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Old July 21, 2010, 02:20 PM   #1
M4Sherman
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Gun shop Question.

My father wants to get into a business of some sort (again) and the question has been raised about a gun-shop. The problem lies in the fact that I have more time and know-how than he does but I am not old enough to get a FFl (18) so this is where the questions shall begin. If he where to open one would I be able to make sales and handle the business while he is at work or would he have to be present from when the doors open to when they close? What are the building and zoning requirements for a shop?

My parents have Tag teamed businesses before but cannot do it anymore since they have decent jobs that take up most of their time But I have flexible hours and make little money anyways.
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Old July 21, 2010, 04:40 PM   #2
NavyLT
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Quote:
If he where to open one would I be able to make sales and handle the business while he is at work or would he have to be present from when the doors open to when they close?
Depends upon which state you are located in. In most states the legal age to possess handguns is 18, so you would perfectly fine and legal. The Federal age limit is 18 for possession of handguns. If you were <18 you could still possess/handle handguns in the shop in the course of employment, but you would have to have written parental permission in your possession to do so, which obviously would not be an issue. (18 USC 922 (x)).

Quote:
What are the building and zoning requirements for a shop?
Totally depends upon the state, county, and city ordinances. There are probably Federal regulations regarding the security requirements for the guns.

This book would be a good place to start:
http://www.atf.gov/publications/down...f-p-5300-4.pdf

You're going to need to know a lot of that stuff anyway if you want to be in the gun dealing business.
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Old July 21, 2010, 09:48 PM   #3
M4Sherman
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We are in West Tennessee if that helps. I am going through as much information as possible. My father is exited about everything but the part of dealing with the ATF stuff.
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Old July 21, 2010, 10:46 PM   #4
Al Norris
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Looked at the ATF website and found this:

Question #4 from the ATF FAQ, Conduct of Business — Licensees:
Quote:
May an employee of a licensed dealer, such as a manager or clerk, who is under 21 years of age, sell handguns and ammunition suitable for use in handguns for the licensee?

Yes, if the employee is not a prohibited person (e.g., a felon). However, to sell handguns, a person less than 18 years of age must have the prior written consent of a parent or guardian and the written consent must be in the person’s possession at all times. Also, the parent or guardian giving the written consent may not be prohibited by law from possessing a firearm. Moreover, State law must not prohibit the juvenile from possessing the handguns or ammunition.

[18 U.S.C. 922(x)]
Then I looked at Cornell for the statute above.

Quote:
18 U.S.C. 922(x)(3) provides:
(3) This subsection does not apply to—
(A) a temporary transfer of a handgun or ammunition to a juvenile or to the possession or use of a handgun or ammunition by a juvenile if the handgun and ammunition are possessed and used by the juvenile—
(i) in the course of employment, in the course of ranching or farming related to activities at the residence of the juvenile (or on property used for ranching or farming at which the juvenile, with the permission of the property owner or lessee, is performing activities related to the operation of the farm or ranch), target practice, hunting, or a course of instruction in the safe and lawful use of a handgun;
So it appears that if you are at least 18 years of age, you are good to go.

You may want to browse the linked section, above. While not definitive, it provides a lot of good information.
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Old July 22, 2010, 09:25 AM   #5
carguychris
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Totally depends upon the state, county, and city ordinances.
+1, although I'll point out a few things, since I work in the land development business.

Counties generally have few, if any, zoning regulations that would affect this type of business. Most counties only regulate land-use activities that could potentially create a huge public nuisance (cement kilns, pig farms, and suchlike) and many don't even regulate those. You normally only have to worry about zoning within the corporate limits of a municipality.

Some city land-use regulations may extend a few miles outside of city limits under a concept known as extraterritorial jurisdiction or ETJ. I do not know if ETJ exists in TN. Check with the planning and/or building department at the nearby city if in doubt.

In my experience, most cities do not single out gun stores without shooting ranges in their zoning codes; they generally fall under the catch-all of "General Retail Business" or something similar. Small retail stores are normally allowed in almost any area zoned for any type of commercial or industrial use. OTOH shooting ranges, whether indoor or outdoor, are another story; they are generally tightly regulated, and may be effectively prohibited altogether if the city prohibits the discharge of firearms within city limits (which is commonplace), and the ordinance (or state law) does not contain an exception for shooting ranges (which is unfortunately also commonplace).

If you will be operating within a city, make sure you familiarize yourself with the fire code and check with the fire marshal, especially if you intend to stock handloading components. Unlike zoning codes, which vary from city to city, fire codes are broadly standardized; the most common one is the 2006 International Fire Code (IFC). Under the 2006 IFC, powder and primers intended for resale are considered explosives and are subject to more stringent storage requirements than loaded small arms cartridges, and the fire department is allowed to require an operating permit. Furthermore, fire marshals are generally given very broad legal authority to require property owners to do things in the name of public safety, and some provisions in the IFC are somewhat vague for this reason. In other words, the local requirements are often more of a matter of understanding the fire marshal's opinion than understanding the codes. It's best to get on this person's good side early in the process and find out the requirements before you start your business.

