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How to Start a Gun Shop Business

Gun Shop Business
Do you want to start a gun shop? If YES, here is a 13-step guide on how to start a gun shop business with no money or experience.

Gun ownership is one of the most controversial topics in the united states at the moment and government legislation concerning gun ownership in the country is becoming more restrictive; however, gun retailing is still a very lucrative business.

The gun sales business involves buying and selling of guns, ammunitions, and related products. Some gun shops also offer gun repair services, run gun clubs and establish Shooting Ranges for their clients to learn and practice with their guns.

Before you can set up a gun shop business in the United States, you would need quite a substantial amount of money as capital and you would also have to deal with some legal hurdles. This article would help you learn how to start a gun shop in the United States of America easily.

Steps to Starting a Gun Shop

1. Understand the Industry

According to a market research report by IBISWorld, the gun and ammunitions sales industry in the United States is a $9billion dollar market with an annual growth rate of 3.6%. The report reveals that there are about 6,650 gun stores in the United States employing about 79,264 people.

The industry is expected to witness a surge in growth in the next five years due to customers anticipating an increase in violent crimes and increase in customers’ discretionary spending. Another report by Pew Research revealed that the annual revenue for Guns and Ammunitions manufacturing in the United States is about $11billion and the average annual federal tax collected on firearms sales is around $123million.

The sales figures for gun sales in the U.S are usually determined by the number of gun purchase applications. Before clients can purchase firearms in the US, a background check would have to be conducted by the National Instant Criminal Background Check System (NCIS) to ensure that the customer doesn’t have any criminal record.

However, not all the applications made are approved but the number of applications can be used to determine sales and revenue to an extent and in 2016, over 23.1 million people applied for gun purchase background checks. Applications and sales are usually highest after a mass shooting or after violent crimes have taken place in the country.

Interesting Statistics About the Industry

The following relevant statistics would give you an idea of how the industry currently operates:

  • Total average yearly production of firearms in the US is around 3,444,375 with 1,425,500 being rifles, 777,125 shot guns, 352,625 revolvers and 889,125 pistols.
  • There are about 465 weapons and ammunitions manufacturers in the United States.
  • 32% of American households own a gun.
  • Around 300 people are shot daily due to murders, assaults, suicides and police interventions.
  • At least 645,000 Americans use guns for personal protection every year.
  • At least 49% of Americans feel that laws restricting gun ownerships infringe on their rights.
  • Texas and Kentucky are the states with the highest number of gun purchase applications every year.

The gun sales industry is expected to grow and thrive in the next five years due to increasing demand by Americans who feel the need to protect themselves from mass killings and violence which has been rampant in the country in the last few years.

This has led to an increase in gun purchases and more revenue and profit for gun retailers in the country. Another motivating factor is that the business has relatively low competition so new entrants are able to grow and thrive easily in the industry.

The business also has multiple income opportunities as gun retailers can also have shooting ranges and perform gun repair services or sell other related accessories and tools.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

Pew Research released a market research report detailing the demographics of gun owners in the United States as follows:

  • 34% of households in the West own guns, 35% in the Midwest, 38% in the South and 27% of households in the Northeast own guns. This represents the number of people who either have a shot gun, pistol or rifles in their homes.
  • Men are more likely to own guns than women as 58% of people who participated in the survey by Pew Research were men and only 42% were women.
  • More White people legally own guns than Blacks or Hispanics as 41% of gun owners surveyed were non-Hispanic Whites, 20% were Hispanics and 19% were blacks.
  • People aged 65 and above whom owned guns were around 40%. Another 40% were aged 50-64 while the rest were aged below 49.
  • 50% of gun owners live in rural areas, 20% live in urban areas while around 30% live in Suburbs.
  • Around 25.36% of gun-owning households have children under the age 18, 23.91% have children aged 0-4 years, another 23% have children 5-11 and 26.8% have children aged 12-17 years old.
  • 45.3 of people who participated in the study by Pew Research indicated that they belonged to the Republican Party, 20.37% were Democrats and 34.2% were independent.
  • 41% of the participants also described their ideologies as conservative, 23% described themselves as liberal and 36% described their ideologies as moderate.

3. Decide What Niche to Concentrate On

There are a few market niches that you can specialize in in this business industry. Some of them include:

  • Guns and Firearms Retailing
  • Gun Cleaning and Repair Services
  • Shooting Range
  • Firearms Training
  • Hunting Gun Renting
  • Gun Safety Accessories
  • Gun Clubs
Level of Competition in the Industry

The competition in the gun retailing industry witnessed a surge between 2003 and 2011 when a lot of retailers entered into the business in order to make some of the quick bucks floating around due to the surge in demand at the time.

However, the greatest competition that gun retailers have had to face is not with themselves but with the e-tailers. Many gun retailers are moving their businesses online and this has caused a decline in sales in the brick and mortar stores.

To be able to gain a competitive advantage in the industry, new entrants are advised to create an online version of their stores in addition to a brick and mortar store so that they can effectively reach customers in both the online and offline markets.

