Step-by-Step Process to Open a Gun Shop in the United States (2025 Guide)

Opening a gun shop in the United States is more than just setting up retail shelves and displaying firearms. It is a legally sensitive business that operates under some of the strictest federal, state, and local regulations in the country.

Every sale, every background check, every piece of inventory must be tracked precisely.

Yet, for those willing to meet the requirements, it can be a rewarding business, both financially and personally.

In 2025, small and mid-sized gun stores continue to serve a growing market of sport shooters, hunters, collectors, and self-defense enthusiasts, making the firearms retail industry a viable, legitimate sector to enter.

1. Research the Market and Build a Real Business Plan

Before diving into paperwork, start with research. Identify whether your area can sustain a firearms retailer. Look at existing gun shops, their pricing, specialties, and customer base.

A strong plan goes beyond the idea of selling guns; it defines who your customers are (law enforcement, hunters, collectors, new gun owners), what brands you’ll carry, and how you’ll stand out (training classes, gunsmithing, custom orders, or range access).

A comprehensive plan should also account for the cost of compliance, insurance, security, and licensing fees. Many underestimate how much the legal setup and background systems cost. These can easily add several thousand dollars before the first sale is made.

Expect startup capital needs between $50,000 and $250,000, depending on the scale of your store and inventory depth.

2. Choose a Legal Structure and Secure Zoning Approval

Forming the right business structure is your next step. Most gun stores operate as LLCs or S corporations, offering liability protection and a clear tax identity.

Once registered with your state, you’ll need a Federal Employer Identification Number (EIN) and a state tax ID if required.

The more challenging part is zoning. Firearms retail is not permitted everywhere. Many cities limit gun shops to specific commercial zones or industrial districts.

Before signing a lease, verify with your local planning or zoning department that the property qualifies for firearm sales. If it doesn’t, you may need to request a conditional use permit, a process that can take months and may involve public hearings.

Failing to confirm zoning before applying for federal licenses is one of the most common and costly, mistakes new firearm dealers make.

3. Apply for the Federal Firearms License (FFL)

To legally sell guns in the U.S., you must obtain a Federal Firearms License (FFL) from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Without this license, you cannot engage in the business of selling firearms, even if your state allows ownership.

The application process uses ATF Form 7, available on the ATF’s website. You’ll submit fingerprints, passport-style photos, and a fee (ranging from $30 to $200 depending on license type).

After submitting, an ATF Industry Operations Investigator will schedule an in-person interview to review your compliance plans, recordkeeping methods, and security layout.

Processing typically takes 60–120 days, though complex cases or incomplete applications can extend that.

4. Set Up Background Check and Recordkeeping Systems

Once licensed, your most critical task is ensuring compliance with federal background check laws. Every sale to a non-licensee must be accompanied by ATF Form 4473, which records buyer identification and transaction details.

All sales require an instant background check through the National Instant Criminal Background Check System (NICS), unless your state uses an alternate system.

The result will come back as Approved, Denied, or Delayed. If delayed, you must wait up to three business days before proceeding.

Your shop must maintain a bound book, the official log of all acquisitions and dispositions (sales, returns, consignments). The ATF can inspect this record at any time. Retain all Form 4473s for at least 20 years and have an organized filing system.

5. Install Security and Safety Infrastructure

Security is one of the most scrutinized parts of running a gun shop. You are legally responsible for preventing theft and unauthorized access to firearms.

Every location should include:

Insurance companies will also assess your security measures before underwriting your policy. The more robust your setup, the lower your liability risk and premiums.

6. Acquire Insurance, Build Supplier Relationships, and Hire Staff

Once the facility is secure, finalize your insurance coverage. You’ll need:

Next, establish relationships with wholesalers and distributors. Many require proof of your FFL, nd sometimes your first purchase must meet a minimum quantity threshold. Expect to work with major distributors such as Lipsey’s, RSR Group, or Davidson’s.

When hiring employees, conduct your own internal background checks and train all staff on firearm handling, sales procedures, and how to properly fill out ATF forms.

If you are exploring financing partners, an experienced financial firm can review your projections and suggest tailored credit facilities to match inventory purchase cycles. For instance, a financing partner that understands the firearm market can structure a line of credit to fund initial inventory purchases and seasonal demand peaks.

A reputable lender also helps when you compare lease terms and working capital options. One option to consider is talking with financial services that support retail operations and regulated industries, such as FD Capital.

7. Prepare for Inspections and Maintain Compliance

After you open, compliance becomes an ongoing part of operations. The ATF will conduct periodic inspections to ensure you maintain accurate records and secure storage.

Always cooperate fully and keep records easily accessible. Violations such as missing serial numbers, incomplete Form 4473s, or undocumented inventory transfers can result in license revocation.

Keep your A&D book updated daily, train your staff to spot fake IDs, and perform internal audits every quarter. Treat every firearm as traceable inventory, because legally, it is.

8. Marketing and Community Relations

Modern gun shops thrive not only on inventory but on trust. Building relationships with local shooting ranges, law enforcement officers, and responsible firearm owners gives your business credibility.

Consider offering safety classes, concealed carry courses, or gunsmithing services.

Digital marketing also matters. A professional website, social media presence, and local SEO help reach younger buyers.

Be aware of platform restrictions; many ad networks restrict firearm promotion, so focus on organic reach and direct relationships with local clubs.

9. Cost Breakdown and Timeline Summary

Final Thoughts

Opening a gun shop in the United States is completely achievable, but it’s not casual. It combines entrepreneurship with public safety.

Those who succeed treat compliance as a foundation, not a hurdle. They record every serial number, run every background check carefully, and invest in relationships, both with customers and regulators.