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Good thing your grandpa is rich, because you apparently have as much business acumen as my 7 year old daughter......there are so many things to say but the fact that the thing that worries you the most is "how much will I have to pay a machinist", underlines how fucked you will be.

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Im no fool .  Just looking into it.  I have read you can find decent machines in the 25k range.  industrial commercial property is cheap right now.   the main thing would be figuring out the time it would take to get a product out as I would have to float a machinists salary and would have to get in before demand dropped to be able to make a name worth buying.

I think advertising and marketing would be the easy part nowdays with the demand out there.      It's high risk I know but I am still young so SOME risk is worth taking.  I certainly wouldn't pull the trigger on anything until we find out whether or not we will win the gun battle.  They are giving it their last shot now and if they can't ban the EBR now they wont be able to in the near future.

 

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What about an coached DIY shop?  You want an AR, you go to the shop and their highly skilled team of expert assistants show you how to put the metal bits in the right place, and which button to push, and how to load the CNC program...     too clever?  Serious suggestion.

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Here is my gut reaction and my immediate thoughts.

I do not know the firearm industry at all (on a business level) or even the machining industry. My only qualifications are as a businessman and financial manager (CFO type) for a large wood products manufacturer a la mom and pop (75-100 employees, privately owned, 'niche' company).

The first thing I think of is setup and tooling time. I imagine if you said 'go' tomorrow it may take you a year to get running. Maybe six months but I am not sure. Have to find a place to setup, find machinery (new or used), get the machinery here (assuming you paid cash and did not finance which takes it to a whole 'nother level), and get it set up which can include, and almost certainly will, modifications to your plant space. Then you have to calibrate it in some way I am sure and get your production methods setup. So, you could use up to half of your immediate two year window to get it going, per se. And you may not be producing anything yet, you just have the capacity too. You might pop them out left and right. You might run into some engineering difficulties that can take a while to sort out.

While I don't know anything about metals and the market for them I wonder if you'll have to buy a lot of raw material to get started too. Anything less and you could be paying a hefty premium which you have to figure into your margin. Okay, so you figure you can pay that premium and still do it. Now you have carrying costs and that raw metal sitting there waiting to be used for however long, assuming you can put a time on turnover. For instance, in the hard wood industry (I know it isn't metal but all I have for reference), anything less than a semi truck load of wood at 20K-40K (depending on the species) is considered small beans and we pay considerably more for small shipments.

Marketing and getting into the industry can be done during the same time as above, I guess. That isn't really my area but in my experience, it really just takes a go getter who is a people person and knows how to move in the right circles.

For instance, we decided to expand our market. We bought a new machine, bought a lot of raw material, and spent a good bit of money getting it setup. Hiring the right person to sell it and get the orders. Even then, using the ample experience of employees and the owner it took nearly 18 months before we could sit down to measure it. "Okay, how much did it end up costing? What are we getting out of it? What does the future look like?" Questions like that.

I think it sounds like a fabulous idea, personally, OP. I've wondered the same thing aloud over the last month. Somebody who knows what they are doing and has the capital and capacity can really stand to profit right now. I'm just ultra conservative. I play the devil's advocate a lot (it's what I get paid to do) so I always sound like a pessimist and, by God, I can see the worst in anything.

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Good thing your grandpa is rich, because you apparently have as much business acumen as my 7 year old daughter......there are so many things to say but the fact that the thing that worries you the most is "how much will I have to pay a machinist", underlines how fucked you will be.

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Your 4 years too late, this "panic" will be over soon, there are 4 things driving this panic.





A. The apocalypse "doomsday peepers"


B. the AWB is motivating people to buy


C. Flippers who want to make a profit


D. Enthusiasts wanting to fill holes in there want list.





A didnt happen, B in the next few weeks either will pass or not, either way it will no longer be motivating buyers, C goes hand in hand with B once the AWB goes either way C will stop buying and start selling, D is normal demand and will always be there.





