Any business owners here?

[Deus Machina]

Long story short: my job sucks, my mom--who I've been unofficially forced to live with--may be going part-time in hers at best (her location is shutting down), and I've really gotten tired at being on the bottom rung.

The only places hiring right now either demand overtime or offer fewer hours at slightly more pay, or the same at less, and none of these options is workable; I'm heading back to school.

So, in the light of mom's meeting ("Thanks for coming, we're gonna need you to hand over your keys") my long-term idle thoughts on opening a shop have gotten more serious.

So, inexperienced manager (me), bad economy, and college student. Not a great combination, I know. But, if I take classes early in the day, and have at least one other person helping, I could keep a shop open in the evenings and weekends.

But, I'm thinking a small shop, relatively limited inventory of the big sellers, ammunition, accesories, and reloading supplies. And, unlike anywhere else around here, a large, freely-visible catalog of guns I could order; an almost infinite variety, as opposed to "what's in stock".

Or maybe not even keep much in house at all--base it on accesories, transfers, and ordering for customers.

And selling at or below MSRP, unlike the biggest local seller charging $800 for a pistol at $650 MSRP.

Maybe make some custom holsters or something, too. Some kind of thing that the local shops don't.

So, I know the stuff up front. The basics of what's involved, the need for off-site storage for the paperwork, and the fact that going to class in the morning and running a shop in the evening would just plain suck.

 

[ArfinGreebly]

Location?

Looking to run this operation out of your house?

In the beginning, you will need to aggressively keep your overheads down.

Signing a fresh lease on a shiny new premises without already having a solid and predictable cash flow is right out of the question.

So, are you expecting to run this from home at first?

 

[Deus Machina]

Hey, if I can run something like this from home, and make better than my current $8 an hour, I think that would be a great starting point.

Thing is, I live in a second-floor apartment, I'm not sure of the legalities of running a storefront from home, let alone an apartment, and I'm hardly that comfortable keeping any but personal firearms at home and letting strangers know about it.

Mostly, the original thought was some place small like just a front office, but even rent on that would pretty much suck until I know what's coming in to cover it.

OTOH, if I did something like charging a little higher for transfers, but delivered, and ran something like Bud's, that might work out...

EDIT: also wouldn't know the exact way to keep track of the paperwork. Would probably have a spreadsheet, but I like my paper. Do ATF inquiries ask by brand and serial number, or last known owner, or what?

 

[PandaBearBG]

Not a business owner, but you should check your local competition, I mean 4 mile radius, try to find out local demand, head to a gunshow/range/etc, and take a poll of who would prefer your style of order business. Of course you can't just wing it, you gotta market yourself as to why go thru you. First question I'd ask would be "So you can order anything? Well why would I have you do it if I can just do it myself?" I think that's your biggest hurdle. Do you have FFL license? Are you a certified gunsmith? If I was ordering from someone like a rifle + scope I would just have him mount it for me, the ability to multitask is probably something that would interest me more than a "order" business.

Opening a business is a tough and risky thing, and can get costly quick. I am not gonna go thru a firearm business that may or maynot be licensed, I am not gonna give my personal information unless the business is either legit and certified, long well established reputation, and above all doing something that is more easier and more advantageous for me, considering its something I can do.

For example, considering you have limited skills in gunsmithing (Just pretending, I am not judging you I don't know you, just providing an example, I apologize) and can only really help me find guns or parts and ordering them. If you provided a service to cut my foam case, duracoat my rifle, break it in, scope it, (of course on my dime and my ordered product) that would give me preference towards you. It saves me time and frustration. or provided hands on demonstrations on reloading, proper range estimation, how to use mildots, or if you could DELIVER my gun so I didn't have to make the drive!!!

Of course I am just rambling, but just giving you my advice on what you should think about when taking on the big stores. You gotta step up your game if you want to compete, again no offense just trying to say what I would want out of a store like yours.

 

[WinchesterAA]

I'm in a very similar situation, bud. I live in Houston, Tx and I'm going to school again, as well as pushing my own personal studies that aren't offered in the schools around me.

