I need business help

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CelticArmory

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Kitsap Co., WA
I was wondering if there are other small business owners that have gun stores with fewer than 5 employees and less than $30K in inventory that could help me with some financial feedback. I'm looking at expanding my business from just services to the retail sector for my town and one of the things I'll need to do is give estimates for sales and such. I don't intend to offend anyone (one business in my state already got offended when I asked a question) but having never owned a retail business before and never having been a financial agent for any other retail business pretty much means I don't know the answers to the questions I'll need to address.

So if anyone is willing to discuss what it took to start up and a rough estimate of how much business they did in their first couple years, please PM me. All info of course will be kept in the utmost confidence. In short I'm looking for a little mentoring.

I would greatly appreciate any help in getting my business beyond this point because if I can't secure a loan to move into the retail sector, I'll be shutting my doors when my licensing expires in three years.

And if everyone thinks I've overstepped my bounds and that I should never ask business questions, just be gentile and don't hammer me too hard. Only bringing in a couple hundred dollars a month certainly won't pay for college courses in business and finance.
 
The first thing you need to do is develop a business plan. I am going to take a guess that the internet has some information helpful to that, if you search for it.

The business plan will include cost and cost estimates on such things as labor, utilities, building costs, advertise costs, inventory costs,hardware and display, Insurance, and continue down to all aspects of the business. It will also call upon you to estimate sales, and all other aspects that effect the bottom line. The more detailed the better picture you will have of how you can make the business work.

It will take you some time and effort to put this together , but it is the only way to become knowledgable enough to make the right choices.
 
You can also get free small business start up $$ from the government. I know a lady in San Diego who got $30k to start up a bistro.
 
You need to get over to www.fflonly.com. It's a forum for only FFLs. Everything is business related and the info isn't public. Come on over and we'll get you squared away. Stuff like this is best kept between dealers.

Disclaimer: It's not my site.
 
CA is asking an excellent question. Templates for setting up a business plan can be found anywhere, but the numbers to plug into the template are not. He's asking for help with the numbers so he can develop his own plan, and use it to seek funding. In certain instances, he may need to show a business plan just to find a landlord willing to rent him space, to find product distributors, obtain licenses, dealer franchises, and so forth.

I'm an architect and I own a restaurant, CA, so I don't have data for you. But I hope I help articulate your needs. Now, to find someone with direct startup knowledge.

Good idea from Rhino.

If it were me, I would find a distributor's rep in the region, someone who will be your vendor in the future. He has something to gain if you're successful. Offer to buy lunch (when you offer to do something for a man, he is more willing to help you in return). Of course, he can't give you specific data, be happy to get order-of-magnitute ballpark numbers. That's all you need right now.

And, be patient. Don't give up. Persevere.
Everyone likes a guy who believes in himself.
 
I'll check out that site, thanks Rhino.

And like ants said, I'm just looking for the numbers. I've got an idea of expenses if I lease a particular property and I know roughly how much in inventory I want to start with. Most likely it will be just me till I can figure out how much I can make in my AO, but that's the kicker. In order to get a loan I need to be able to show how much I can make, but I haven't a clue.

I'll do a little more looking on Business Plans and such and check out that other site.
 
Break even point on sales:

overhead divided by profit margin

$5,000/.4 (40%)= $12,500 in gross sales to break even. To make a profit, sell more than $12,500.

What I advise startups to do is buy and sell things that move fast. Two week maximum turn time. Traffic is your lifeline. Get them in, then sell to them. Stay away from gimmicks. Genuine service and sales is what counts.
 
You can also get free small business start up $$ from the government. I know a lady in San Diego who got $30k to start up a bistro.
Click to expand...
Sorry, SBA absolutely will not help gun dealers.

If by stocking $30k in inventory you mean specifically firearms, I would focus on trades, used guns, and consignment sales instead of new stock, as there's almost no markup on new guns.
 
RhinoDefense said:
Break even point on sales:

overhead divided by profit margin

$5,000/.4 (40%)= $12,500 in gross sales to break even. To make a profit, sell more than $12,500.

What I advise startups to do is buy and sell things that move fast. Two week maximum turn time. Traffic is your lifeline. Get them in, then sell to them. Stay away from gimmicks. Genuine service and sales is what counts.
Click to expand...

