Considering some work on the side- need help...

[Ronin13]

I can't comment on the FFL business, but I would recommend you take a very serious look at purchasing a home with him. Generally speaking, purchasing a home with a friend or family member is a poor choice if it will be in both of your names. It is far better for one of you to purchase in your own name and split the mortgage payments with the understanding that any profits made from selling it in the future are split.

It isn't a matter of trust, so much as people's lives change. One of you could decide to want to move away and want to sell while the other wants to stay. One of you could fall in love and want to move your significant other in. The market could take another dive and you could both be upside down on the place and one of you would want to sell for a loss while the other wants to live in the home indefinitely. Way too many variables.

I only mention this because I have seen two friends go through it and it landed them both in situations that were very difficult.

I'm buying myself, in my name, and all that- I'm getting a VA home loan, and only I can apply on it- so after the purchase we're splitting the payments and all that, but the house for all intents and purposes will be in my name.

You know I have to say honestly I have thought about everything that you have brought up as a business possibility and what it comes down to is that you have to be very good at paperwork. You will be doing way more of that than building rifles for years before you ever see a profit. The laws with this type of stuff are very complicated, they got that way through decades of litigation between lawmakers and lobbyists like the NRA. Both are fighting for an edge and it makes it very complicated if you want to get into the type 07 FFL world. I know people that do it, but they had a great deal of financial resources at their disposal to get everything up and running the right way. They had to hire lawyers to research their methods and their business model before anything was even purchased.

If you are going to buy a house to do all of this in, there are a ton of things that you need to look into regarding zoning, covenants, county laws and regulations, and much much more. To work from home uncle sam needs his cut so there are a ton of rules in place to make sure that you are operating within tax laws.

I am a very organised person, and I am very good at paperwork but after looking into what is required to run a business of this type I have abandon the idea. You will need to devote 100% of your time to running the business just to break even. It is not a side job kind of a thing. If you just wanted to run an FFL from home that is one thing, and you could probably do it offering cheap transfer services for people and running a small business that buys and sells new weapons. But beyond that I would say take baby steps into the industry and feel out the laws before diving in.

Interesting perspective. Of course we're gonna start small- it's not like I'm going to jump in and hope to be the next Wilson Combat or Dan Wesson... I was thinking of only building like 5-10 rifles a year, but for the most part work on selling and easy transfers, like an "open on weekends" type of deal. Just a simple side small business, we'd both keep our day jobs. Wouldn't a type 07 FFL make it legal so I could sell but leave the possibility open for manufacture when I get good at it?

[colorider]

Ask yourself , what is going to set us apart from the competition. Why will customers choose to buy from us and not from others? Are people going to make the drive to evergreen? Pretty simple business plan stuff, but also the most important.

[jhood001]

I'm buying myself, in my name, and all that- I'm getting a VA home loan, and only I can apply on it- so after the purchase we're splitting the payments and all that, but the house for all intents and purposes will be in my name.

Awesome. The way I read it made me think you were going in on it together. Congrats on your future home purchase!

[BPTactical]

When you enter into the 07/Manufacturing side you enter into another world as far as liability.
No thanks
Also, listen to Jhood. He is wise.
Joint ownership of anything is a quick way to destroy a relationship.
Never let money come between relationships.

[ChunkyMonkey]

I think you need to think this through. How much mark up do you need to move a franken-AR w/ ease (no marketing budget etc)? $100? $200 per rifle? You have to sell 20 rifles just to make a couple grands. The profit margin to liability/cost and time you must put into this don't add up. DPMS basic carbine is $600 at walmart - comes with factory warranty. If you decided to move forward, the only value I see is personal start up business experience which can be priceless. Good luck w/ whatever decision you make.