I used to work as a contractor for Comcast, but this job was 6 or 7 days a week, 10-16 hours a day, and none too pleasant with all of the corporate confusion going on.

SO, I quit, and designed business cards and flyers offering my services as a cable/phone line/ethernet installer, as well as PC repair services, and custom built machines.

After that, I distributed flyers everywhere I stopped that would allow me to place them somewhere, I handed business cards to anyone who seemed like it would benefit them to know me, and so far I make about 400$ a week on average now. That's 1/3 of what I used to make, BUT.. I don't drive very far anymore, or all that often, so I'm saving a good deal of money, and not killing my truck. My customers don't hate me anymore, and well..

no complaints on my end!


Also, the best part of it all is I can study all the time, even while working, I have time to visit my girl, and it was a good decision afterall. I was sweating it bad, but I needed something better than ONLY cable.

 

[jakemccoy]

I can't give you much useful advice because I don't have enough information about your background or what your trying to do. However, I did notice that you said you love your paper. You're going to have to get out of that mode. Computer programs make running things so much easier. Nowadays, information saved on computer is more secure if you backup everyday with an Internet backup service, like Mozy, Idrive, Carbonite, etc. It's not 1970 anymore. A dumber person than you will run circles around your business if that person has modern computer skills.

 

[geim druth]

Check through the Small Business Administration site,

http://www.sba.gov/

They have lots of info on starting your own business.

Your local Chamber of Commerce may be of help to you also.

If you do decide to lease store space, spend time picking your location. Think carefully about the type of customers you are trying to attract. How convenient is the location for them? How is the parking? How secure is the area? Is the site attractive? Are there other stores or attractions nearby that are already bringing your potential customers to the area?

Selling from books is tough. You need to have some stock to start with, something your customers can see and touch. It doesn't have to be top of the line, but it should not be cheap or flimsy either.

If you are only open on a part-time basis, make yourself available to your customers even when your store is closed. List a contact number on your door. Give a cell phone number to legitimate customers and shoppers. Return all calls promptly.

Hope this helps, good luck.

 

[mgkdrgn]

1) Local zoning ... can you run a retail business from your house?
2) Mama zoning ... unless you own the house, will she let you run a retail business from your house?
3) Is there an HOA (Home owners association) involved? Will they allow retail operation?
3) Local business license
4) State Sales Tax License
5) What ever state/local licenses are required to sell firearms
5) Updates to insurance policy on house
6) A safe or two
7) FFL
8) Business cards, accounting system, sales receipts/forms, display cases, yadda yadda yadda.

Once you have =all= of the above in place (that is maybe $2K - $3K), THEN you can think about buying inventory so that you'll have something to sell.

So, now you are now out, oh, $10K(bare bones minimum) or so, and you haven't had -any- income yet.

IF you have $10K - $20K laying around that you can afford to loose, a lot of spare time, and you can meet all of the local/state/federal/mama requirements ... have at it son, this is how dreams are built.

(and yes, I'm doing about the same thing myself right now)

 

[scottaschultz]

I was looking into getting an FFL to supplement my income. The thing that stopped me was finding out that I could not operate a business that deals with firearms from my home. If you can't do that, you are done.

You say that you want "a small shop, relatively limited inventory of the big sellers". With all due respect, this is stuff you can get anywhere. Keep in mind you are not only competing with the local brick and mortar stores, there are also dealers on the Internet to deal with. Having been in business, I learned a long time ago that people don't buy from you because you are a nice guy who needs the money, they buy from you because you can offer them something no one else offers.

You also say that you want to sell "ammunition, accesories, and reloading supplies." The biggies like Midway and Grafs can't get this reloading supplies, what do you know that they don't? And ammunition, well we all know how scarce that is.

You also say that you will have "a large, freely-visible catalog of guns I could order; an almost infinite variety, as opposed to "what's in stock". First of all, catalogs cost money. I worked in the printing industry for years and you have to make it worthwhile to start a press. This usually means quantities in the thousands. As far as ordering stuff, you had better be cheaper and quicker than places like Buds (who does not charge for shipping), CDNN and Able Ammo (to name only a few) plus the dealers on Gunbroker, AuctionArms and GunsAmerica and other Internet sites.

