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Posted: 2/11/2013 4:14:00 PM EDT
I am a 34 Y/O fully employed person who has built a few ARs and now getting into AKs.

I have several buddies interested in purchasing the guns Ive built. I dont plan on quitting my cush 9-5 with benefits anytime soon but the extra cash would be nice. Ive researched some of the ATF laws and the zoning in my area and it allows for the "Home Buisness". Gun safe, alarm system, filing/forms systems and telephone line are all in order.
I believe the licensing will go smoothly, I understand their will be a $150.00 ATF application fee, another fee from my CPA to start an LLC.

However, from what Ive read Im not real sure about the ITAR tax of $2,750.00 . That would totally make it not worth it.

My business model would only consist of bending my own flats, and assembling parts kits.

My question, would be if I am missing something more and/or if it would be worth it for the enthusiast or hobbyist to pursue this venture. Im wanting to be legal and make some extra money.

Thank you in advance for any feedback you guys can provide. -Evan


Link Posted: 2/11/2013 4:24:45 PM EDT
ITAR would be a pain to deal with. I've looked into it, and it was not worth it to me.
Link Posted: 2/11/2013 5:12:21 PM EDT
Anytime you start a new business, it's a good idea to assume it's going to cost at least twice what you conservatively think it will cost.

The safe (commercial-grade), alarm system, and attorney/CPA help will itself set you back a few grand. You might also need additional tooling. And if you're assembling weapons commercially, you'll want liability insurance. You may also need local business permits. All these costs can add up quickly.

Aside from costs, also think about how much you really want to work in addition to the 9-5. I went down that road once. I also had a cush 9-5, and started a side business (not related to guns) that, to my surprise, took off quickly. Before long, I was working my 9-5, only to come home to work my 6-11. Plus an entire weekend day. And I still had to turn down a lot of business. When I realized that I was working more than 70 hours/week, all of a sudden it wasn't so fun anymore. That lasted a year until I sold the business. The extra money was really nice, and it was cool to discover that I had it in me to start a successful business. But in the end I was killing myself, and I decided that no amount of money was worth not having any free time to enjoy it.

Really all depends on your own priorities I guess. You could just do a few rifles here and there, but that won't offset your costs for quite some time.

Best of luck with whatever you decide.
Link Posted: 2/11/2013 6:03:39 PM EDT
Good luck with finding liability insurance for manufacturing firearms. Unless you want to go all out and make this your business and quit the day job when things get rolling, I wouldn't bother with it. I am in this same boat, just starting out but, I plan on loosing the security blanket(day job) the first chance I get.
Link Posted: 2/11/2013 6:05:10 PM EDT
The costs wouldnt be all that excessive. I Have all the tools for building. I am alot like you in regards to building a business. I want to prove to myself I can be successful without " relying on the man" to provide me with an income should their be changes in my companies work force.
Its something Id like to get my wife involved in, and my sons when they get old enough. I want to teach my sons to provide for themselves and not always rely on someone else to keep them employed. Certainly NOT rely on the gov`t ( unless of course its involved in military service, of which is the highest honor )
So, with all that said , Does anyone know if the ITAR tax is mandatory to all manufacturers ? Or only companies doing business over seas ?
Link Posted: 2/11/2013 6:10:17 PM EDT
Originally Posted By ratfink57:
Good luck with finding liability insurance for manufacturing firearms. Unless you want to go all out and make this your business and quit the day job when things get rolling, I wouldn't bother with it. I am in this same boat, just starting out but, I plan on loosing the security blanket(day job) the first chance I get.


How was the FFL interview? Do you find your to the point were it could go either way as far as going all in , or continueing to work for the man?

Im interested in how your experience went ? maybe some pointers or some more things to think about._ evan
Link Posted: 2/11/2013 6:17:04 PM EDT
Originally Posted By layne555:
I am a 34 Y/O fully employed person who has built a few ARs and now getting into AKs.

I have several buddies interested in purchasing the guns Ive built. I dont plan on quitting my cush 9-5 with benefits anytime soon but the extra cash would be nice. Ive researched some of the ATF laws and the zoning in my area and it allows for the "Home Buisness". Gun safe, alarm system, filing/forms systems and telephone line are all in order.
I believe the licensing will go smoothly, I understand their will be a $150.00 ATF application fee, another fee from my CPA to start an LLC.

