Outfit a gun shop for $60K? Experts (or not), please ...

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takhtakaal

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A good friend is in an unusual immigration situation and would rather leave assets behind in an investment than attempt to stay in the country as an illegal immigrant. He's firmly against it, in fact, unlike many others.

He's been here since '99, and would like to ultimately remain here as a permanent resident. His visa runs out this spring, and although his son is a US citizen, the wife will be returning to their home country with their son. He will be moving to Canada, where his legal status is more secure, and where he has a second residence.

We've covered the bases of incorporation, and figure that an LLC and an FFL would run us close to a grand. There are no legal issues -- foreign nationals can take part in incorporations. Figuring on leasing some sort of a store front, help me figure out a business plan based on the assumption of $60K to invest in stock and fixtures.

I know that it would be a fairly bare arrangement, and I've been kicking around a few ideas, or hooks, to increase traffic with things that I've never seen offered in gun shops in the way of goods and services. What would you like to see more of?

Please, share your ideas. I've already let him know that most of a gun shop's income doesn't come from new firearms, and I've had him cruising the internet looking at places like Bud's to get an idea of just how competitive that market segment is. He's depending on my knowledge of retail, in general, and firearms, more specifically, and I'm depending on the voice of the people here for more of the same.
 
While potentially legal, some local folks may "attempt" to make it out to be a money laundering scheme or gun runnig or something equally ethnocentric. Maybe get an idea of local demographics to determine the best place to put the store. In today's very touchy world, people can get scared of gun money (they see as bad) going over ANY border, or vice versa. Im not against the idea, however, uneducated public may be so. That out of the way... Heck, go for it! A gun store is always a neat idea!:)
 
There's nothing potentially legal about it. It's completely legitimate, and he isn't going to be involved with the day-to-day operations, anyway.

I do, though, see the somewhat romantic nature of the whole "gunrunner" image.

gunrunnermy6.png


Kind of an '80s hair band sort of thing -- what the hell, I've got enough hair!

Anyway, back to the question: how much of what for $60K at a bare minimum?
 
The OP's question seems like a serious one. Let's please not hijack his thread.

I'd be very interested in hearing from anyone with experience establishing and running a gun shop. It's something I've considered recently, and I'd like to hear what others do.
 
I know you ask for expert opinions here and I'm not one so skip this if you want to. Seriously though, I honestly couldn't outfit a nice gun vault from the floor up and put 50 nice guns in it for 60K. I thought about this perspective and thought there might be some relevance.
 
things that I've never seen offered in gun shops in the way of goods and services. What would you like to see more of?
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ok no joke it was a total failure around here but a long time gun store in the early 90's turned to tobacco and home brewing supplies in addition to fire arms. My delima with that would be but a gun or brewing supplies as I am a Home Brewer too.
As for other goods,services it would be funny to me to see a gun/porn shop I guess with prostitution on the side. Illegal as it would be it will make a huge money maker.........OK JOKES OVER

many gun shops go to poly coatings and such a pawn shop here did that at first for guns then started doing rims and such. Basic gun smithing perhaps is another service.

I would stay out of the pawn realm.
 
I think a huge plus would be offering safety / CCW classes onsite. I also find that very few stores have a great holster / accessory selection. I usually have to do that online.
 
Know your area. What's not well-covered? There's no store within an hour of where I live which sells entry-level defense weapons and reasonably-priced ammo. Alternatively, you may live in an area where pawn shops abound but sporting firearms are hard to come by.

I'd suggest something like a firing range with entry-level pistols and cheap ammunition. Start with only a few manufacturers and three or four types of ammunition. Have catalogs of other manufacturers available and charge non-obscene prices for ordered firearms and for FFL transfers. That way you'll build a base of entry-level customers who will hopefully practice regularly and eventually upgrade (or buy for their spouse), plus attract gun nuts like us who like the $10-15 FFL fee and will buy ammo and gear while they're in the store.

Lastly, and this is just a thought, specifically not carry merchandise from countries like China. Get as much "Made in the USA" stuff, with signs saying so, as you can manage. Some of us spend extra time checking the country of origin for products. I won't buy from China and I'm willing to pay a premium for stuff made in America.
 
