I elaborated on this subject on Guitars Canada a while back so I'll just cannibalize that post and comment on what some of the costs are that affect the bottom line.
This is based on my experience of going from hobby to business and doesn't represent every builder.
The costs it takes to run even a small pedal business properly can be quite high as it takes a lot of capital tied up in inventory and other expenses before you even turn on your soldering iron.
Inventory. You need enclosures, footswitches, jacks, potentiometers, knobs, resistors, capacitors etc. all in different values and sizes. You have to buy this stuff in large quantities to get a good price on it which costs more money up front and since it all usually comes from several different places you pay shipping costs several times over. You need the inventory because you can't wait for weeks for one silly part to show up or when you're prototyping you need to be able to walk over to your parts stash and pull out exactly what you need right now. If something breaks or goes wrong you need to be able grab another off of the shelf and keep going. This is very expensive and it takes a lot of money and time to get to the point of usually having whatever you need on hand. You also need a lot of cabinets, drawers and labels to keep it all organized. If you're like me and don't have an available local supply of anything electronic related and need to order everything in you need to keep an even higher level of inventory for those cases where shipments are late, tied up in customs or lost because you can't just go to a local store and find what you need in case of emergency.
Website. You need a website obviously. Recurring costs for that are name registrations, site hosting, if you use a shopping cart system you need a SSL certificate to keep you customer's info safer.
If you can't build or maintain a website then you have to pay someone for that service as well as any functionality add-ons or modules that you need on your site.
Business registration, fees, rent, utilities, insurance, taxes etc. These are ongoing recurring costs. If you can't do your own accounting or finances then that's more money you have to spend.
Utilities and materials. Internet, computers, software, paper, ink, shipping labels and materials like tape and those little white boxes pedals come in. That's more money tied up in inventory and supplies.
A lot of small builders are not registered businesses (FWIW on this subject I am legal and registered) so some of these costs wouldn't apply and most work out of their home so a lot of that overhead is covered.
If you're a registered business and draw a paycheck out of it the government is going to want it's cut of it too don't forget and if you are not registered and make too much money the Govt. may not be happy about it if/when they find out.
Paint, powder-coat and graphics. Paint isn't cheap and neither is powder-coating, even if you can do it yourself and get good results. It's time consuming and time is money. As for graphics if you can't design your own you'll have to pay someone to do it and you still need a way to label them whether it be decals, ink stamps or silk screening. Costs vary depending on method used.
Tools. You need a good soldering station, which isn't cheap but it's worth every penny and it is a purchase you will never regret. You also need a supply of solder and iron tips for when they wear out and a fume extractor is an absolute necessity now. If you drill your own enclosures you also need a drill press and a good set of drills and you need to know how to use them properly, accurately and safely.
Circuit boards. Perfboard and veroboard is fine for very low volume work but you need PCB to make anything at a reasonably quick pace. Again, if you can't do it yourself it will cost you money in addition to the costs of having the boards made for a product that may or may not sell. There's that money tied up in inventory thing again.
Warranty. Sh!t happens sometimes and these are costs you have to cover.
Dealers. If you have dealers or plan on having dealers keep in mind that dealers need to make money off of your products too and have other expenses to cover associated with carrying your products you may not be aware of so your dealer price will be a great deal less that your list price.
R and D costs. These can be considerable and it is money and time spent before you even have something for sale if it ever even gets to the for sale point. That money has to come from somewhere and if your pedal is a sales dud those are costs you will not be able to recoup.
Pedal Demos. You need gear to record them yourself or be willing to give pedals away in exchange for someone else doing it.
Advertising. Running ads online or in print as well as fees for places like ebay can add up. Forum memberships can add up if you pay for membership on a lot of forums.
Going to Trade shows? Fuel, hotel, food, gear rental, promo materials etc, with no guarantee of a return on all the money you spend to do it.
Paypal and bank charges. Paypal fees are high and they take a percentage of every dollar you make as well as occasionally withholding your payment under some circumstances (money you need for capital) for weeks. If you're dealing in Canadian Dollars they'll screw you on the exchange rate too and you need a bank account to put all the burlap sacks with dollar signs on them full of money in.
Most importantly you will probably need a day job (almost all of us have one) or other source of income as you can't sustain yourself or your family long term on this alone unless you are selling a lot of pedals consistently over a long period of time and you need to balance your work/family/pedal builder life and have time to do all the administration duties of owning a business like emails, finances, inventory, ordering etc. If someone has delusions of grandeur of making it rich building pedals with legions of fanboys they need their head checked and their soldering iron taken away from them.
It is a lot of fun though and I build because I truly enjoy it, the profit is a bonus.