[dwalker460]

I am actually in a similar sort of boat. I have about 1000sqft of showroom/office space that needs to generate some sort of income, and I have seriously considered setting up a gun parts/accessory etc. shop up front. My issue is I already have a lot going on, and there is just no way I can take on another project myself. So the only outlook for me is to either find a partner who is just about ready to go and needs space/capitol/etc. or to add budget and hire on employees/managers/etc..
I cannot concieve of a way it would work out that I would try and do something out of my garage or home, just too much downside with very little upside.

[Ronin13]

When you enter into the 07/Manufacturing side you enter into another world as far as liability.
No thanks
Also, listen to Jhood. He is wise.
Joint ownership of anything is a quick way to destroy a relationship.
Never let money come between relationships.

Yeah, I'm checking into that, as far as how exact and precise things need to be and all that- I would probably only build with full custom lowers and get the barrel, gas block, and tube as one piece to attach to the upper (since this is where I've heard the majority of any screwups go catastrophically wrong) and go from there.

And indeed, Jhood is good, Jhood is wise...

[dwalker460]

I'm buying myself, in my name, and all that- I'm getting a VA home loan, and only I can apply on it- so after the purchase we're splitting the payments and all that, but the house for all intents and purposes will be in my name.

mmm I see this as a recipe for drama myself. Lets say he gets involved with some girl (or guy, I dont judge) and decides to move out and now your the only one making those payments? Or how about if after 5 years you decide to sell and or cash out whatever equity there is, and he has helped make all these payments, what then? I can see a lease or rental arrangement, but only a very small percentages of families can actually run a family business, or have any monetary dealings and it not affect the relationships.

Interesting perspective. Of course we're gonna start small- it's not like I'm going to jump in and hope to be the next Wilson Combat or Dan Wesson... was thinking of only building like 5-10 rifles a year, but for the most part work on selling and easy transfers, like an "open on weekends" type of deal. Just a simple side small business, we'd both keep our day jobs. Wouldn't a type 07 FFL make it legal so I could sell but leave the possibility open for manufacture when I get good at it?

The problem I think your ignoring is that you will spend more in insurance, fees, etc. than you can realistically make selling 10 rifles a year, and it will be a very serious headache and time commitment. I think if you want to "get good at it" you need to go work for someone in the business. I get that the trend with young people these days is to just study a bit on the internet then go out and open your own shop because "I can do it as good, and for less", but the reality is you should go out and get experience, actual practical experience, BEFORE you make a commitment of time and money that has serious repercussions for each mistake you make.

[Ronin13]

mmm I see this as a recipe for drama myself. Lets say he gets involved with some girl (or guy, I dont judge) and decides to move out and now your the only one making those payments? Or how about if after 5 years you decide to sell and or cash out whatever equity there is, and he has helped make all these payments, what then? I can see a lease or rental arrangement, but only a very small percentages of families can actually run a family business, or have any monetary dealings and it not affect the relationships.



The problem I think your ignoring is that you will spend more in insurance, fees, etc. than you can realistically make selling 10 rifles a year, and it will be a very serious headache and time commitment. I think if you want to "get good at it" you need to go work for someone in the business. I get that the trend with young people these days is to just study a bit on the internet then go out and open your own shop because "I can do it as good, and for less", but the reality is you should go out and get experience, actual practical experience, BEFORE you make a commitment of time and money that has serious repercussions for each mistake you make.

We've talked about the house thing for a while now- and we've explored several options so we'll figure that out, no worries. As for the other part- I'm talking about building 10 rifles a year to start out- as far as selling we're hoping to actually at the very least break even by the end of the second year... I have a feeling ammo will be the big income maker though. I would love to get some experience and all that, but do you know of anyone who is hiring? I'd love to work at BluCore, especially after I get my NRA Instructor Cert, but it looks like right now most of the shops aren't hiring at the moment. But yes, that's some wise advice, experience before commitment- we're not planning to do this anytime real soon, we're just bouncing ideas around right now.

[nynco]

You also have to consider the tax on a manufactured fire arm vs building. There could be a way around that depending on whether you build to order and make 2 separate payments. One for the lower, and one for all the other parts.