Realistic business plan for new gunsmiths?

[rap36case]

I have an MBA and been to professional school. I have lots of questions about setting up a realistic business plan for a new graduate gunsmith.
1. Set up 2 corporations: one for the shop facilities and equipment, and one for the gunsmithing practice?

2. Start small with limited service offerings and add on equipment as needed?

3. What is reasonable charge for hourly services?

4. Is it better to build a shop on property than to rent?

5. Do banks actually make loans to gunsmiths to start their business?

6. Any caveats, problems or headaches to avoid?

 

[Ledd Slinger]

I'm not a practicing gunsmith, but I know many who are. These would be my answers...

1. No, you won't make enough money for that unless you become very successful.

2. Yes

3. How good are you? Nobody will pay a decent wage for a beginner or bad gunsmith

4. I'm not a real estate agent and I have no idea what the market is like in your area or your financial status.

5. Not a banker either.

6. Yep, a ton. Too many to explain. Worst being the guy who doesn't know how to shoot, operate a firearm, or hand load ammo but wants to blame it all on you.

 

[shortgrass]

1. Set up a single corporation or LLC. KISS (keep it simple stupid) 2. Start small. You should have the basic tools after graduation from school. Don't buy expensive tools or tooling until you have a job for them, and then depending upon cost, you don't want expensive tools you will only use once. 3. Hourly rate will be determined by your skills and your location. It's the cost/return. It's a business, not a hobby. 4. Commercial property is expensive to rent. 5. Banks won't lend to a unestablished gunsmithing business. They may have no interest in lending even after you're established. 6. See #6 posted by Ledd Slinger. Add to that the interdnet educated. JMO

 

[Ggmac]

Start slow , general cleanings , scope mountings , stock changes etc.
Basic rates for those services are set by your local economy. You can't be more expensive then cabelas , gander mtn or bass pro .
Banks , even credit card companies do NOT want your business . Plan on bankrolling your first 2-3 yrs of expenses from your pocket with no income to speak of .
Plan on many , many questions from potential clients . Be fully versed on correct terms . Again this time is not at any charge .
No matter what you do , remember that the corporate umbrella can be pierced .
Buy not large expensive tooling , no one serious in shooting competition is going to try a newbie. Don't get offended . Your first rebarrling service should be using profits or short chambered barrels.
Your tooling you need would be headspace gauges , basic measuring instruments, a good level work bench , good screw drivers, a scope collimating tool , extensive cleaning tools . Many books showing assembly diagrams .
Find a local machine shop , licensed and insured , that is willing to work with you . You will need them for welding and basic machine work .
Good luck .

I forgot to mention , you'll need a few thousand dollars in basic tools . Basics speciality tools for shotgun chokes , stuck choke removal , forend removal etc . Basic AR tools , barrel vise , barrel nut wrenches , pin wrenches , receiver wrenches for all popular actions , a drilling and tapping set up , I've used the Forester set up since 1976 , it was one of the first tools purchased.
You'll need barrel crowning tools , or you can use your local machine shop for now .
Basic rates are in Brownells catalog, it's a rough figure , but gives you a place to start .
I charged more for machine hours than general shop hrs .
Give away the labor if they buy the product from you , such as scope mounting . If they bought the scope and accessories off your shelf , mount and bore sight it free .
I'm sure I'll think of more later .

 

[Riesel]

I happen to know there are easier ways to lose money than Gun Smithing.
To make 100,000 dollars in gumsmithing, start with two.

 

[DaveTooley]

Everyone has covered most of the pertinent issues. The one thing I'll add is don't quite your day job and marry into money. It took me probably 5-7 part time years to get to where I was making money which I promptly burned up shooting. Unless you carve out a niche in the market that separates you from the pack, it's tough for a one man shop to survive.

 

[Ggmac]

Back again .
A COMPLETE set of good drills , SAE and metric . A good set of taps and and speciality taps , a small good drill press or a combination drill press ,lathe ,and mill . ( this is a little better choice as you'll be able to make small pieces ) a good compressor , belt sander , grinder wire wheel , air brush , bedding pillars ( these you can make with the 3-1 machine ) release agent , again release agent , rifle cradles , ( can be made )
Good , the best you can buy Scope base and action screws etc , scope base shims .
Good measuring tools , this you need to spend some $ on . Granite base for measuring .
Got to walk dogs , later

 

[carlsbad]

First thing you need is a reputation. Work on that before you bother to set up a business. --Jerry

 

[Ledd Slinger]

Back again .
A COMPLETE set of good drills , SAE and metric . A good set of taps and and speciality taps , a small good drill press or a combination drill press ,lathe ,and mill . ( this is a little better choice as you'll be able to make small pieces ) a good compressor , belt sander , grinder wire wheel , air brush , bedding pillars ( these you can make with the 3-1 machine ) release agent , again release agent , rifle cradles , ( can be made )
Good , the best you can buy Scope base , action screws etc , scope base shims .
Good measuring tools , this you need to spend some $ on . Granite base for measuring .
Got to walk dogs , later

You're gonna scare him off. Lol

 

[swd]

The best business plan I know of is work for someone else for 2-4 years while you develope a good reputation to build on.

