doublegunshop.com - home Forums General Discussion DoubleGun BBS @ doublegunshop.com This could be good...right?

If all stays exactly as it is now, it would seem this is a good arrangement for the owners and you. Problem is, things seldom stay the same.

If the business thrives and grows and it becomes noticeable that the non-rent paying gunsmith is taking up floor space that is needed for a growing inventory, at least one of the three owners will take issue with that.

If the business fails and goes bankrupt, good luck retrieving your duplicator and tools when the bankruptcy court trustee locks the door prior to auctioning off the stores' assets in order to pay creditors. I once lost a good many personal tools when an employer filed ch.11 and eventually liquidated in a ch.7 bankruptcy. I had few receipts for tools acquired by me over the years whether purchased new or at auctions or bought used.

There are a million scenerios in between these which can affect you. The advice given to protect yourself should not be ignored. You can negotiate becoming a 1/4 partner and share in the risks and rewards equally. You can become a seperate entity or even a subcontractor, but you need to define your role and protect yourself and your assets.

You might want to find out if the "gunsmiths" who work for Cabelas or Gander Mountain maintain their own FFL, or rely on the store or corporate FFL. Better yet, you might want to contact BATFE and get a definitive answer in writing since, as Jim notes in so many words, they will not consider ignorance of the law as a valid excuse.

I do hope this venture works out for you and the owners as the number of stocking gun shops and FFL's is in definite decline since the Clinton years.

I'm thinking, based on advice here, that the best scenario would be for me to set myself up as a separate biz, legally, and just pay him rent. I get my own FFL, which should be doable seeing as BATF has inspected the shop and licensed him 3 months ago. Keep my own log book for BATF, and keep my owns set of books for tax purposes. That way it seems I can protect myself from being involved with it if he goes belly up. Rent is also tax deductable and work in trade is not. I can work my own posted hours. I don't even want to be involved with the reatail side. Don't plan on it. Being a partner is out of the question. I want my own space to do my own biz. I'm in a downstairs part of the shop so that will limit the BSer's stopping by. I plan on only being open 3-4 days a week for now, and if I need to get something done badly I can just go in and lock the door to the upstairs or do it in my home shop. Getting a lawyer involved would be looked on as "City". This is rural western PA, and a man's word and a handshake still mean something. Although I will consult privately with one and ask him to draw up any agreements.

Keep it coming you all have been encouraging and enlightening.

thanks

double-

It sounds like this could turn out well for you, the guys upstairs, and your friends and future costomers. You've also received a bunch of good advice and much to consider. One thing you didn't specify is whether the business owners rent their space or own it. If you're paying rent there should be a lease agrement which should protect you as well as the lessor including having adequate hazard and loss insurance. Also, if the lower level space you intend to occupy is a basement or even street level, I'd check the flood insurance rate map (FIRM) to see if you'll be wet or dry in the event of a flood...

Best of luck to you!
jmc

I'll look into that too...thanks.

Handshake deals just don't make for good friends or business. As soon as money gets involved, either too much or too little, someone gets greedy or insecure. Then the fight begins. The three guys up stairs will become pretty testy if they are unable to make a go of the store. And the probability is they won't. I hope they make it but small gunshops are a dying breed. I am from Western PA myself. Look around at how many gunshops have come and gone in your own experience. Few have made it for a whole year - too much competition from internet, Cabela's etc. Protect yourself. In the end, having your own shingle and becoming known by being around that shop will be an asset for you. You can continue business after they are gone if that happens.

Get a FFL. Get insurance. Get a lease. In the end these three things will protect everyone involved. If the one guy has several business then he will not only understand a professional relationship but understand how your both are better off with one. Run your new business as a business not as a hobby or toy. Fastest way to fail is to not treat it as a real business. Oh yeah, do not forget to pay your self. Fun is fun but you need to pay bills and no one is happier than a person who can easily pay his bills. Hope it works out well for you. We need all the decent gunsmiths we can find these days and one who is happy is a plus.

Ok so question...will BATF issue a license to me if I have the same address as the store license?

I did something similar for a few yrs about 18 yrs ago. Although, I did not move in the property, I took in work. I stopped by the gunshop and picked up my work. I quoted it and had a standard price for most common stuff. Set your prices, stick to them, and don't count their money. Just because you may be charging $25 labor to install a pad and they charge $60, don't start thinking about raising your prices after you learn what they charge. Set your prices up front based on local economy, and the local clientel with room for the retailer to make a fair profit. I was doing work for common folks on common guns like 870's, Mossbergs, Win 12s on occasion, and rarely any double. Much of my work was handgun repair and the occasional rifle work.

It was not uncommon for my retailer to charge 100% markup on my work. I knew that and was still good with it, knowing that the charges I established were making me good money. If you want all of the profits, you need to 'go it alone'. Even then, a gunsmithing only biz will commonly deeply discount charges for other retailers that provide a steady stream of work.

I would be very careful about moving in any equipment and tools you can't afford to loose, without a written sublease agreement. If these guys default on their lease or loans and get locked out, you're left without any legal standing to recover your stuff.

Probably your best resource here will be SKB (Steve Bertram)as he was in a similar arrangement a year or so ago.

Get your own FFL, log in all repairs on the appropiate forms (Brownells). I would second the idea of having a lawyer (shudder) draw up an agreement. Good Luck in your endevor.

I too, live in rural western Pennsylvania. For the most part, you are correct about a man's word and handshake. But you know as well as I that every county has its' courthouse and the yellow pages have a lot more lawyers than pizza shops. This should tell you something.

My total losses in the bankruptcy I noted earlier were around $30K. The court gave me $210.00 about 7 years later... less than a penny on the dollar. I was building a house at the time and an extra 30 grand sure would have come in handy. Be diplomatic in your approach, but look out for number one.