Author Topic: Looking for some business mentors  (Read 268 times)

StartingEarly

  • Bristles
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  • Posts: 427
  • Age: 27
  • Location: Wisconsin
Looking for some business mentors
« on: August 17, 2017, 04:11:01 PM »
I'm starting up a small business this winter. It's very low overhead for the most part, there's about 5k a year in insurance and government fees, otherwise I am mainly just paying $150 to rent out a room while I'm getting things off the ground. I will be producing re manufactured ammunition with the goal of keeping prices low with quality high. I've already done a few hundred hours of research into the various components that will go into the varying calibers and am will be sourcing from multiple places. The component costs I've come up with allow me to undercut even some of my cheapest competitors if I'm willing to take a low per unit profit. My idea would be to grow the business volume wise to a point that it is profitable and once that point is reached there will be the snowball effect of cheaper components driving the bottom line.

I have about 125k in total assets, about half of which is in retirement funds, so not the most liquid. I have most of the equipment I need already just for basic starting out. When I eventually go automated I would be looking at roughly 10k per press for the production presses for pistol per caliber and then about 15k for the presses for case prep and production for rifle per caliber. It would likely be very far in the future as each press would be putting out about 4 million rounds per year per shift, so it would take a lot of operating capital just to feed them and it would take a lot of sales to keep them running.

The kinds of advice I have gotten so far are to grow the business slowly, don't take out large contracts with anyone unless you're sure beyond a shadow of a doubt you can fill them. Don't take out loans to buy components even if you can get costs down slightly. Be willing and expecting to take a loss or make almost no profit the first two years. Plan on a very high chance of failure. That last one I really don't like but it is kind of a fact of life. I figured I should have some people in my corner who have been around the block before. Even if it is another type of business entirely I'm willing to take all advice.

For getting the product out there I'm thinking somewhat grass roots. I am planning on focusing efforts in the competitive shooting sports since the people that do it tend to use 25-50k rounds a year, sometimes much more whereas a regular shooter might buy one case from you every year if you're lucky. My buddy is getting into three gun events so he'll be traveling around the midwest meeting all kinds of people and getting a lot of attention everywhere he goes (he's like 6'5") so he'll be be supplied with my ammo and having custom shirts and hats on. I'm thinking delivery for starters would probably be kept to the local region on weekends and would be hand delivered by myself. I could get a first gen insight and beef up the suspension a hair and it would be able to handle up to 10 cases (250-450 pounds depending on caliber for 1000 rounds per case). I looked into shipping nationally and for a small start up it isn't feasible. The cases of 45acp weigh about 49 pounds and run $57 for economy shipping at least that is what it was from here to Arkansas when I checked, locally might be cheaper. I figure I could get out and meet my customers face to face and it would only be costing me my time since the mileage could be written off against taxes and the operating cost of the first gen Insight is so low with it getting about 60mpg and the manual ones being pretty well bulletproof.

Tyler
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