How to Start a Gun Manufacturing Company

Do you want to start a gun manufacturing company? If YES, here is a 20-step guide on how to open a gun manufacturing business with no money or experience.

According to industry reports, firearms and accessories account for about 60% of US industry revenue; ammunition accounts for about 40%. Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.

The bottom line is that you need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open a gun manufacturing company in your city.

You can start your gun manufacturing business from a small town in the United States and if you are good at what you do when it comes to manufacturing fanciful and reliable guns, it won’t be too long before your brand becomes a nationally recognized brand.

Steps to Starting a Gun Manufacturing Business

1. Understand the Industry

The United States has been home to a robust firearms industry for decades. The earliest available data provided by ATF on firearms manufacturing shows that 3.04 million guns were manufactured in the United States in 1986. Although this volume of gun manufacturing stayed relatively stable in the 1990s and 2000s, ATF data shows a massive increase in recent years.

While an annual average of 3.8 million firearms were manufactured in the United States from 1986 to 2008, this average more than doubled to an annual average of 8.4 million firearms per year from 2009 to 2018. According to industry reports, gun manufacturing in the United States reached a 31-year high in 2016, with 11.5 million firearms manufactured.

Gun production has dropped since then, decreasing 28 percent in 2017 and 25 percent in 2018. Despite these drops, however, 2017 and 2018 were the seventh- and fifth-highest years for firearm manufacturing, respectively. The rise in gun manufacturing in recent years is more or less driven by rifle and pistol production.

According to ATF data, nearly 76 percent of firearms manufactured from 2009 to 2018 were either pistols or rifles. Within the category of pistols, the rise in production is likely attributable, at least in part, to the growth in the manufacturing of large-caliber concealable pistols.

Additionally, the category of miscellaneous firearms, which includes items such as pistol grip firearms, firearm frames, and receivers, has grown considerably since 2010.

While close to 851,000 miscellaneous firearms were manufactured from 1986 to 2009, more than 3.4 million were produced from 2010 to 2018. Note that this massive growth in the gun manufacturing industry is also demonstrated by an increase in the number of licensed gun manufacturers in the country, which grew 255 percent from 2009 to 2018.

As of 2018, there were over 12,600 licensed firearms manufacturers in the United States. The increase in the number of licensed gun manufacturers occurred nationwide, although there are significant differences in the size of the gun manufacturing industry from state to state.

While there are a significant number of gun manufacturers in the United States, total gun production tends to be more concentrated among a few large companies. Three manufacturers were responsible for producing more than 58 percent of pistols made from 2008 to 2018: Smith & Wesson Corp., Sturm, Ruger & Co. Inc., and SIG SAUER Inc.

Additionally, three manufacturers were responsible for the production of more than 45 percent of rifles produced from 2008 to 2018: Remington Arms, Sturm, Ruger & Co. Inc., and Smith & Wesson. Licenses to manufacture ammunition have also increased, from 1,511 in 2009 to 2,119 in 2018.

Presently, there is no reporting requirement for ammunition manufactured in the United States, so there is no way to have an accurate accounting of how much ammunition is manufactured in a given year.

Gun manufacturers are currently subject to relatively little oversight by ATF upon receiving their license to operate. Manufacturers are required to maintain records of their firearm production and sales and are subject to one potential annual inspection of inventory and records to assess compliance with applicable laws and regulations.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

Any entrepreneur looking to venture into this business will have to first slave over the creation of their business plan, invest countless hours in the details of their business strategy, and also address details about the industry.

To succeed, you’ll need to be careful to avoid common industry analysis mistakes and to accurately represent your start-up in an industry context. In the United States, guns are mostly used for hunting, sports shooting, self-defense, and other legal activities.

Also, the increasing number of shooting ranges, shooting sports programs, and personal security concerns also grow the demand for gun manufacturing. However, when starting this business, your primary target markets will have to be gun accessories shops and private gun collectors in the United States.

3. Decide Which Niche to Concentrate On

In every endeavor, personal or business, the purpose intended is very crucial. For commercial reasons, the purpose of putting up a business sets up the direction of the track of business.

In the gun manufacturing business, you may be confined to producing guns and other armaments. Although there is no specific niche in the gun manufacturing business, note that specifying the products to manufacture is critical in knowing what tools, machinery, and facilities to use.

The Level of Competition in the Industry

According to industry reports, firearms and accessories account for about 60% of US industry revenue; ammunition accounts for about 40%. The US industry produces about 11 million guns per year: about 50% are pistols and revolvers; about 40% are rifles, and about 10% are shotguns and other firearms.

