Before I take apart the posting, let me say that I agree in principle with its premise, assumptions and most of its conclusions. I mainly disagree with the mathematics.

Eddie Bauer, the sporting goods chain that has been focusing on sporting wear in the last decade or two has a store on Michigan Ave. in Downtown Chicago. Hanging from the 2nd floor balcony of the circular entryway are six 16-foot cedar strip canoes. They definitely appear to be there for decoration, but I asked about purchasing one. They are listed in their computer at a price of $2500, so they ARE for sale, and they DO have a value. Eddie Bauer bought them wholesale for less than that. I have not seen one removed from the wall in tha past year (not that I spend every day checking) but I don't think they sell very many of them.

If you are trying to assess a dollar value of your boat, your best resource would be to check with Gerorge, the board's unofficial resident CPA. He could give (for a fee, of course) an expert's opinion on costs, amortization and depreciation of tools, property and materials. In the past he has stated his costs and his prices for the boats he builds and sells, too. You might check the archives for that data.

> There is a difference between "worth" (what the market will pay)
> and "cost" (what it takes to build and sell).

Close enough to not waste time quibbling about the definitions of these terms and exceptions.

> There is a very large market for kayaks below $1,000, a moderate market in
> the range of $1,000-3,000, and almost no market above $3,000. Based on the
> market kayaks are worth less than $3,000. (There may be a market for
> kayaks as furniture but...)

How big is a `very large' market? As many as buy used cars? As many as buy toasters?

I think Klepper's top of the line folding kayak ( with sail rig) is going in the over $3000 range. They have been selling these things longer than anyone I can think of. With a boat that people expect will last a lifetime the value is increased. Klepper expects the fabric skins to have a life of 25 to 30 years. (this from their site: www.klepper.com/indnavi.htm ) Quick math: $3000 for 30 years is only $100 a year. That is really pretty economical if you want a boat that will last a long while, stores out of the damaging UV of sunlight, and doesn`t need to be revarnished each year. On the other hand, a beautiful wood stripper, or stitch and glue, has the advantage of being easily repaired -- something that is not always the case with molded plastic boats. This extends the service life for many years, and could make it a more economical purchase than a lower-cost molded boat. Even if you make an expensive boat you can sell it based on the value, particularly if it has attributes that others do not have. What is the value of flush ports? How valuable are custom fit seats? What about light weight? Would a person who planned a trip with numerous portages be interested in shaving 10 pounds off their load? What about shape and speed? A strip-built boat does not make any design compromises just so that it can come out of a mold. ETC. Summarizing, there are numerous attributes that can increase the value of a wooden boat and make it a good value, even it the initial cost is above average.

Finding customers is the biggest problem. If I could solve that I'd give up the day job (actually a night job) and build boats full time.

> To get costs down below $3,000 is almost impossible. Producing a boat with
> 100 hours of labor requires keeping labor cost below $30/hr. This
> translates to $20/hr wages and $10 overhead (employer's share of taxes,
> and benefits). For $20/hr you cannot hire good workmen, certainly not
> those who can produce a good boat in 100 hours.

Since Eddie Bauer is able to sell similar craft for $2500, I must insist it is quite possible. Certainly my costs, other than labor, are far below $3000. In my area you can hire good workmen for well under $20 an hour. (We are not talking Canadian dollars here, are we?) With a 2000 hour work year (50 weeks of 40 hours a week) that would give a gross salary of $40,000. A very livable wage. Nearby farmers looking for work they can do during those days when they are not in the field, are quite happy to take on such tasks. They have high skill levels and excellent work ethics. You can literally `farm out' work to them on a job basis. They usually have their own work shed or barn, too.

> But you can get costs down to a reasonable level (on a per boat basis).

> $50 power tool depreciation (cost $1000 life 20 boats - table saw and
> router set up to hold .005 tolerances)

If you are building 20 boats a year this means your power tools last just 1 year. I expect much longer life from my tools. Ripping strips for 20 boats would take about 20 hours on the saw. The router would be used about the same to make the bead and cove edges. Probably I'd get a shaper instead of a router, though. For that $1000 I'd get tools that would last 5 to 15 years. If they lasted 10, my 200 boats would each use up only $5 worth of tool cost. By the way, add on the cost of sharpening the blades and router or shaper bits. Also add a planer, and the cost of sharpening its knives. You'll be around $10 a boat.

> $50 hand tool depreciation (new razor saw each boat, and new sandpaper -
> almost infinite life of all other tools (cost less than $200))

Same reasoning as above. I can't imagine buying 20 razor saws a year, but then I don't own any now. On the other hand, even buying sandpaper in bulk you DO go through a lot of it. I think $50 a boat is a bit high.

