This could be good...right??

[targa911S]

A new gun store opened here about two months ago, locally owned by enthusiasts, small shop, maybe 100 guns for now, mostly sporting stuff. Now some of you here know that over the last 10 years or so I have been doing barrels and wood, along with repairs on mostly doubles for uhh, friends and I have honed my skills pretty well over the years. So..before this place even opened I stuck my head in the door and asked if they needed any help in the way of simple gun smithing. Mounting scopes, cleaning and minor repairs. they said that they were just opening but I should come back later when the are really open, which I did. Well it's a 3 man shop, all related to another, and as I was dropping in weekly, they were asking me to do stuff and paying me either in trade, or cash for simple stuff. So I asked if I could move some tools in and set hours two days a week there to do things they had either set aside for me, or appointments they would make for me. They call me even when I'm at home whenever they get a double gun they need info or advice on. Lately I have been keeping the two day a week schedule and I take some "homework" in to keep me busy when there is nothing going on from the store. So now I'm one of the gang and they refer to me as the "shotgun guy" to the customers. Now this place has a lower level that is going to waste unused, perfect to set up a real shop and move my boiling tanks, tools etc into and set up shop. My wheels are turning, can you see where this is going?

Ok so two days ago a buddy of mine calls me and tells me he picked up a used once stock duplicator from an estate of a deceased gun smith for $175.00! It's one of the ones on ebay and gunbroker listed for $1,100.00! I was at the shop that day and told the guys the news but that I really had no place to put it. The owner quickly said " Bring it here and put it downstairs".
I'm thinking he was opening a door for me. When we moved it in yesterday the owner was not present as he owns another biz as well, but the other two were there and help Charlie and I get it in. we're old so the help was much appreciated. Once that was done and Charlie was gone we were all down there looking at it and decided to test the water on moving in all the way and doing all my work there, with some kind of arrangement like I do all the shop work in exchange for the space to do my own stuff that comes in from my contacts. It was met well with a " I think that could be done" reply.

So..my question to you all is. How do you think I should work this? He has the FFL and of course everything that comes in the door and stays for longer than what is it 24 hrs?, must be logged. Rather than put that burden on him, should I apply for my own FFL now that I am in an already in an approved facility and keep my own books? This would help me greatly for tax purposes, etc. Should I set myself up as an LLC? What do you all think in general, and what would you call a fair deal regarding "work for rent"? Sorry this is so long but I value every bodies opinions here and I know some of you have similar stories. What think yee brain trust?

[legion]

I would start by talking to the shop owner and seeing what would work best for him. If he wants everything on his books, I wouldn't but up too much of a fuss because you are working rent-free.

Just my 2¢. There may be legal implications I don't understand.

[RPKESQ]

Make sure you have a vetted legal contract that covers:

Who owns what

Liability, both for property and end user (customers)

Access, what hours are you allowed in, will you have keys

Disputes, lawsuits are ugly and expensive

Landlord issues, seperate from other business issues

Rent, or lack of it

Profits, if you are pulling in enough, someone will want a taste

Let me know if I can help in any other way.

[Seahawk]

I would also add that since you do trade guns, buy and sell on your own, that you discuss that in advance.

Also, if you are allowed keys, as suggested below, make sure you get insurance.

I really hope this goes well, David. Sounds like it could be a nice arrangement for you.

Originally Posted by RPKESQ

Make sure you have a vetted legal contract that covers:

Who owns what

Liability, both for property and end user (customers)

Access, what hours are you allowed in, will you have keys

Disputes, lawsuits are ugly and expensive

Landlord issues, seperate from other business issues

Rent, or lack of it

Profits, if you are pulling in enough, someone will want a taste

Let me know if I can help in any other way.

[ramonesfreak]

i have no experience with guns but as an analogy to the music instrument biz, which you are also familiar with...

a local tech guy i know does alot of work on repairs and customization stuff....guitars and amplifiers. he works out of his home...he has a basement workshop.

when the stores around here have a customer that needs say, an amp repaired or a guitar re-wired or pickups installed...they call him and he picks it up and fixes it and then brings it back and gets paid...the customers never even know where the stuff goes to get fixed...he also has a decent business with customers directly out of his house

i would prefer to have my equipment at home is i guess what i am saying...who knows what could happen to your stuff. here today, gone tomorrow

i would also prefer to work out of my house if i could, rather than have to be somewhere else all the time

good luck, whatever you choose to do

[targa911S]

I would prefer to work out of my house too, but without the license it's a no no. I do not want keys. Don't want the liability or the responsibility. I'm thinking paying him rent, getting my own FFL and keeping my own books is the way to go. Rent is tax deductible, trade is not. I don't want to be an employee. I want my own hours and my own schedule. basically these days, getting a home FFL is impossible and I really don't want guys with guns coming to my house. So I am in essence using his facility that was just given an FFL, so I should be able to fly through on my own as this place just passed inspection 3 months ago,and I can pass all the background stuff. I want no part of his retail operation. I just need some space I can rent in a secure facility that fills the guidelines to receive my own license.

