FFL's and business guys

[North Bay Guy]

I'm strongly consider getting my FFL and opening a retail firearm dealership. I would like to run a modest, small to medium size store front shop, selling handguns, long guns, safes and the usual accessories. I have been doing research for a few year and I'm ready to take the plunge. I understand the requirements (see below) to start/operate a firearm dealership but I still have a few questions.

1. Local Business license stating "Valid for the retail sale of firearms".
2. Certificate of Eligibility (COE) (get it from CA DOJ)
3. Retail Sales Permit (BOE, Board of Equalization, sales tax permit)
4. Federal Firearms License

Question 1. Should I get my business plan in order and acquire a loan before doing the 1-4 listed above? It seems like a loan and store front might be my biggest hurdle other than local permits.

Question 2. Are there any educational programs or classes dedicated to teaching people how to run a Gun store in Ca? For example courses on, how to file documents correctly, DROS system, storage requirements, security, fed/state/local regulations, insurance, etc...

Question 3. What bank's should I consider for a business loan? A local Credit union or a major bank? I've heard some banks pulled the plug on gun dealers.

I've tried applying for a job at the local gun stores in my area with no luck. Most of the gun stores around here are owner ran mom and pop shops, that hardly employ anyone. I'm ready to tackle this on my own and learn as I go. This will be my livelihood not a hobby or side project. Any help or resources would be greatly appreciated.

Thanks all
North Bay

[DVSmith]

The first thing I would look at is the market you are in. Can it support another gun shop. The next would be to call the city (or county if unincorporated) and ask about zoning laws for sporting goods stores that sell firearms and accessories. Find out what you can and can not do. With that information in hand, start working up a business plan that reflects a realistic budget for retail space and build-out, staff, inventory, insurance, equipment (don't forget security equipment), etc. That will help you calculate the minimum you need to bring in monthly in profit on the sale of goods. Don't forget the cost of professional advisers, legal and accounting.

[North Bay Guy]

DVSmith- thanks for the reply and tips. I think the market can support another guns store very well in my area. When I make my business plan I will be very careful not over look any expenses. I will be contacting some cities in my area to get all the zoning info for gun stores. I know there's gonna be some red tape involved in getting the permits, FFL, tax cert, COE, centralized dealer list, a good business plan and loan, etc.

I'd like to hear from some people who have been here done that. What mistakes did you make? Do you have any advice?

[jonathan50bmg]

I got my certifications first, then I applied for a business loan to open a small store. I decided to just purchase more inventory an run a small home based FFL. In order to sell anything, your prices must be competitive. There are great deals on the Internet for anyone to see. The margins are super tight on firearms. Nobody is paying retail right now, unless its an extremely hard-to-find item. If I had a store, I would have to charge more for my inventory. People don't want to pay top dollar for anything right now. Best of luck with your venture! Be smart and do your homework before you go head first.

[freonr22]

how much to have in the bank to start? $125k???

[Pally]

Check out the National Shooting Sports Foundation (www.nssf.org). Search for Retailer information. This site has lots of resources for shooting-related businesses and start ups.

[North Bay Guy]

I got my certifications first, then I applied for a business loan to open a small store. I decided to just purchase more inventory an run a small home based FFL. In order to sell anything, your prices must be competitive. There are great deals on the Internet for anyone to see. The margins are super tight on firearms. Nobody is paying retail right now, unless its an extremely hard-to-find item. If I had a store, I would have to charge more for my inventory. People don't want to pay top dollar for anything right now. Best of luck with your venture! Be smart and do your homework before you go head first.

Interesting. At this time I'm not really considering a home based FFL. You do make some valid points though and I can see why you went that route. Thanks for the info, I'll go for all my certifications first, then the loan and store.

