By Paul Smeltzer
Owner/Operator Athens Gunsmithing
Welcome back to The Business of a Gunsmithing. We have discussed what for some may have been basic information. Perhaps, but neglect of the basics are the very reasons why new businesses fail at such a high rate. What I hope to do with this series is be honest and clear about what it takes to have the best chance of not being a negative new business statistic. With that said let us explore the start up process. Let me begin by providing you with a checklist of sorts.
1) Create your business
2) Establish an address for your business
3) Acquisition of equipment, tools, inventory
4) Advertising and marketing
1) Creating your business is more than just picking a name, not that picking a name is unimportant, it is in fact a good place to start. Give some thought to your business name, it should convey something about what your business is. Jim’s Repair Service is not very descriptive. Jim’s Gunsmith is more descriptive, but slightly disappointing if customers never talk to, or see Jim. However they know Jim’s wife Sally because she answers the phone, answers questions, and handles the front counter. May sound a little weird but calling the business Sally’s Gunsmith may be more identifiable because people know Sally, Jim is the guy who works in the back.
Your name should be search friendly, most people look for goods and services first through internet searches. Internet searches are based on key words and your name should have some of the key words that reflect your business. If you are doing repairs and retail gun sales – Sally’s Gun Sales and Repair, is more descriptive than Sally’s Gun Shop.
After deciding on a name, you need to decide what kind of business entity it will be; sole proprietorship, LLC-Limited Liability Corporation, partnership, corporation, co-op. The decision on what that entity should be is influenced by who is going to be part of the business; family members, spouse, or just you. Taxes also play a part as well as financial and personal liability in the business. If you don’t know much about these different business entities, or taxes, consult someone who does. The Small Business Administration is not a bad place to start. Attorneys and tax accountants are also an obvious source. I will say it is possible to do the work yourself if the business entity is not going to be complicated. I do my own taxes and have set up my own business entity online through the state’s Secretary of State website. My business is a sole proprietorship LLC – Athens Gunsmith Service, LLC.
2) Establish an address for your business. By this point in the process you have located a suitable area to set up business and have an understanding of what you are selling. Now let’s get specific about exactly where in that suitable area you are going to call home.
First question: Will you lease or buy that address? If you lease, it is a monthly/annual cost of doing business, if you own, it may still be a cost but also an asset. If you lease, be sure of the terms of the lease, equipment you will use, power requirements, noise issues, and modifications you may need to accommodate your business. Some of these issues are also valid if you are going to buy an address, but usually not as big a problem. For example if you are going to be using a vertical mill, lathe, 60 gal air compressor and a coating oven, you are going to need more than a couple 120 volt outlets.
That nice location next to the ice cream shop in the strip mall, may not be good with a compressor making noise, sand blaster adding its note, and the lights dimming when it all kicks in at the same time.
That brings up the next step in starting your Gunsmith business – compliance. You need to know what activities are permitted at your new location, I can assure you that there will be problems with operating across the street from an elementary school. Also be aware of any permits, licensing, or local taxes. Even in the little town I live in they require an annual Occupational License which is based on my annual revenue, which basically makes it a tax, and is due on April 15th, but it is a license, not a tax, because the village can’t levy a tax.
Again these are annual costs of doing business, if any of those costs was a surprise, revisit your calculations from Part 1. Set up any power, phone, utilities you may need to activate, check out the local post office for any delivery requirements, same for UPS, FedEx or any other shipping/receiving requirements. Arrange for any building or road signage necessary, it’s good for people to be able to find you.
Once you have established your business name, entity, and address, you now move to obtaining any licenses, permits, or any other documentation necessary to do business. You will need to obtain an FFL, you may need to get local occupational licenses, state and/or local tax certificates to collect said taxes, and any other special permits your local government may require. Set up business accounts with companies you will be buying supplies and parts from, wholesale accounts for buying inventory of other people’s stuff you might be selling, execute any contracts, agreements, or other documents necessary to conduct business. Finally set up bank accounts, loans, and credit card service if you are going to accept credit cards.
Congratulations, you now have an official, tax paying, compliant, business. Now all you need is stuff to put in your building and some customers.
3) Acquisition of equipment and other useful stuff. Make a list of equipment you will need from a lathe to a credit card machine, make another list of tools you will need from screwdrivers to punches, make a third list of supplies or consumables, things like sandpaper, envelopes, tags, and paper towels, and finally a list of any inventory you are going to retail. Next figure out where you are going to get all this stuff, how it is going to get here, and what kind of a deal you can get.