If the AWB does not go into effect A, B and C wil open there closets and say "holy shit why did I buy all this stuff" and we will see a flood of parts on eBay, Craigslist and the EE.

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Want to know how to make a million dollars in the gun business?  Start with $2 million.

State Business Registration/Corporation:  $300-500

State Business License:  $200-350

Liability Insurance Policy: $8000-$12000 per year

BATFE Type 07 FFL Initial Fee: $200

    Facility Inspection
    Environmental Compliance

4-6 Months Later, 07 FFL approved

State Dept ITAR (International Traffic in Arms Regulations)  Annual Registration Fee: $1750

Commercial Property Lease:

Machinery:

Tooling:  End Mills: $200
            Mag Well Broach $3000-5000
            1 3/16" Tap: $75

Labor:

Unemployment Insurance/Workmen's Comp Insurance:

7075 T6 Lower Forgings: 2yr Backlog at $22each

Beadblast Cabinet, 2 stage air compressor 230v 3phase:  $1500

Anodizing Tank Setup:  $2500

Anodizing Acids, EPA Compliance, $500

Anodizing Dye: $100

Anodizing Acetate Sealer: $100

Quoted:

Im no fool .  Just looking into it.  I have read you can find decent machines in the 25k range.  industrial commercial property is cheap right now.   the main thing would be figuring out the time it would take to get a product out as I would have to float a machinists salary and would have to get in before demand dropped to be able to make a name worth buying.

I think advertising and marketing would be the easy part nowdays with the demand out there.      It's high risk I know but I am still young so SOME risk is worth taking.  I certainly wouldn't pull the trigger on anything until we find out whether or not we will win the gun battle.  They are giving it their last shot now and if they can't ban the EBR now they wont be able to in the near future.

 

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You can get a used bridgeport or clone - then convert it to CNC. The CAD/ CAM files are all over the place that will allow you to mill billet 80% lowers while you get a feel for the business. No need for FFL and your startup costs are reasonable... this is the route I am exploring presently.

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I'm cheap.

How many lowers a week do you want to broach?

Maybe we could wire edm them?

What's your plan?

Production doesn't happen on some bullshit grizzly mill.
 

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How about just making good magazines and flooding the market??

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i was going to buy everything else up front. all of it could be resold without much loss. other than missing the demand surge a machinist an proprty lease are the two major costs i would be concerned about if it took a long time to turn out a product.   thanks for the constructive input though.  

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My grandfather is rich and I have some money saved up and we got to talking because we like making money.

Curious what exactly it would cost to get an FFL and a machine shop up and running?  If there is no ban passed and the cost is reasonable I am pondering getting a firearms business going.  If all manufacturers are facing two years of back order then that means I can probably profit 24/7 for at least two years and if it dies down much after that I can just cash out and sell the equipment if unable to carve a spot in against the competition.

Not really looking to get into barrel making since I have heard it is a completely different monster or complete guns.  Probably just machine receivers and BCGs .


Anyone know what kind of cost I am looking at for this with used or new equipment?  Also what does a machinist run for salary? Im not going to pretend I know how to run one of these things so Ill need to hire someone that does.  Might make them partner in the business in exchange for lower initial salary if machinist rates are extremely high.

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Who is going to do the reverse engineering/design work so that the machinist has something to program/make?

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The files are out there.

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Don't let all the neg. comments stop you.

Do your research, check the cost of equipment, supplies ect.
You don't have to own the building, and it doesn't have to be top of the line.
Check on insurance, Should have no issues opening up in any town.
Check with a CPA on payroll and payroll tax's, and don't forget OBAMA CARE.
Every business starts somewhere, if serious, drive on, make money.