You said "OTOH, if I did something like charging a little higher for transfers, but delivered, and ran something like Bud's, that might work out..." First of all, people will shop around for the best price. You can't charge more just because you need the money! If you are going to deliver, your personal car insurance won't be enough. Will will need to carry much higher limits. And not to bring up Buds again, but they are a multi-million dollar operation. I am sure they started out small, but they have earned their place of distinction in the mail order firearms business.

As I said in my 2nd paragraph, you better give me a very good reason to buy from you other than being a college student who lives with his mom and thinks his $8/hour job sucks. Not to be cold and heartless, but all I really care about is what's in it for me.

The other thing to keep in mind is that while the firearm business seems like a no-brainer at this point in time with the change in leadership in Washington, things will eventually settle down. It simply can't remain at this level forever.

I don't mean to discourage you (hard to tell, eh?), but this is probably not a gold mine waiting to be discovered.

Scott

 

[kingpin008]

this is probably not a gold mine waiting to be discovered.

Bingo. Everyone else pretty much covered it already, but this bears repeating. Virtually any business, but especially those started on a shoe-string budget (as yours probably will be) is going to operate at a loss for at least the first two years. That's the facts. You will be in the red, living off of savings, eating ramen and peanut butter & jelly sandwiches for years before you see the first dollar in profits.

If that works for you, I wish you all the luck in the world. But if you need a better source of income right now, this is not the way to go.

 

[rfurtkamp]

if you could DELIVER my gun so I didn't have to make the drive!!!

No can do, or dealers would offer it.

FFLs have to operate out of a fixed place of business (including at gun shows).

 

[freakshow10mm]

OTOH, if I did something like charging a little higher for transfers, but delivered, and ran something like Bud's, that might work out...

That right there is illegal as all get out. You cannot deliver guns. All transfers MUST be performed on the premises on the license or at a bona fide gun show. Period. There are a few dealers that I know that got their license pulled a few months ago for that.

Besides the standard zoning, HOA, paperwork stuff you need to have a serious business plan. I'm sure you are just kicking tires out of frustration now, but opening a business is serious business.

Having guns in stock means you need a lot of capital to start with. $10,000 in guns to start off is barely getting interesting. What about ammo? What types of accessories? If you want this to be a full time job or a part time job, that will limit your scope of operations.

I started my business with a newborn son working full time and going to college full time. The business has been a part time thing for me up until a few months ago when I lost my day job. It's been a struggle and will continue to be for some time.

My advice, find a premises you can rent or lease for cheap. Get your FFL and do transfers, sell some ammo, buy and sell used guns. New guns are special order. Maybe keep a Glock or two, couple Ruger or Browning .22s. Keep doing that while you're in school on a part time basis. When you get out of school and can/want to go full time, then you will have the capital to move forward.

Gun sales and ammo sales will drop like a rock in the next 6-12 months for sure. Everyone I've talked to is already feeling it. Ammo is still on a run but gun buyers panicked and spent all their free money on guns and ammo and now they are feeling the economy's pinch. The used gun market will explode soon.

Charging the average $20 per gun transfer can be great income. That's why 99% of dealers do it. Plenty of them do just that. They have an FFL, they do transfers and order guns as special order. 5 transfers a day is $100. 5 days a week is 20 days average per month there's $2,000 per month gross profit. Special order a gun once a week and make $50-100 on the sale, there's up to $400-500 per month. Not much markup on ammo, but stock FMJ in 9, 40, 45, and 22 rimfire for sure.

 

[WinchesterAA]

BOY there sure are a lot of hoops for a guy to jump through before he can sell a gun...

How come it takes infinitely longer to be able to sell a gun, than the actual transaction takes?