 

[Ggmac]

SWD said all that matters !

 

[X Ring Accuracy]

This is a repost of what we said earlier about the same type of question. Doesn't address your questions but some insight that may help. Good luck.

The biggest thing I would do differently would understand that advertising is just as important and knowing how to do it. Having your job until you get over-run with work is smart too. When you go full time, plan to spend ALOT on advertising online. Schools are great but nothing teaches better than OJT. Read all you can. Putting words from a book into thoughts, then doing isn't hard, just practice does make perfect. More than one way to skin a cat too, remember that. One thing I did, as mentioned, was go to all the local gun shops and offer our services. Some will toss your card in the trash, some will smile and shake your hand but patience pays. We now do work for a dozen big gun shops from being the one who can versus the other gunsmiths who think they can and mess something up. We were the fix it guys and it paid off. A lot of hackers out there that profess to be "smiths" so cleaning up behind them pays big dividends. We now pick and choose but it has been a long road. Go to a local range if you have one. Go shoot, be part of the range activities, if asked about your rifle, ammo, etc be polite but knowledgable. Many guys at the range seek some direction but don't know who to ask so pay attention. The ranges all have their resident know it alls so don't step on their toes, LOL. Keep bus cards on hand, do small jobs, the word gets around. We have built record setting rifles for shooters at ranges and that helps in the reputation dept no doubt. Start doing guns shows.......weekends packing it up, hoping to get some interest, many times no sale......BUT you got out your info and they do come back around, sometimes years later but they do. We goofed on the advertising as it IS VERY EXPENSIVE but worth it. We are slammed now from word of mouth, referalls, gun shops in the area and customers who we have built 6-10 rifles for over time. This has taken a long time. Reputation rules. It won't be quick unless you have piles of money. And finally, you will be competing with guys who have CNC this and CNC that. Another example......bedding. It is easy peasy. Do it 10 times for yourself, learn all the tricks before you put it out there. Customers WILL take their rifle apart to look at the bedding. If it doesn't look like the stuff online, they bash you. The machining part is simple if your a machinist, it is either right or f&$ked up, no in between. Coatings....it better look perfect or again, you get bashed. Point is, whatever you let out of your shop better be perfect. THEN the reputation starts building. Be wary also of the once in a blue moon customer who is never happy regardless of what you do......cheerfully refund their money even though you know they are an idiot and what you did is correct. Whew

 

[carlsbad]

"Be wary also of the once in a blue moon customer who is never happy regardless of what you do......cheerfully refund their money even though you know they are an idiot and what you did is correct."

I fully agree with this and can't understand how some major businesses in the industry are getting away with going the other direction and treating good customers like crap. I guess they are "big enough".

--Jerry

 

[Alex Wheeler]

My advise, keep overhead to a minimum. I bought all of my equipment cash while working full time and smithing part time. My shop is at home, no extra rent. So when I went full time I had no bills related to the business. There is not much money to be made in this business doing gunsmithing work. The guys that seem to do well, are slamming out "spec" rifles. Throw a barrel on an action, cerakote, skim bed it in a Manners and get 4-5k. Go tactical if you want to make $$$, lol

 

[rap36case]

These responses are all great! Thanks! Like a painting, it is great to get many perspective to help get it into focus.
I hope to attend an NRA accredited school next fall and will pick up a set of hand tools over 2 years.
I'm semi-retired, so I am not planning to make a pile of money. Dealing with people in gunsmithing, I expect is like dealing with patients in a dental office. If you tell them up front it is information, and after the fact sounds like an excuse.
Personal experiences are very valuable, as well as the lessons learned. I hope to hear more for other gunsmiths.

 

[hunter243sgk]

I have always wanted to get my liscence and be a gunsmith. Well long story short I never did and after reading all of this I cant help but to wonder if it is even worth it nowadays. Something else to think of is where you are located. In my area the best smith could not do well unless it was all through the mail. I really checked around my area a few years back and there just is not enough people who want much done. It would just be mounting scopes and bore sighting. And a few cleanings or repair work rarely. Which I find odd as Ky is such a big on guns sate. I believe most in this area are just hunters and collectors.

