Hey guys, so I'm thinking about starting a small gun business. Been doing private LTC, or license to carry, classes recently. Was thinking about getting a place for a classroom to do public LTC classes. And I'm thinking might as well get an FFL to sell some guns as well for self defense. Probably just mostly do transfers at first. But I'd also like to build some custom SBR's and SBS's and all that fun stuff for my customers as well. So I'm thinking about starting with a Type 07 FFL and Class 2 SOT. It's probably like $150 for the FFL and $1,000 for the SOT and $2250 for the ITAR, so like $3400 to get started right? I'm thinking about getting a retail shop in a strip mall, or maybe even just starting with a space in an office building which would be much cheaper. I guess how can one find out if you can do a 07/02 at a certain location? I don't want to lease a place and then find out I can't get my FFL... Or do you guys think I can apply for an FFL before taking out a lease? I mean it takes like 1-3 months for approval right? Kind of sucks to have to pay rent while waiting.. Thoughts? Advice?

Thanks, David

You'll have to include the actual address info on all your license applications so first start with checking the local city/county zoning regulations to know if your type of business can happen at your choice of locations.

If you get an office space in an office building you will have to disclose to the landlord your intentions. You can't just say you will do ltc classes only  and not tell them about the FFL/smith stuff. The Atf IOI will call the landlord to verify and unless the landlord was ok with it (you arranged prior to applying) you won't get an FFL.

Pretty much any landlord you come across gets all iffy when they hear "gun"or "gun sales" or freaking "gun" anything for that matter.  It's always a liability thing with them.

Your best bet is to find the place first.

Check with landlord. Ok
Check zoning ok
Check to see any church's schools or parks nearby (potential for denial) ok

Then consider applying.

When I did mine there was a school just barely outside the perimeter distance (1000 ft?)

This is just the stuff I dealt with. Zoning didn't apply for me as our city doesn't regulate gun stores. Or any business unless it's liquor or adult related.

Looks like it's zoned for Commercial. Of course I'm reading some articles that say Houston Texas doesn't have zoning laws... I think this office building will probably be ok with it, as they already have private security business renting out offices in the same building and they carry guns. But I'll ask the landlord to see if they are ok with it of course. Looks like there's a Church nearby, but it's over 1000 yards away. So I think I might be ok. 

This may be the single worst time in history to enter the gun business.
Before you invest a single $1 do the following:
Write a business plan:
-Research your market. How many other gun stores are within a 20 minute drive? How many retail gun shops are no longer in business in your area?
-What can you offer that other gun stores cannot?
-Getting a retail storefront and the license is cake.........the hard part is retailing in the age of Amazon and the internet.
-What are you going to sell? Can you beat PSA, Bud's or CDNN on price?
-How many transfers a month to just cover your rent? Utilities? Insurance? Alarm?
-Building custom rifles? Unless you have a rep you are going to lose your shirt. ANYONE can throw parts on an AR lower. It's a race to the bottom as to who can do it cheaper.

I'm not saying this to dissuade you, but to hopefully keep you from making the same mistakes others have made before you. You'll have to search the archives for the previous tales of woe. I'm in Plano, and can name a half dozen gun shops that have gone belly up in the last year. And it's not due to the market, people in DFW buy a lot of guns.

I'm a kitchen table dealer who averages 170 transfers a month. There is no way in hell I'm investing a nickel in a retail storefront. Why? Because I'll never match Palmetto State Armory and Brownells selling S&W Shields for under $300. Right now dealer cost at RSR on those is $343 for a small time dealer. How many of those do you think are sitting in retailers display cases right now? And the shield is just one example.