Hope this helps!
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Old July 22, 2010, 09:50 AM   #6
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Knowing guns is not enough - do you know how to run a small business. Can you find the available capital to stock it and support it until business generates enough business?

Do you read the industry mags - not the pop periodicals?

Have you taken any courses on businesses, taxes, accounting?

Most new businesses fail.
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Old July 22, 2010, 10:13 AM   #7
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Glenn is right on the money. I think that statistic is 2/3rds or more of all business fail within the first 5 years (it's hard to track when a business fails and what constitutes failure). The biggest reason for beginning business failure is not enough starting capital. Most people do no understand the vast amount of money that goes into a business before it starts generating profit. Visualize a gun shop. You have to buy all of those guns before the shop opens (ie: when you have no revenue). You also have to buy the licenses, display cases, ammo, clothing, cleaning supplies, aftermarket gear, phone system, computer system, etc etc before you get any kind of revenue. For most people this means a very large loan from a very friendly bank.

As far as actually running the business, your father will need to ask Chronos to create some time because it's a ton of work. If it's just you at the counter, what happens when two high-dollar customers walk in looking to buy? You can't help them both at once. You'll need help. And I don't want to go into the accounting and tax preparations. Also, how familiar are you with personal sales skills?

This isn't to discourage you, just to let you know of what lies ahead. There are a lot of great resources on this forum for exactly what you're trying to do. Do not under-prepare.
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Old July 22, 2010, 10:22 AM   #8
Glenn E. Meyer
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Two high end outfits in SA failed. Both were started by hobbyists, had no business sense, were rude, had crooked employees.

The big range owner in Austin told me that he tried to talk to them but they knew it all.
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Old July 23, 2010, 01:26 AM   #9
M4Sherman
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Alright time to start answering questions to get more answers.

My father and mother ran a trucking company (owner Operator and later just owner) for about five years ; quite successfully I might add, before personal reasons put a stop to it (Little sister Missed daddy) and they later owned a junk store but like I said they both got Very good jobs (sales rep and district manager).

As for zoning the I live in a very small town that is just of a the high way and there are a few buildings for-sale/rent that would be quite suitable for our needs; one of which we used to run a small "junk" store out of which did pretty well and rent/sell for a reasonable price.

The main reason he wants to open a business is to help bring more traffic into the town. the genral traffic has slowed because the last mayor created a speed trap and at the same time , doubled the water bill ($100 minimum per month) over hired the police department (5 full time 9 reserve) and some how got the crime rate to sky rocket. in other words screwed the economy. Well my father and many others are trying to fix this place and one of the main things the town needs is revenue . So hopefully we can get something going to bring the traffic in.

The gun-shop idea is prevalent because the closest one is about 25 miles away and it is crappy and the only decent one is about 35 miles away. Also the two main deer prossesing facilities for about 70 miles are both withing 5 miles of my house and one is right across the street from where we plan to set something up.

I am very proficient with personal sales since I have been buying and selling stuff in my spare time since I was knee high to a grass-hopper (8 or 9 years old) so that is not a problem and as for needing more that one person to help that is where the family element comes into play. This would be a week-end hobby job for me until hunting season comes around. By that time pops business slows down so he would work the counter and I would be working less than a block away with my brother. so if our father got swamped we are within shouting distance of coming to his aid and then we can scurry back when things die down.

Now as for the set up cost. they will be much less than for the average person because we have and abundance of spare time and tools to build our own stuff and what we cant build we have laying around (printers,credit card machines routers,modems,display cases [three of those big ones] ect). and the capital is already provided by means of a savings he has built up for this little endevor. So far I am figuring about 20K-30k to set up If we rent and use our collection's as inventory and then about 5k per month for at least a year

Thanks for the advice so far I am still learning and reading. Maybe we will go a different route but this one is definitely worth looking into.
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Old July 23, 2010, 07:05 AM   #10
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Carrying cost of inventory is a major reason that most stores fail.

You need a business PLAN. After getting overly-familiar with ALL the local/state/Federal regulations, acquiring all the local/state/Federal licenses and permits, allocated enough for marketing, inventory, capital for buildings, utilities, taxes etc., you'll see that $500,000 -$1,000,000 is not out of the question. Most gun wholesalers will generally not allow you to order 1 or 2 at a time - you'll need to stock a line of guns, including some you may not want (their dogs). There are SO many products and accessories, you'd need a building like a Dick's or Cabela's to store them all, so you will need to determine what your "target audience" (pun intended), is so you can start with that and grow the business.