 

[butchlambert]

Nobody knows better than Dave Tooley. He is one of the best. It is a good job for a retired person, a part time person, or as Dave said, a wealthy wife.
I haven't read all of this, but are you going to specialize? Are you going to deal with every Tom, Dick, and Harry that walks in your door wanting you to work on the sights of their Revelation? Will you specialize in rebarreling? Business plans are important, but you have a lot of thinking to do and training.
I'm retired and have a nice machineshop and love rifles. I do 90% of my own work, but would never hang out my shingle. There are better ways to make the money that I spend on my hobby.

 

[Ledd Slinger]

I agree that specializing is a good idea. I know one fella who specializes in makng custom knives and only does simple gunsmithing work. He does not do any rebarelling unless it's a pre-fit. Pretty much just trigger jobs, stock work, and small action modifications.

The gunsmith I use for all of my rifle machine work will NOT touch a handgun. He has too much work with rifles and shotguns and refuses anyone who walks in the door looking for handgun work no matter how simple the task may be.

As far as tooling, you will need most of the basics. The best way to learn what tooling you'll need is to work FOR a gunsmith for 2-4 years as "swd" stated. Once you have the essential tooling and begin to take in work, you will learn which additional tools you'll need to buy as the tasks demand it.

I am a 'hobbiest' gunsmith and only do the simple tasks. I do not machine barrels or actions, but I do just about everything else. One great piece of advice I learned from a veteran gunsmith years ago is to never buy a new specialized tool until you need it. You can buy all the tooling you 'think' you'll need, but if you don't get anyone needing work that requires that tool, you have wasted funds that could have been spent on other supplies and tools you need to make money with the current requests coming in the door. If you dont have the tool but are willing to buy it for the job to complete something for a customer, be up front with them and let them know it will take longer because you have to purchase the tool. They'll usually undestand. If you take too long because you didnt let them know you are waiting on a tool to be made and/or shipped, thats when you make peole angry. The specialized tools will partially pay for themselves as well if you buy them as needed because you will be making money with them when they arrive to complete the task. Eventually, over time, you will acquire most of the specialized tools to do most every gunsmithing job if that is your intention.

 

[Sniper338]

I have an MBA and been to professional school. I have lots of questions about setting up a realistic business plan for a new graduate gunsmith.
1. Set up 2 corporations: one for the shop facilities and equipment, and one for the gunsmithing practice?

2. Start small with limited service offerings and add on equipment as needed?

3. What is reasonable charge for hourly services?

4. Is it better to build a shop on property than to rent?

5. Do banks actually make loans to gunsmiths to start their business?

6. Any caveats, problems or headaches to avoid?

If you have property its was cheaper to have your own shop and no overhead.

Best thing to do financially is do not get in debt with it. But tools when you have CASH to buy them.

a debt free business will prosper more as you gain client base. With cost of tools you cant afford a bill from a loan when you have little or no business. Start small and grow. You will have to do it part time for a long while.

Keep business account separate from your personal account.

Save up your personal money and buy tools with that after your own bills are paid. Your home and food is more important.

Im a finance guru... my advice WILL pay off in the end...

 

[jsn]

The old standard for small businesses was to own the property as a proprieter and the actual business (corporation) rents from the owner. The business had a lease agreement that stated that it was responsible for all maintenance and repairs. Equipment would have been purchased by the business corporation. The reason for this was that if the business failed, the property would still be yours (subject to a mortgage, probably). There are probably a number of things that have changed over the years, but the basic concept is still good.

For pricing, let's suppose you decide a fair rate is $60/hour. How many hours a year do you want to work per year? How many do you think you'll actually get paid for? Most employees work about 2,080 hours per year. This will be your revenue model, and your labor is predominantly what will pay the bills.

I would suggest that you not get involved in purchasing parts for people with long lead times, even if your customers pay you the deposits/full price. The headache of administration will be an issue--if they really want it, have them accumulate the parts and deal with/pay the suppliers.

Labor standards will be an issue. Will you charge the first several thread/chamber jobs your actual 5-6 hours while you get up to speed, or will you charge the labor standard of say, three hours, for what it will take you to do once you are up to speed?

If someone wants you to work on their Glock sear, will you freehand it or will you buy the Brownell's fixture for $300 and each insert for each pistol model sear for $??? Or turn the work away?

Learn to shoot well, reload, and attend local matches where you show that you know what you are doing, if that's the kind of work you want to do.