***Special Note: In a victory for small business buyers, the recent $900BB stimulus bill directs the SBA to pay the first 6 months of new SBA 7(a) loans approved between February 1 and September 30, 2021 (up to $9,000/month). Our advice: Don’t wait. Find a quality business and get moving quickly. Banks will be busy this year and buyers that wait until July/August will likely lose out.
This Company is an e-commerce and brick-and-mortar supplier of firearms, ammunition, optics, and accessories headquartered in Western Michigan. The Company’s operational focus is online sales of in-demand and high-quality guns and ammunition to all 50 states.
The Company ships products to other federally licensed arms dealers across the United States. The Company’s purchasing customer then retrieves the product from their local dealer. The smaller portion of the Company’s activity is related to over the counter in-person sales in their brick-and-mortar store.
The Owner started the Company in the early 2010s after uncovering the investment potential of the firearms industry. The products in this industry have long shelf-lives, and the industry is generally resistant to cyclicality and seasonality. The Company features strong growth metrics due to (a) scalable quality of online sales, (b) robust ERP infrastructure, and (c) leading customer satisfaction. Because the Company does the bulk of its sales online, it faces no geographic restrictions.
The Company features a capable and cross-trained staff. Policies and procedures within the Company are set up so that any given staff member can handle multiple responsibilities if the need arises. This has allowed for the Owner of the Company to enjoy a passive ownership style, putting in approximately 40 hours per month at the Business on average.
Real Estate: The building is leased from an unrelated third-party.
Total Building Size: 7,950 square feet
Number of Employees: 8
Year Established: 2013
Facilities: The Company leases a 7,950 square foot facility from an unrelated third party. The space includes a retail storefront, a 22-cubicle office, and a warehouse with a main level and basement. The Company’s lease started in December 2015 on a 5-year term with three separate 3-year options to renew. The Company has the legal right to control the space until November 30, 2029. The first option to renew has been exercised and is active until 2023; two 3-year options remain.
Support/Training: Ownership is willing to provide reasonable and customary transition assistance.
Reasons for Selling: Other business ventures and to spend more time with his family.
Established E-commerce Platform: The Company has invested significant resources into its online presence. Most of the Company’s sales are transacted over the Internet with customers with whom they do not interact with in person. The Company has an online infrastructure in place to do business in all 50 states. The platform is now set up to be run with minimal upgrading or investment, and the platform is ready to scale up to reach a more extensive customer base if new ownership desires.
Sophisticated and Scalable ERP Software Package: The Owner of the Company developed an interconnected backend ERP system that could manage the Company’s orders, inventory, customers, purchases, accounting, and more. This software has been live since 2017, and it cuts labor and overhead significantly. The software replaces the cost of multiple employees, and it has been a crucial driver in the overall expansion and growth of the Company.
Capable and Cross-Trained Staff: The Company cross-trains employees effectively, fostering a company culture in which everyone works as a cohesive team. The Company’s staff members can continue daily operations with minimal oversight, allowing the Owner to take a more passive role with a flexible work schedule.
Unrestricted Domestic Geographical Footprint/Reputation: While the Company is headquartered in West Michigan, its customer base includes all 50 states. The Company’s business model is set up to be extremely capable in an e-commerce environment. Using Internet marketing and advanced customer resource management, the Company can reach any location across the United States. The Company has a reputation in place to provide quality products to a broad base of customers.
Recession-Resistant Business Model: The Company features a recession-resistant business model and has invested considerable time, energy, and capital into creating an operating infrastructure that is immediately profitable and capable of organic growth.
Scalable E-commerce Growth: The Company is confident that its ERP software system can handle $100M+ in revenue volume. The software is customizable and includes many trade secrets built into its functionality. The system can handle the growth and modifications that an entrepreneurial-minded owner may desire, or it can continue to benefit the Company, operating as-is.
Investigate Product Pricing to Improve Profitability: Since 2019, the Owner has been focused on uncovering optimal pricing figures so that the Company can retain outstanding customers but also leverage its renowned name and reputation to mark-up products to an increased level than they are currently at. The Company is still on the lower end of pricing compared to similar companies in the industry, and further investigation into the pricing strategy could improve profitability.
Meet/Expand Capacity: The Company has the infrastructure to accommodate a significant increase in staff. Expanding the Company’s breadth of networking connections would allow for the Company to communicate the value they add to customers more effectively. Further, there are many wholesalers the Company does not use. Therefore, there are available avenues to increase product selection if desired. The Company can also drop ship products. The Company currently does not take advantage of dropshipping products; however, an ambitious new owner could increase sales by leveraging this concept.
Favorable Industry Trends: The firearms industry displays many prominent benefits and substantial revenue potential. The Company was founded not only because of the Owner’s passion for firearms but also because the industry is risk-averse and displays strong performance in both economic booms and recessions. The Company is confident that it can utilize its recession-resistant business model to continue high performance with future projected economic conditions.
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