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Gun Retail and Restoration Location- 20% PM

Passively owned and $1.2M inventory included!

CASH FLOW
$1,029,895

Specifications

  • Price
    $3,800,000

  • Revenue
    $5,028,881

  • Cash Flow
    $1,029,895

  • Location
    Harrisburg, Pennsylvania

  • Employees
    5 FT & 1 PT; all employees capable of running the day-to-day operations of the store

  • Profit Margin
    20%

  • Inventory
    $1,200,000

  • Intangible Assets
    Excellent location, large number of repeat customers, well-known for customer service

  • Reason for Sale
    Approaching retirement

The purchase of this passively owned firearm store includes $1.2M of inventory guaranteed by current ownership! While many retail stores were hit hard by covid restrictions in recent years, this location has not only survived but thrived after doubling in cash flow and increasing their profit margin to 20%! Current staff consists of 1 part-time and 5 full-time workers including a general manager who fully handles business operations. Located in Pennsylvania, the current local customer base is very diverse including local law enforcement agencies, first responders, military personnel, hunters, recreational shooters, and individuals seeking home protection. Thankfully, the store has a wide variety of available products to meet these demands including ammunition, scopes, sites, holsters, safes, and new and used rifles, handguns, and shotguns. In addition to these inventory availabilities, they offer such services as gun trading, gunsmithing and cleaning, off-season storage preparation, scope installation, night sight installation, total tear down and reassembly, and function checks. With the aforementioned inventory and services, an outstanding reputation built on customer services, and their established and knowledgeable staff this business is primed for a new owner to step in and enjoy the spoils of an annual cash flow over $1M.

 

The revenue, both online and in store, is generally split evenly between the sale of firearms and accessories. With an established customer base they sell approximately 3,000 firearms per year, with 1,000 of those sold to repeat customers. They work out of a 3,000 sq. ft. space and the current rent is $2,600/month, with 4 years left on the lease. They have 700 firearms in stock, valued at $1.2M which offers a bank loan that would be 60% collatorized.

 

Priced at $3,800,000, this business is in a prime geographic location, has a solid online sales representation, has a solid reputation and client base already in place, and is poised for continued growth. A new owner could offer more online products by working with more distributors; the company currently works with three distributors but has memberships with 12. Opening the store on Sundays would also lead to a boost in sales.

Business Highlights

Year Established: 2014

Location: Harrisburg, Pennsylvania

Service Area: Primarily locally based clientele

Products: Wide variety of new and used firearms for sports, protection, and recreational use, plus ammunition, scopes, sites, holsters, safes, etc.

Services: Gun trading, gunsmithing & cleaning to prepare firearms for off-season storage, scope installation, night sight installation, total tear down, cleaning, reassembly, and function checks of firearms

Customers: Local law enforcement agencies, first responders, military personnel, hunters, recreational shooters, people wanting to protect their home

Business Hours: Mon-Sat: 10am-6pm; Closed on Sundays

Lease: 3k sq. ft. building; $2,600/month

Reason for Selling: Approaching retirement

Personnel: 5 FT & 1 PT; all employees capable of running the day-to-day operations of the store

Seller Training Period: 3-6 months

Growth Opportunities: Work with more distributors (the business currently has memberships with 12 distributors, but only works with 3) – working with more would allow for more online sales

Current Owners’ Responsibilities: Owner 1: General Oversight; Owner 2: Managing Member (willing to stay on as an employee) 

Employees

  • 5 FT Employees

 

  • 1 PT Employee

 

All 6 employees are extremely knowledgeable about each gun in stock at the store and are capable of all armoring services and point-of-sale. They are all certified instructors as well and can teach customers about safety features and how to shoot the firearm (with no ammunition).

Financial Highlights

  • List Price: $2,800,000

  • 2021 Annualized Cash Flow: $937,393
  • 2020-2021 Average Cash Flow: $711.730

*amounts may vary

Assets

  • Inventory: Currently 700 firearms in stock, valued at approximately $1.2M
  • Intangible: Excellent location, large number of repeat customers, well-known for customer service

Cash Flow Analysis

Description of Financial StatementTax Return
Accrual
Tax Return
Accrual
Tax Return
Accrual
Tax Return
Accrual
Notes
2021202020192018
GROSS SALES$5,028,881$5,818,647$3,693,314$3,458,554
Net Income Shown on Financial Statement$250,133$226,465$151,762$82,766
ADDBACKS
Compensation to Owner$280,000$150,000$150,000$0Does not need replaced
Owner's Child$462,000$150,000$150,000$0Acts as Store Manager: Would stay on board
11% Tax on total W2 Salaries$81,620$33,000$33,000$0
Depreciation$34,191$673$1,897$3,133
Auto Expense$241$3,494$6,084$6,647Personal Expense
Dues$1,800$1,800$1,800$0$150/month
Health Insurance$4,800$4,800$4,800$4,800$400/month
Meals$110$835$256$68
Travel$0$0$5,744$971
Amortization$0$0$0$500
Contributions/Donations$0$0$0$0
Replacement$-85,000$-85,000$-85,000$-85,000To replace/retain owner's son as store manager
TOTAL ADDBACKS$779,762$259,602$268,581$-68,881
Seller's Cash Flow = Total Addbacks + Net Income$1,029,895$486,067$420,343$13,885
Profit Margin20.48 %8.35 %11.38 %0.40 %
  • There was a definite boost in sales in 2020, largely due to the pandemic. As more people were working from home and looking to start/continue an outdoor hobby, gun sales surged. The seller stated that most people who buy their first gun come back for more, and most existing customers are not “one-gun” clients. They have customers who buy/trade on a weekly basis.

     

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The Firm makes no warranties or representation in consideration to the information provided above. All communication regarding this business must occur directly with The Firm Advisors, LLC. The Firm is not a real estate brokerage and does not sell real estate. The Firm solely advises on exit strategy.