Actually.. There's a lot of hoops to jump through to BUY a gun. It should be as simple as handing money to the seller, and receiving the product, but instead there are phone calls to make, superusers to consult about the person standing infront of you, because naturally, you couldn't ask him who he is, and get an honest answer, so you need to call someone in another state, who probably doesn't talk to people too much more than anyone else does, and MOST DEFINITELY unlikely would be the chance that the person on the phone knows the person infront of you, but still..

he/she will give that judgement.

Is that right? Am I missing the point, or what?

 

[22-rimfire]

Read through the comments. You are in for a a rough road. I suspect you will need probably $100K to get started even with a very low budget business. You still have to live and eat while your business gets started. If you borrow the money, think about how much interest you are paying monthly before you sold anything.

You will need a real store/shop. One dealer I know converted his garage into a store in a small town. He does just about every gunshow within a 200 mile radius, maybe further. I know he has a real low overhead business. But his prices really aren't much better than the regular gunshops. I buy from him because I like him, no other reason. $20 difference on a gun makes little difference to me in the long run. It is about inventory.

What you will find out is that other gunshops order guns too. Some sell at gunshows. At gunshows, you will be competing with folks outside your area and ones that have been doing it for a long time. Typical modest dealer at a show might have four tables. At $75 per table, plus motel and food expenses, you probably spent at least $500 for the weekend before your even sold anything. Being in business for yourself is tough.

You think you have a new wrinkle that will get you sales. Maybe.... but, there are few ideas that are new, just old ideas tried again at different places. Buds in KY is a good example of something that works and its a relatively new idea. They keep a very large inventory. I suspect they have at least several million $ tied up in inventory all the time. Yes, it's cheaper than selling bull doziers and cars in terms of inventory. But, it still takes a lot of capital to make the business work and you have to pay employees. There are only so many guns you can ship by yourself per day. Plus you have to answer the phone, take orders, answer questions etc. and still do all the packing. Where is the time? It doesn't exist; you have to have employees.

Enough with the negative comments. Other people start new businesses. You can too. Just go into it with your eyes open.

 

[DHJenkins]

I come from a family of business owners.

You'll need at least 6 months of reserve money to live/operate on while you build up a business. You'll need to work 7 days a week, 14-16 hours a day.

It's why I don't own my own business. I like working 8 hours, then going home and then having my time actually be MY time, to do with what I will.

My advice would be to try a different line of work. Contruction pays pretty well, even on the bottom rung.

 

[wvshooter]

You are always better off working for yourself than being someone else's employee in the long run. In the short run you can starve to death. My advice is to do something where there's plenty of demand. Being in Fla. heating and air service is needed regardless of what the economy is doing. You can get some training, go to work for an established heating and air business as an employee and spend a couple years learning the business while you're making good money. After two or three years if you're still interested in being your own boss you can buy your own van and equipment and take the plunge. You might even become the guy who has several crews in a dozen or more trucks.

I would make everything gun related a personal pursuit. Reserve it for your personal enjoyment. The headaches surrounding a firearms related business are legion. The capital investment required is enormous compared to a service type business.

 

[Deus Machina]

Everything I've thought of, but much more in-depth.

Transfers are looking more promising than anything else.

I wouldn't have a problem with the ramen diet. With part of the bills covered, me trying to go to school, and my low-pay, sometimes low-hour job, I'm sort of used to that.

The problem is that I don't have any fallback right now. Borrowing $25k in startup costs means I'm $25k in the hole and on the streets.

I know the competition, and think I could do as well as some of them. But not better. Relatively established, and they do sort of have their bases covered. The only thing I could have on them is a different specialization, and MSRP prices. The big places is also financing an indoor range and huge floorspace.

And when I said "I love my paper", I didn't mean that I won't use computers. I'm 24, I'm not old enough to count them as useless. But I do like having hardcopies on hand. I'd still have a computer, backed up daily, for ease of use.

Mom's good with a business, especially because she relies on me for the roof as much as I do. But I'm in an apartment, and will have to dig up the lease and check local zoning laws. I'd happily do just transfers from the kitchen table, if I can. I'm not sure if it's a federal or any possible local or lease-related thing that might prevent that.