However, from what Ive read Im not real sure about the ITAR tax of $2,750.00 . That would totally make it not worth it.

My business model would only consist of bending my own flats, and assembling parts kits.

My question, would be if I am missing something more and/or if it would be worth it for the enthusiast or hobbyist to pursue this venture. Im wanting to be legal and make some extra money.

Thank you in advance for any feedback you guys can provide. -Evan



Don't forget the....
General Liability Insurance
Worker's Comp or WC Exemption
Yearly tax filing fees
FFL License renewals
local business license and renewals
Contributions to the unemployment compensation fund (even though you can't get any of it as long as you are in business, lol, like me)
SOT fees
Yearly reporting to the division or corporations or whatever organization applies
business banking account
EPA regs
ATF inspections
recurring paperwork/forms/A&D book
.... and so on.... and so on

Unless you are going to make it a full time thing and have someone to keep up with all of the administrative work.... it probably isn't worth it.


Link Posted: 2/12/2013 4:08:48 AM EDT
Originally Posted By layne555:
Originally Posted By ratfink57:
Good luck with finding liability insurance for manufacturing firearms. Unless you want to go all out and make this your business and quit the day job when things get rolling, I wouldn't bother with it. I am in this same boat, just starting out but, I plan on loosing the security blanket(day job) the first chance I get.


How was the FFL interview? Do you find your to the point were it could go either way as far as going all in , or continueing to work for the man?

Im interested in how your experience went ? maybe some pointers or some more things to think about._ evan


For me, the US Gov. and BATF were the easiest part. Dealing with the city and all the other BS that goes with starting any business was the biggest hurdle.

See evlblkwpnz post above for a list of other things you will need to work out.
Link Posted: 2/12/2013 8:23:17 AM EDT
Originally Posted By layne555:
I am a 34 Y/O fully employed person who has built a few ARs and now getting into AKs.

I have several buddies interested in purchasing the guns Ive built. I dont plan on quitting my cush 9-5 with benefits anytime soon but the extra cash would be nice. Ive researched some of the ATF laws and the zoning in my area and it allows for the "Home Buisness". Gun safe, alarm system, filing/forms systems and telephone line are all in order.
I believe the licensing will go smoothly, I understand their will be a $150.00 ATF application fee, another fee from my CPA to start an LLC.

However, from what Ive read Im not real sure about the ITAR tax of $2,750.00 . That would totally make it not worth it.

My business model would only consist of bending my own flats, and assembling parts kits.

My question, would be if I am missing something more and/or if it would be worth it for the enthusiast or hobbyist to pursue this venture. Im wanting to be legal and make some extra money.

Thank you in advance for any feedback you guys can provide. -Evan




And what if the Prez/ATF shuts down all the part kits from importation ?
Link Posted: 2/12/2013 2:53:43 PM EDT
Originally Posted By ratfink57:
Good luck with finding liability insurance for manufacturing firearms. Unless you want to go all out and make this your business and quit the day job when things get rolling, I wouldn't bother with it. I am in this same boat, just starting out but, I plan on loosing the security blanket(day job) the first chance I get.


If you were a really small business and only made several guns a month if that, couldn't you have an attorney draft up a non liability agreement for both you and the purchaser of your guns to sign? If that would hold up in court that seems to be the way to go in my view.
Link Posted: 2/12/2013 3:23:37 PM EDT
Originally Posted By setlab:
Originally Posted By ratfink57:
Good luck with finding liability insurance for manufacturing firearms. Unless you want to go all out and make this your business and quit the day job when things get rolling, I wouldn't bother with it. I am in this same boat, just starting out but, I plan on loosing the security blanket(day job) the first chance I get.


If you were a really small business and only made several guns a month if that, couldn't you have an attorney draft up a non liability agreement for both you and the purchaser of your guns to sign? If that would hold up in court that seems to be the way to go in my view.


