7 Reasons Why Most Gun Stores Fail
7 Reasons Why Most Gun Stores Fail
It’s an unfortunate truth that most small businesses fail within five years of opening, and that statistic applies just as much to businesses within the firearms community as well.
Whether you’re an armorer, custom gun manufacturer, gun store owner, or fall into a different category of the firearms industry altogether, there are some principles that will help sustain and grow your business and keep you out of the majority.
For the purposes of this article, we’re simply going to refer to gun store owners, but if you’re a custom Cerakote applicator or firearms instructor, these tips will apply to you as well.
Reason 1: Failure to Reach a Core Audience
Having a loyal customer base that not only comes to you for their initial purchase, but comes back time and time again and refers friends and family to your business, is a proven business model that is sure to succeed. This is true whether you run a brick and mortar shop, an e-commerce store, or combination of both.
Identifying who those people are before opening your business can make a huge difference in your early success, which in turn often informs the performance of your business for years after you initially open. Taking the time to do some market research of your ideal customer, or avatar, will help you define how best to serve and support your customer base, and help you market your goods or services to them in the most effective way possible.
First create your avatar, AKA the perfect customer. Is this person male or female? What’s their education level and household income? What activities are they interested in? Where do they spend time? Define this person in extreme detail, allowing yourself to fully think through who you want to be your “regulars.”
Defining your core audience then gives you the ability to reach them, since we’re only able to effectively communicate with someone if we have an understanding of what makes them tick. This understanding will help you focus in on what their pain points are and help you give them what they want. For a business owner, giving the customer what they want if more important than giving them what they need – which leads us right in to our next reason for failure.
Reason 2: Not Building an Effective Sales Process
Having new customers come in and old customers return on a regular basis is the dream, right? For most small business owners, though, this dream seems like a far off mirage in the desert of the daily grind. There is an oasis out there though, and it’s called a sales funnel.
A sales funnel is a method that you’ve developed that works to bring prospects in and convert them to customers. Think of it just like you would a real funnel; a large opening at the top that flows down to a specific point. You’ll bring in a lot of people at the top of the funnel, then through your sales process, you’ll find your true customer at the bottom.
To have an effective sales funnel, your prospects need to be able to find you. This can be done in a variety of ways, but it really comes down to two distinct methods: inbound marketing and outbound marketing.
Inbound marketing is bringing customers to you by establishing yourself as an authority through content marketing, social media marketing and branding. This would be something like a customer finding your business through an article you wrote that shows up on the first page of Google, or seeing a social media post that was shared by a friend. HubSpot, a leader in inbound marketing, describes the inbound sales process in these terms: Attract > Convert > Close > Delight.
Outbound marketing tends to be more traditional marketing, advertising and selling strategies, such as plastering your logo on billboards and bus benches, sending out direct mailers, or selling door to door. While outbound marketing efforts can be effective in maintaining top of mind awareness, they are much less effective at converting visitors into customers and the return on investment is much lower.
Once you’ve decided on how your going to bring in prospects, then you need to develop an effective sales process that guides them from casual visitor to enthusiastic buyer. This is done through building a relationship, providing upfront value, and distinguishing your product or service from your competitors. There is such a wide range of businesses in the firearms industry that it is beyond the scope of this article to cover all of the different ways that converting prospects into customer can happen, however we will be providing different ways of accomplishing this in future articles.
Once you’ve built an effective sales funnel, you can start focusing on optimizing those conversions and leveraging those customers further than a one-time purchase.
Reason 3: Failing to Utilize the Back-End
So, you’ve identified your target markets, attracted prospects, and converted them into a paying customer – that’s great! Now, wouldn’t it be nice if you could get them (and their friends and families) to come back to you?
This is where the back-end comes into play. The front-end is the initial relationship and purchase made by your customer. It’s great to have a lot of front-end transactions, but they occur once and then you’re left figuring out how to bring more people in for their first and perhaps only purchase.