4. Know the Major Competitors in the Industry

Some of the popular guns retailing shops in the United States include:

  • GearFire
  • Hyatt Guns
  • American’s Gun Store
  • Mid America Arms
  • Bud’s Gun Shop
  • ShootSmart
  • Fort Thompson Shooting Goods
  • Johnson Firearms
  • American Gun and Pawn Inc.
  • American Hunter Gun and Archery Shops
  • GrabAGun
  • Gunnies
  • USA Liberty Arms
  • Great American Gunstore
  • Impact Gun Stores
  • Bass Pro Shop
  • Able Ammo
  • Shooter’s Warehouse
  • Cabela’s
  • Cheaper Than Dirt
Economic Analysis

The firearms and ammunitions industry has been growing tremendously over the past few years. The growth in the industry has been driven by an unprecedented number of citizens of the country choosing to exercise their fundamental human rights to carry arms and ammunitions for personal protection and hunting purposes.

The industry contributes a lot to the overall economy of the United States through its tax contributions and by providing well-paying jobs for the citizens of America. In 2016 alone, the firearms and ammunition industry was responsible for as much as $51.3 billion worth of economic activity in the country and taxes paid were over $6.5 billion dollars.

The firearms and ammunitions industry also helps to reduce the rate of crime in the country by increasing the number of people who are able to defend themselves.

Trend predictions by experts in the industry lean towards high rate of adoption of the online business model in the industry. Many popular gun retailers have taken their businesses online and many more are beginning to adopt this Business model.

There is also the threat that gun ownership laws in America may change due to the high rate of campaigns against gun ownerships. This makes running a gun shop a very profitable business with high rate of uncertainty over the future.

5. Decide Whether to Buy a Franchise or Start from Scratch

There is really no need to buy a franchise for this business especially since the technicalities involved are minimal. Starting your gun shop business from the scratch is also the best option because it allows you to exercise a lot of freedom over your business.

You can easily adopt business and marketing strategies as you see fit and also set prices as you want. You would also be able to avoid the high costs associated with buying a franchise. Another option you can explore if you don’t want to start your gun shop from the scratch is to buy an existing business.

You may be lucky enough to find someone who is looking to sell their gun shop for various reasons. However, you must do your due diligence before buying the business. Try to find out the reason for the sale and make sure the business has enough patronage, good will and no legal issues or existing liabilities.

6. Know the Possible Threats and Challenges You Will Face

Gun shop dealers face a lot of challenges when trying to set up and run their businesses. Some of these challenges include:

  • Getting Licensed

Before you can get a license that qualifies you to run a gun store, the ATF would have to run a background check on you, which means investigating every aspect of your life to ensure that you can be trusted with the crucial responsibility of buying and selling firearms.

The license may cost as much as $3,000 and the licensing process may take up to 2 months of which you can’t be too certain that you would get the license because any irregularities they find may be used to disqualify you.

  • Laws and Regulations

There are a lot of laws and regulations that you have to adhere to in this business and any misstep can cost you huge fines or jail time in some cases.

  • Security

For this business, you would need to install a lot of security facilities to ensure that the place is highly guarded and to prevent break-ins from people looking to get their hands on your stock illegally.

  • Insurance

Insurance is also a big deal because a lot of insurance companies consider gun sales business as ‘high-risk’ so gun shop owners sometimes have to purchase ‘excess lines’ insurance. Insurance may also cost a lot of money for gun shop owners.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

If you are planning to start a gun shop, it is very important to consider having the proper corporate and liability protection for your business because if your business entity is properly set up, it can help to protect your assets from liabilities that may occur. As the gun retails business is a very volatile one, it is best to set up your business as a Limited Liability Company (LLC).

A Limited Liability Company is a corporate structure whereby the owners or members of the company cannot be held personally liable for the liabilities or debts of the business. If you set up your gun shop as a limited liability, your personal assets cannot be used to settle liabilities of the business.

However, setting up your gun shop as a Limited Liability Company would expose you to a higher tax liability and formation fees compared with setting it up as a sole proprietorship where you only have to pay limited taxes and minimal business formation fees.

8. Discuss With an Agent to Know the Best Insurance Policies for You

Insurance for the firearms industry is not like any other business out there due to the volatile nature of the business. However, the insurance requirements for this business are quite similar to those of most businesses. Some of the insurance requirements for the business include:

  • Property Coverage

You would need to put asset protection into consideration especially when you own a shooting range or host gun shows. You want to ensure that your assets are adequately protected and your business doesn’t have to close permanently or temporarily due to a loss.

  • General Liability Insurance

Whether you are running a simple retail gun shop or own a shooting range or hunting club, you would be hosting a lot of members of the public within your business premises and that is why you need general liability insurance to protect yourself and your customers in case of slips and falls, injuries due to handling firearms improperly, injuries from ricochets and other liabilities that you or your business may be held responsible for.

  • Automobile Insurance

You would also need to protect the vehicles you use for your business (if any) through automobile insurance.

  • Professional Liability Insurance

If you intend to offer gunsmithing or firearms instruction services in your gun shop, you must obtain professional liability insurance to cover for claims of professional negligence.

  • Workers Compensation Insurance

Workers compensation insurance covers for your employees who may be injured on the job.

