The business side of gunsmithing

[butchlambert]

Ten years huh? What was it 20 bucks?

I never said there weren't smiths who had CNC equipment.

I have no idea how that business is ever going to repay any of that stuff. There's not enough revenue in it.

Let us just say that a CNC machine cost $50,000 And that would be a pretty cheap one. How many chamber jobs would you have to do to pay that back? 3000? That is a lot of chamber jobs. I just don't see the throughput ever paying for these machines. If you were to actually go buy them like the other industries do.

Sir, ten years ago and also last year on their price increases. CNC guys-James Anderson ACGG Guild custom wood stock guy, Pete Pieper-Precision Barrel Work- Dave Tooley, John Holliger-White Oak Armament are just a few that have CNC equip and do pretty damn good. I can list more, oh yeah, do you remember Cigar Cop? He makes money with his CNC equip. It is a different world out there Sir.

 

[urbanrifleman]

His main bu


His main business is as a general contractor
A lot of his machine/tooling investment was initially for doing his own rifle work, it’s nice he’s expanded to brakes, tuners and dies.

Yup. Write off.

The point is that his business in gunsmithing would have never been able to justify that expense. I've seen this quite a bit. Some other larger company has this as their side business which actually pays for everything.

 

[butchlambert]

Yup. Write off.

The point is that his business in gunsmithing would have never been able to justify that expense. I've seen this quite a bit. Some other larger company has this as their side business which actually pays for everything.

Sir, I know you are satisfied with what you are doing, but you need to realize that your business model ain't the same as some of others.

 

[Ccrider]

This seems to be the type of business you have to build slowly. Start off small with quality reasonably priced equipment and upgrade as clientele base and demand requires it.

It’s been done this way before.

Or, go all out, buy to topline high performance equipment if you have the financial ability to do so, and time to wait for a return as your business hopefully grows.

I say you need to have another full time job that takes care of your family or independent wealth starting out. Otherwise, you are destined to struggle and likely fail.

 

[urbanrifleman]

Sir, ten years ago and also last year on their price increases. CNC guys-James Anderson ACGG Guild custom wood stock guy, Pete Pieper-Precision Barrel Work- Dave Tooley, John Holliger-White Oak Armament are just a few that have CNC equip and do pretty damn good. I can list more, oh yeah, do you remember Cigar Cop? He makes money with his CNC equip. It is a different world out there Sir.

I know Butch.

I never said there aren't companies using CNC equipment.

White Oak armament? Has he been in business for 35 years? That's quite a while to build up equipment and infrastructure. He does production not gunsmithing. That's a whole different thing.

I was an engineer for 25 years working in assembly and manufacturing. Many of those years in automated machining. I bought lots of equipment in industry, Butch.

Industry isn't gunsmithing.

 

[urbanrifleman]

Sir, I know you are satisfied with what you are doing, but you need to realize that your business model ain't the same as some of others.

I think it's just your nature that you want to lecture people. And you seem to take the conversations into these corrals that you feel you have some expertise and then badger people about it.

I didn't say anybody else's business model is flawed. I didn't comment on anyone's business. I was just talking about payback on equipment. And many of the people that are in business aren't actually in business It's actually a hobby supplemented by their main income.

Long story short, in regards to the actual subject being discussed, which is gunsmithing and business, if a person wants to get into gunsmithing just realize many times they're competing against people that really aren't doing it for a living. Many of them are supplemented by some other income. So you will be competing against them.

 

[butchlambert]

You did comment on others business.
" I didn't say anybody else's business model is flawed. I didn't comment on anyone's business." Go back and read your posts.
You need to say that you are doing well with your business model and not state that other's are wrong.

 

[urbanrifleman]

His main business is as a general contractor
A lot of his machine/tooling investment was initially for doing his own rifle work, it’s nice he’s expanded to brakes, tuners and dies.

So actually it's not a self sustaining business. It's a hobby and write off for his main income. My point exactly.

 

[urbanrifleman]

You did comment on others business.
" I didn't say anybody else's business model is flawed. I didn't comment on anyone's business." Go back and read your posts.
You need to say that you are doing well with your business model and not state that other's are wrong.

I never said anyone was "wrong" stop reading stuff into my posts.

It seems to also be in your nature to read things into posts making everything some kind of battle of one person against another. That is certainly not what I'm doing. I'm just sharing what I'm seeing.