And I used Bud's only as an example. If I could keep inventory, that would work better for me than a brick-and-mortar place. Otherwise, I could manage to spring for a good deal on a truckload of S&W Poodleshooter Mk2's, dump them through Gunbroker, and next week find a box of newly-imported H&K Schutenblasten's. Wash, rinse, repeat.

Would it suck? Oh, yes. But I'd rather spend my nights poor but working for myself, then poor and working for the unappreciative corporation I'm at. Besides, in essence, it's not far from how a lot of Gunbroker's dealers operate. I just need to dig up the proper methods for it. Inconsistent, but I could keep and supplement a part-time job instead of relying solely on an unestablished shop.

And, not offering accessories accessories in-store would cut on overhead; if I do indeed need a storefront, I could cut it down to a single office, centralize on transfers, and only need on-site room for a desk, filing cabinets, and a couple decent safes.

Either way, I'm not the type to jump in without knowing what I'm getting into. I appreciate all the input, and I knew well that it would be discouraging, but really at this point it's inspecting everything and the risk-reward analysis.

 

[Sunray]

"...I'm heading back to school..." For what?
It's extremely difficult to run any business when you're going to school for anything. One or the other will suffer.
"...a different specialization..." Figure out what that would be. First.
You won't get credit terms for anything you buy(all gun shops buy the stuff they sell from distributors. No such thing as consigment.) until you establish a credit rating with the assorted distributors. It'll be COD for everything. That means having cash to pay for it.
Forget running any retail operation out of an apartment. Most of 'em won't allow customers running in and out. A lot just don't allow any business to operate out of the building. Read your lease though. In any case, it means you would have to rent a space. Commercial store rents aren't cheap. Goes by the square foot. Look into the legalities of using a 'U-store-it' type place for warehousing. No firearms, of course, but accessories can be stored in one. Usually not horrendously expensive.
Talk to your ISP about a web site as well. Having your own domain name isn't terribly expensive. Network solutions charges about a grand to register one for 100 years. $13.99 per year for 20 years.
"...I'd happily do just transfers..." Requires an FFL. Likely the easiest thing you'll have to do. Talk to your local ATF office. They'll likely say no without a store front. Mind you, lots of retailers are mail order only. Bob's Gun Shop, for example. Parts guy who is not Numrich(I'd bet Gunparts/Numrich is just livid about Bob's domain name too) . http://www.gun-parts.com/index.html/
Don't even think about taking credit cards. Costs a fortune.
You'll most likely require a business licence too. Either State or local. Maybe both. Usually not a big deal though. If there is such a thing in Florida, you'll want a 'tax number' as well(that's what it's called up here). Lets you buy stuff for resale without paying sales tax. Go here for Florida sales tax info. http://dor.myflorida.com/dor/taxes/sales_tax.html
The most expensive thing will be liability insurance. If you set up to do transfers, you'll need it. Have any firearm in your possession, even for an hour, you can be sued if there's anything wrong with it. Even a frivolous law suit will cost you money.

 

[doc2rn]

Look at getting a small business grant fromt the gov. Then get your storefront opperation going. Beats having to come right out of pocket. Next comes the FFL then the LLC if you plan on making then selling something like ammo. As some have said hold off on the CC system, and get lots of insurance. Dont forget security because you will be a prime target!

 

[mgkdrgn]

Talk to your local ATF office. They'll likely say no without a store front.

Absolutely -not- true. All ATF cares about is that you meet the local requirements for your business. They want to see that you have a business licensee and a permit to collect sales taxes.