[targa911S]

Hey ...when did this happen?

"Paul
1962 Karmann Hardtop T6 Super"

[ramonesfreak]

makes sense..wasnt aware a license was needed. if you need a coffee-getter or errand-boy let me know, though my commute would be about 6 hours each way. :-)

[BRPORSCHE]

Originally Posted by targa911S

Hey ...when did this happen?

"Paul
1962 Karmann Hardtop T6 Super"

Targa,

My Dad's 356 FOUND!

[James Brown]

Communication is the key, sometimes, when owners sense things are getting out of there comfort zone, they stop communicating with you. They will just "let you do your own thing" off to the side.
However, if both agree on a game plan, and make that work, everything else will fall in place (cash, income, security, growth). make a great product and people will come.

[targa911S]

Originally Posted by BRPORSCHE

Targa,

My Dad's 356 FOUND!

Scott you are one lucky guy. Paul is the most honorable man I have ever known.

Now if he just can avoid rolling it over.......

[on2wheels52]

David
If the owner is agreeable I would suggest operating under his FFL. You can have your own bound book that he of course will have access to. I can come up with a lot of reasons not to have your own license, especially given the lucky situation of this opportunity. Perhaps get to know everybody a bit first before committing to a license, you wouldn't propose after the first date.
Jim

[targa911S]

Hey Jim.
I have thought the same thing. I ordered a bound book today and some 3 part repair/claim tags today from Brownells. I also thought that BATF would have a problem issuing two FFL's to the same address.

[on2wheels52]

"I also thought that BATF would have a problem issuing two FFL's to the same address."
That's one.
Jim

[ODDJOB UNO]

i would work on them there only. i would leave them there only. they have the safes they have the alarm system they have the insurance.


and i would make sure that place is set up like ft knox. reason the latest scam is driving vehicle into gunshops, jumping out with bolt cutters IF weapons are secured and dashing out with armfuls of guns. this tends to get the OMARS really really testy especially if they are successful.


kind of like taking forklifts and tractors with buckets and stealing ATM machines just a lil more bolder and not as obvious as a tractor with an ATM swinging from the bucket going down the road.


and i would carry a loaded weapon while at work or not work there.

[targa911S]

Yes of course I carry every time I'm there. I kiddingly said to my wife the other day that i wore a suit to work every day for 30 years and now I wear gun.

[m21sniper]

Just make sure you can legally prove everything that you put in there is yours.

Congrats man, i hope you make bajillions in your new shop.

[red-beard]

You'll want to setup an S-Corp. It is the easiest thing to setup and you simply report all of your income on your regular tax return. The Corp return is easy as well.

I would call up the local BATFE, or whater they are today, and discuss the options. You're going to be dealing with them anyway.

[MRM]

As was mentioned above, communications and expectations are the keys to success. Everything is friendly and informal now, but if you want to stay on good terms with the owners, you will want to put your business relationship on a formal basis ASAP. The reason is that when everything starts out informal and friendly, both sides do thing as favors to the other at first because they're friends or friendly. But as time goes on, if what started out as a favor becomes an obligation, one side (or both) starts feeling like the other is a burden or that they are being taken advantage of.

Here's what you do. You should enter into a real live written lease with the shop owners, giving you the space for the shop downstairs. You should pay an acceptable amount of rent, but you should have the lease set up so that you pay the rent monthly with money. Working out rent for services is a dicey deal unless you have a set hourly rate that is easy for both sides to evaluate. I think it's best that you just pay a couple of hundred dollars a month in straight rent. Rent should be negotiated to be pretty cheap because it is otherwise unusable basement space you're taking on as a sublease, but it has some value.

Now on the flip side of the relationship, they need to compensate you for what you do for them. You should not be an employee of the shop. I think you should have a 1099 relationship as an independent contractor for the shop. They refer business to you, you pay them rent; they have you smith their guns for resale, they pay you for your services. You pay them rent out of what you earn from running your shop. They deduct their payments to you on their taxes; you deduct your rent payments on yours.

You should set up as a legal entity. It works better that way for many reasons. It's just best to keep your business activities all under one roof so the taxes, paperwork and liability all stay under one roof. There are tax advantages and disatvantages to each kind of entity you could set up. I highly recommend looking into an LLC or C corp.

It isn't expensive to set up a lease and legal entity. You can do it yourself, but it's kind of like doing your taxes alone - you're never sure if you missed something that a professional would have caught. It's well worth having a lawyer set you up with a lease and company. That way you know you are protected and have the best tax advantages available.

If you go to a good lawyer who specializes in small business organizations, you should be set up with a lease, the LLC/corporation and all the state and local filing fees and business licenses for $1,500 to $2,500 bucks, start to finish. This is the kind of work where if someone wants to charge you more, it means they don't know what they're doing and will charge for their time figuring it out. A lawyer experienced in setting up small businesses can do this quickly and efficiently and will get the job done well.

So do some research here, get as many questions answered as possible, and then go to a lawyer prepared to show him what you want and why. He'll help you make the final selection of entity and get you set up right.

[targa911S]

That is some solid advice. Thanks!