> $150 epoxy and epoxy application tools

> $200 cloth

If you are building boats on an ongoing basis you would buy larger quantities of materials and save substantially. I have already accounted for the application tools with the other hand tools, above, so lets just talk resin and cloth. You can do a stripper for under $200. A single gallon of epoxy and the additional hardener is in the $50 to $90 range. For one layer on the exterior of an 18 foot hull you'll need 6 yards of fabric. Unless your hull is very wide you should be able to use 38 inch wide material. For the inside, you use the same. For the deck youll also use a 6 yard piece on the outside, and another on the inside. total: 24 yards of fabric (figure 25 yards and get a discount at some places). At $5 a yard this would be $125. For 20 boats you would buy 500 yards. You should be able to get this form several sources for under $3 a yard. That drops the price per boat to about $75 for cloth and $50 for resin. You figured $350, I figure $125.

> $150 wood (includes wood for new strongbacks and forms for each boat)

Well, if you don't reuse the forms and strongback you are just foolish. you save a tremendous amount of time (and cash) by NOT making new ones for each boat. That is 3 to 10 hours of labor right there. Otherwise, the wood for strips will be well under $100.

> $10 utilities (ignoring the monthly base rate charge)

Too cheap, but I'll go with it for now. that would be only $200 a year.

> $50 16'x24' shop (building is cheaper than renting ignore the land cost -
> but you can rent mini storage for about this amount)

Way too cheap, but extremely variable. That is only $1000 a year (under $80 a month) If you are going to make 20 boats a year you'll need a bigger place, too.

> $50 advertising (your best advertising is to carry your boat around on
> your car)

Better advertising would be paddling it around. This part of the job would be great !

> -$100 tax savings for running a business

Huh? This I need explained to me. I thought my business PAID taxes. Certainly the IRS thinks it should.

> You can spend more but even a loose (not no) budget is less than $1000 +
> labor per boat.

Well, I figure it to be less. Assuming you are building 20 boats a year. for each boat: about $60 for tools and sandpaper, $125 for glass and resin, $100 for wood (That includes a few sets of forms and a couple of strongbacks as well as wood for strips) Add in $20 for varnish and the materials are $305 per boat.

Your workspace expenses: insurance, rent, heat, electric, etc. are big variables. If you work in an unheated shed in a warm, dry climate you can really save here. You have $10 for utilities and $50 for rent. I would at least double that -- and that is more guess than estimate, but I think $125 per boat is reasonable. At this point the cost is $430 per boat.

Advertising and marketing: I would prefer to sell these on consignment through a sporting goods store. The store can display it and take a commision when it sells. Meantime it costs them nothing. While I have no obvious costs for advertising and marketing with this approach, (and I don't pay for gas to drive the thing around) my money is tied up until it sells, so I should figure in the amount that it costs me to tie up those funds. If I take out a bankloan for my company I have that amount fixed by the terms of my loan. If I use cash from my savings, these out-of-pocket costs are costing me the interest I could be getting if I had left those funds in the bank, or invested in mutual funds.

This cost of funds is something to think about with labor, too.

Anyhow, if you are building 20 boats a year in a 40 hour work week ( or 2000 hours a year) you can only spend 100 hours on each boat. That is a reasonable time for building a single boat, but considering that you are PLANNING on building more than one boat, you'll save time on EACH boat. How? well, your forms are just cut once (or maybe twice) a year. If you want to have three boats in the works at the same time, stack three sheets of plywood and cut three identical sets of forms at the same time. Mount them on three strongbacks. While the glue is drying on one boat you can be adding strips to another.

> To make 60k of income per year

You'll need to charge $3000 per boat for your labor and add on the other costs. I may figure my costs differently from you, but they will be over $430 and under $1000. That is pretty close to what you figured with your 20 boat a year estimate (below) Like i said at the beginning, I mostly agree with your answer, I just quibble over the numbers you used to get it.

> at 10 boats per year (half time work) you need to charge $7000 per boat

> at 20 boats per year (full time work) you need to charge $4000 per boat.

I can't figure where you got the $7000 for part time work. If you are working at a $60,000 pace, a half-time job should yield you $30,000 at the end of the year. If you are trying to get $60,000 from working only half-time, I wish you the best of luck, and humbly request you put on a seminar in my area, soon, showing me how I too can do that. This would be a $120,000 a year pace, which I think is a bit unrealistic.

If I was happy with making $40,000 a year, instead of $60,000, I could cut the price of my boats by $1000 each. They would be closer to $3000 than $4000. That might make it a lot easier to sell them.

If I could speed up my process so that it took me only 66 hours to build a boat I could build 30 boats a year instead of 20. Staying with a standard shape and cutting multiple parts at the same time might enable me to do this without any loss of quality. In fact, making so many might increase the precision as I could make a part, fit it, and then use that as a pattern for the same piece on the next 29 identical boats. I could then cut my wholesale price by 1/3rd, bringing the price per boat to about $2000 and still make $40,000 a year.

Now, this puts the wood boats at the top end of the competitive market, instead of in the stratosphere. With the good looks, light weight, and great strength, long life and ease of repairs you should be able to make a strong sales presentation. Anyone with the bucks to buy a kevlar boat (for the weight savings) will be in your market. If you can hire someone to work fast and pay them less your profitability will improve. College students working summer jobs are a possibility.

> To make a profit you need to be GOOD and FAST.

No quibbling about that. Good sells the boat, Fast makes the money.

Paul Jacobson