Lots of great points of view represented here!
As I sit here sipping my oj in the office of our shop/business on this Saturday morning I thought that I would drop by and express my own views regarding going into business AND making one's living with Lutherie.
As some of you know, perhaps many of you after my last thread a couple of months ago, recently David Collins and I opened Ann Arbor Guitars in the epicenter of Ann Arbor's booming business district. Like me David once also walked the various forums of the OLF so he too is pretty well known not only in the biz of Lutherie but on the OLF too.
For us it was the opposite of a perfect storm in so much as all things seemed to fall into place for us and our new business is doing very well and beyond expectations. Prior to pulling the trigger on self-imposed indentured servitude...

and the "C" word (relax.... I mean "commitment...") we did some things very right that greatly contributed to our current and future success.
First and this applies to me specifically I took the advice of another former forum member, Rick Turner. Half a decade ago when Rick graced the OLF with his decades of experience with Lutherie AND great experience with starting small businesses too Rick had some strong views regarding what a Luthier is... In a nut shell when Rick was not describing many of the guitars built by forum members as "GLOs" or "guitar like objects...." and likely offending more folks than just me Rick was unbudging regarding his belief that to be a Luthier one must also be well versed AND experienced in repair work. As a builder only back then and pretty proud of my own progress and guitars I didn't take kindly to Rick's delivery of his message but in the long run and at the end of the day... Rick was correct!
So... prior to "committing" to the financial liability associated with going into business I hung out my own shingle in a smaller market and became a repair guy. Several years of fixing everything that came through the door and being exposed to the biz of Lutherie on a smaller scale served me very well. For very little money and/or risk I was finally reversing the flow of money in respect to what my interests in Lutherie has been costing me.... Although I never intended to sell my guitars that I built and I remain committed to not doing commission work fearing that I likely would lose interest if I had to look at something that someone else had for their idea of what a great guitar should be I stayed firm to my desire to only build what I wanted to build.
Back then I would hang my creations in my shop and sure enough repair clients would invariably inquire as to who made the guitars on my shop wall. In short order the repair business inadvertently became a stalking horse so-to-speak for sales of my own guitars. By the time that I closed my former business so that I could concentrate on Ann Arbor Guitars and being a personal proponent of the old adage "do one thing well instead of a bunch of things &*(&^%..." the dozens of guitars that I had built myself were all in the hands of new owners and often pro players. It was not my intention to sell all of these guitars but hey after much prodding, clients bringing by their wives for "enablement..."

who was I to be the nay sayer.
Prior to closing my first Lutherie biz I was called by David and asked to come work with him as a contractor repairing all manner of plucked stringed instruments in the music store, a 51 year music store that had been a staple of Ann Arbor's culture for over five decades including the 60's... Once again I was fixing hundreds and eventually thousands of guitars in the very busy Martin dealership that also had a tradition of Lutherie as evidenced in some of the early Big Red Books where they talk about Luthier Herb David.
In addition the linage here was well known to produce successful Luthiers in so much as this shop was where folks such as Dan Earlywine and Bryan Gallop started.
So, in my typical long winded style.... the point that I am trying to make here is that for me success with Lutherie included taking the advice of Rick Turner (many, many thanks Rick!!!) and having the honor of being associated with David Collins and all that I have learned from David.
In addition I cut my teeth on several thousand broken guitars including pre-war Martins including a few very nearly pre-civil war Martins. Beaters are useful too in so much as everyone deserves to have great music in their lives and fixing inexpensive guitars can in many ways be pretty challenging.
Some experience running a business (including my own background from corporate America) was also helpful.
So... like an athlete training for an event I believe that the path that I took was appropriate, very useful, and in taking the time to raise my own personal value proposition by becoming more skilled and knowledgable as well as experienced by the time a real and present opportunity to go large presented itself I knew what to do.
We are just finishing up our second full month as Ann Arbor Guitars. We have more clients than we can shake a three piece neck at and this is a result of David's clients, my own clients, the former music stores clients, and.... you guessed it - location, location, location....
Although we are located in a very progressive, highly regulated community this community is also rich with the arts and also has a booming local economy including a massive university, Google, GM, Ford, and many other technology concerns. It's also been said that during recessions the Ann Arbor area always fares very well regardless of the impact to the rest of the state mostly because of the university and 4-5 other colleges located here.
Those who have opined that one simply has to just "do it" and take the risk there is some truth to this. But what I wanted to stress too is that anyone flirting with hanging out a shingle needs to take inventory of their own personal value proposition as it may be viewed by others. Do you have very high standards for the quality of work that you do AND the value that it represents to clients? Are you capable of dealing with the public and perhaps even enjoy this interaction as I most certainly do? Do you have a market (location) that will support a Lutherie business? What's the back-up plan if things go south? Are you experienced enough to either do the repair work or honor a warranty claim for every conceivable thing that may go wrong in time with your own creations? Are you capitalized for the slow months AND do you have a vision of how to grow the business without boxing yourself in from future growth.
Health insurance.... I'm not married so being self employed has other hurtles for me especially as I age and basically fall apart in new and creative ways....

Health insurance is important in so much as small businesses depend on the principals to wear all manner of different hats.... Although I hate wearing hats.... glasses too.... my reality is that if I get too sick to work our business suffers. By the way in this sort of business there is no other path to success that will not be directly dependent on how much time we spend doing billable hours at our benches...
With the mention of health insurance is also the subject of the life styles, previous commitments (that C word again....), and other things specific to your own lives that could be stumbling blocks for one if one wants to try something new such as being a pro in the Lutherie field.
For us many things came together that are greatly contributing to our success BUT we also did the personal things required to position ourselves well for the opportunity when and if it happened. There is no substitute for learning how and why guitars fail as Rick Turner once rightly told this forum. Even if you only intend to build you need to learn how to support your creations no matter what some gigging musician may creatively do to them someday....
As for making an acceptable living from only building I remain skeptical for a number of reasons. This is not to say that some will not "make it..." and I am sure that some will and some do. But there are many, many extremely talented "big name" builders already out here AND with lots of credits to their names. Newer and small builders often after selling a few guitars to friends, family, friends of friends, etc. come to the realization that the competition is fierce, the bar is very high, the value represented by the established builders is clearly substantial in many cases, and in a number of other respects the solitary existence of a builder is not for everyone. I couldn't do it.... spending a couple hundred hours on a single project over and over again with very little people contact seems like it would suck to me personally. But hey to each their own.
If you take away one thing from my post here that may be of value to you my hope is that you understand in advance that being a Luthier as your primary profession is not easy... You will have all the challenges of any small business AND a dependency on economic issues since we are basically paid with the disposable income of folks. There is LOTS of competition, down time, and it's not cheap either to pay your lease payments, insurance, utilities, employees, and more. And if you are the sort who believes that one has a duty to give something back as I do, frequently...., it's an even more expensive endeavor.
Can it be done - absolutely but know in advance that how well you do will be a function of how well you did your homework, the value that your services/wares represent, your market, your capitalization, and the whims of the economy in general.
Please also consider that going pro as some call it... may be an excellent way to take something that one is passionate about and turn it into drudgery and despair.
If you have a plan, have done your home work to represent real value in your offerings, have a decent market, some coin set aside, can solve the health insurance issue(s), and still wanna do what you love, Lutherie - go for it! You may find as I have that dreams do come true and be as happy with what you someday may do as I am these days!
Thanks for reading and I hope that every one is doing great!