 

[urbanrifleman]

So, how much did all the equipment in the shop cost to enable you to do the barrel finishing. How much is that amortized over the total number of barrels? What are the on going, recurring costs to keep the shop open? How much should be put aside to repair and replace the equipment?
What's left for the gunsmith to live on?

Those were my points also.

I'm getting ready to build a shop in my backyard to move all my equipment for my business to my house. I'm not really sure that I could justify the expense as far as a business expense. I'm setting up my house so I can get married and be happy and I'll make it back when I sell my house or when my fiance sells hers. But if I were doing a straight amortization I don't think I could actually justify building a building building on my house. Rental property here in Tulsa is all been sucked up by the dispensaries and skunk grow or I wouldn't do it. Real estate here has gone crazy from all these people moving here and the weed business..

 

[SKWERLZ]

So actually it's not a self sustaining business. It's a hobby and write off for his main income. My point exactly.

For now, we don’t know his plans for it.
Regardless he’s made an investment most any similar business has to make when starting out.

 

[urbanrifleman]

For now, we don’t know his plans for it.

If a man spends that kind of money and he's not making money on the first day he's losing money. I'm just going to go with the idea that he doesn't care if it makes a dime. I'm sure the whole thing was just one big tax write-off for his income. Lots of people do it. It's actually smart. One of the great things about having a successful business is that you can build your infrastructure and then write it off.

 

[Will Henry]

I spent just about fifty years gunsmithing and still do some. I never made a ton of money at it but did OK. The very best arrangement I ever had was having my shop in a busy gun store to which I paid a fixed percentage. In return for their percentage, the store took in work , collected the money and remitted my share. Although I did a fair amount of gunmaking, my money came from general repairs and alterations. The store got all profits from parts sales and they maintained inventory. I bought my own tooling. Paid the sales staff a commission on work taken in on my behalf. I dealt personally with any customer disputes, which were rare in any case. For a time, I had shops in two stores but this spread me too thin and I had to work harder to cover the cost of my employee gunsmiths. Their idea of a productive day was reading through the Brownells catalog.
During this period (about fifteen years) I worked on an average of about 1800 guns a year. I would re-barrel a couple of rifles per week, Install a dozen recoil pads, Glass bed four or five rifles, install some muzzle brakes. tune up some revolvers, clean and oil a bunch of Remington 1100's, install some chokes, weld some bolt handles, drill and tap some rifles, and so on. Memorable high earning days included one where I did trigger jobs and some repairs on 25 S&W Model 10's for a police department. I charged 30 bucks apiece and did them all in one day. Another day, I re-barrelled six rifles, at 125 bucks apiece, in eight hours. Muzzle brakes were a huge money maker. I charged 100 dollars labor and could usually figure on doing seven or eight in a day. Since this was in the late '80's, I was making good money and I had a large number of regular customers as well as the general hunting public. I always tried to make my money via productivity rather than high pricing or selling unnecessary work. The downside was, for fifteen years, I seldom got to go hunting during prime time.
Today, I make my money from our campground and gunsmith for personal gratification. The gunsmithing landscape has changed a lot over the last thirty years, and I don't think I would want to try making a living at it today. In comparison, the campground is less stressful and I get more exercise!
There are a lot of very good gunsmiths and gunmakers who are also astute businessmen, and who make a very good living at it. Some are members here. I have nothing but admiration for them. WH

 

[AccelR8]

Some years ago I talked with a guy extensively about expanding his shop, specifically about adding CNC cells. He was in an industry closely related to but not exactly firearms manufacturing

He told me, first of all the approach is not A. I want to do this job, and B, I need this cell (or machine or tool) to do this job so C. I will buy the machine.

He said you don’t use your cash to buy the machine. You finance it over time or you lease it. Now, I have always been highly debt-averse so this is a hard concept for me. But I have gotten that advice many times over from people in the business world. There’s much more to say about that but...

His concept was, just as you would analyze the entire business venture, you do so for each machine, each tool. Look at the cost of the thing (don’t forget the labor expense of running it and so on) versus how much money it’s going to bring in each month, each year over x-number of years and the decision is made solely on is it going to earn a profit or not. If you cannot say with some degree of certainty that it’ll make money, then you don’t do it.

He has been VERY successful and his business has grown exponentially through wise decision making.

 

[jackieschmidt]

I could give you all sorts of advice on the pitfalls in running a business that revolves around machine work, since My two brothers and I own and run a machine shop facility, (we do marine repair).

However, we are not a “mom and pop” facility, we service one of the major industries in the Country. Our in shop rate is $150 an hour, our out of shop rate, (field work), is $250 an hour.

