do for MANY reasons but mainly for enjoyment.

BUT - for a moment - suppose that someone enjoys - business?
Suppose there is a level of enjoyment and fulfillment in "selling" something?
Can we enjoy the analysis of profit and loss?
Is it possible that the entire act of conducting business is somehow - fun?
For ME - this IS the Case.
I just love the whole shooting match.

BUT - forgive me - I cannot call it a Hobby business.

IRS PUB535, says that a hobby business is one where the creator or seller is willing to sell at a loss just for the enjoyment of the hobby. IRS, does not necessarily recognize this as a business but will allow collection of income tax, but restrict other tax exemptions. I am not willing to sell at a loss.

Really - IRS Publication 535 spells it all out clearly.
It's really not hard.

This is a retirement business. All expenses are already paid.
I don't need to cover Electricity, Rent, Heat, food, wages or anything else.
My retirement expenses will be covered.

So - WHY - do it.
Because it is ENJOYABLE to do it.
Because I can have a place for all the stuff I make to go.
Because the customers push my envelope
Because I enjoy everything about it.

Dave, Rennie - Sure, there is no NEED to do it.

Charlie - I am 100% in agreement with everything you posted. I think you do it for fun also.

Rennie - I LOVE making signs. I don't always use wood. In fact I rarely use wood. Wood is not a good sign material.
The guys in networked with last weekend making the money were more in Laser cutting/ Engraving. They landed a few commercial contracts, which was the bulk of the money. They honestly had fun doing what they were doing. The guy retired 15 years was an Airline Pilot. He really does NOT need the money, but they do go on some really nice vacations where ever and whenever they want to. I am thinking the laser makes more money that the signs make. I'm not sure yet.

Well Leo, with what you are saying all I have to add is go for it. I do sincerely wish you well in it. I don't know about Charlie but for me starting saving like I did was not because I was smart. With money my smartness probably went out the window. I did listen to a captain who was smart. He told me to start the account, which at that time you had to be posted overseas, and then start an allotment so the money went into the account automatically. Then the key thing was not to touch it. THAT was the hard part. But I did leave it alone until I retired and got some things that were needed and left the rest alone. Now it is a habit to leave it be so no problems. Unless briskets double or triple in price again.

Dave Hoskins said:

... Unless briskets double or triple in price again.

Click to expand...

I like a man who has his priorities in the right place.

Man cannot live on peanut butter alone. Must also have brisket!!!

Interesting thread.. I live mostly on Social Security, but I don't need much and I do get enough to be comfortable. I turn because I enjoy it. I'll never make a "business" out of it and can/do not make enough to live on. I sell my turnings at a local market at a reasonable price so I can move a few pieces out of the way, so I can have room to make some more.

I worked for 40 years in the traffic and transportation industry and don't want to "work" any more... when my turning turns into work I'll quit and retire again.

Having followed this thread from the start the main differences seem to be how people define work, retirement, hobby & business.
All Governments want to tax any extra income you have, put a large wedge of cash in the bank & you will pay tax on the interest it makes so if defining what you do as a business means you pay less Tax then it makes sense to set up as a business. Doesn't mean you have to do any work at all, doesn't mean you have to look at employing people or growing into a big Company.
I have absolutely no interest in growing into a big company, I don't see myself employing anyone else although I haven't actually said I would never do it & I take on the work I want to when I want to, basically it's my choice.
The only real differences are that because I don't have to rely on income from my business for anything I can decide what I do & when I do it, I don't need to take on jobs I don't really want to do because I have a mortgage payment coming up or the kids need new school uniforms
I don't have to haggle with customers over price or worry about what the competition is doing. Having said that I would like to get paid a reasonable rate for the service that I have provided so set my prices at a level that I consider to be fair to both me & the customer. If they don't like it then I can negotiate if I want to or I can simply walk away.

I really enjoy what I do & couldn't see myself doing anything else so for me it is a win win situation, I hate the term Hobby Business for me it is a Business full stop, I am simply doing the same sort of thing I would be doing if it were a hobby I don't make a huge amount of money, I could easily make more if I wanted to again that is my choice.
I don't see there being much difference between making the things I want to make & making the things other people want me to make other than the fact that I get paid more for making what they want, still have enough time for my own projects anyway so I am doing both

When it comes to things like marketing, advertising etc etc, it's really down to what you want to be doing & how you want to spend your money, it can bring in a lot of work if that's what you want, it can bring in the sort of work you want to be doing if you want to concentrate (or enjoy) a particular type of work. I have found enough work for me to do without spending a lot of money but I would be happy to spend more money if I felt I needed to. Once again it is my choice not something I have to do

It's a mish mash of terms and I think Leo is getting some good info about all that people do similarly and differently.

For me, I have a main stream of income currently in Social Security survivor benefits that replace my spouses income in raising the kids. This income is not indefinite. It was always our plan for me to 'make things' for sale to supplement her income so I could stay home with the kids. I have tried to continue that plan and thus far it is working with the exception that unexpected (dental, home, etc.) expenses have depleted our savings far sooner than anticipated. I always needed to generate some income to keep us living in the lifestyle we were accustomed to and that didn't change either.

Even before this, I have been self employed for 21 years. I knew that if I planned to generate ANY income that I needed to be structured in business to prevent personal liability from crossing to business liability and therefore some sort of corporation was necessary. God forbid a product liability issue cause harm to my ability to care for my family. I chose a Sole Member LLC and elected with the IRS to be taxed as a Sub S corporation. This made sense for me but it is different for everyone so do your research and find what fits best for you! The goal is to find a structure that allows you the freedom to spend money that you have and that you generate from the business so that you do not miss legitimate deductions and your income from the business is not double taxed.

So yep, it's a business, it's a hobby business, it's fun, it's rewarding. I love my job. It doesn't feel like work when I'm creating designs and making stuff. The customers are happy when they call me UNLIKE it was in the HVAC business. I wouldn't trade the ability to work from home and raise my kids for anything. I must earn an income with our business even though I'm getting paid to do a hobby that I love.

I'm going to come in with a somewhat different take away. Sounds like the folks over in the engraving and sign community are just as awesome and supportive as the folks around here. IMHO having a good community around this sort of thing is immensely helpful and useful especially when you're trying to figure out where square one is. With a bit of know how and a lot of good help like that sounds like you're certainly getting off on the right foot

Ryan, if it's the Vectric people you are talking about then you are correct, it's a great forum full of very helpful & supportive people. I've been a member of that forum for a few years & it is one of the best forums I have ever been a member of, funny enough the reason I am on here is because I know of Leo from that forum & he recommended this forum to me

Yeah Vectric user forum is an awesome place, and there are a few more.

3DSignForum, is now only a skeleton of what it was, but there are people there that I have met that are equally awesome.

RDworkLab - is a laser forum. Pretty new. Some people in there I have cyber known for years.

Online - youtube - there are some posters that get into some of the nitty gritty. Roger Webb is fantastic, but it's not likely I will ever meet him as he lives in OZ. Frank Hogsworth is also a very in depth guy. Oh there are so many others.

Through the years you get to meet people and get to know them. Even the cyber people that you will never meet, are great resources.

Heck - I will probably never get to meet Martin - REALLY wish I could - but MAN - what an awesome resource HE is.

Then there is the time I spent owning a franchise and all the support you get in that.

Not to mention reading, studying. Even the IRS offers a LOT of great somewhat easy to understand literature.

Yeah -- there is a LOT of great commradery, help and support all around us.