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7/8/2020 3:01:36 PM
Posted: 1/13/2014 1:48:10 PM EDT
It has been my dream since I was little to own and operate my own gun retail business. I want your opinions. I know its tough and I know the profit margins are small. Also, is this the wrong time?

I have a good Full time job that pays the bills and gets me ahead that I WILL be staying at. I want to open this on the side at first selling on multiple places online and hitting all the gun shows. If I can make it I will one day have a store front.

Like I said I want to start out on the small side, but (thanks to my family) will be inheriting a large retail space for basically operating costs. I know I don't have enough capital but still want to see what you guys have to say.

I will be buying around $25,000 worth of inventory to start. And my full time gig is rock solid, it wont be going anywhere.

I would love to bounce ideas back and forth with you guys as there is no other place I would trust more then the guys here.

So what say you guys... am I stupid/crazy/etc?

This is my dream and I will do whatever it takes to make it work. I know its hard and I know I will be married to my job. so let me have it, and be honest. I know there are success stories too!
Link Posted: 1/13/2014 2:32:08 PM EDT
Link Posted: 1/13/2014 2:46:45 PM EDT
I do realize that $25,000 is a little on the small side for inventory but being as I am starting out small and part time, shouldn't it be enough to get a decent start?

$25,000 is my own cash. I would like to do it without starting out already in debt in business loans you know?

I have a perfect record and have my concealed carry already, will be running out of my house and then in the storefront and I have no worries in the world about going through the process and everything being accepted.

What I am concerned with is, is this the right time to being doing this? I feel like there is no better time then know and I feel like if I don't do it now I feel like I never will.

I do have a couple years of experience working under an FFL holder with an actual storefront so I do know how to go about everything.

Thanks for the input Guahan and keep the comments and stories coming! Also my credit is decent and have good standing with my banks and family and would be able to secure more funds if need be.
Link Posted: 1/13/2014 3:01:52 PM EDT
Link Posted: 1/13/2014 3:15:13 PM EDT
I don't have near enough money or knowledge or equipment to manufacture.

Yeah I know profit margin on new guns is pretty low, actually better on used firearms. Accessories would be once the store comes, out of my house I just cant see it.
Link Posted: 1/13/2014 3:46:31 PM EDT
I funded such a venture of a family member (brother-in-law).  Five years later, he is still in business because he is cordial guy, has a good gunsmith who lets people watch while he works on their guns, and numerous other relatives working part-time at his shop on nights and weekends.





A year into the business he told three things surprised him.


1. The 70 hour work weeks.


2. Employees are constant non-stop drama.


3. He now hates to talk about guns outside of the shop to anybody.




 
Link Posted: 1/13/2014 4:02:27 PM EDT
Yeah, I plan on doing a little smithing as well so hopefully that will help out. The long hours don't bother me. I plan on having exceptional customer service as all the shops around me are absolutely HORRIBLE and it should be like stealing candy from a baby, they already wanted to buy from me instead of the owner.

Hopefully employees wont be a problem as it will just be me, and possibly in the future my father and father in law working on and off.
Link Posted: 1/13/2014 4:50:27 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:
I don't see why not, though $25,000 is kinda on the low side. I would see if you can use that as a downpayment for a SBA backed microloan.

What's more important than the FFL is a solid business plan, and a large line of credit to expand. A FFL is extremely easy to get and is a really a non-issue to starting a gunshop.

I got a 07 FFL at my home in a bedroom less than 80sqft, and it was pretty easy. Once I got my shop it was just a simple change of address request
View Quote



This is good advice but I don't disagree with your theory to start small.
Link Posted: 1/14/2014 4:36:32 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:
I don't see why not, though $25,000 is kinda on the low side. I would see if you can use that as a downpayment for a SBA backed microloan.
View Quote

SBA wont make loans to FFL's.