No. There's a legal concept in the Uniform Commercial Code called an "implied warranty of merchantability." This means that, as a matter of law, a product should be fit for ordinary use as a buyer would intend. While this warranty can be disclaimed in some circumstances, as a matter of public policy it generally cannot be disclaimed if the product is found to be defective or dangerous. I.e., if the buyer is using the gun as intended and it blows up because it wasn't built correctly, the seller can't waive a piece of paper in the air and say "Not my fault". This is precisely why you need liability insurance.
Link Posted: 2/12/2013 4:10:45 PM EDT
Where does it say you have to have a safe?
Link Posted: 2/12/2013 4:34:10 PM EDT
Heres some more articles that I covered. I would defenitely have to pay ITAR fee, that alone makes it not worth my time. These laws are overwhelmingly crushing to the hobbyist such as myself.

http://www.ak47.net/forums/t_6_44/352526_Do_07_FFL_s_need_to_pay_the_ITAR_fees_.html

I can almost understand the $150. filing fee, the cost to incorporate and the insurance.... However their is another tax you pay if you make more than 50 guns per year. Then the ITAR tax is total BS. I get so frustrated with all the red tape and taxes on this and fees for that.
Why in the Hell should I have to pay an International Trade in Arms tax , if Im NOT selling internationally....
Link Posted: 2/12/2013 4:41:07 PM EDT
Originally Posted By ec4321:
Where does it say you have to have a safe?


It gives you three options, a safe being one of them. From the other posts Ive read your insurance company might recquire a safe.

(a) Except as provided in subdivisions (b) and (c) of
Section 26805, any time when the licensee is not open for business,
all inventory firearms shall be stored in the licensed location. All
firearms shall be secured using one of the following methods as to
each particular firearm:
(1) Store the firearm in a secure facility that is a part of, or
that constitutes, the licensee's business premises.
(2) Secure the firearm with a hardened steel rod or cable of at
least one-eighth inch in diameter through the trigger guard of the
firearm. The steel rod or cable shall be secured with a hardened
steel lock that has a shackle. The lock and shackle shall be
protected or shielded from the use of a boltcutter and the rod or
cable shall be anchored in a manner that prevents the removal of the
firearm from the premises.
(3) Store the firearm in a locked fireproof safe or vault in the
licensee's business premises.
Link Posted: 2/12/2013 4:43:17 PM EDT
I may just go after an 01 FFL, ( Mainly for parts discounts ) and put together uppers and other non manufactured parts.
Link Posted: 2/12/2013 7:04:17 PM EDT
You can still build rifles without an 07. If your customer sends you ALL the parts and you just do the work, then you are "gunsmithing" not manufacturing.
Link Posted: 2/12/2013 8:45:04 PM EDT
Originally Posted By ratfink57:
You can still build rifles without an 07. If your customer sends you ALL the parts and you just do the work, then you are "gunsmithing" not manufacturing.


I think that would take some of the fun out of it personally, and doing it that way your limiting yourself to common kit guns like the aks and ars for the most part; and everyone builds those.
Link Posted: 2/12/2013 8:52:13 PM EDT
Originally Posted By layne555:
I may just go after an 01 FFL, ( Mainly for parts discounts ) and put together uppers and other non manufactured parts.

Take a look at questions 18 and 19 on page 2 of this application....

http://www.atf.gov/forms/download/atf-f-5310-12.pdf

It seems to me that you are pursuing a license for the wrong reasons (cheaper parts, I can build my own full autos, etc.). Virgin receivers (AK, AR, etc.) are usually logged into the A&D book as "other" when they arrive. If you build the parts into a weapon and the weapon departs as a rifle.... you manufactured a firearm and you definitely need an 07 to do it legally. Or, the receiver (other) has never left the shop properly, never been transferred to you personally or a customer, and it is now an assembled rifle sitting in your safe.... you still need an 07 to do it legally. Your ATF audits are not going to go well (read: your worst nightmare) if you do what you are saying while only holding an 01. Federal time is no joke. 100% of the sentence is served. 10 years is 10 years, period. I know someone who recently finished a 11 year sentence.... he was an 01. If you want to conduct a legitimate business for profit, go for it. If not, you have been made aware. In the words of a very wise man.... "Shit ain't no game."

Link Posted: 2/13/2013 1:54:58 PM EDT
Dont let any of the naysayers talk you out of it.
"Can't" usually doesn't, while "Can" wins the race!

Just my .02

Dynamik1
Editor, EDC Knife Reviews
Link Posted: 2/13/2013 4:29:12 PM EDT
Originally Posted By layne555:
Originally Posted By ec4321:
Where does it say you have to have a safe?


It gives you three options, a safe being one of them. From the other posts Ive read your insurance company might recquire a safe.

