by Gene Kelly, President of AGI
It’s one thing to know how to repair or modify guns, it’s quite another to be able to run a successful gunsmithing (or any other) business. In this important article, AGI President Gene Kelly tells us his secrets for running a successful and profitable business. Here are the first three secrets… look for the rest in the coming weeks.
Gunsmithing can be a wonderful hobby. It can also become very profitable, if you know the secrets of successfully operating a business. I am going to share 7 of those secrets with you in this article.
The first is “Know what benefit you want to get from the business.”
The key to success in any business venture is knowing exactly what you really want to get out of it. While that may sound really simple, it isn’t. Most people only have a vague idea of what they want to accomplish when they start a business. Gunsmiths are no different. They don’t want to have a boss, they know that much, and they want to have the fun and thrill of fixing firearms, and they want to make money. But beyond that they probably haven’t written down actual goals in the amount of dollars desired to be generated by the business, both Gross and Net and what that equates to in the number of sales, repairs, services, etc. they need to do each month to cover all the costs and still put a nice profit in their pocket.
This isn’t difficult to do, shouldn’t be scary and I cover it thoroughly in the Complete AGI Business Success Tool Box Course. But I am going to share some of the core information with you right now. If you are interested in Gunsmithing as a hobby or just as a way to earn a little bit of extra retirement income, this process becomes slightly less necessary. Your goal may be just to enjoy repairing guns and to bask in the admiration of those that are less skilled, nothing wrong with that. However if you want to generate a significant income from your Gunsmithing Business, THIS is where you need to start.
So set some simple basic goals to start. Don’t over complicate it. Just think about how much you would like to put in the bank each month (profit) and follow these steps:
Know your operating costs, decide on and maintain adequate profit margins to meet your goals.
Most Gunsmiths fail simply because they don’t charge what they need to, to cover overhead and still make a significant profit. They seem to be afraid to charge what their knowledge and skill is really worth. They often price a job low, because that is what the starving Gunsmith down the road is charging and he has been charging that for 20 years, or “because this gun is only worth X I can only charge Y.” Wrong!!! The market will bear more than you think it will. People WANT to SPEND MONEY on their guns! This is one of the key areas I work on with our students and now some of them are making six figures a year!
Once you know what your personal objectives are, then next you need to have some idea of what your total business costs will be. Again, to begin with don’t over complicate it. Here’s a simple break down of how to do it:
I am going to over-simplify this, (I go into a lot more detail in the course), but basically you need to know your overhead & general costs such as; rent, utilities, advertising, etc. for the month. That is what we are calling your overhead. Let’s just say it was a $1,000 to keep it simple.
Then we divide that by the number of hours you will doing paid work. So a typical work month (40 hours per week, 4 1/3 week) averages 176 hours per month. Now this is assuming you are going to be 100% productive and we all know that no one ever is. So you need to adjust that number by a performance factor. Say you were only able to bill 50% of your time. That would be 88 hours a month if you are working full time. So take your total overhead ($1,000 in this example) and divide it by 88. Bingo! You now have your per billing hour overhead cost, (in this example $11.36 an hour).
Now take what you want to make in NET profit each month (let’s say $5,000) and divide that by 88 (50% Billable Hours) and you will end up with your second number $56.81. Add them together and you get the minimum hourly rate that you need to charge. (in this example $68.17 a hour). Does that seem like a little or a lot to you? If it seems like a lot then you REALLY need to take my Business Success Course. But it may surprise you that you can actually charge less than that per hour and make more NET profit if you become more efficient. I will address how to do exactly that in a minute.
Marketing & Selling your Gunsmithing Services
I hate to pop your bubble, but the truth is that when you open your doors as a Gunsmith (or any other business) the whole world will not suddenly come running to your door to have their guns repaired. How can they if they don’t know you are offering Gunsmithing Services??! It never fails to amaze me that some Gunsmiths think they don’t have to do any advertising at all to be successful. However, a big advantage for Gunsmiths is that you can spend a lot less on advertising than most other businesses because of the huge demand and the lack of qualified Gunsmiths. But you have to do it smart and let them KNOW you are there, open for business and qualified to repair or customize their firearms. Again I extensively cover marketing in the Business Success Course. But as a headstart, here are 4 simple and extremely low cost ways to get a ton of business:
- Business Cards, hand them out everywhere and post them letting people know you are an AGI Certified Gunsmith.
- Post and Mail a Simple Brochure (AGI can help you, by providing you with a standardized brochure) to gun shops, pawn shops, ranges,
gun clubs and take them to hand out at gun shows. Everybody needs a good gunsmith –people share news about them like hot stock tips.
- Create a proper yellow page ad (don’t buy an ad without listening to the AGI CD on how to create effective yellow page ads and certainly don’t listen
to the ad sales rep!!)
- Have a simple but effective website presence, with the 5 key components covered. (AGI has a turn-key system that can help with that too).
Just these four simple things can get you a lot of work. There are even more powerful tricks that I reveal in our success courses. You also need to know how to “Sell” your work & services. Whoa! You may be thinking “I hate selling!” But wait a minute, “selling” is not a dirty word! It just means knowing how to best help your customers make a good decision. If you are honest and want to actually help your customers, then you need to know how to do real selling.
Look for Part 2 of this article soon.