With just $25k for inventory I would focus on transfers, buying/selling used guns, ammo (if you can get it), and accessories as there's a lot more markup in them.  Otherwise you'll find buyers will look at your stuff then order iti online because the mass shippers (Bud's, CTD, CDNN, etc) will sell guns at retail for less than you can buy them from a distributor.
Link Posted: 1/14/2014 5:02:05 AM EDT
hold the 25k,
see how things go,
start slow  it el work it self out just fine.

Link Posted: 1/14/2014 6:08:12 AM EDT
Why buy 25K worth on inventory if you are just starting out small? Start getting the word out that you are a FFL. Get set up with distributors and order items when a paying customers wants to purchase it. Also those company's like Buds and CDNN need a local guy to do the transfer. So do as many transfers as you can. At $25 a transfer you will start to go positive in no time. Watch for deals at the Distributor level and watch what is selling. Get those items to sell online. If your working a full time job and running a FFL, this may be all that your time permits.

There is nothing wrong with starting out small.
Link Posted: 1/14/2014 8:14:27 AM EDT
I'm pretty sure I can handle this. And the $25,000 on inventory I believe is smart as I would be investing everything back into INVENTORY.

Sell a gun - profit and purchase another, build inventory.

I can live off of my full time job and have amazing job security, its not going anywhere.

I already have a decent inventory built up. I know what guns sell for around here and can easily make it as long as I can sell. Every shop around here sells at 30%.

I can sell at less and have virtually NO OVERHEAD  besides gas, marketing, online costs, shipping.

I'm not seeing a reason why not to do it the way I have planned. These guys are idiots and are banking 6 digits. And I can and will do it better.
Link Posted: 1/16/2014 8:33:34 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bubbles:

SBA wont make loans to FFL's.

With just $25k for inventory I would focus on transfers, buying/selling used guns, ammo (if you can get it), and accessories as there's a lot more markup in them.  Otherwise you'll find buyers will look at your stuff then order iti online because the mass shippers (Bud's, CTD, CDNN, etc) will sell guns at retail for less than you can buy them from a distributor.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bubbles:
Originally Posted By Guahan:
I don't see why not, though $25,000 is kinda on the low side. I would see if you can use that as a downpayment for a SBA backed microloan.

SBA wont make loans to FFL's.

With just $25k for inventory I would focus on transfers, buying/selling used guns, ammo (if you can get it), and accessories as there's a lot more markup in them.  Otherwise you'll find buyers will look at your stuff then order iti online because the mass shippers (Bud's, CTD, CDNN, etc) will sell guns at retail for less than you can buy them from a distributor.



The 7a loan program does not name FFLs as an ineligible business for a loan.
Link Posted: 1/16/2014 11:41:38 PM EDT
[Last Edit: 1/16/2014 11:45:04 PM EDT by Guahan]
Link Posted: 1/17/2014 7:20:38 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:


I'm unsure where you got that a FFL cannot get a SBA loan. I have a SBA Backed Patriot Express loan for $200,000 line of credit at my lender.

You just need 3 years tax returns
3 Year projections
Your Debt Schedule
Business Plan
15% Downpayment
and pretty good Credit History
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:
Originally Posted By ricky_45:
Originally Posted By Bubbles:
Originally Posted By Guahan:
I don't see why not, though $25,000 is kinda on the low side. I would see if you can use that as a downpayment for a SBA backed microloan.

SBA wont make loans to FFL's.

With just $25k for inventory I would focus on transfers, buying/selling used guns, ammo (if you can get it), and accessories as there's a lot more markup in them.  Otherwise you'll find buyers will look at your stuff then order iti online because the mass shippers (Bud's, CTD, CDNN, etc) will sell guns at retail for less than you can buy them from a distributor.



The 7a loan program does not name FFLs as an ineligible business for a loan.


I'm unsure where you got that a FFL cannot get a SBA loan. I have a SBA Backed Patriot Express loan for $200,000 line of credit at my lender.