Note that within a category, a company may make guns of different calibers and styles. The most popular pistol calibers are 9 millimeters, .45, and .22.

The most popular revolver calibers are .357, .45, and .38. Demand in this industry is driven mostly by hunters, gun enthusiasts, and weapon upgrades by police departments. The profitability of individual companies is more or less linked to marketing.

Large companies boast of economies of scale in purchasing, while smaller companies can compete effectively by producing premium-priced high-quality or decorative guns. However, the industry in the United States is highly concentrated.

4. Know Your Major Competitors in the Industry

Long before you open a gun manufacturing business, it’s a good idea to find out how you will fit in the competitive landscape. Companies that manufacture small arms and ammunition include;

• American Outdoor Brands (US)
• Colt (US)
• National Presto (US)
• Remington Outdoor (US)
• Vista Outdoor (US)
• Beretta (Italy)
• FN Herstal (Belgium)
• Glock (Austria)
• Heckler & Koch (Germany)
• Kontsern Kalashnikov (Russia)
• Norinco (China)
• Taurus (Brazil).

Economic Analysis

So many technical professionals all over the world have devoted their knowledge, experience, and expertise to explore the many possibilities of becoming a gun manufacturer. Some choose to specialize in engineering and material science that can possibly focus their learning to meet the increasing demands and needs for weapons material processing and manufacturing services.

The actual process of gun manufacturing can really take a lot of time and each step of it is important. Also, note that every aspect of manufacturing guns is expected to be given utmost attention. All other related topics should also be covered to ensure profitability and success for the business.

Note that developing your own staff members in the aspect of preventing accidents through giving appropriate training should also never be neglected. After all, a little mistake could be sometimes fatal in the weapons industry that’s why safety should always be your top priority.

You should also be updated with the latest trends and technologies that develop in the industry so you will not be left behind. Doing extensive research in advance will help you to always stay a step ahead of your competitors.

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

As a gun manufacturer in the United States, it’s imperative to explore all your options before you commit to a specific business opportunity. Howbeit, despite the attraction of starting from scratch, you should also consider the benefits of acquiring a gun manufacturing business or seeking a franchise.

If you have enough capital to start a gun manufacturer’s business, then you have no problem financing the purchase of a business that has a solid earnings history and a workable business model.

Note that Franchising won’t ensure with certainty that you will be successful but it can mitigate many risks that increase your chance of failure. If you planning on starting a gun accessories manufacturing business, a smart move is to consider buying an existing business since there are no recognized franchises in the industry.

6. Know the Possible Threats and Challenges You Will Face

There are indeed a few challenges and barriers to entry in the gun manufacturing sector. To make firearms in the United States, an individual or business is first expected to obtain a firearms manufacturing license from ATF, known as a type 07 license.

Gun manufacturers are also currently subject to relatively little oversight by ATF upon receiving their license to operate. Manufacturers are required to maintain records of their firearm production and sales and are subject to one potential annual inspection of inventory and records to assess compliance with applicable laws and regulations.

Also, note that manufacturers are expected to report the theft or loss of any firearm to ATF within 48 hours of discovery and to respond “immediately” to crime gun trace requests. In addition, licensed manufacturers are required to report to ATF annually on the production of firearms, even if a manufacturer did not produce any firearms during the reporting period.

In addition, depending on local and state law, there may be a number of obstacles you have to overcome. The issues are usually related to environmental protection; however, there could be a number of other state and local matters to address prior to applying for a license to manufacture firearms.

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

When looking to start a gun manufacturing business, have in mind that the legal entity you choose will go a long way to determine the structure and success of your business. Generally, you can either choose a general partnership, limited liability company, or a corporation for your gun manufacturing company. Notably, the best option will be to set up an LLC.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. They are also simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings, and other managerial formalities.

Howbeit, there are some factors you should consider before choosing a legal entity for your gun manufacturing business and they include; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectations and of course taxes.