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So yeah,

1) Get C/S corp and FFL done (30 days) Corps take 5 minutes in some places, like here. FFLs run about 2 months.
2) Set up bank accounts (1 week)  About an hour, maybe 2.
3) Find location with adequate floor/electric (concurrent to the above)
4) Get quotes and order machines (about a month)
5) Wait for machines to come (another couple of months)
6) Level floor/machines, run network and get office set up (1 week)
7) Hire qualified people (good fucking luck - maybe another month or two)
8) Get forging orders in (start that while you are getting the machine quotes in and it may still take another month)
9) run test batch - note that the CAD files floating around aren't quite perfect (another month or two of tweaking)
10) Run intro batch (one week)
11) Send them off to be anodized (you want to do that yourself HAHAHAHAAHAHA! - another month)
12) Send out samples to distributors and gun writers (maybe generate some interest if you have a really excellent product - another couple weeks)

(You are a year in at this point... the ban will have passed or you'll be selling into a glut with some thin margins)

 

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Even if they weren't out there.  Its not difficult to make a solid from a blueprint.   It would only take a couple of hours.

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A broach like the one KiethJ posted is about 100K for the machine , 10K per tool(should have 2, one spare), and 35K in training setup and accessories, so almost 160K to do one operation.

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fify

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Do you really want to incur hundreds of thousands of dollars in costs, FFL fees, labor, time, real estate, and construction just to crank out a few ARs for a little bit?



You're going to be a new player. You'll have to market to distributors and dealers in order to sell your product. You'll have to innovate some.



Do you REALLY want to do this in a time like this? Your lead time will suck. Honestly, it will probably be to the point that when demand falls off the cliff is when you crank out your first rifle. Why? Gotta build the facility, get the licenses, hire people, train people on the machines, and market the product before you can even think about recouping your investment.



We've seen this before. Manufacturers hired more and expanded their capacity when it happened last time. By the time they got the extra capacity going, demand had ceased to exist. Colts were going for sub $1k. They lost their asses on that investment.



The market is close to saturation. When it reaches that point, the bubble will pop, and you'll be out a fuck ton of money, most of which you won't be able to get back.

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that would be my main concern is canceled orders once the panic is gone .   The other side of that coin though is there will be hundreds of thousands of new AR owners with Black Rifle disease. I see the platform becoming more popular in the future if they don't manage to ban it.  The AR is the next 870 or 700.  My line of thinking is that the current demand might be enough to get a business through the first year or two.  There is no better time to get something started than when supply is nowhere near demand.  


 

Quoted:
Don't let all the neg. comments stop you.

Do your research, check the cost of equipment, supplies ect.
You don't have to own the building, and it doesn't have to be top of the line.
Check on insurance, Should have no issues opening up in any town.
Check with a CPA on payroll and payroll tax's, and don't forget OBAMA CARE.
Every business starts somewhere, if serious, drive on, make money.

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Hell, that's pretty far from fixed.
As others have pointed out, forgings may take a couple of years at this point.
Then there's the fact that there's like 10 FFL carrying "finishing shops" and they are probably backed up badly.  
... a good guesstimate from start to finished product is like a year


Oh, and I can tell you from experience that C/S corp FFL processing does not take quite as long as you might think.
(but getting your location has to happen first... project management is a bitch)

<EDIT>
and the bank account thing... even if you are "straight cash," you need a line of credit.

 

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This sounds like a sensible test-the-waters type approach to me.

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Is it legal to manufacture 80% lowers with no FFL?? I though they had to approve your design. I ask because I have a Haas CNC on its way now for my automotive business, but these would be a nice way to make some extra cash. I had also considered an FFL, but unlike the OP I am already set up with building and most equipment.

Here is another question I have been wondering, If you make lowers with an FFL do you need to do the anodizing in house or can it be outsources even though they are complete lowers?

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To be honest, I believe your best bet would be to build a shop and contract out to the various manu's out to help them meet their production.  

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If you want to open a machine shop you need to manufacture products for the oil and gas industry.  Not gun parts.
BTW, we machinist are expensive and very high maintenance