9. Get the Necessary Legal Documents You Need to Operate

Setting up a gun shop in the United States requires that you go through a series of background checks and that you obtain a number of licenses and permits. Some of the legal documents that you would need for this business include:

  • Gun Shop Business Plan
  • Zoning Compliance Permit
  • Federal Firearms License (Gun Dealer’s License)
  • Biometric Documentation and Fingerprint Cards from the Local Police Department
  • Tax compliance documents
  • Certificate of Incorporation
  • Insurance Policy Documents

10. Raise the Needed Startup Capital

The guns and ammunitions industry plays a very vital role in the United States economy especially since it provides a number of decent paying jobs to citizens and the tax contributions also go a long way.

If you are able to present these facts to your banker or any other potential investor, you shouldn’t find it challenging to access funds to start up your gun shop. Some ways you can finance your gun shop business in the United States include:

  • Credit Union/Cooperative Society Loans

There are a number of credit unions in the country who offer loan facilities to their members at reasonable interest rates. The only challenge is that you would have to become a member and then wait for a few months after active participation before you can qualify to get loans from the organization.

  • Bank Loans

Another option that you can explore is to obtain a loan from your bank. If you have a good credit score and you are able to present documents like tax returns and financial statements, you should be able to get mid-single digit interest rates with repayments spread over a long term.

  • Alternative Gun Store Loans

If you are not lucky enough to get traditional loans, you can look towards obtaining alternative business loans. The lenders are usually ‘fintech’ companies who rely on technology and sometimes humans to underwrite the loans. These types of loans are usually for operating and working capital business needs.

  • Cash Advance

Another good alternative to traditional financing is to obtain cash advances. Cash advances involve selling of your business’s future receivables so that repayments can be made in small percentages when the business kicks off.

11. Choose a Suitable Location for your Business

Location is essential in this type of business and scouting for a suitable location for your gun shop is one of the most important considerations you need to bear in mind when you are trying to set up a gun shop. The first thing you need to consider is the zoning laws of your city or state.

You must ensure that you choose a location where you are legally allowed to set up a gun store and a shooting range if you are looking to start one too. Setting up your gun store in a shopping mall is not a bad idea as it gives you the right visibility and access to customers, but if you are going to set up a shooting range too, you might have to secure extra space somewhere else for that.

You must also choose a secure location that is not prone to break-ins and robberies. This is one of the criteria that would be considered before you are issued a Federal Firearms License and if the location you choose is not considered safe enough; you may be refused the license for that.

12. Hire Employees for your Technical and Manpower Needs

The technical and manpower requirements for setting up a gun store in the United States would of course depend on the size of your business. If you are starting really small, you may not need too much in terms of manpower as you can double as the manager, bookkeeper and salesperson.

But if you are looking to start a medium to large sized gun store, you may need a lot of helping hands to ensure that the business runs smoothly. Some of the technical and manpower requirements for starting a gun store in the United States include:

Technical Requirements
  • Top notch security gadgets and installations
  • Computer
  • Cash Register
  • Credit card processor
  • Product Catalogue
  • Marketing materials
  • Stationeries
  • Vaults/Safe
  • Display shelf
  • Inventory
Manpower Requirements
  • Firearm instructor
  • Business manager
  • Accountant
  • Marketers
  • Sales person/receptionist
  • Security officers

13. Write a Marketing Plan Packed With ideas & Strategies

Gun marketing does matter. A gun shop is no Grocery Store where you can just relax and expect people to walk into your store by default. This is one business where if you really want the customers, you have to work for it. It is important to develop a solid marketing plan for your business before you even start.

The marketing plan should be a major part of your business plan and you should ensure that you implement the strategies in order to help your business move forward and in order to beat the competition. Some effective marketing strategies that you can implement for this business include the following:

  • Improve Your Web Presence

Just like with other goods, many more people are finding it easier to sit at home and make their orders from their computers rather than going through the hassles of driving down to a gun shop. Ignoring these category of customers would mean losing out on a reasonable market hence you should ensure that your brick and mortar gun shop business has an online version too so that you can service customers of all categories.

  • Newspapers and Magazines Adverts

Another great marketing option is to place adverts in local publications like newspapers and magazines around you. You should also consider advertising on online publication platforms too as they are also very effective.

  • Radio and Television Shows

If you can afford it, you can consider sponsoring your own show on radio or television where you can discuss security issues and teach people how to protect themselves.

You may not be able to promote sales of guns directly on the airwaves due to censorship issues but you can promote other security gadgets and make your store widely known so that more people can visit your store and then buy guns from you.

  • Social Media Marketing

Paid, targeted advertisements on social media platforms like Facebook can also help to increase visibility for your business and promote sales too.

  • B2B Marketing

Business to business marketing is another marketing strategy you must not ignore if you want to succeed in this industry. You should advertise your products to other businesses like security guard agencies, private and public military companies and other outfits that offer security services.


The toughest part of starting a gun shop business is getting the Federal Firearms License hence you must ensure that you conduct all necessary research and put all necessary things in place before applying for the license so that you can avoid being denied of the license.