Small Town Sporting Goods Stores

[Hilltop]

I have a friend that recently came into a large sum of money from a business he sold. He is interested in starting a gun/archery shop in our small town of 800 people. The surrounding community has maybe 4000 total people with our only competition being a Walmart 20 miles away. He is offering me a chance to "invest" or manage it. I am interested in talking to anyone around the country who has, or is currently running a similar store. The individual already owns a store front for the shop so shop expense will be much cheaper than normal. His thoughts are to carry guns, bows, various outdoor accessories and an archery range to start with. Anyone out there willing to share some wisdom?

 

[Colorado Cowboy]

Could be a gold mine or not.

Is there a gun club nearby? Shooting range? We have a gun shop here (but our town is about 5k). The gun shop works with our club members and the club on all our activities, gun transfers, etc. Lots of good $$$ in it. It will have to be service oriented to survive and provide what WallyWorld can't or won't do. Just carrying merchandise probably won't cut it. Our shop also gets involved with the Parks & Wildlife on hunter safety and other community effort.

Ask lots of questions of the current owner and look at his books and tax returns.

 

[Gr8bawana]

First off let me say I have no experience starting up a business.
It seems like it would take a lot of cash to stock up a store with enough guns, bows, ammo, perhaps hunting clothes to give customers choices in merchandise.
Even if there is enough cash to fill the store to you and your partners liking, you still have to get customers in there buying the merchandise.
There was a small RV parts store in the small town where I live but every time I went in to buy something the owner said he would have to order it for me. Needless to say he wasn't in business very long.
Approximately how many of those 800 in your small town are shooters and archers? How many from the surrounding 4000?
There have been lots of small businesses in my town that didn't last because of our proximity to a large city, 1.5 million+ that is 60 miles away.

If you decide to go in on this I wish only the best of luck to you and your friend.

 

[kentuckyhunter]

I seem to buy more and more stuff online now. Can get almost anything with the touch of a finger and it seems the younger generation will only increase that trend.


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[go_deep]

I have to agree with the online buying also, unless its a big ticket item.

 

[Extractor]

Hilltop, I would be very careful on a business start-up. Eighty percent fail in first 12-18 months. Running your own business can be very rewarding personally and financially, but in a town of 800, with only a base of 4000, that might be really tough. People will easily drive 20 miles to Wally World to save a dollar. If you can't afford to lose all of your investment ... might want to reconsider. If your friend came into a lot of money , why does he need yours? What are inventory projections, what are estimated monthly costs vs receivables. Those are just the beginning questions. I'm speaking from a 25 year business owners experience. Also was burned by a relative on a "can't miss opportunity", lost a lot of cash and a friedship. Every business might work, just be dam sure to do your due diligence.

 

[ivorytip]

if he is at retirement age and just wants something to do that he enjoys and possibly make some money this could be a cool idea. I buy online when I have to but if I can buy from a local shop, even if its a little more money, I buy at the local shop. I wish more people would do this. its fun going in and talking and getting to know the people. there is an archery shop not that far from here that does pretty darn good. we have a cabelas, a sportsman, a dicks sporting goods, big 5 and other sporting good stores closer than this archery shop but he stays in business and does good despite. people like the feel of these fam owned shops and the feeling that comes from knowing that the person behind the desk is more than likely a lot smarter than the guy behind the desk at cabalas... in a lot of cases I hope he does well but as was said, lots of homework before hand to test the waters. ask around, get peoples thoughts on the matter, get the spark going first and listen to the spark that ignites. if a small spark..... prob not a good idea.

 

[EOHunter]

As mentioned above, the younger generation is moving more towards online purchasing, especially when you have places that offer free or really cheap shipping. I am on the older end of that younger generation and I use the internet a lot for purchasing things, however I see a lot of value in being able to into a store and get to have it right now. our local sporting goods store is kinda of good and kind of bad. Sometimes you go in and the service is awesome and other times you go in and it seems like you are bothering them. Their prices on some things are competitive, but on guns are outrageous. I can buy online, pay shipping, an FFL fee and still be money ahead. It is kind of a joke around town to go down there, feel out the gun you want then go buy online. Even their sales prices are more expensive than normal prices elsewhere. I do like going into the smaller shops, and I don't mind paying a little more and helping the locals out, but at the same time I won't get raked over the coals doing it.

