I need business help

[Grey_Mana]

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[mnrivrat]

Don't forget to make an apointment with your local Chamber of Commerace person. They have a lot of information reguarding the resources available. All the way from government loans to grants , to rental buildings, etc.

 

[RhinoDefense]

They aren't start up businesses I'll bet.

My business made over 40% net its first year. Many of those I know made in excess of 40% net their first year. There are ways to make money in this industry. Some people know where to look.

A start up business will necessarily have a much lower PM to attract business.

I disagree. Profit margin does not attract business. Value does.

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.

You don't understand this industry very well.

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.

Banks are a joke and so are business loans. The OP needs to bootstrap, find investors, or use his customers to fund his business. Getting a bank loan is for established businesses and not startups.

 

[SunnySlopes]

You don't understand this industry very well.

Anybody can boast of anything on an anonymous internet forum. To say I doubt you is an understatement.

Regardless, let's see if the OP actually goes anywhere with this. I say he won't. I say his plan bears no similarity to the product you endorse. His product can be had from any one of a hundred internet sources.

You're comparing apples to oranges.

 

[RhinoDefense]

An economic recession brings growth in two industries leaps and bounds ahead of others. Those are the food industry and the firearms/ammunition industry. When SHTF, people want food and protection so they seek it. People have to eat and people have to be safe.

There are ways in which the smaller business can compete with the box stores and knock their socks off. I'll give you a hint: small businesses react to markets much, much faster than big businesses.

Go check out New Frontier Armory out of North Las Vegas (NV). He started his business during the recession and now does $8+ million in sales annually. Go tell him he's not going to make it in this economy. :banghead:

 

[SunnySlopes]

He started his business during the recession and now does $8+ million in sales annually. Go tell him he's not going to make it in this economy.

That has nothing to do with anything. How's his cash flow? How are his liquidity and profitability ratios? So a company makes a million in sales. How much do they owe? What's their overhead? How much interest are they paying for their loans? Just because they sell a lot doesn't mean they make a dime.

I'm not going to go to the trouble to try to teach you Economics 101. You might have a highly specialized product which gives you a particular niche, but that's not what the OP is talking about. His competition is going to be Walmart and Buds Guns.

But like I said. The whole thing is academic. The OP isn't going to be able to pull it off. It's just wishful thinking on his part.

An economic recession brings growth in two industries leaps and bounds ahead of others. Those are the food industry and the firearms/ammunition industry. When SHTF, people want food and protection so they seek it. People have to eat and people have to be safe.

Nonsense. In a recessionary economy people are looking to scale back spending. That's why durable goods always take a hit. SHTF? You're talking two separate scenarios. Try to stay on track. We're in a recession. Society hasn't collapsed. Yet.

 

[RhinoDefense]

That has nothing to do with anything. How's his cash flow? How are his liquidity and profitability ratios? So a company makes a million in sales. How much do they owe? What's their overhead? How much interest are they paying for their loans? Just because they sell a lot doesn't mean they make a dime.

Talk to him about it. It's not my company.

I'm not going to go to the trouble to try to teach you Economics 101.

I'm well educated already, thanks.

You might have a highly specialized product which gives you a particular niche, but that's not what the OP is talking about. His competition is going to be Walmart and Buds Guns.

Both his competitors rely on high volume, low margin. Focus on what your competition doesn't. Is that his true competition? Maybe, maybe not.

But like I said. The whole thing is academic. The OP isn't going to be able to pull it off. It's just wishful thinking on his part.

So if you don't have anything useful to contribute to the OP other than telling him he's going to fail, stay out.

To the FFLs on here, this guy is exactly why I say to not seek business advice from customers on gun forums. Customers on here do not understand about business and do not understand about this industry.

 

[SunnySlopes]

Talk to him about it. It's not my company.

You brought him into the picture. I could care less. High sales doesn't mean profitability.

this guy is exactly why I say to not seek business advice from customers on gun forums. Customers on here do not understand about business and do not understand about this industry

That's maybe the most ignorant and pretentious post on the thread. You know nothing about me. And even less about economics.

As far as my not having anything to offer the OP other than that he's going to fail, he came onto a public forum asking for advice. My advice is to not try to start a retail gun business in the midst of a recession.

And you haven't offered anything that demonstrates you know anything about business or economics. Like I said, on the internet.........

 

[Bubbles]

I'm looking at expanding my business from just services

Dumb question, but what services are you offering now? We have a ton of firearm retailers in my area, but almost no one offers gunsmithing, refinishing, etc.

 

[RhinoDefense]

I've posted plenty on business, not necessarily in this thread alone.