One gun store here had to place initial order minimums of $25,000 to get one brand of inventory he wanted.

Over 85% of retail business fail in the first year, and 85% of what remains fail in the second year.

Make sure you know EVERYTHING about small business - what you're retailing doesn't matter as much if you know how to run a business.
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Old July 23, 2010, 08:29 AM   #11
carguychris
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Speaking to oneounceload's post, here's one thing I've observed: the two gun shops I know that best fit the "mom 'n pop" mold carry very few new guns. They primarily carry used guns and military surplus. Furthermore, I've been told by numerous different people in the business that the profit margin on new guns is very low. The money is in the accessories and trade-ins.
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Old July 23, 2010, 10:05 AM   #12
M4Sherman
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Quote:
you'll see that $500,000 -$1,000,000 is not out of the question. Most gun wholesalers will generally not allow you to order 1 or 2 at a time - you'll need to stock a line of guns, including some you may not want (their dogs).
One of the main reasons most businesses fail is because they spend to much money before they have a customer base. I have seen it happen dozens of times. So for any business we start $500,000-$1,000,000 is out of the question because that much of an investment for small business without a customer base is insane at best.

Quote:
One gun store here had to place initial order minimums of $25,000 to get one brand of inventory he wanted.

maybe in-order to get a discount but usually you can but 2-3 guns at a time from a middle man (AIM, cheaper than dirt ect) at a high price that you can then turn into a slight profit on. but your main income will be made on ammo ,gear and such.
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Old July 23, 2010, 11:19 AM   #13
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maybe in-order to get a discount but usually you can but 2-3 guns at a time from a middle man (AIM, cheaper than dirt ect) at a high price that you can then turn into a slight profit on. but your main income will be made on ammo ,gear and such.
Issue with that then becomes when someone walks in with a quote from CDNN or Bud's and you can't match or else lose money.........

And I agree about mom and pops selling few new guns. I would start with used ones, sell consignment guns, anything to make the shelves look busy for a low price. He needs to determine who his biggest draw of customers will be - hunters? target shooter's? HD/SD guys? Then he can tailor the bulk of his limited budget to that and have a smattering of other stuff to round it out. he'll also need to set up some wholesale accounts with distributors for the accessories
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Old July 23, 2010, 11:42 AM   #14
M4Sherman
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Issue with that then becomes when someone walks in with a quote from CDNN or Bud's and you can't match or else lose money.........
then they are more than welcome to pay the shipping,FFL fee and then the $10 Tennessee background check thing (still researching that). On new guns your only looking at a 10% profit most of the time. in other words they are there to bring people into the store so they will buy something you can make money on

Quote:
And I agree about mom and pops selling few new guns. I would start with used ones, sell consignment guns, anything to make the shelves look busy for a low price.
We have about 100 guns between us going from a mosin nagant to a custom Ruger redhawk. so a starting inventory is not a problem as long as we could also keep a steady supply of used guns coming in....and maybe a few cases of mosin nagants (59.99 each if I buy 20)

Quote:
Then he can tailor the bulk of his limited budget to that and have a smattering of other stuff to round it out. he'll also need to set up some wholesale accounts with distributors for the accessories
the Accessories are something I havent put much thought into. I am curious what a minimum order would require? We have an abundance of storage space thanks to my mothers current job. So my main overhead for that would be shipping and the main purchase which I would have to buy in bulk inorder to make a profit on that....
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Old July 23, 2010, 04:23 PM   #15
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then they are more than welcome to pay the shipping,FFL fee and then the $10 Tennessee background check thing... in other words they are there to bring people into the store so they will buy something you can make money on
Speaking of which, I would like to suggest offering cheap transfers ($10-$20 plus admin fees) as a way to get those people in the door.
Quote:
....and maybe a few cases of mosin nagants (59.99 each if I buy 20)
FWIW one of the previously mentioned mom 'n pop gun stores does a healthy business buying the big Spam cans of milsurp 7.62x54R and/or 8mm Mauser ammo, opening them, taking out the little paper-wrapped 20rd packages, and selling them individually at a markup.

Another related hint: Carry the old cartridges that Wally World doesn't sell (I suggest .45 Colt, .44 Special, .32 Long, 8mm Mauser, and .303 British for starters). This will bring in owners of old guns that would otherwise be fancy paperweights. People in rural areas don't like to throw things away.
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Old July 23, 2010, 06:01 PM   #16
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Work with EVERY gun related group, sponsor CCW classes, hunter-ed, make a big deal about your ability to special order anything, in short, provide whatever folks want at a reasonable profit margin
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