All I can say is make sure you have a good inventory. A customer is only going to to come in so many times and hear "We can order it for you", before they just stay at home and order themselves and cut out the middle man. Specialize in something and do it well. Its hard for a small business to be a hunting store, maybe some boating, maybe some tactical, maybe some archery...you get the idea. I always thought a cool idea if you lived in an area that could support it would be like a build a bear workshop, only this would be a build a gun workshop. For instance you might be building and AR, so you would have half a dozen lowers to choose from, different build kits in different colors, different barrels and so on and the person can just assemble it right their in your shop. It would be tough and expensive to carry the right inventory though.

 

[roknHS]

Not a good idea, I wouldn't do it. Your market isn't big enough. Too many people buy online to save money. A small store just can't compete with the prices of chain stores and internet businesses. Most name brands require minimum orders in order to get decent pricing. You can't afford to stock the amount of inventory it would take to get the discounts required to compete.
I just saw the small gun and bow shop in my town of 35,000 go broke and close up. Surrounding area has to hold at least another 50,000 bodies.
If you want an expensive hobby that consumes lots of money and pays nothing, it's the perfect way to go. Oh, you never get a day off either.

 

[sneakypete]

Hilltop, to me the population in your area doesn't pencil out to be able to support the shop. Now if the shop could work with bow manufactures on a consignment basis and carry the basics in high quality arrows, releases etc. on the gun front I'd look at carrying a few guns/ pistols and offer to buy used guns if they fit your area! Low inventory and offer to order whatever the customer wants with A deposit! Archery leagues, kids leagues are important, and don't forget the ladies!

 

[dan maule]

I dabbled with this 20 years ago. One of my best friend's parents have run a very successful shop all his life. My advice would be don't try to stock everything from A to Z offer a consignment rack to sell used guns a lot of people like me stop at these shops to check out the used racks and $20 latter leave with some 22 shells or other items. For new firearms stock the cheap stuff mainly my buddy always tells me their shop sells 10 savage 243's for every browning. Most people are way more willing to travel 100 miles to nearest cabelas if they are going to drop $1k on a gun or scope so I wouldn't try to compete with them. Contrary to some of posts I read hear most people in small towns don't mind waiting a week for you to order them something when they know exactly what they want. Start off stocking the basics and let your customers help you determine what you need to stock in your area.

 

[coloradoshedhead]

It's tough to compete with Cabelas and Bass Pro.
The best shot at making a small business successful in such a small market is to bring something to the table that isn't readily available through ordering gear online.
I believe one of the better examples of this would be the same type of business a guy opened in Craig, Colorado. The owner called it a "Pawn Shop" with all of the miscellaneous tools, DVD's, games and such but his focus was on selling and TRADING guns primarily. He had a really good focus and income on the sales and trading to where he could start expanding into bows, clothing and expanding his ammo availability.
When it came down to it his selling point was he would match Cabelas' prices minus the shipping which was convenient beings' how the nearest store was 300+ miles away.
Make it a cool hangout where guys can go BS and invest in a hobby they enjoy and it could be very successful.

 

[Extractor]

I don't want to be a wet blanket, but if you have an accountant, ask him, and when he picks his jaw up off the ground, don't open your wallet for this adventure. Unless you really want this occupation and are willing to lose everything you invest, then go for it. You probably have a solid 5 to 10 percent chance of succeeding. Think about every day that you will be working, what will you have to produce, what about the inevitable dry spells, are you prepared for those. Have you spoken with manufacturers/sales reps? What do they think about this idea? What is the market saturation like in the area of this proposed shop? Is there a gunsmith available to you, this would be a great asset. What about a bow mechanic? What will be your return policy? How many employees? Who will do the payroll, FICA, taxes? This undertaking should take you months of preparation and planning. What does your spouse think?