8. Choose a Catchy Business Name from the Ideas Below

The United States gun industry sees an annual revenue of $11.7 billion. This includes both gun and ammunition sales, resulting in almost a billion dollars of profit. With a good number of licensed gun manufacturers in the United States, the name you choose for your company will either make or bar it. Nonetheless, here are a few names to consider;

• Sig Sauer Inc.
• Silver Shadow
• Bersa
• Black Creek Labs
• Sportman’s Supply Co.
• Steyr
• Black Hills
• Blaser
• Top Gun Supply
• Traget Sports
• Undercover Arms Co.
• Sportsman’s Trading Company
• Springfield
• Unified Weapons Systems
• Union Arms Company

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

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

Here are some of the basic insurance policies that you should consider purchasing if you want to start your own gun manufacturing company in the United States of America;

• General insurance
• Health insurance
• Liability insurance
• Risk Insurance
• Workers compensation
• Building/Property insurance
• Overhead expense disability insurance
• Business owner’s policy group insurance
• Payment protection insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

You may not need to file for intellectual property protection/trademark when starting a Gun manufacturing company in the United States. You may start and run this business effectively without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

However, if you want to leverage the business opportunities within the industry and also to protect your unique design, company’s logo, and other documents or software that are unique to you or even operation concepts, then you can file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

The gun industry in the United States is effectively unregulated. The laws governing the operation of these businesses are porous and weak.

The federal agency tasked with oversight of the industry—the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)—has been historically underfunded and politically vulnerable, making it nearly impossible for the agency to conduct consistent, effective regulatory oversight activities.

In addition, Congress has imposed restrictions on how ATF can perform this regulatory work through restrictive policy riders on the agency’s budget. Congress has also removed some of the most useful tools for ensuring that gun industry actors operate their businesses in the best interests of consumers and are held accountable for the harm caused by their products.

Note that the result of this constellation of weak laws, lack of resources or good certifications, and dearth of political will to support gun industry regulation is that the industry that produces and sells deadly weapons to civilian consumers has operated for decades with minimal oversight or confirmation from the federal government and almost no accountability in the U.S. legal system.

This is not an idle concern. The United States experiences rates of gun violence that no other high-income nation comes even close to matching. This violence persists even as the number of Americans who choose to own guns has steadily declined.

12. Get the Necessary Legal Documents You Need to Operate

To make firearms in the United States, an individual or business is expected to obtain a firearms manufacturing license from ATF, known as a type 07 license.

There are no substantive requirements to qualify as a gun manufacturer in the United States: Applicants must only be over age 21, be eligible to possess guns under federal law, and not have willfully violated any federal laws or regulations related to firearms.

A three-year manufacturer’s license requires a $150 fee, and ATF is statutorily required to act on the license application within 60 days, regardless of how much scrutiny an individual application may warrant. Gun manufacturers are also expected to register with the Directorate of Defence Trade Controls at the U.S. Department of State and pay an annual $2,250 fee to that agency.

The application for the FFL is extensive. There are three documents that must be completed—the Application for a Federal Firearms License, a Certification of Compliance, and a Fingerprint Card.

The Application for Federal Firearms License is 18 pages long but is split into four separate copies, including two for the ATF, one for the Chief Law Enforcement Officer (CLEO) in your community, and one to be retained by the applicant.

(The ATF does notify state and local law authorities of FFL applicants within their jurisdiction through the application document.) Have in mind that all four copies must be completed by the applicant. The forms ask for contact information, business details, answers to a variety of questions, and signatures to verify certain information.

Each form also requires applicants to attach a headshot photograph (2” x 2”). If an applicant is seeking to license for a business, the application is expected to list all owners, co-owners, partners, and other “responsible persons” involved with the business.

The last two documents are shorter, but still complex. The Certification of Compliance is one page and asks applicants to verify U.S. citizenship status and certify that their application is accurate to the best of their knowledge.

The Fingerprint Card is two pages and was developed by the FBI. It asks for fingerprints of all ten fingers, along with height, weight, eye and hair color, sex, race, and place of birth.

Once the application is submitted and received by the ATF, the ATF is mandated under the Gun Control Act of 1968 to act upon it within 60 days. Here are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;

• DBA
• EIN
• Business and liability insurance
• Federal Tax Payer’s ID
• State Permit
• Certificate of Incorporation
• Business License
• Business Plan
• Employment Agreement (offer letters)
• Operating Agreement for LLCs
• Insurance Policy
• Online Terms of Use (if you have a website)
• Online Privacy Policy Document (basically for online payment portal)
• Company Bylaws
• Memorandum of Understanding (MoU)

13. Raise the Needed Start-up Capital

The gun manufacturing industry is a delicate and intricate business. This is why only a few people engage in this sort of business. One who wishes to engage in the gun manufacturing business must prepare a sufficient amount of capital, and invest in state-of-the-art machinery and facilities.

There are separate machinery and facilities to install for production and for quality control. In addition, licensing at the federal, state, and local levels may be expensive as well.