Here is a link to a site that deals in gunsmithing and running a gun shop
http://thegunsmiths.com/phpBB2/ I found this article to show some common sense as well http://thegunsmiths.com/phpBB2/viewtopic.php?t=501.
Depending on rent and what type of fire arms you plan on caring it might be difficult to do with only 60 grand but with that much of an investment you might be able to barrow more or set up a credit account with several distributors. I have had several shops and all made me money, but guns and firearm accessories isn't enough, carry paint ball, and air soft, archery, clothing, safes, by all means if you have the space and a qualified smith near you bring him in, rent space to him he should have his own business within your shop but responsible for his own insurance, taxes, and record keeping. Hire friendly knowledgeable employees, keep the shop well lite and clean, you can have manufactures reps come in and talk to your staff about their products and even come in and give customer seminars, they usually will give you some very handsome discounts during that time as well.
Sponsor competitions in your area, I bought out a gun shop a few years ago that had a large inventory of single action pistols, I sponsored a couple of cowboy action shoots at the local range, by the end of the second match I had sold and reordered rifles shotguns and pistols for the sport, I even started caring vintage clothing, sometimes you need to create your own opportunities.
Good luck
 
You might have a problem if the individual who is leaving the country owns stock in the company of 5% or more, then the ATF will have problems issuing the FFL, unless it is a publicly traded company, in which case there is a variance you can apply for.

However, if he merely gives the money to you as a business loan, and that there is a repayment schedule, then they can't complain, as he is merely an investor, and not an owner.
 
$60k isn't going to do much for traditional gun retail, IMHO. I'd wager my LGS has over $60k in ammo alone. If you add a gunsmith or instructor, you'll have to gauge demand for that and pay them a commission unless they get all revenues and pay you a rental fee.

If it's a gun business you want, I'd find some cheap warehouse space and start selling non-FFL parts over the internet for Glocks, 1911s, and AR-15s.
 
I work in a gun store and I can tell you that here at least this is a bad time to even think of getting into the business. We started a downturn last summer and it's getting worse every day. With the cost of gas and heating going up every day and the threat of looming recession, people are holding off on toys
 
You certainly aren't going to get much for 60K. Don't even think about an indoor range, or a large gun selection at all.

There's also insurance.

Like another poster said, low-cost, decent quality firearms, ammo, and accessories. Not many guns over $500, I'd say. Most gun stores around here abound with hunting rifles and shotguns, and AR-15s. None have a large selection of .22s, or decent used handguns and the like. Poorer people like me appreciate a good inexpensive .22 and handguns that are affordable to us. You can always tell a customer that you will be more than happy to special order an expensive firearm for them.

Parts and non-firearm stuff- fishing, paintball, etc, should also be looked at.
 
How about a Pawn Shop.

Wait for them to bring the guns to you, and then loan them .10 cents on the dollar.

Only way I can think of to open any kind of gunshop on only 60K.

rcmodel
 
The pawn model won't work here; our state laws forbid moneylending against the worth of firearms.

The advice about a low and slow start is well-received and on the money. Doing something with a range would be nice, but the liability insurance is jaw-dropping and it's hard to find a political subdivision around here that will allow you to discharge firearms, indoor range facilities or not.

I'm not entirely sure that I agree with the thought that this is the worst of times to be getting into such a business; in fact, it may be the best time of all. Even fruit flies at this point are well aware that the Big Three probable choices for POTUS, starting 21 JAN 2009, represent Bad, Worse, and Worst for our interests. I lived through the beginning of the last ban, and it turned into a furious feeding frenzy as people began waking up to the reality that their wings were getting severely clipped.

I'm thinking of going the route of Taurus, Rossi, Glock, lower-end S&W, and building up to the point where we could stock bigger and better. Tomorrow we're making another grand sweep around the area to look at a few shops and see how they do business. Obviously, doodads and accessories are good selling items, but I've been told that Galco is almost impossible to do business with as they have a crazy high minimum andd pretty much tell you what you'll get.
 
With only $60k to work with I'd say get yourself a niche and really work it - get a tiny storefront, join the community forums, and have an online presence. Become a distributor for the brand and create a network of smiths and custom shops you can send work to. You're going to need to make yourself some kind of authority or destination retailer for the product/brand.

A few niche gun markets have already been suggested - the best advice I can give is to go with what you know, there's probably some aspect of firearms and the culture and community surrounding them you already know more about than most simply because it's what interests you. Also, I'd stay away from the already heavily commoditized AR/AK market - it'll be much more difficult to stand out in the crowd.
 
Low starting budget doesn't mean low end. Often just the opposite.

