Tying for Dollars
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Have you ever thought about becoming a commercial fly tier? Learn what it takes to make money from your flies.

We frequently receive inquries like the telephone call several weeks ago from a nice young couple. They were working in sales, hated their jobs, and wanted a way out; they hoped commercial fly tying would be their great escape.

We asked them, “What will you do for health insurance, life insurance, and retirement plans?” After a long pause, they admitted they’d have to work out those details. Tabling those problems for future consideration, we asked them to grab a paper and pencil so they could jot down a few notes. First, we talked about a few dry legal and tax issues, then we discussed tying flies—in that order. Here’s some of what we told them.

The Tax Man Cometh
Okay, let’s say you’re determined to start a fly-tying business: full-time, part-time, as a way to generate a little supplemental retirement income, or whatever. Believe us when we say there’s more to tying and selling flies than just making the patterns and hauling money to the bank. Before you even sell your first fly, you’ll have to fill out some government paperwork to make your business a legal entity.

A business owner must first decide what to call the new venture, and then apply for an employer’s identification number. You get this number using Internal Revenue Service form SS-4; you can download this form at the IRS Web site. (Go to www.irs.gov. Type “ein” in the search engine and go from there.)

Filling out this form and mailing it to the IRS registers your business with the Feds. The nine-digit number you receive from the government will obligate you to things such as paying estimated income and federal excises taxes each quarter, and might allow you to deduct part of your house and vehicle on your taxes as a business expense. And, as we will discuss in a few moments, this number will also allow you to purchase
fly-tying materials at wholesale prices.

It’s very important to note that we’re touching on only the most basic requirements to satisfy the federal government. All states and many municipalities also have legal requirements for establishing businesses. Be sure to research these laws and comply in full. As you will discover, there’s more to tying flies for a living—full or part time—than just sitting at the vise.Acquire all the necessary licenses to operate a business in your area, and be sure to learn about federal excise taxes. (When in doubt, engage the services of a professional tax planner and smallbusiness consultant.)

Before you begin tying, it is important to determine who will buy your flies. Will you focus on retail, wholesale, or a mix of both types of sales? This decision will affect your targeted customer base and the formula you use to calculate federal excise taxes (FET), and is another reason we’re discussing taxes before we even launch into talking about tying flies. This is the kind of decision that could make or break your business.

FET is a fairly complex tax that covers a whole range of items, but we’re concerning ourselves only with the 10 percent tax paid on “fishing lures,” which are the flies you want to sell. (Federal excise taxes are also levied on rods, reels, and other piece of fishing tackle.) Let’s say you want to tie and sell Royal Wulffs. If you sell a Royal Wulff to a retail customer for one dollar, you must pay 10 cents (10 percent) to the IRS at the end of the quarter in which you sold the fly. On the other hand, if you sell that same fly to a store for 60 cents, then you owe the IRS six cents at the end of the quarter. But, if your sales contain a mix of retail and wholesale business, then you pay six cents on every Royal Wulff you sell; the tax is calculated on the lowest sales price for that particular pattern, not what you actually received for each fly. And remember that if you do any retail business, you must also pay any applicable state and local sales taxes. (Once again, if you have any questions on these important matters, seek the advice of a tax professional.)

Selling Flies and More
Let’s assume you have decided to sell flies to both shops and retail customers. Now you have to decide how many different patterns to sell. Do you try to tie all the patterns carried by a couple of shops, or just a few flies for many shops? We’ve done it both ways, and our business has evolved over the years to the point we tie only hair-wing dry flies for a wide range of customers, both retail and wholesale. By focusing our business in this manner, we can keep a narrow inventory of materials and tie large numbers of similar patterns. We maintain a cache of dry-fly hooks, hair (deer, elk, moose, and calf), hackle (dun, ginger, grizzly, and brown), and assorted threads and flosses. Just think of all the different patterns that you can tie with these few materials: Humpies, Wulffs, Parachutes, Stimulators, and Trudes in assorted colors and sizes. These flies are our bread and butter. You will have to decide what to sell based on your customers’ needs and what you like tying. One of our commercial-
tying friends, who is also a customer of ours, ties a single grasshopper pattern of his own design and has all the work he can handle. You’ll just have to find what works for you.

Your business’s employer identification number, which you will receive from the federal government, is your ticket to purchasing materials from wholesale companies. You’ll want to buy from these outfits because you must keep the cost of your raw materials— hooks, feathers, furs, and the like—as low as possible. One of the first things you will discover, however, is that most wholesale companies require introductory minimum orders to establish new accounts. For example, when we set up our account with the Danville Chenille Company, the first minimum order was $1,000. That’s a lot of chenille and thread. But, it didn’t take long to figure out that we could increase our income by also selling materials to other commercial fly tiers and shops. Those sales have become a very important part of our business. You may elect to do the same, or decide to purchase smaller quantities from companies like ours. If you decide to sell a few materials on the side, there is definitely a moment of trepidation when placing an order for a couple hundred thousand hooks; the result could be devastating to your small business if it turns out you can’t move the merchandise. Turning over that inventory will be critical to your success. We haven’t always made the right purchasing decision, and can make someone a heck of a deal on 10 pounds of strung India saddle hackle!