An often-overlooked cost for this type of business is insurance. With gun manufacturing, you would be exposed to material liability. Some of the options you can explore when sourcing for startup capital for your gun manufacturing business include;

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank
• Pitching your business idea and applying for business grants and seed funding from, the government, donor organizations, and angel investors
• Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

In terms of choosing a location for your gun manufacturing business, note that the most important thing is being guided by the demand for your product and also creating access to labor and raw materials in the location. Have in mind that choosing a suitable location for your business will enable you to cut the cost of transporting your raw materials and finished products to and from your manufacturing facility and warehouse.

If you make the mistake of renting or leasing a not-so-viable facility for your gun manufacturing business, then you must be prepared to spend more on promoting the business and perhaps giving direction to potential clients. It is important to note that a business facility in a good location can be quite expensive and you should be able to allocate enough funds for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for a gun manufacturing company, then it is imperative you talk to a business consultant or a realtor. Nonetheless, here are some of the best states in the United States of America where you can locate your gun manufacturing company;

• Alabama
• Arkansas
• Georgia
• Idaho
• Arizona
• Florida
• Indiana
• Alaska
• Missouri
• Louisiana

15. Hire Employees for your Technical and Manpower Needs

The manufacturing of guns began centuries ago. As the demand increases, governments of various states provide more stringent policies and requirements before one can effectively set up a gun manufacturing business. This is because of the inherent danger of the use and sale of guns.

There must be proper regulation in the sale and manufacture of guns to protect lives and property, without impairment of enterprise. Persons intending to engage in gun manufacturing are expected to have a good understanding of the industry.

Extensive knowledge about guns and arms, their use, and their parts are needed to effectively carry on the business. Managerial skills and knowledge are likewise required to carry on the business. One having scarce knowledge will not be an efficient manager and businessperson.

It is equally important to educate one’s self further to improve products and manufacturing processes. The gun manufacturing industry is a delicate and intricate business. This is why only a few people engage in this sort of business.

In the production process, it is equally imperative to have well-trained and educated laborers. Training and knowledge by both businesspersons and laborer pay great significance because of the life-threatening nature of the gun manufacturing industry. A simple remiss can cost your entire investment.

The Service Delivery Process of the Business

The actual process of manufacturing guns can really take a lot of time and each step is very crucial. Developing your own staff in the aspect of preventing accidents through giving appropriate training should also never be neglected. Remember that any little mistake could be sometimes fatal, that’s why safety should always be your top priority.

Aside from the technicalities, business aspects such as marketing and knowing your target clients would also be important keys for you to continually grow. Reading books about marketing and distribution could somehow be helpful.

Other than that, leveraging the internet and searching for the right details through the use of commonly-used search engines could likewise point you to much useful information found on the web. If you can contact professionals, you can get further advice so you can do things the right way.

16. Write a Marketing Plan Packed With Ideas & Strategies

With proper marketing strategies and state-of-the-art products, becoming a gun manufacturer can indeed be something more than a lucrative business for you – it can be a great way to earn from something that you are passionate about.

Naturally, you should also put in your best efforts with regard to being updated with the latest trends and technologies that develop in the industry. Also, when you are drafting your marketing plans, make sure that you create a compelling company profile.

Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the marketplace when marketing your arms. Nonetheless, here are a few marketing ideas or strategies to consider;

1. Understand your customer well

Hopefully, you’re manufacturing firearms because you enjoy the culture and the people. If not, you need to immerse yourself in both. Talk to firearms enthusiasts relentlessly. Find out what they expect from firearms manufacturers and how they prefer to spend their money.

Use your data, too. Your point of sale system should be able to report your sales figures. Do you sell an unusually high number of small handguns? Perhaps your customers are concerned about personal defense. You could create more sales by packaging self-defense kits (handgun, ammo, mace, flashlight, alarm, etc.) or referring customers to a self-defense program for a commission.

2. Build a community around firearms

People like to be a part of something, especially when it has to do with their hobbies. If you can find ways to make them feel included in something bigger than themselves, they’ll happily spend more money.

Connect with any local organization that supports the safe use of firearms. There may be a club nearby, a firearms training school, or a local competitive league. You don’t have to donate money or buy advertising space with these organizations (although that wouldn’t hurt), but you should make yourself an active participant. This creates goodwill in the community.

3. Cluster near similar businesses

In the business world, clustering together creates a commerce hub where everyone makes more money. Partner with businesses that have similar customer bases. For example, check your local shooting ranges, especially the ones that don’t sell firearms.

