So I've been building frames for *almost* 10 years now, and selling them for something like 8 years. Doesn't sound like much but at this point, that makes me almost an old man of the bike industry. Why? Because so many framebuilders go out of business so quickly.
I've always wondered why that is, but after those 8 years of interacting with other builders, I've arrived at the following model.
-Start with 100 new framebuilders, all beady-eyed and eager to build bikes.
20% are recent college graduates or dropouts living with their parents/roommates.
30% are naturally terrible at making things out of metal when they start (I was one of these).
50% don't remember trig from high school and think building good bikes is all about pretty fillets or Justin Bieber's initials carved into stainless lugs.
75% have no startup funds and have to order tubesets one at a time, file miters by hand, and work out of an unheated garaged (again, me).
80% have never run a business of any kind and are unable/unwilling to use math to figure things out - like how much money to charge, or what their costs are.
100% will sometimes screw stuff up, and 50% (or more) think they are perfect and won't accept blame for anything going wrong with a frame (whether it's a cracked tube, geometry not quite right, whatever) and will slowly (or quickly) accumulate angry customers.
And of course most builders are going to fit into more than one of these categories of doom - for example, I was a grad student living with my girlfriend, who sucked at making stuff and had no money. All of them can be overcome, but the more you have to overcome, the harder it will be, and so you see a lot of builders drop out after only a year or two - I've talked to folks who literally were unable to tell me what the difference between gross and net was, who were amazed that they still could only afford ramen after a year of building. Or folks who build *amazing* works of art - but take 6 weeks to build one frame. Guys who couldn't tell you how to calculate an effective seat tube angle, people who have only ever ridden one kind of bike but are building something else for customers, dudes who spend all day drawing up laser cut dropouts to distinguish themselves when they don't have any idea how to fit a rider to a bike, etc, etc.
I've been told that only something like 15% of the builders at NAHBS actually make money, and I'm inclined to believe it. Framebuilding attracts artists and dreamers, but then it eventually spits most of them out once they get a boy/girlfriend or a kid or two and realize that while the first dozen frames were fun, the next 50 aren't going to be, and that they're losing money on every one.
So the bottom line is that if you fight through your own shortcomings, are realistic about your goals, and are very lucky (I caught the "29ers are teh bestest!" wave, nice timing) you can make a decent living. I would guess the success rate is something like 5%, though.
So the folks you see who are still doing it after a decade, or multiple decades, are talented, lucky, and also somewhat crazy (except me, I'm just lucky and crazy).