You have the right buisness model.
Ours, with guitars, was I'd sit down (or Pete would) with a legal pad, and the customer. "what do you want?" was how it started... Most potential customers had no idea what they wanted by the way. They just liked the idea of a "custom" guitar. When we walked to the wood pile to select species for various components, they had no idea either... probably why our most popular model was the "1958" model (a '58 Strat) and usually in sunburst or an original color.
When the customer DOES know what they want, we collected the data, worked up the costs, took a 50% down-payment, and started building.
We DID do the first (as far as we are aware) commercially made electric solid-body lap dulcimer. Customer had converted an acoustic one, and knew what he wanted. It was solid purple heard with a Wenge fingerboard, gold hardware and active Bartolini electronics which included a "boost" switch for solos...
I'd still be doing it if I could have. I got a job in NY and my partner was always on the road with Phish, so I couldn't spend every bit of every weekend (back in CT) trying to stay above water with orders, quarterly taxes and inventory stuff...