IMHO it is all sales pitch from the LA vendors. Some people have that kind of success but it often takes a long time to build up that kind of client base unless you can partner with a thriving quilt shop where they refer customers to you. And that is assuming your area is not completely saturated with LA quilters like some areas are. Yes you have to have separate business insurance and also a resale certificate for tax exempt purchasing (if you plan on offering batting and getting your supplies wholesale). Also, depending on your state, you have to file quarterly sales tax statements with payment to the state. Most LAers I know of who have turned their talent into a thriving, profitable business do other things besides longarming, like teach, write books, sell fabric or design and sell patterns and some even become dealers for their longarm brand.
I burnt out big time custom quilting for others so after a couple of years I cut way back and only quilt for a few other people. However that was probably because I still work full time so I only quilt on weekends. It completely consumed my quilting time so I never had any time to work on my own stuff. Maybe after I retire I will rebuild it but I like having the time and flexibility to work on my things. I have been blessed with the talent to envision quilting designs that will compliment quilts and to execute that vision but there was always that nagging worry in the back of my head, what if they don't like it (because 90% of my clients gave me carte blanche to do what I wanted). And there was also that worry of damaging someone else's quilt and it did happen to me. I was devastated. I did repair the quilt (needle hole due to machine going out of time in the middle of quilting, breaking the needle and the machine still running) and also gave away the custom job. The client could not find the repair so it was well done, but the incident positively gutted me. Another time I sprayed a quilt with a misting bottle of water to remove marks and it ran! Those two incidents caused me to step way back in pursuing quilting for hire.
My passion is custom and densely quilted. When I finally started keeping track of my time and how much per hour I was actually making I was not even making minimum wage, not even close, more like $2 to $3 per hour! And I wasn't even factoring in my research, design and marking time into that figure. I don't have the internet presence, name recognition nor the major awards to warrant charging what the famous longarmers make (like Karen McTavish or Bethanne Nemesh). So when all that finally hit home for me, I decided to quilt only for myself and a few special clients. I know of a lot of longarmers who have also quit doing custom work for others and only do E2E designs (be it CG, panto or freehand). They save the custom for their own quilts or work in collaboration with someone for show quilts.
Pros, I have met some amazing people and have seen and worked on some drop dead gorgeous quilts and had a part in making them even prettier. I have been inspired to step outside my own box with my quilts. People who entrusted me with their quilts helped me to get where I am today in terms of my skill, both as a quilt maker and a longarmer.
I am thankful that I bought my longarm for my own pleasure and use. I saved for it and paid cash so no payments. It was only after I got it and realized I had a natural talent for it that I tried turning it into a business. So I have no regrets about only quilting for hire at my convenience and pleasure, nor do I have any regrets for the experience of quilting for others. I would never purchase a longarm if I had to depend on quilting for others to make the payments. But that is me. I am extremely debt averse!