The back-end of your business is where there is massive opportunity, and modern technology being what it is, reaching your customers after their first purchase has become extremely easy. Whether you run a physical storefront or an internet-based one, collecting emails should be an important part of your remarketing strategy.
This will allow you to add customers to your email list, something you should set up in advance with a series of emails designed to provide your ideal customer, the avatar we talked about earlier, with solutions for other problems they may have.
As an example, if you’re a gun store owner and a new customer comes in and purchases a handgun, you now have a lot of opportunity to market to that person with additional offers. The week after their purchase, you can send them an email with a discount coupon for ammunition. A week after that, it’s a good time to send another email with a video review of a pistol cleaning kit that you carry.
You get the idea here, and this is called a drip campaign. It’s fairly easy to set up through an email subscriber service such as MailChimp, and can bring in a lot of additional revenue through existing customers. Statistically speaking, existing customers have a much higher likelihood of spending money with than cold prospects.
There are other methods of remarketing to your existing customers that we’ll get into at another time.
Reason 4: No Business Systems in Place
If you’re like most small business owners in the firearms industry or related industries, it’s likely that you’re running the show on your own, or with one or two employees that help with the primary functions of the business. This makes it extremely easy to get caught up in the day to day of fulfilling orders or handling customers and forget some of the small things that keep everything running smoothly.
A very simple way to fix this is to have detailed systems in place for yourself, your employees, and the business in general. Having systems in place for every aspect of your business makes it easy to check the boxes, helping you accomplish necessary action items, and makes it much easier to train new employees.
Everything from cleaning the office to how to train a new employee on the most intricate part of your business should have a detailed system, preferably typed up and in a binder as well as saved somewhere safe on a hard drive.
This not only streamlines day to day activities and tasks, but sets you up for success in the future because anyone will be able to grab a binder and know what to do. This means that if you’re out sick for a week, your business is still operating, and if you ever want to sell or franchise, having these systems in place will make that much easier.
Reason 5: Failure to Control Expenses
This could easily fall under systems, because having financial systems in place is absolutely crucial to the prosperity of any business, large or small. For the self-employed entrepreneur though, controlling your expenses can be the difference between succeeding and shutting your doors.
Managing and tracking expenses can be difficult, especially when times are good and revenue is flowing in. It’s easy to get complacent with excess spending until it’s too late and the well is dry. Likewise, if the business owner or corporate leadership is frivolous with company money, that can breed contempt among employees which may lead to disaster.
One solution is to have financial goals written out well in advance. As financial advisor Dave Ramsey has said, if you don’t have a plan for your money, someone else does. Having these goals written out can help you develop a plan for what to do with earnings; how to spend them and where to save them.
Enlisting the help of an experienced bookkeeper or accountant can be a huge asset to your business as well. Professional financial help is an expense that will save money for you and your business.
Reason 6: Inability to Compete Against Market Leaders
If you own a small business in the firearms industry, you’re well aware of the giants out there: Cabela’s, Brownells, or even the largest local chain in your area. These are your competitors, and if you don’t think your prospective and current customers are checking them out too, you’re fooling yourself.
You have to be able to differentiate your business from the big guys, and that’s actually in your favor. As a small business owner, you have the incredible opportunity to do just about anything you want. That means you can run any promotion, host any event, or create any kind of content that you believe will help your business.
This kind of creativity will help you corner the market of the local gun store, and you’ll carve out a place for yourself that the big stores just can’t compete with. We’ll be sharing some of those ideas in later articles.
Reason 7: Leadership Failure/Lack of Corporate Culture
We’ve combined these two because one really informs the other. A lack of corporate culture, even within a sole proprietorship or small business, shows that there is a missing piece that can have an impact on every point we’ve just talked about.
As the business owner, it’s up to you to dictate the attitude of the company. If your store is just a place where people come to work and collect a paycheck, then something is missing.
Creating a culture in your business that makes your employees excited to come to work and represent your organization as a brand ambassador in their off hours is what you should be aiming for. This all starts from the top, and if you’ve ever worked as an employee in a large corporation, you know that bad attitudes can spread quickly and tank a department or an entire company.