You just need 3 years tax returns
3 Year projections
Your Debt Schedule
Business Plan
15% Downpayment
and pretty good Credit History



That's what I figured. I am looking to get about a 200k line myself.  I have some cash and plenty of collateral.  Being a CPA helps, too.  I have great financial statements
Link Posted: 1/17/2014 7:25:05 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:

I'm unsure where you got that a FFL cannot get a SBA loan. I have a SBA Backed Patriot Express loan for $200,000 line of credit at my lender.

You just need 3 years tax returns
3 Year projections
Your Debt Schedule
Business Plan
15% Downpayment
and pretty good Credit History
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Guahan:
Originally Posted By ricky_45:
Originally Posted By Bubbles:
Originally Posted By Guahan:
I don't see why not, though $25,000 is kinda on the low side. I would see if you can use that as a downpayment for a SBA backed microloan.

SBA wont make loans to FFL's.

With just $25k for inventory I would focus on transfers, buying/selling used guns, ammo (if you can get it), and accessories as there's a lot more markup in them.  Otherwise you'll find buyers will look at your stuff then order iti online because the mass shippers (Bud's, CTD, CDNN, etc) will sell guns at retail for less than you can buy them from a distributor.

The 7a loan program does not name FFLs as an ineligible business for a loan.

I'm unsure where you got that a FFL cannot get a SBA loan. I have a SBA Backed Patriot Express loan for $200,000 line of credit at my lender.

You just need 3 years tax returns
3 Year projections
Your Debt Schedule
Business Plan
15% Downpayment
and pretty good Credit History

From other FFL's who applied who were told 'No' due to the nature of the business.  I didn't need a loan when I started so I didn't check into it further.
Link Posted: 1/17/2014 3:32:12 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bubbles:

....SBA wont make loans to FFL's.....
View Quote

But they will to "sporting goods" stores.


Hart's Assault Weapons of Death & Tactical Sniper Supply
vs
Hart Sports

Doesn't scare the neighbors or the SBA paper pushers.
Link Posted: 1/17/2014 8:19:58 PM EDT
And to clarify, the SBA doesn't make loans.  Banks make the loans.  SBA guarantees the loans. It's the bank that you will need to convince.



Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DogtownTom:

But they will to "sporting goods" stores.


Hart's Assault Weapons of Death & Tactical Sniper Supply
vs
Hart Sports

Doesn't scare the neighbors or the SBA paper pushers.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DogtownTom:
Originally Posted By Bubbles:

....SBA wont make loans to FFL's.....

But they will to "sporting goods" stores.


Hart's Assault Weapons of Death & Tactical Sniper Supply
vs
Hart Sports

Doesn't scare the neighbors or the SBA paper pushers.

Link Posted: 1/17/2014 8:43:04 PM EDT
Where in IA will you be located? I live in Cedar Rapids and would support an Arfcommer with my transfer or purchases.
Link Posted: 1/18/2014 8:11:39 AM EDT
I am located about an hour west of Des Moines or Ames. I am going through the application process now. No reason to be denied so everything should happen here in about 2 months I guess.
Link Posted: 1/19/2014 9:38:56 AM EDT
[Last Edit: 1/19/2014 9:39:45 AM EDT by sterling18]


Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Countryboycarter87:



I am located about an hour west of Des Moines or Ames. I am going through the application process now. No reason to be denied so everything should happen here in about 2 months I guess.
View Quote
Good luck.





The license is a piece of cake.  It's the business part that's more difficult.  Around here, margins for new is about 3%.  From what i've learned for my area is everyone wants a good deal.  Why buy from a brick and mortar when online is cheaper.  Grabagun and Buds undercut most around here.  So I just started with transfers.  We'll see where it goes.





Also, you will need a business license from your town.  My IOI said they don't accept DBA.  They want to see your TAX ID and business license.



I've noticed from my area is if you have a range, you can have amazing markup on ammo and accessories.