 

[gym]

I thought I put this into perspective on page 1, SBA, is just a Bank loan, look back to my post. I went over "angel investors" the liklyhood of borrowing money from an institution in this economy is almost zero. Your only chance is to get a partner. A working partner who needs to buy himself a job. Companys just cut 5% accross the board accross the entire gammitt in the USA. No one is lending money. You need to find a guy who wants to take a shot, someone who can look at the numbers and see a way to boost profits.
Maybe offer instruction, duracoating, etc. That's really your only shot, as you already know.I looked in to gun stores a few months back, it's a high risk deal if you don't have "play money" to risk. People loose jobs, they cut back on things that they don't need, like another gun, a gym membership, that new car,too many folks are worried their going to lose their jobs to buy things that they don't really need. If you are catering to the average guy who has a couple weapons, he's holding fast right now. Maybe after the elections it will be better, if Obamma gets in it will be worse, so it's just too iffy.

 

[CelticArmory]

Banks are a joke and so are business loans. The OP needs to bootstrap, find investors, or use his customers to fund his business. Getting a bank loan is for established businesses and not startups.

It’s a little hard to “bootstrap” a retail business on $300. With my current services in my area I’m not quite pulling in enough to pay my office rent, let alone rent out a much larger and more expensive building and fill it with inventory. I live rural and all of my customers are of the poorer class and certainly won’t kick in investment money. My auction partner puts up money for me to order firearms to be sold at his auction. The down side to that is I’m not making enough off the “partnership” to keep me afloat. That’s why I’m looking to get a retail place of my own.

… His competition is going to be Walmart and Buds Guns.

… The OP isn't going to be able to pull it off. It's just wishful thinking on his part.

Nonsense. In a recessionary economy people are looking to scale back spending. That's why durable goods always take a hit. SHTF? You're talking two separate scenarios. Try to stay on track. We're in a recession. Society hasn't collapsed. Yet.

My competition in my town is not Walmart or Buds Guns. Walmart here doesn’t sell firearms, only a little ammo and very little accessories and supplies. Big 5 sells long guns only, little ammo and very little supplies and accessories. The nearest gun store is about 15 miles away in another town and they provide poor service and high prices.

As far as Buds Guns goes, while a lot of people want to buy from them or on Gunbroker, our state has a Use Tax on anything brought in to the state and they’ve been pressuring gun stores more and more to collect it. A lot of places are either charging the tax or no longer doing the transfers. I’m one that has stopped doing the transfers because I feel the tax is immoral and unconstitutional. A few of the places around here that do take the transfers and charge the tax also charge a hefty transfer fee because they would rather have the business than have it go to the internet.

Now, if Sunny and Rhino would please stop bickering on my thread, that would be nice. And don’t poo poo me, Sunny, don’t count me out, don’t think I’ll give up. I’m as stubborn as a Missouri Mule, failure is not an option. Oh, and before I decided to stop doing transfers from out of state I was seeing an uptick in firearms sales. Same with the firearms sales at our auction. Our nation is falling apart, it’s not just a down economy, and most folks can see that and are preparing, especially us hicks.

Dumb question, but what services are you offering now? We have a ton of firearm retailers in my area, but almost no one offers gunsmithing, refinishing, etc.

Thought I’d covered this before. I’m a class 07 gunsmith. I offer a variety of basic gunsmithing services. www.celticarmory.com (my site)

 

[SunnySlopes]

Sunny, don’t count me out

No offense friend but I know what I'm talking about. I'm currently analyzing the financials of a couple of corporations and understand a thing or two about business and economics. Now is not the time to start a business that sells a) luxury items and/or b) durable goods.

I hope you do well but the recession is against you. Read very carefully everything gym is saying as it is what I've already said.

Like I said, best of luck.

By the way, yes, you are in competition with Amazon, MidwayUSA, Walmart, Buds, Cabelas, Cheaper than Dirt, etc. The internet has completely changed the way America does business. I can't remember the last time I visited, much less purchased from, a local gun store.

 

[Bubbles]

...our state has a Use Tax on anything brought in to the state and they’ve been pressuring gun stores more and more to collect it. A lot of places are either charging the tax or no longer doing the transfers. I’m one that has stopped doing the transfers because I feel the tax is immoral and unconstitutional. A few of the places around here that do take the transfers and charge the tax also charge a hefty transfer fee because they would rather have the business than have it go to the internet.

Ah, WA state. Yes, I read that your state tax department is forcing FFL's to collect and remit sales/use tax on guns that get transferred in. CA is doing the same, and I expect other states to follow as it's a revenue stream that can and will be tapped by our legiscritters without actually having to vote to raise taxes.