And how will the online LTC classes affect this part of your business?
You'll be paying rent for that classroom 24/7/365.........how many classes can your market support?
I don't teach LTC but have many customers who do. Most use an existing business and bring in folding chairs and card tables. They don't do anywhere near the business that an instructor with a range can do.

security officers carrying guns for their business is a much different thing to a landlord compared to a business selling actual guns and possible doing gunsmithing as well

Just a side note. After two years and supplying a certificate of insurance my landlord just lost their insurance due to my gun business. Harleysville Insurance decided it was not "in their appetite" to have a gun store on the property.

Ouch.

Friend...I am a fan of all things firearms and like to see new businesses in the field...but you really should check on these things to KNOW for sure. A lot of the rules and regulations you will have to deal with in the industry require a clear understanding and attention to detail.

The industry is changing.
Once upon a time, as a dealer, you bought ones-twosy of what you wanted.

Now, you're forced to buy in packages.
Example - if you want one donut, but have to buy them by the box of a dozen.

RSRs price for a single Shield IS $343.00, but currently, buying 7 gets you a free gun. So, with 'cost averaging' your actual cost is $300.00.
Earlier this year, it was buy 5, get one free. Which brought the actual cost to $285.00.

The point being, if you're gonna break into the biz, you're gonnna have to go deep in inventory to get the best pricing.

Well no shit?
That's the S&W dealer package available at nearly every distributor........and you prove my point.
If my actual cost is $300 each (with cost averaging).....and Palmetto is selling them for $299 DELIVERED............why would I buy ANY S&W Shields?......THERE IS NO PROFIT! Not to mention the 8.25% sales tax I have to charge on that purchase.

Buy a Shield from Palmetto.....$299+ transfer fee to receiving dealer
vs
Buying from LGS...$300+tax= $324.75...........and the dealer makes ZERO profit.

Unless you are buying hundreds, if not thousands of a particular firearm you will not be able to match Palmetto, Brownells or Buds on guns not under a MAP restriction.

Every area of operation is different.

I have an established (30+years) storefront and work in an alternate universe that parallels online sales/competition.
I have no expectation to beat out Walmart nor PSA.

We do/have done several dozens of the packages at $359.99+6%tax. Only ours include a #16uncleMikes holster(hip or iwb) and 2 years of free detailed cleaning.
And yes, we do transfers from psa and others.

But, yeah, it IS a tough time to get into this.

No one puts a gun to a dealer's head.  If their inventory budget can support XX # SKU's it makes sense to get deals.  Distributors are over stocked with product!
They have to move product....their margins are small to begin with.  Volume is where their money lies!
But, there are some brands that seemingly do make it hard to do business with stocking dealer floor plans!  Go look any LGS or big box with Benelli dealership..  The have a lot "dawg" inventory.
Buying direct affords dealers to get best pricing to try to be competitive.
Of course everyone has to start somewhere....but the kitchen table dealer without overhead whines about costs!  
And, in this world money talks and well BS walks!  

Places like bud's get a lot of stuff drop shipped on their behalf.

A person who is frugal may save money buying "online" as the may save sales tax....factor shipping and transfer costs it might be a bust?

There are so many programs with some distributors...the LGS or KTD can look like they have inventory on hand with website connections.

People start businesses....with no business plan need to rethink....

I'm not whining. I make MORE $$$$ when PSA blows out product at below dealer cost. Instead of buying from the local gun store, they buy from PSA and I do the transfer.



Snappy comeback but what the fuck are you referring to?




Being that most online sellers are offering free shipping and many dealers offer transfers for $20 or less..........the LGS can rarely match that.


Do a search for "do you have a written business plan" in this subforum and you would be surprised at how many do not.

I don't think this is a reason for a denial of an FFL.  I may find out as I'm planning on obtaining one and will be within 1000 ft of a school.  Does anyone know if this is a fact?

No Federal law or ATF regulation has any restriction on proximity to a school or church.
My first premises was within 1,000 ft of a school.

No, the school zone policy does not mean a denial.  It simply means that you are within a school zone and are required to take extra steps in selling a firearm.


For example all guns (IIRC handguns) needs to be locked when leaving your store/property.