In many areas the low end is already covered by local dealers who can move some volume. To scale things... I got into a discussion with an employee at a local large semi-discount sporting goods/gun store. She said that on a normal Saturday they usually sold around 100 guns and on a busy day (around the holidays or whatever) that could easily top 200. In other words they may be spending more than $100,000 a week with their distributors just for guns for that one store. That gives them access to discounts you can't get.

If you offer items nobody else can/will provide (in your area) then people who want what you've got will work with you even if you have a small sort or need more time. Selling customized 1911s out of a small storefront might be an example of that... I've been in "shops" that basically had at most 200 square feet of retail space, a few counters, and not very many 1911s on display. The guns they had were more a catalog... you want the stock plates from this, the hammer from that, the frame finish of this other one? Sure thing. You could buy them out of the counter but the point was to get exactly what you wanted. The upside of that is that, when a customer orders, you put together the parts list, go to your vendors, assemble the gun, and so on all the while knowing that you have a customer for the gun before you order it. The downside is that only a few types of guns can really be sold that way (1911s, AR-15s, 700s, mausers, etc) because the firearm distribution network seems to be really sketchy and you can't order any old gun (except those I've listed above...there are lots of people that can have a 1911 frame or ar15 receiver in your hands tomorrow guaranteed) from your distributor and know you'll have it in a week or even two months.

That's minimizing inventory. The other angle is minimizing cost of inventory. Some types of "inventory" cost you very little. Consignment guns are a great example... you don't pay for them because they aren't yours. You just sell them and take a portion of the money. Other examples would include paper targets and the like just because they are cheap. Getting consignment guns takes time and presence though.

If it was me I'd set up a web front end and "will call" style ordering... "If you want an ______ you order it from us online (or in the store) and we'll call you when it arrives." Set that up for both guns and accessories. Have bread-and-butter items in the store. Also arrange with a local smith to push custom (especially custom fit and finish work) and oddball. Have your "low end" supplied by consignment and orders that were never picked up.

But it ain't me....
 
The pawn model won't work here; our state laws forbid money lending against the worth of firearms.
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Slightly off topic for a second, what a stupid law. In Florida Pawn Shops do take in firearms as collateral, to pick them back up the owner has to pass an NICS background check. So the state gets a two-fer out of it, one - desperate people in need of cash give their firearms to people who keep then in a safe locked up and two - the state gets to check the owner of the firearms yet again (assuming they were checked in the first place) for eligibility.

Back on topic, start an online firearms accessories business, pick a couple of main lines like AR-15's and XD's, whatever carry everything except receivers and the actual pistol. The advantage is that you don't have to waste capital on bricks and mortar and you can serve a much wider audience.

Another firearms area that is completely neglected and I mean completely, is effective and nice civilian clothing designed for concealed carry.
 
I think a lot of gunshops in my area fail to fully capitalize on online advertising. Sure they have a few tidbits of information, but i haven't seen any local shops have a comprehensive list of their inventory and or prices (not sure if its a "can't advertise" issue or not).
 
Stock stuff for the competition shooters. Not many shops carry much of anything for this small, but very active group.
Most reload, so that stuff is always needed, as are specialty targets suitable for the various matches, extra mags for the most popular models, 'etc.
It might be tough to compete with the web sites, but folks who shoot a lot don't generally object to buying local and paying extra for the convenience.
Compared to the cost of match fees and regular practice, it's not an obstacle.
 
Get ahold of Lipsey's they are wholesaler. Also I live near Dallas and the gun shop I go to has a boresite offer for $25 you would be amazed how many people do it. I have seen 3 people at the same time getting their gun boresited right before deer season. I guess trying to save a few rounds at the range or lease. Maybe also keep some reloading supplies in stock. Start by selling guns on consignment so you can use capital for the other stuff. Good luck
 
rimfire?

Somehting to think about...several of my last purchases have been .22's in various forms. Ammo's getting more and more expensive.

How about a store that specializes in .22 and other rimfire formats. Market it as an "entry level" store, unintimidating for new shooters, the "gun shop commando's" probably won't hang around long to intimidate the new folks.

Start-up costs would be relatively lower, you can accessorize the daylights out of any .22 (think Ruger Mark series pistols and 10/22's). Offer a wide variety of .22 ammo (it's hard to find a place to buy 1-2 boxes of a variety of different types of ammo to try out. Put together yourself a small indoor range (i'm thinking the engineering of a rimfire range would be relatively simpler). Sponsor rimfire matches, boy scout events, etc. especially focusing on the younger generation.

Just my humble opinion.
 
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