(a) Except as provided in subdivisions (b) and (c) of
Section 26805, any time when the licensee is not open for business,
all inventory firearms shall be stored in the licensed location. All
firearms shall be secured using one of the following methods as to
each particular firearm:
(1) Store the firearm in a secure facility that is a part of, or
that constitutes, the licensee's business premises.
(2) Secure the firearm with a hardened steel rod or cable of at
least one-eighth inch in diameter through the trigger guard of the
firearm. The steel rod or cable shall be secured with a hardened
steel lock that has a shackle. The lock and shackle shall be
protected or shielded from the use of a boltcutter and the rod or
cable shall be anchored in a manner that prevents the removal of the
firearm from the premises.
(3) Store the firearm in a locked fireproof safe or vault in the
licensee's business premises.


If you are in Florida why are are you quoting California law?

There is no Federal law or ATF regulation that requires a safe, security system, attack dog, moat or even a lock on your door.
Link Posted: 2/13/2013 8:56:42 PM EDT
Originally Posted By layne555:

However, from what Ive read I'm not real sure about the ITAR tax of $2,750.00 . That would totally make it not worth it.




And that is exactly why it's there.

Link Posted: 2/15/2013 11:05:52 AM EDT
Yep. I think its better to leave it to the pros. I have high hopes and dreams of chasing what I love , As does everyone. With a full time job and a family its probably just not feaseable.

It is also true that it take money to make money.... Maybe I should look into a knitting business. Lol , #sarcasm
Link Posted: 2/15/2013 2:32:50 PM EDT
Originally Posted By evlblkwpnz:
Originally Posted By layne555:
I may just go after an 01 FFL, ( Mainly for parts discounts ) and put together uppers and other non manufactured parts.

Take a look at questions 18 and 19 on page 2 of this application....

http://www.atf.gov/forms/download/atf-f-5310-12.pdf

It seems to me that you are pursuing a license for the wrong reasons (cheaper parts, I can build my own full autos, etc.). Virgin receivers (AK, AR, etc.) are usually logged into the A&D book as "other" when they arrive. If you build the parts into a weapon and the weapon departs as a rifle.... you manufactured a firearm and you definitely need an 07 to do it legally. Or, the receiver (other) has never left the shop properly, never been transferred to you personally or a customer, and it is now an assembled rifle sitting in your safe.... you still need an 07 to do it legally. Your ATF audits are not going to go well (read: your worst nightmare) if you do what you are saying while only holding an 01. Federal time is no joke. 100% of the sentence is served. 10 years is 10 years, period. I know someone who recently finished a 11 year sentence.... he was an 01. If you want to conduct a legitimate business for profit, go for it. If not, you have been made aware. In the words of a very wise man.... "Shit ain't no game."



You are correct, but the post you quoted said "uppers and other non manufactured parts" which I took to mean non-serialized items.
Link Posted: 2/16/2013 6:01:03 AM EDT
Originally Posted By dookie1481:
Originally Posted By evlblkwpnz:
Originally Posted By layne555:
I may just go after an 01 FFL, ( Mainly for parts discounts ) and put together uppers and other non manufactured parts.

Take a look at questions 18 and 19 on page 2 of this application....

http://www.atf.gov/forms/download/atf-f-5310-12.pdf

It seems to me that you are pursuing a license for the wrong reasons (cheaper parts, I can build my own full autos, etc.). Virgin receivers (AK, AR, etc.) are usually logged into the A&D book as "other" when they arrive. If you build the parts into a weapon and the weapon departs as a rifle.... you manufactured a firearm and you definitely need an 07 to do it legally. Or, the receiver (other) has never left the shop properly, never been transferred to you personally or a customer, and it is now an assembled rifle sitting in your safe.... you still need an 07 to do it legally. Your ATF audits are not going to go well (read: your worst nightmare) if you do what you are saying while only holding an 01. Federal time is no joke. 100% of the sentence is served. 10 years is 10 years, period. I know someone who recently finished a 11 year sentence.... he was an 01. If you want to conduct a legitimate business for profit, go for it. If not, you have been made aware. In the words of a very wise man.... "Shit ain't no game."



You are correct, but the post you quoted said "uppers and other non manufactured parts" which I took to mean non-serialized items.

Just noticed that wording. My reading comprehension was on lunch break I will leave it at this.... I don't think it will be worth the expense and scrutiny to do it part time.
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