 

[FROGO207]

I have been on both ends of the spectrum in this one. Worked many menial jobs trying to find what I wanted to "do". Then started my own small business that was marginally successful for about 10 years. Then the bottom dropped out of the market about 15 years ago. I now have fallen back to old skills of Electrician/plumber and part time firefighter. I find it is good to have another take care of the business end and the weekends/evenings are once again mine for education. IMHO a so-so job with benefits that frees your time up for education is OK for the short run as long as the future is well planned out. That said I would recommend becoming a small business owner in a heart beat. First It HAS to be your ONLY job or you most likely will slowly fail. You can not afford to be sick or hurt in any way or this could be the end of both efforts. A friend the other week was saying that he was trying to open a pizza joint here in town. My comment was "There are 500 full time residents here and nine pizza places already, what makes you think we really need ten of them?" I hope you find what you are seeking but the road will most likely be long and stressful.:banghead:

 

[freakshow10mm]

You won't get credit terms for anything you buy(all gun shops buy the stuff they sell from distributors. No such thing as consigment.) until you establish a credit rating with the assorted distributors. It'll be COD for everything. That means having cash to pay for it.

Not true.

Look into the legalities of using a 'U-store-it' type place for warehousing. No firearms, of course, but accessories can be stored in one.

Where do you get the no firearms part? Have you read every agreement for every storage unit enterprise in the US? Have you read the federal law regarding storage of firearms in an off site premises used solely for warehousing? Doesn't seem so.

Talk to your ISP about a web site as well. Having your own domain name isn't terribly expensive. Network solutions charges about a grand to register one for 100 years. $13.99 per year for 20 years.

That is horrendously expensive. I have 4 domains for my business and they don't cost me that much together.

Requires an FFL. Likely the easiest thing you'll have to do. Talk to your local ATF office. They'll likely say no without a store front. Mind you, lots of retailers are mail order only.

There is no federal requirement for a storefront. You have to comply with zoning laws in your locale.

The most expensive thing will be liability insurance. If you set up to do transfers, you'll need it.

Insurance starts at $2,100 per year.

 

[scottaschultz]

Here, I will start doing some of your homework for you:

http://www.hillsboroughcounty.org/sbic/info/homeoccup.cfm
http://www.hillsboroughcounty.org/sbic/regulation/hillsborough.cfm

Unlike my county, I do not see any specific prohibitions on certain types of businesses, but there are still a lot of things to consider. I think your biggest hurdle is going to be your apartment lease.

As far as doing transfers, while this may seem like an easy way to start, you still need an FFL and it must be legal for you to operate a business from the location on your application. You do need to have specified hours (even if they are limited) when you will be open. This isn't necessarily for the benefit of the customers, but also for times when the BATF agent can drop by for an inspection.

The other aspect to doing transfers is that you will have to do A LOT of them to make any sort of living. Let's say you charge $20 to do a transfer. If you do 100 a month, that will be a gross income of $24,000 a year. Realistically, do you think there are 100 people a month, every month, who will transfer a gun through you in the Tampa area?

And another aspect of being self-employed... DON'T GET SICK! While an $8/hr may suck big time, if they provide health insurance, this is worth a lot! I know you are young and strong and think you are pretty much invincible, one trip to even one of those Med Stop places can set you back hundreds!

You say you have thought of everything... I question that!

EDIT: The first thing you NEED to do is call your landlord Tuesday morning and tell them you are considering starting a home-based business that deals in the sale of firearms. Even though you do not actually sell firearms, you are a party to the sale since it can not be completed without you and you will be storing guns on the premises that do not belong to you. Until you do that and until you get their approval, nothing else matters.

Scott

 

[Beelzy]

You live in Florida??

Do Pool Service.......Set your price, hours, vacations.

Easy to learn too!

 

[Bob Spangler]

It's good to see that you have the drive to go do this.

You're planning on going back to school, and that is a very good move. I think you should do that first. While you're there, you can be planning, researching, and getting some clever thoughts developed. It's all about the 'back of the envelope' calculations.

Then, get a decent job in your field. While you're working, start the business.

The reason is that you pay a good chunk of change every year to the gov't. You'll be able to write off your expenses, so effectively you'll be saving 1/4 of your salary. You'll appreciate that every April :^)

Bob

PS: I also recommend diversifying (I juggle three interests -none critical at any time, and all fun- and a professorship). In your situation, a good 'side' business might be apartment rentals in the building that you buy. That way all of your eggs aren't in one basket and you have more opportunities to deduct investments that raise your equity.