Starting your own stompbox company

[thegroove13]

Just a simple question:  what are the legalities of starting your own stompbox company and maybe some costs involved?

 

thanks--you all rock:smiley

 

-music001:

[WRGKMC]

If you're a one man operation then it simply comes down to paying taxes on your profits. If you plan to expand and hire workers than its like any other business that requires all the legal rights of paying employees minimum wage, health care, holidays, and all the other stuff that people scream about when they are hired by a company and feel they are owed a living.

If you do it on your own, then you have to have a design of course, something everyone will want to pay money for, does a better job that any other unit out there, is more reliable, less expensive and more popular than your competitors. If you're a newb, you have to figure out advertising costs. No one's gonna know if you have a good product if you don't tell them and prove its a good product.

Then you have to find reliable sources for your components, build the units well, and stand in back of your builds when they do fail which means having cash to pay the return costs and ship them back a working unit.

Trick is even if you buy your components wholesale, you don't get the best prices unless you buy in large bulk. The cost of one transistor can be say $5 and 100 may be $.25. Your wholesales wont even talk to a hobbyist who buys small quantities. They will give you good deals on large orders, so you have to figure all these things in when figuring out your manufacturing costs including the time it takes to build, test, package and ship them. Shipping is a huge expense now so weight can turn away customers who don't want to spend more for shipping than the unit costs. As you do more and more shipping you may be able to get reduced rates with your shipper. Good luck though. Their rates have been going up between 5~20% each year for the past 5 years. Thank the government for not allowing oil production and keeping fuel costs high for that.

Building a website where people can actually hear what the boxes do and have some audio/video presentations would be a step up from an EBay store front, which is where many begin. Getting the word out takes happy customers if you're working by word of mouth. If you get some profits together where you can advertise in some musical websites, magazines etc, then you can greatly increase your sales base.

Then when you are beginning to get ahead where you can afford to expand, hire something to do shipping, testing, construction, purchasing, designing etc, along comes the feds who will put a microscope up your rear end and audit every penny you earn and spend. They wait till you have a business then come in like the mafia expecting regular payments you want to stay in business. They may not bomb your business if you don't pay, but there's really no difference in what the IRS can do to you when they add up all the on line sales you made. Its simple for them now because they have all the software and laws to do it because people were too stupid and too trusting.

Truthfully, the window where you can build a business from the ground up starting under the radar till you are big enough to come out of the shadows and become legitimate is practically non existent now. Unless you have a big wad of cash to keep it undercover till its healthy, its harder than its ever been.

Best suggestion I can give you is go down to some some small store in your area. See if you can meet the owner when he's got some free time and ask him some of your questions. Maybe you even have a family member or friends relatives who run a small business. Most will be happy to tell you what it takes to get a small business off the ground and what you will have to do to get going. Many love nothing better than to brag about what it takes, and who knows, you may even find a potential financial backer who will want to invest and help to get you going. If you have a passion for it, and that passion is strong enough to be infectious to others, they may be willing to support you getting a start. Their guidance may be a critical need for you and you may realize, there are few differences between someone selling eggs and one selling stomp boxes when it comes to running a business.  

[thegroove13]

Thank you very good insight--the marketing/material/shipping/taxes are not an issue.  I am familiar with all that from self employment for over 10 years.  the legalities of it are my questions at this point.

[rkittleberger]

If you know how to make them, I'd recommend just starting a basic online marketing plan without worrying too much about the company side.

Just make a few and market them using Ebay, Pinterest, Amazon and see how it goes. Do you have a stompbox you've developed?

I'd be interested to see it.

[thegroove13]

I have it in development-- and have a partner too.  Just all the legal stuff I want to be sure about