I've noticed the price of firearms in my county are very high in comparison to the valley and southern Cal. In general all firearm related stuff has always been very expensive in Sonoma County. Keep in mind I'm not that old, I was just a young buck during the good old days. Anyway I know my prices will have to be very competitive and I'm not going to become rich from selling guns, at least not without working hard, going through hard times and being determined. Realistically I'm probably not gonna open a shop near a high traffic intersection or somewhere highly visible from the busy highway. The more I can save on rent the more I can spend on advertising. Sometime down the road, I'll probably try to move to a prime location.

[North Bay Guy]

Check out the National Shooting Sports Foundation (www.nssf.org). Search for Retailer information. This site has lots of resources for shooting-related businesses and start ups.

Thanks for the link.

[Baboosh]

Your biggest feat is going to deal with the city you want to operate in. Most cities have such tight restrictions at where FFLs can operate that it puts you in industrial zoning. Not much industrial zoning in high traffic commercial areas. I got approved, then denied, then approved then they just said no. I fought and fought to get it. The business license MUST say 'RETAIL SALE OF FIREARMS'

Your second feat is dealing with the CA DOJ and the time it takes to get everything. You'll be paying rent for 6-12 months before you can even sell a firearm. ATF took roughly 5 months for me but it'll take another 3+ months to finish the CA requirements.
You can't finish the paperwork for the business license till you get the FFL.
Can't get the local firearms license until you have your business license
Can't get on the centralized list until you have a local firearms license.

All those take 1-2 months each.

Also remember and start planning to deal with the HSC and get approved by the DOJ to administer it. If you don't you can't sell handguns.

Remember the fees and the amount of livescan you will be doing. At $80 a pop get ready to drop a lot of money just to apply for the licenses mentioned above. And if you did what I did and put your wifes name on it double all the fees.

[North Bay Guy]

Baboosh- Thanks you for the very informative post. Lots of helpful information. I was thinking about having my wife on everything, it will be easier not too and it's definitely cheaper if it's just me. I know dealing with city is gonna be tough and very time consuming. That's probably my biggest concern right now. I appreciate you sharing the timeline of how the process went for you.

[SOAR79]

tagged, great info here

[Baboosh]

Baboosh- Thanks you for the very informative post. Lots of helpful information. I was thinking about having my wife on everything, it might easier not too and it's definitely cheaper if it's just me. I know dealing with city is gonna be tough and very time consuming. That's probably my biggest concern right now. I appreciate you sharing the timeline of how the process went for you.

IMO I'd keep her on, especially if you think about home based. Especially if she shoots like my wife.

ATF is easy and will issue an FFL to anyone. They will happily take your $175. It'll be useless without local and state licensing though.

First step is to decide if you want home based or retail.

If home based file for home occupancy permit. Learn to get creative to talk your way past the city people.

If retail based call your city and see where they allow FFLS to open shop. Then find a location.

It is a lot of work and after your 5th LiveScan you are going to ask yourself 'why in the world do they need ANOTHER LiveScan'.

[iammeuru]

Your biggest feat is going to deal with the city you want to operate in. Most cities have such tight restrictions at where FFLs can operate that it puts you in industrial zoning. Not much industrial zoning in high traffic commercial areas. I got approved, then denied, then approved then they just said no. I fought and fought to get it. The business license MUST say 'RETAIL SALE OF FIREARMS'

It actually needs to say "Valid for retail sales of firearms" to be exact.

Your second feat is dealing with the CA DOJ and the time it takes to get everything. You'll be paying rent for 6-12 months before you can even sell a firearm. ATF took roughly 5 months for me but it'll take another 3+ months to finish the CA requirements.

Indeed this will likely be your hardest set of steps.
1. The Business License is your first step, but it is going to need to be at a location you intend to go into business at, wherever that might be, so probably that entails rent at said location (I'm doing mine out of my home as well, but for you a storefront). Localities will have varying restrictions, and the people you talk to might not know the answer, so they'll just try to shuffle you along or get you to give up, but don't... There's a way most likely... unless your city is just adamantly against it.