 

[Extractor]

I'm really not trying to be a downer. I just don't want to see someone who seems to be a pretty good guy get hosed. Sometimes our dreams get in the way of reality.

 

[hskrhntr]

I have some experience in this area, and it didn't end well for me. I opened a small retail store (think mini Walmart/variety store) in a small Nebraska town of 800 people 5 years ago. A regional chain shut down and closed up shop. I looked at the books, did my due diligence (I thought), and was convinced it was going to be a great investment. It was my secondary business, I have a primary business I own and work 40+ hours a week, so I relied on my employees pretty heavily. The payroll was a killer. Bottom line, I lost a pretty significant amount of money over two years and sold it, at a loss, to one of my employees. She's surviving because she has very little payroll expense.

What I found is that people are very mobile and have no issue driving 20-50 miles to buy things. They're used to it when they live in a small town. I was also surprised at how price sensitive people are. They will wait until they go to Walmart if it will save them 50 cents. On that small of a level, it's almost impossible to compete with the big box stores. Cost of inventory in small quantities, freight, utilities, payroll, marketing costs on a small gross sales number don't allow for the small margins that the big box stores live on. I'm not trying to rain on your parade, I'm just trying to be honest about what I learned about small town retail.

Something else to consider on a personal level....I'll never forget something I learned when I job shadowed at Cabela's in high school. The guy I shadowed managed the fishing department. I said "So you must really like to fish?" His response was "No, I really don't, but I love to hunt." So I asked why he worked in the fishing dept. He said, "Because my slow time is during hunting season. If I worked in hunting I wouldn't ever get to hunt." The guy at the bow shop I go to said something very similar last year. He doesn't get to hunt much anymore because his customers need the most service during bow season. Just something else to think about.

If you decide that you do want to look into it seriously, I'd be happy to share more details on my experience, what to look for, what to look into, what worked, what didn't. Just shoot me a PM.

 

[Slugz]

Interesting post. As always I learned a lot. My son is looking at attending the Trinidad State gunsmithing course and this casts a little doubt on his plan and confirms the thought on it being a secondary type of job. As others have said already I think a real hard look at the numbers to generate a data based decision void of emotion is best. Over coffee this morning I thought about how many times I actually went to a sporting good store for a purchase......each time it was for something I needed last second and didn't plan ahead and get online. none of those items were high priced or high profit margin. The exception to that was a new bow a few years ago as we traveled around trying all models/manufacturers. If someone handed me this assignment I'd start with a percentage break down of expected sales and try to find 2-3 niche markets for the area to complement the overall plan.

 

[Hilltop]

Thanks for the feedback and time put into many of the responses. I didn't share some of the details in my initial post. The individual is willing to post 100% of the startup money in exchange for my labor/expertise. It would be very low risk for me as I wouldn't have to invest any money, just a lot of time. His expectation is that I would have the opportunity to invest into the business if and when it proved to be a sound investment. He also happens to be my boss so I wouldn't have to give up my day job to pull this off. He has 4 other very successful businesses so I have a lot of trust in him as a business man. I agree with the skepticism in general- that's why I decided to ask on here for some advice and thoughts. I think the only chance for success is to offer products/services that aren't readily available anywhere close to us. I'm not sure what those are at this point... Again, I appreciate everyone's time.

 

[Matthoek21]

Not sure if you could throw in some guiding be it fishing and/or hunting might help. But that can be a lot of work as you know. Not sure if you are near a location that people would want to pay to come hunt or fish or not?? Just a thought.

 

[packmule]

It's hard for bow shop/gun shops to operate well in our area (base area population of 100K) and hunting is practically a religion. Now if it was in the back of a Dollar General/Family Dollar store a person would be in business.

 

[Matthoek21]

It's hard for bow shop/gun shops to operate well in our area (base area population of 100K) and hunting is practically a religion. Now if it was in the back of a Dollar General/Family Dollar store a person would be in business.

Packmule,
I literally was thinking the same thing. Man they do some business.