That has to cover everything that allows us to keep the doors open. Wages, health insurance, liability insurance, matching 401-K, the electric bill, machine maintenance, tooling, taxes, etc.

Which leads me to tell you that always remember that the vast majority of Gunsmithing revolves around what can best be described as “toys”. You will be dealing with individuals, not companies. Most enthusiast already have a preconceived notion of what the work will cost. In short, regardless of how well you perform your work, you have to be reasonably competitive.

Also, when the economy takes a downturn, the “Toys” are usually the first thing that people have to cut back on.

Don’t over extend yourself. You can easily destroy your “good will” by trying to please too many at one time and end up pleasing no one. You have to be willing to give realistic delivery dates and realistic capabilities of your business.

And remember, never sacrifice your good name for the expediency of the moment. At our shop, we have spent decades building a reputation as a premier facility in Marine Machine Shop Work. But even as respected as we are, you can loose it it an amazing short time frame.

I know of two very well known Gunsmiths who have in the past ruined their character in the eyes of many by shady business dealings. The only thing you are left with in the end is your good name.

Don’t tarnish it.

 

[Bc'z]

Shillen and Criterion haven't changed their barrel pricing in 20 years.

So everyone else should follow suit?

I know the Smiths and stock makers I work with are artists in thier builds to the finest details striving for absolute perfection, myself included.
So to state a couple companies haven't raised prices is asinine, it's like comparing apples to watermelons.
Kind of like going to your doctor and saying I can get a procedure done cheaper down the street.
That's your choice.
I understand, respect and appreciate the market you've targeted, there is a need and your doing a fine job of filling the gap, but it's not for everyone.

 

[urbanrifleman]

So everyone else should follow suit?

I know the Smiths and stock makers I work with are artists in thier builds to the finest details striving for absolute perfection, myself included.
So to state a couple companies haven't raised prices is asinine, it's like comparing apples to watermelons.
Kind of like going to your doctor and saying I can get a procedure done cheaper down the street.
That's your choice.
I understand, respect and appreciate the market you've targeted, there is a need and your doing a fine job of filling the gap, but it's not for everyone.

I think you're missing my point. It's great that there are companies that are offering low prices to their customers. And I think that businesses ought to keep prices as low as they possibly can to pass that value onto their customers. But at some point it becomes flawed that these companies are actually viable businesses. I'm not saying that's what's happening, but with cost going up especially steel, which has significantly changed post COVID, at some point you have to start wondering if they are actually still making money.

I mean look at what happened to Jewel. I'm totally speculating at this point, but I'm assuming that they had a vendor that was significantly cheaper than they could buy their parts out on the market. And it's possible That's why they can't find another supplier.

I deal with exactly the same issues, I'm not saying that these aren't real issues. I'm simply commenting on what I'm seeing. It's not a judgment.

 

[urbanrifleman]

So everyone else should follow suit?

I know the Smiths and stock makers I work with are artists in thier builds to the finest details striving for absolute perfection, myself included.
So to state a couple companies haven't raised prices is asinine, it's like comparing apples to watermelons.
Kind of like going to your doctor and saying I can get a procedure done cheaper down the street.
That's your choice.
I understand, respect and appreciate the market you've targeted, there is a need and your doing a fine job of filling the gap, but it's not for everyone.

I think the shooting world is becoming educated to the fact that this isn't 1992 anymore. Lots of things have changed. Lots of the old ways have been challenged.

 

[COLT45SA]

I am working on my long-term plan for setting up my shop and need to better familiarize myself with the business aspect of running a gunsmith shop.

I haven't found much literature on the topic and not sure about taking a shot in the dark at the many random entrepreneur or small business books would be helpful or not

Any advice would be greatly appreciated.

You have chosen a difficult to address topic. I may be possible to find your answers in books, but it will take far too long to find the 'right' book.
I wish that I lived closer to you so we could discuss my background and the several businesses I started. I made mistakes and learned from them. Business is business and there is nothing peculiar about the business side of a gun-smithing business. What you need to find is a mentor, someone who has been successful in several start-ups. Try calling the local SCORE chapter and ask if they have someone who has done so.

 

[COLT45SA]

First, That's gross not profit, And $250.00 a day is chicken feed these days.

Hopefully he is not looking to rent a high-buck facility which today represents a large %age of an business owners fixed expenses. 2x$250 every day would be a good start absent of a high rent expense~!