2. File with the ATF (Form 7) for the FFL

3. Wait for ATF to come to your location to inspect, and talk with you about what's going to be required of you (this part took me 5 months, but I have no idea how they prioritize, so ymmv)

4. Once FFL arrives, apply for COE (this requires a livescan, and is the only part that has required one for me so far).

5. It might be a fantastic idea to find someone to take training with for your Handgun Safety Certificate Program application so you can be a DOJ approved instructor for handing out HSCs, and for doing safe handgun handling checks (you want to do this).

6. Apply with BOE for sellers permit, and call and ask them to send you a paper copy (you can, and might want to do this at any point after you get a business license, but you'll need it for your centralized list application, as they'll want a copy of it. It takes maybe 3-5 weeks to get this from the state.)

7. Once COE comes back, apply for centralized list, and large capacity magazine permit (both get sent in at the same time, and the large cap permit requires a letter stating something like you're planning on selling them to approved persons and/or out of state markets)

8. Get scanner/copier/printer for your location. Get card swipe reader from amazon or other retailer. Get safes or locking mechanisms setup at location. Ensure you have filing cabinets. Get HSC cards. Get 4473 forms ready. Get signage requirements for state and ATF hung. Get inventory tags ordered.

9. When the packet comes back with the centralized list acceptance, and Large Cap Mag permit, sign up for the DES (new DROS replacement), and you're in business.

FFL took me five months for inspection, and about 30 days for it to arrive at my home.

COE took about 1 month to arrive.

Centralized List/Large Cap Mag Permit took about 1 month.

HSC DOJ Approved Instructor thing is still in progress for me, because I'm not on a compressed timeline, and I lagged on getting it setup, but it could have been done before any of this if I had been on the ball, and just known what I didn't, but should have known at the time.

Getting setup with distributors is something I'm going through right now, and as I've not got a storefront somewhere, some just don't want to do business with me, but I'm getting accounts setup now with the ones that will do business with me. I think you can potentially do this with some with just the FFL, but I'm unsure. In order to have firearms shipped to you in california you'll need to be on the centralized list for sure. You can go out of state as an FFL and do a transfer in person and bring them back into the state without any california red flags going up since the rules just say shipping is contingent upon CL/CFD (I actually asked this of DOJ, and they said they don't control what happens out of state, and the restriction is on shipping into CA). I would suggest doing this as soon as you can if you're running a storefront since you'll want stock when you open. Also, I would setup a DBA, as all the ones I've started looking at require that, but it's required really for what you want anyway.

You can't finish the paperwork for the business license till you get the FFL.

Not true in my case, and really it's kinda the first step to get the business license if you're going in logical order...

Can't get the local firearms license until you have your business license

The local firearms license (as listed on the CL application) is just the business license number in my case, and I suspect in many/most cases in CA, but in some localities they have a seperate license potentially???

Can't get on the centralized list until you have a local firearms license.

True, but as noted above.

All those take 1-2 months each.

Well, the above times are just my experience, and I do say YMMV, but these are all pretty recent.

Remember the fees and the amount of livescan you will be doing. At $80 a pop get ready to drop a lot of money just to apply for the licenses mentioned above. And if you did what I did and put your wifes name on it double all the fees.

So, the fees will likely be pretty insignificant compared to the rent $$ you'll be forking out for a basically non-revenue generating storefront while you wait on licensure, but it breaks down like this for a Type 1 FFL:
FORM 7: $200 + $10ish for pics at costco, and $10 for paper prints where I am
Business License: $51 where I am
COE: $81
HSC Instructor Training: $75, but varies widely (I found $75-$250)
Seller's Permit: Free (until you have to pay them the sales tax anyway... you can't escape the TAX man though)

The pricing can differ if you become a type 7 or other FFL (think ITAR registration...), or if you get an SOT (for supressors only basically, although you likely don't need/want this, it is available in CA to some limited extent, but I won't delve too deeply into this here other than to say for other NFA stuff you need further advanced documentation).

[Baboosh]

You saved a lot of steps.

Great in depth post.