By the way, Black’s Sporting Directories: Fly Fishing, is the best source of information for the fly-fishing industry. This annual directory contains the names and contact information of almost every business in fly fishing, including all of the major—and most of the minor—wholesale fly-tying materials companies. This book costs about $25, and is available by calling 1-800-766-0039. Black’s is a “must have” for anyone planning to run any fly-fishing business, and is worth every penny you pay for it.

Time Is Money
If you’ve made it this far, you have probably wondered if we would ever get around to tying any flies. Thanks for your patience. Now we’ll share a couple things we have learned over the years that help us speed up our tying without sacrificing the quality of our flies. The bottom line is that the high quality of our flies allows us to ask more money than what our customers would pay for similar patterns tied by the off-shore outfits.

How do you increase speed without losing quality? We’ve learned that it is the small things that count. Our first flytying rule is never to lay down tools that can remain in our hands. For instance, we never lay down a pair of scissors. If you do occasionally lay down the scissors while working, you will produce about a dozen and a half fewer flies in an 8-hour day; the small amount of time it takes to repeatedly lay down and retrieve those scissors adds up. And unless we use more than one bobbin to tie a fly, it also never leaves our hands. As soon as we trim the thread on a completed fly, we tuck the bobbin between our left little and ring fingers, and it remains there until we start the next pattern. Tools that we do lay down are always placed in the same locations so we don’t lose time looking around our tying stations for them.

You already know we specialize in hair-wing dry flies. To speed up the tying process, we keep 24 hair stackers at Al’s workstation. He fills 12 stackers with hair for wings, and fills the other dozen stackers with hair for tails. You might ask why Gretchen doesn’t have a battery of stackers in front of her. That’s because one of us seldom ties a complete fly. Instead, we team tie; Al ties the wings and tails, and Gretchen completes the flies. On the rare occasion when one of us does tie an entire fly, we arrange the materials at the workstation in the order in which they go on the hook.

There are lots of little things you can do to speed up your tying, and not all of them are done at the tying bench. At the end of the day, for instance, when we retire to watch a little television, we each bring a saddle-hackle pelt to pluck and divide the feathers; the hackles of each size go into a separate container. Pre-sizing hackle really saves Gretchen a lot of time at the vise and helps us track our inventory. We’re always on the lookout for little things that increase our output at the tying bench. After all, time is money.

The Fun Part: Earning $$$
We’d be remiss if we didn’t spend a few minutes discussing one of the most important aspects of any business: the paperwork. You can tie the most beautiful flies in the world, but if you can’t get them to your customers in a timely manner and collect payment for your work, you’ll be out of business in short order. One of the difficult things about commercial fly tying is that you’ll probably want to tie most of your flies during the winter, but this is when most customers don’t need them. Many businesses operate on a “net 30” basis—send the product to the customer, and expect payment 30 days later. Unfortunately, the fly-tying business doesn’t work that way, at least it hasn’t for us.

Our tying season is from October to the following June, which is the part of the year when the fly shops we service are struggling just to keep their doors open. They certainly don’t want fly orders coming in through the winter months requiring them to write checks within 30 days. Most shop owners want to receive flies starting in May, with staggered delivery throughout the season based on needs, hatches, and water conditions. The problem is you’ll tie flies throughout the winter based on contracts you negotiate for delivery the following season. This means you probably won’t have an income during the winter from commercial tying.

By the time summer rolls around, you will definitely be ready to replenish the bank account. For us, summer is the time to work on parts of the business other than full-time tying: guiding, working in a fly shop, operating a shuttle service, and tying “fill in” orders are just a few of the things we do during the summer. It is the time of the year when the income is good, but you have to get real creative and work hard to make it through the upcoming winter.

What should you charge for your flies? That’s an almost impossible question to answer. What we do is pick an arbitrary amount we feel we must make per hour. For this example, let’s say it’s $10 an hour. Next, we divide the amount of time it takes to tie a dozen flies into that number to get a cost per dozen. (Remember to also figure in the cost of the raw materials to tie those flies.) Over the years, as people became more familiar with the quality of our work, we managed to raise our prices, but at first there were some very lean years when we had to accept lower prices.

Commercial fly tying may not be right for everyone, but we enjoy it and work well together. In closing, we’d like to leave you with one thought. Remember the young couple we mentioned at the beginning of this discussion? They were hoping to escape those hated sales jobs. Take a quick look through this article and see how many times we mentioned the concept of selling. Maybe commercial fly tying really isn’t right for them, either. What do you think?

Al and Gretchen Beatty are two of the most accomplished professional tiers in the country. Their sage, hard-earned advice bears careful thought and consideration. Al and Gretchen live in Idaho, but you can check out their Web site at www.btsflyfishing.com.

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