Ask if you can supply some of your items in their shop. Yes, you’ll make a smaller margin on each item because the range will want a piece, but these are additional sales that don’t cut into your business. If you were willing to go through all the paperwork, you could make a lot of money by setting the range up as a responsible person on your FFL so you could sell your entire line of firearms on their premises.

You can cluster with any business that serves the same customer. Look into creating partnerships with sporting goods stores, fishing stores, outdoor apparel stores, archery stores, or survivalist stores.

4. Expand your inventory

Note there is a huge selection of firearms and related equipment available these days. Your customers have very specific needs. Being known for something (like competitive guns or a big ammo selection) is smart, but if you try to focus too strictly on a particular niche, you’ll lose sales.

For example, modern sporting rifles are popular everywhere, but they can’t sustain a business. During the slow season, you need every sale you can collect to pay your rent. If you rely too heavily on one type of sale, you’ll lose your business if those purchases become unpopular.

Expand your inventory anywhere you can, but do it smartly. Manufacture products that your customers want to buy (this goes back to understanding your customer). Accessories typically have much larger profit margins than firearms, so keep plenty on hand.

When you can make a 100% markup on an item, it’s smart to push them. Make sure you follow inventory management best practices, too.

5. Stay out of trouble

You can’t grow your business if you’re always dealing with ATF violations and penalties. You need to lock down your compliance and record-keeping practices early in your business’s lifespan. If the ATF revokes your FFL, growing your business won’t be a concern because you’ll be out of business.

17. Work Out a Reasonable Pricing for your Services & Products

One major factor that will help you sell your guns at rock-bottom prices is to acquire your raw materials and supplies directly from wholesalers in large quantities. Most businesses that succeed in this industry do so by improving their Economies of Scale.

You can also try as much as possible to work with independent contractors and marketers; it will help you save costs for paying sales and marketing executives. Also, if you are able to secure a business partnership as it relates to getting referrals, you will be able to get the right pricing and of course, maximize profits from your business.

18. Develop Iron-clad Competitive Strategies to Help You Win

The recent shift in the gun industry landscape has gone towards younger, more urban, and females. Recently, new buyers of handguns and firearms fit into one of these three categories. Companies need to match this major shift in consumers with a shift in how they are digitally marketing for the gun industry since their target audience is adapting.

• Optimized Inbound Marketing: Owing to the difficulty in mainstream and traditional advertising avenues, inbound marketing can be a great opportunity for manufacturers when marketing for the gun industry; many brands in the industry have created effective inbound marketing strategies and have found it yielded excellent results.
• Responsive Website Design: Marketing for the gun industry no longer means just ads in magazines and on television. With a surge in younger customers in the gun industry, it’s necessary to meet their expectations for a sophisticated, professional, and responsive website design. This means that your website will correctly adapt to changes in browser size and shape, including mobile design.
• Targeted Social Media Marketing: With a younger generation, comes an increased interest in social media. With the amount of time the majority of people spend on social media; any company that isn’t taking advantage of the advertising opportunities that social media brings might as well be throwing money down the drain.

19. Brainstorm Possible Ways to Retain Clients & Customers

One of the ideal ways to retain clients and customers in the gun industry is to transform your marketing, brand awareness, and overall messaging by utilizing a framework based on storytelling. Story is a sense-making device used since the dawn of time to communicate—our brains are hardwired for it.

When done and used properly, Story will give you an edge over your competitors—even if their product is better. The main reason why story works so well is that it cuts through the clutter and distraction of today’s ultra-competitive outdoor, shooting and firearms industry that helps your brand stand out among all the other “me-too” claims.

Too many brands play the hero when they need to be playing the guide. This helps your customer understand your offering faster and helps them become something better e.g., a better marksman, more accurate, more aware, savvier, or in some cases more advanced.

Again, ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeat sales from them and also attract new customers. Part of what you need to do to achieve this is to track progress, results, or outputs with the aim of improving on them quickly as the case demands.

When it comes to managing your customers and building a loyal clientele base, you should purchase customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk SMS and customized emails and above all, you can easily receive compliantly and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.

One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity in the way they want people to perceive them to be.

Regardless of the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand-boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage to boost your brand and create a corporate identity for your gun manufacturing company;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community-based events
• Leverage the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your gun manufacturing company
• Distribute your fliers and handbills to target areas
• List your gun manufacturing company in local directories / yellow pages
• Advertise your gun manufacturing company on your official website and employ strategies that will help you pull traffic to the site
• Position your Flexi Banners at strategic positions in the location where your gun manufacturing company is located.
• Ensure that all your staff members wear your branded shirts and that all your vehicles are branded with your company logo.

Frequently Asked Questions