That said, if every FFL has to collect it then there's no point in not doing transfers, as the customer is going to pay. The only difference right now is that you're driving customers to your competition.

...before I decided to stop doing transfers from out of state I was seeing an uptick in firearms sales.

Because transfers bring in customers, who then see the other products and services you have available. Set your price a few bucks less than your nearest competitor and bring people to your door.

 

[NewFrontierArmory]

Did someone say my name.....

I agree with RhinoDefense for the most part. I started with $4K and a vision 3 years ago and worked VERY hard and got to where we are today. Store inventory/equip is worth well over $1M and we don't owe anyone a dime that goes past 30 days.

There are ways to beat the big guys. We have another deal breaking in mid Jan that within 6 months should put us up there competing directly with them. You just have to make smart decisions. Planning and research is free, and with the internet at your fingertips there is no limit to the amount of "digging" you can do to see if you can make something a success.

Anytime we bring on a new product or invest and branch out into a new area, I sit with a whiteboard and scratch paper for hours until I get things semi-organized. Then I bring in a few of my trusted employees, managers, or friends to play devils advocate and pick my ideas apart and tell me why they won't work. We work through those problems and improve our plan until we can't pick it apart anymore. Its not rocket science, just don't jump into anything blind.

If you need any help you can contact me via e-mail from our website: www.newfrontierarmory.com and I'd be glad to speak with you.

 

[NewFrontierArmory]

Sunny, you seemed well versed in business so I won't question your replies much, but I will tell you you are 100% wrong on one thing.

Pull up any industry reports on the outdoor sports / firearms industries and the growth over the last 5 years (every year) is like no other industry.

Where most have taken hits, this industry is growing more and more every year, its not affected the same as other durable goods industries. People are feeling less and less stable, and more and more unsafe and are arming themselves.

 

[SunnySlopes]

this industry is growing more and more every year,

False. It has responded to market forces and declines just like everything else. You're saying the firearms industry has never suffered a decline? Don't be ridiculous.

its not affected the same as other durable goods industries.

That's positively absurd. It's all economics. Don't you know that?

The same was said about real estate in 2004. It was like nothing anybody had ever seen. But what you people apparantly don't realize is that everything in business, finance and economics reaches equilibrium. It peaks, levels, then collapses.

Look at Smith and Wesson's balance sheet, for example. In 2006 they only had about $700,000 in cash and cash equivalents. In 2007 and 2008 that figure had jumped to $4 million each year. Zero came into office and 2009 and 2010 jumped to nearly $40 million each year. What does that say? It says they're headed for decline. Maybe not this year. Maybe not next year. But it's inevitable. That's the market. And the smart man always pays attention to the market.

Consider the guys who stocked up on ARs a few years ago at premium prices. How are they doing now?

 

[Chedderbob]

Because of the hostility of the posts, I will preface mine by saying I have a BBA-Marketing, currently pursuing an MBA. I won't use any of that in the next few lines.

You have already stated your current market, and target market is poor/small town. Poor people generally buy according to 1 factor... Price. Not value. Arguably a glock has higher perceived value than a hi-point, but poor people buy hi-points. Keep that in mind when making business decisions. I'm merely saying poor people have very little customer loyalty.

My second statement is that no one knows YOUR business better than you do. If you fully believe it will work, then you MAKE it work. If you have doubts, don't do it. Pretty simple really.

 

[NewFrontierArmory]

Sunny, I'm basing my industry numbers off of hard data, so I don't know how you could say I'm wrong. Check out the NSSF state of the industry reports for the last few years. I'm not saying this market hasn't had its ups and downs, and yes, its been up in a bubble for a few years, but it is absolutely up at the moment and for the last few years and thats a fact.

 

[NewFrontierArmory]

Poor people generally buy according to 1 factor... Price. Not value. Arguably a glock has higher perceived value than a hi-point, but poor people buy hi-points.

Also keep in mind that the profit margin on Jerricho's, Jimenez Arms, and Hi-Points is more than what we make on Glocks, so its not that bad of a thing. I won't sell them because I think it turns away the majority of my educated customer base, but if thats the market you have just learn it and cater to their needs.

 

[SunnySlopes]

yes, its been up in a bubble for a few years, but it is absolutely up at the moment and for the last few years and thats a fact.

Clearly, by your own admission adjustment is inevitable. And such "adjustments" aren't far behind bubbles. And "if" the OP could get up and running, say, within the next two years, he'd come into it just in time for the market to turn downward.

But our debate is purely academic. I'm looking at the OP's posts and he's not going to be able to swing financing. You think I'm pessimistic? I'm Pollyana compared to the current banking climate.