Those numbers help some. I can figure out what my overhead will be without too much trouble. As far as inventory goes I plan on not just having firearms but also accessories and supplies. Everyone needs cleaning supplies and shooting supplies. They are inexpensive for the most part. Also reloading and ammo supplies. The only firearm related anything in my town is Big5 and Walmart. The Walmart doesn't sell firearms, only limited ammo and supplies/accessories. Big5 only sells long guns and they have very limited accessories/ammo and no supplies.

Bubbles said:
Sorry, SBA absolutely will not help gun dealers.

If by stocking $30k in inventory you mean specifically firearms, I would focus on trades, used guns, and consignment sales instead of new stock, as there's almost no markup on new guns.
Click to expand...

I was reading up on the SBA site and there was nothing outright prohibiting firearms businesses. In fact the lending is up to the particular lender, not SBA. I also intend to have a variety of retail stuff. I might do consignments, but I really hate the idea of buying used firearms as I've been burned every time I've done that. I may have to work up a procedure for inspection before taking in a used firearm that involves full disassembly, inspection and test firing.
 
Bizstats.com (not my site)

My New Venture Creation professor swore by it. I kinda have to take him seriously seeing as how he is the head of small business research and development for my university.

You may not find your exact industry, but you can usually use logic/common sense and poke around in an adjacent industry's financials until you come up with a suitable number.

Also when googling templates you might not want to use a full business plan right off the bat (extremely time consuming.) You might try a feasibility analysis or a summary business plan template, it will get the ball rolling with most financial institutions.
 
a rough estimate of how much business they did in their first couple years
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If they opened their business in a healthy economy, the numbers won't be comparable. You're opening a business in a recessionary economy. It's different.

Rhino used a profit margin of 40%? I find it hard to believe that firearms and firearms components stores have a profit margin of 40%. Celtic isn't going to be able to buy in volume the way Walmart or Basspro might.
 
Rhino used a profit margin of 40%? I find it hard to believe that firearms and firearms components stores have a profit margin of 40%. Celtic isn't going to be able to buy in volume the way Walmart or Basspro might.
Click to expand...
First off, it was an example to illustrate the math. Secondly, you don't have to be a volume seller with buying power like Walmart or Bass Pro to make money in this industry. I know several FFLs that are making net profit of 30-60%. Every business is different.

Good business managers can do well in any environment. It's not the economy, it's you. Blaming the economy is a cop out.
 
I have experience with SBA. Periodically they have programs to 'target' certain types of business,
and also to shy away from other types. Last year they had a negative thing on restaurants,
ours couldn't even get in the front door.

But SBA people are very friendly, you can call and ask.
Just don't go thinking that the Government hands out startup money.
They help secure loans under specific conditions.
They do NOT simply hand out billions,
unless of course your business is on Wall Street.

Hey, Celtic. That's the plan! "Celtic's Wall Street Bank and Guns and Ammo".
Obama will fall over himself handing you billions!
 
Good business managers can do well in any environment with enough hard work, luck, financial reserves, and a spouse with the patience of Job.
Click to expand...
There, I added something to it, Rhino.
 