First piece of advice on procuring equipment, lathes, mills, belt sanders, etc, is don’t get more of a particular piece of equipment than you need, and once you decide on exactly what you need, get the best you can afford. I would love a nice older South Bend lathe, but I don’t need that much lathe for what I do. Finding one where I live would be tough, getting it to my place would be tougher, getting it into my shop would require surgery, and none of this would be cheap. I don’t need a South Bend, I do need a lathe. I have a Grizzly Industries Gunsmith lathe model G4003G. They delivered it to me, it fit in my shop, it does what I need it to do in an efficient manner, and it was cost effective for me. It is my second lathe, the first lathe was a smaller lathe, it too fit in my shop, they also delivered it to my door, it was less expensive, however it did not do what I needed it to do. It was not an efficient machine for what I needed it for, and was therefore not cost effective. It now sits unused in a corner, a monument to not getting the machine I needed. Not enough of a machine is worse than getting too much of a machine.
There are a lot of choices out there for equipment, some fairly cheap and cheaply made, some at a decent price and adequately made, some over priced and poorly made. Do your homework. Consider price as well as need, along with how much use you will put it to. The harder you work it, the better quality you need. With that said the belt sander I use a lot I bought for less than $30.00 15+ years ago at Harbor Freight, I just change out the belts. All I can tell you is do your homework.
4) Advertising and marketing. This is actually one of the more difficult components to get right, but also a very critical part of your business. I am coming up on my 63rd birthday. For those of you somewhat younger, once upon a time if you wanted to advertise your business you bought a business listing in the yellow pages – the yellow pages were pages colored yellow that were in the back of a phone book – a phone book was a big paper book with everyone’s phone number in it from a town or city. This book was free and published by Bell Telephone Company, because they were the only phone company there was. It was the first search 6 engine available to find people or businesses. I know you young people probably have never seen or used one, that’s OK, you know how to find stuff on your smart phone or other devices. You older folks are the only ones that know what the yellow pages are, or ever used them, I’m sorry if that is still what you use – you are missing a lot.
First lesson in advertising is that most people, including old guys, use internet access to find goods and services. The percentage of your customers who are relying on the good old yellow pages to find you are probably not big enough to sustain your business. Forget the yellow pages – please.
You need to have a web presence of some kind if you are going to reach a useful portion of your market. This web presence includes a business web site to help people find you, but also a presence in social media, Facebook, Pinterest, etc. It is very important to be able to connect to your potential customers via the various electronic communication devices being used by just about everyone. Granted the older than me generation is not as tech savvy, but their kids and grandkids are, they may have more disposable cash, but are they not immortal. If you are not familiar with how most people are accessing business online, via smart phones, tablets, or laptops, find someone who is – google website design, find out if they have an app for that.
I find this component of running the business the most difficult because of the time it takes to stay current with new media, and to keep what is in place fresh and relevant. I don’t have the time to keep up with it in my business, it is the one thing I delegate to others who are more knowledgeable.
Although it may seem that personal contact does not happen in today’s marketplace, that is not entirely true. There are some old time avenues to market your business face to face. In the firearms business, local gun shows would be at the top of that list. You have a large building full of people looking for gun related goods and services. Setting up a couple of tables at a gun show is a great, inexpensive way to market your business. I always approach a gun show from a marketing standpoint rather than a selling prospective. Sure I bring some stuff to sell, but my expectation on selling stuff goes no further than meeting the cost of the table and my time. What I really want to do is talk with people about my services. I bring with me headspace gauges, muzzle and chamber wear gauges for military firearms and offer a free check. It never fails to get at least one rebarreling job. I bring examples of reblueing work and Cerakote jobs, eye catchers like my BAR, or a Nexus sniper rifle in a suitcase, all to get someone’s attention, answer a question and give them a business card.
A successful show is handing out a couple hundred business cards. I have always generated new business from being at a gun show, many times I have brought home guns to work on that people brought to me at the show. It is a place to sell me, my business, and what I can do.
Other opportunities include gun clubs, police forces, and shooting matches. I have several firearm training certifications from NRA, CMP, and concealed carry. These all help to get the name out. There is a local 4H shooting team for whom I do most of the trigger work for their competitions. At their last competition, the junior group was first in the state, and the senior group took second. Good for them and their coaches, and not bad for business either. I donated a couple of rifle hard cases and got a lot of play on their Facebook page.
Advertising and marketing is all about being able to be easily located and connected to those who need your products and services. There are many ways of connecting to your market, it’s not about the yellow pages any more.
Know your market, think about how best to connect to those customers, be creative, try different things, don’t be afraid to ask a professional.
Next time we will talk about building and keeping your business.