Identify the important components of an operating budget a firearms business needs.
Your startup budget is vastly different from an operating budget for one main reason. Usually most of the startup cost for opening a business is a one-time investment. This means that it may cost a lot more, but you will not have to pay for these things annually or on a regular basis, like with an operating budget. When considering what your operating budget may end up being you may want to look at things like water, gas and energy consumption. These will be paid on a monthly basis like your rent or mortgage so figure out what that is going to run on average and include it in the operating budget. Also, staffing can play a huge factor in your operating budget. Starting small and being the only employee to complete the days tasks can save money but as the business grows you will need a staff so consider how many people you may need, how much you can afford to pay them and at what frequency they will be paid and include this into your operating budget as well.
Next, we have your inventory to consider. The money made on these products does not become all profit because doing so means you did not restock as inventory was depleted. Start seeing the products on your shelf as how much markup or profit they make and not the MSRP because you will need to take a good portion of the initial cost of the product and reinvest in future orders to stay stocked. For example, this magazine cost me $10 from a distributor and I am selling it for $14.99 as MSRP suggests staying competitive with other businesses. I should not take the $14.99 made to pay an employee, I should be taking the profit of $4.99 for payroll and use the other $10 to purchase another magazine to sell. Finally, we have repair cost to consider in an operating budget especially considering my business model includes a live fire facility. Anything down range will get hit with a bullet at some point. Lines, trolleys or carriers, security cameras etc. all will get destroyed with time and a down lane is lost revenue. Consider charging a specific rate for damages if a customer has cost you money in repairs so this issue kind of pays for itself.
Summarize and describe the tax considerations a firearms business owner must prepare for in general.
Most people do not think about the taxes they charge and what additional charges they should prepare for. The tax on sales in your business is subject to the state tax you are opening shop in, but did you consider if the county you want to open up in has a separate tax amount they expect. A brief example of this could be that the state you open up in wants you to charge 6% tax on every item sold but you had no idea the county you opened up in wants an additional 0.5% tax on the same items. This means that if you sold $10,000 worth of inventory then at 6% you collected an additional $600 in taxes that should be paid to the state quarterly if you are smart. But wait, you should have charged 6.5% tax to cover the counties tax expectation as well. This only ends up being an additional $50 but if ignored for long enough becomes a lot more and could be the reason your business fails or looses its license to operate. No one likes paying taxes but if you don’t keep your numbers tight than the tax man will be paying a visit for sure, so charge your customers the necessary taxes, pay what you owe and move on.
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