We tried for an SBA loan when we wnated to expand, an already profitable 40,000 sq ft business, "a gym", since we were both in resonablly good financially shape, and white, We got a big zero. They don't lend money to "regular people", they specialize in minority, and people who wish to put up what they already own as collateral, you would be better off with a private funding. I worked on a business plan for a year. It's a lot of work, but there are "angel investors" along with "investmant groups" that you can pitch your ideas to. You must have a thorough Business Plan, first, as they give you 15 minutes to make your pitch, contact me and I will send you some ideas, I have a BP from start to finish for what we were working on. It was a make up related device. But there are different stages like seed money, start up, etc, you have an already going business so you are basically lookjing for an angel investor, who in turn want's to see financials and projections. I personally have never seen a caucasion male with a home and income, get a loan from the SBA. First thing is a cofidentiality agreement,so your private concerns remain private.
What someone else did is only relivent as far as giving you marketing advice. You need demographics, household incomes, percentages of how many familys own at leats 1 gun 2, 3, etc and a top down analytical study to back up the reason why you feel your projections are correct and where you expect the numbers to be looking out 6 months forward to 5-10 yrs. It has to be done right, and if you never did it, looking at wbsights is going to make you feel it's over your head. It's really not, most is Guesstimations, based on current trends. It comes down to ,what you have that is good enough for someone to put their money into vs something else. And how you justify the numbers, You will need a lot of Stats. Try to look at it as if you were lending a complete stranger x amount of money, and what you would want to know. The net does have templates you can use for an starting point. Most has to do with how convincing you can be to a stranger, and how prepared you are when taking a meeting, "assuming you get one" Right now it's hard to get start up money for almost anyting.Even alternative energy, "which was hot even in the recession" has been getting clobbered because of too many concerns over how un effecient and impractical, wind and solar are. If you follow the market these stocks have got killed the last few months.
Why don't you look for a partner, even a minority non voting shareholder, as all you need is a little help and cash, You can use Google to do your online ad work. I know several companys that use Googles marketing to do all their ad work. They know where to place your ads better than we can ever learn. And your local stuff is just print and whatever else you decide you portion out depending on what you have. But I think a partner is more what you need, maybe someone with more business knowledge, and an interest in guns, "they don't have to have an interest in guns, but it would make what your trying to do easier if they did"
 
I know several FFLs that are making net profit of 30-60%.
Click to expand...

They aren't start up businesses I'll bet. A start up business will necessarily have a much lower PM to attract business.

Now is a terrible time to start a durable goods business. With online retailers such as Bud's Guns, and the internet offering firearms components (think MidwayUSA, Cabelas, etc), a start up gun business doesn't stand a prayer in a recessionary economy.

Plus, if you notice, the OP says it's all contingent upon his ability to get a loan. Banks aren't accepting risks re loans these days. And a gun store/firearms related store in this economy is extremely risky.

I think it's moot.
 
I'm one of those minorities, they didn't lend to me.
Click to expand...

It's not just you. After the subprime collapse where many banks went bankrupt, everybody tightened up their lending standards.

That's why the OP's plan won't go beyond the conceptual phase, IMO.
 
That's just one of the things , they don't lent to 95% of the people who apply. We had the man from the SBA tell us that. We didn't fit into their niche. In order to get them to give you a lone their formula is almost impossible to fit into. But white males are a lot less likelly to get a loan from them if they make a decent living. You would be better off with a credit union.

How to Get an SBA Loan

The SBA is an important source of business loans for American entrepreneurs. Know the general criteria set by the SBA for its small business borrowers.
by Lyve Alexis Pleshette
Staff Writer
It says you have to have the money in order to get it, that's why I suggest he persue an alternative.







An important source of financing for U.S.-based entrepreneurs is the Small Business Administration (SBA). The SBA provides short- and long-term loans to eligible, credit-worthy start-ups and existing small businesses that cannot obtain financing on reasonable terms through normal lending channels.
(article continued below ...)




Note, however, that SBA does not provide direct loans. Rather, the agency provides guarantees to loans availed through SBA's partner lending institutions, which includes many community banks. The applicant must satisfy the lender's requirements before he or she can ask for a guaranty from the SBA, unless the borrower is deemed prequalified based on the person's character, credit, reliability and experience (prequalification is for loans $250,000 or less).
taken from here http://powerhomebiz.com/vol44/sbaloan.htm
So you are getting a bank loan, and it basically says what I pointed out, you need collateral, so if you have thet then you can just get a loan from the bank, if you qualify, which is now almowt impossible for a business like a gun store.
 
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Score

Checkout the SCORE wesite score.org. SCORE is retire executives who provide free advise and counselling to small businesses. They can help with business plans etc.

Good luck!
 
The auction house I work with for transfers wants to eventually partner up and effectively move in together, however knowing his personality and the fact that he's got the financing he would basically want to own my business and give me a tiny little cut. :banghead: I wouldn't mind pitching in with him if he profited from his business and I from mine, instead of him profiting from everything and me nothing.

Another thing I was thinking, since most loans require collateral, if I got a loan to purchase a retail property with enough left over to renovate, stock it and perhaps hire someone that might be more doable.
 
Partnerships are hard. If you don't trust him, don't do it.

You need to look into angel investors if you can't secure traditional financing and can't bootstrap. They will want a percentage of ownership and profit (20-49% ownership). The ownership (shares) is their collateral.
 
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