 
Link Posted: 1/19/2014 2:52:43 PM EDT
Interesting... All the shops around me do 30% and seem to be doing just fine
Link Posted: 1/22/2014 3:56:07 AM EDT
[Last Edit: 1/22/2014 6:20:17 AM EDT by Bladeswitcher]
Write a business plan, a real business plan, a business plan for YOUR business. It doesn't matter if your vision is different than the way others have approached similar businesses. The point of your business plan is to explain and justify your vision for a business and make a case for its eventual success. Prepare it as if you were seeking investors or bank financing, even if you're not. Ultimately, the point of the business plan is not to attract investors, it's for you to go through the process of thinking about your business, identifying your strengths and figuring out ways to overcome your weaknesses.. Investigate all the angles, run the numbers, lay out the things that will make you successful and the things that could cause you to fail. Be brutally honest and address every possible obstacle. Research your industry and demonstrate that you understand the market and where it's going. Consider all your competitors and spell out how and why you will carve out a slice of the market. Really think this thing through and put it down on paper. This is a detailed, exhaustive document that could easily go 100 pages or more for a brick and mortar operation . . . though probably a lot less for what you're imagining.

Writing a business plan is a major pain in the ass, but it's one of the best things you can do before jumping into the abyss. The more you think about your business, the better. It can save you from heading in the wrong directions and potentially save you from wasting a boatload of money. It can also be a really good way to get creative and develop ideas that will help you stand out from the competition.

THere's lots of online resources that teach you how to write a good business plan. Better get cracking . . . besides, running a gun business is much more about business than it is about guns. If you don't like the sound of that, then you better skip the whole notion.
Link Posted: 1/22/2014 12:15:54 PM EDT
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bladeswitcher:
Write a business plan, a real business plan, a business plan for YOUR business. It doesn't matter if your vision is different than the way others have approached similar businesses. The point of your business plan is to explain and justify your vision for a business and make a case for its eventual success. Prepare it as if you were seeking investors or bank financing, even if you're not. Ultimately, the point of the business plan is not to attract investors, it's for you to go through the process of thinking about your business, identifying your strengths and figuring out ways to overcome your weaknesses.. Investigate all the angles, run the numbers, lay out the things that will make you successful and the things that could cause you to fail. Be brutally honest and address every possible obstacle. Research your industry and demonstrate that you understand the market and where it's going. Consider all your competitors and spell out how and why you will carve out a slice of the market. Really think this thing through and put it down on paper. This is a detailed, exhaustive document that could easily go 100 pages or more for a brick and mortar operation . . . though probably a lot less for what you're imagining.

Writing a business plan is a major pain in the ass, but it's one of the best things you can do before jumping into the abyss. The more you think about your business, the better. It can save you from heading in the wrong directions and potentially save you from wasting a boatload of money. It can also be a really good way to get creative and develop ideas that will help you stand out from the competition.

THere's lots of online resources that teach you how to write a good business plan. Better get cracking . . . besides, running a gun business is much more about business than it is about guns. If you don't like the sound of that, then you better skip the whole notion.
View Quote



Also, there is a book called Thinker Toys.  It is awesome for creative thinking.
Link Posted: 1/25/2014 10:44:02 PM EDT
Well being a dealer in 2014 will be better than it was in 2013 so you have that going for you . The market is saturated with dealers though. That won't matter if you know what you are getting yourself into. Thoroughly understand that you are going to be in retail. Retail is no joke. You're always competing. So ideally you should have a thorough understanding of how retail works and how to operate a business. Things like distribution, manufacturing, margins, marketing, book keeping, compliance, cycles of the market, forecasting the market, politics, trends, etc... You'll learn a lot along the way but my point is, it's all business related. Being a dealer is about making money. That is the bottom line. If it's not, you will go under and out of business.

So imagine for a moment you wanted to start a business and it wasn't dealing in firearms, could you do it? Not would you, could you? If you think you can, then go for it.
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