how much cash should I have to open a gun shop

[ironman5669]

I have always wanted to own my own gunshop, (a small one at first) not a mail order house, but an actual stocking dealer with actual guns on the shelf and an actual storefront, how much cash do you think I need on hand to get it off the ground (rents are around 1200 a month)

John

[PolishMike]

Rent 1200? Hook me up with that... lol

To do it right you need at least 200k.

[Backcountry]

I'd actually double that, or go $500,000... most businesses that fail do so because they are undercapitalized. If you try to scrimp by you will fail.

[bollero]

no Way that seems way to much...

[Ripon83]

In this market, buy a shop location don't rent one. $1200 a month "rent" will pay for $150,000 loan on commercial property and put $50,000 down - there is retail space out there for $200,000 - some of it brand new. At least your $1200 "gets" you something each month that way.

Figure out your monthly operating costs for labor (if any), marketing, facility costs (rent/payment, utility, insurance, security, etc) and figure no sales for at least 3 months and if you are new at busines figure 6 months.

[ironman5669]

I am thinking a little more modest than half a million lol, what does insurance run?

[DVSmith]

What type of inventory are you planning to stock?

I am not sure firearms manufacturers are the same as manufacturers in my industry, but in order to become a dealer they may require a certain level of ordering. If you can't meet that you have to order through secondary distribution like Davidsons and that can eat into your margins.

[pdugan6]

In this market, buy a shop location don't rent one. $1200 a month "rent" will pay for $150,000 loan on commercial property and put $50,000 down - there is retail space out there for $200,000 - some of it brand new. At least your $1200 "gets" you something each month that way.

Figure out your monthly operating costs for labor (if any), marketing, facility costs (rent/payment, utility, insurance, security, etc) and figure no sales for at least 3 months and if you are new at busines figure 6 months.

That is a great starting point. And 200k is a good amount to use to become a well stocked dealer with a nice selection of guns, accessories, and ammo and reloading supplies.

[ironman5669]

what does insurance for a gunshop cost?

[Ripon83]

Insurance will be a major expense; sorry I don't know the answer but I'd simply call a broker that deals with businesses and they'll give you information - they can look it up easily.

One thing I failed to mention in trying to set aside 3 to 6 months of business expenses - but also home expenses. When you don't bring home a pay check for a while - its going to get difficult to pay the home mortgage, and other bills. Add that in for 6 months too - maybe a year.

[ironman5669]

inventory is a big question. right now I am thinking about 30,000 of mostly guns some ammo and a few accesories. I am in a town with no real competition (big 5 and walmart) and I am pretty well known in the local shooting community. I will never have enough money to do it the way I would like to , but the plan is to start sort of small and grow the business. what can I expect to pay for insurance?

[Gunsmithing]

Keep your day job .
Sub rent This well be the biggest cost and most citys will not let you do sales from home.
Use the internet in your store for inventory the 10 day waiting allows the firearm to be ship to your store and have the customer pay in full be for shipping. This help on keep the cost of your inventory low.
I have found most shops/business for lack of turn over (sales) the first few years. Also buying ever gadget (store fixture and tools) under the sun will use your operating cash.

Good Luck
Dave

I have always wanted to own my own gunshop, (a small one at first) not a mail order house, but an actual stocking dealer with actual guns on the shelf and an actual storefront, how much cash do you think I need on hand to get it off the ground (rents are around 1200 a month)

John

[PolishMike]

Sorry I was on my phone earlier. I did this about a year ago and I started with 200k and was STRAPPED for cash at the beginning and I didn't even have much in stock.

If you want to stock anything at a decent price you have to buy in to each manufacturer. Most will take money up front for guns. Distribution will all be certified COD.

You have to figure move-in costs, safes/vaults, getting the building up to CA PC. (Bars, ect) Insurance, workers comp, taxes, advertising, pos systems, computers, it all adds up quick.

The license fees are by far not the biggest concern. Figure if you want to buy in to an ammo company the minimum purchase is $50,000. You can buy from distribution but you're paying the same as Joe Blow is at walmart.

Leasing a decent building in a good area will cost you at least $2/sqft after NNN.

[kemasa]

You also have to make sure that you have enough money to get the place ready, get all the permits and open the place. In some cases it can take a long time and the money can quickly go. It can also take some time before you get enough customers to make a profit.

Do some simple math and you will see that the amount of money needed really goes up quickly. If you run out of money, then you can lose it all.

[GoingQuiet]

no Way that seems way to much...

How do you think it is way too much?

Inventory will take up the lions share of it - If you carry 20 different models of Glock - there's $10-15k right there. Building your place out will not be cheap, insurance and overhead isn't cheap.

Just imagine this - your "average" gun store carries 6-10 different brands.

Glock - $15k in Glock is doable, $25k is more likely.
Sig - $20k in Sig is anywhere from 15 to 25 guns depending on how you work it
Ammo - I've got $3000 in 380 ammo alone, so to cover all the major pistol and rifle calibers, expand that out to $20-25k
Insurance - My insurance is around $1500-2000 a year depending on coverage. When I take in more inventory, my insurance goes up.
Rent - First last and security

Theres easily $50,000 right there and I've just talked about carrying Glock and Sig.