any one interested in starting an ammo company here in Canada? specialize in 22 ammo, flood the market here and sell the overflow in the states. even after all the hoarding and increased prices, 22 ammo will still be number 1 in sales. a golden egg for some one with know how and start up capital.
22 ammo
- Thread starter Hydroformed
- Start date
hometownhero
CGN Ultra frequent flyer
- Location
- Toon Town, Sk
They should have never closed the plant's we had in the first place.
- Location
- West Quebec
Is this a trick question ...
Because your idea is unsustainable. "Flooding the market" as you put it will drive down prices which is fine for the buyer, but as the seller it makes little sense. So why would they go into business to have a poor return on their capital.
The Canadian market is probably not big enough anymore to sustain a 22 only factory. Your looking at something like a one months production to supply the whole country and then you would be dependent on another market. Unless you were so small to start to keep your production inside Canada and then you would be as expensive as ammo is now.
I actually looked into this idea (and currently still have it on the back burner) and still am kicking it around. Not just for .22, but for many different calibers. I have access to a good location that could get all the government requirements, (full fenced in facility, 32,000sq ft, 1.5 hectares of land, storage areas, manufacturing and office space) as well as living in a "cheap" labour rates and property tax area.
The problem is the financing. And I work in the financial industry, so I have an excellent knowledge of commercial financing. There are programs out there (and in fact I have already met with an acquaintance of mine who offers government repayable interest free loans, and who could finance on this, but of course there are conditions that need to be met)but it all comes down to initial investment. Unfortunately, I personally do not have $750,000 to inject into this project to get to the point of where this can be walked in for traditional financing. Now most areas where you personally do not have the capital, you search out an investment from private investors. This is a great tool to use, but is expensive money, and to top it off, they are mainly equity lenders that would only be interested in lending on real estate; not a brass forming machinery (however ACOA would finance on equipment because this is used for job creation and retention, but need the money put upfront again!). Also many private lenders would not be too eager to lend on a risky plan (explosive, environmental and also moral (for some) project).
Now, unless someone with cash who is passionate about this type of business, or someone who would invest in someone else, or a large existing company, it just could not take off. Insurances, government regulations, environmental concerns are all things that can be sorted out, but at the end of the day, its all about the financing. Banks will need sales, or at minimum orders. orders and sales will need quality and pricing, pricing will depend on costs (are the components manufactured here, or outsourced and assembled here). One of the tools I have been searching, and it is to outsource components for now and assemble here. Later manufacture components, however now what kind of quality will be produced, and how will that affect later quality. Next is exit strategy for investors. Is it buying them out at a later date? take over from another larger company? How and when do they get paid out, and also make a good return.
I'd love to do it, but to find 1 investor with 800,000 or 8 investors of 100,000 is not easy in this area. I would offer a 5% equity stake for every 100,000 with a 6% interest, deferred interest for 1 year would be ideal (for me) but not so much for an investor. Is there competition, yes! General dynamics in Quebec employs over 1,450 people and over 50 million a year in sales and there are others, but as we all can see there is a need for more in the current marketplace. Its all about the green!!
The problem is the financing. And I work in the financial industry, so I have an excellent knowledge of commercial financing. There are programs out there (and in fact I have already met with an acquaintance of mine who offers government repayable interest free loans, and who could finance on this, but of course there are conditions that need to be met)but it all comes down to initial investment. Unfortunately, I personally do not have $750,000 to inject into this project to get to the point of where this can be walked in for traditional financing. Now most areas where you personally do not have the capital, you search out an investment from private investors. This is a great tool to use, but is expensive money, and to top it off, they are mainly equity lenders that would only be interested in lending on real estate; not a brass forming machinery (however ACOA would finance on equipment because this is used for job creation and retention, but need the money put upfront again!). Also many private lenders would not be too eager to lend on a risky plan (explosive, environmental and also moral (for some) project).
Now, unless someone with cash who is passionate about this type of business, or someone who would invest in someone else, or a large existing company, it just could not take off. Insurances, government regulations, environmental concerns are all things that can be sorted out, but at the end of the day, its all about the financing. Banks will need sales, or at minimum orders. orders and sales will need quality and pricing, pricing will depend on costs (are the components manufactured here, or outsourced and assembled here). One of the tools I have been searching, and it is to outsource components for now and assemble here. Later manufacture components, however now what kind of quality will be produced, and how will that affect later quality. Next is exit strategy for investors. Is it buying them out at a later date? take over from another larger company? How and when do they get paid out, and also make a good return.
I'd love to do it, but to find 1 investor with 800,000 or 8 investors of 100,000 is not easy in this area. I would offer a 5% equity stake for every 100,000 with a 6% interest, deferred interest for 1 year would be ideal (for me) but not so much for an investor. Is there competition, yes! General dynamics in Quebec employs over 1,450 people and over 50 million a year in sales and there are others, but as we all can see there is a need for more in the current marketplace. Its all about the green!!
While I partially agree, considering the pricing and availability, as of late, for .22lr I'm sure you could build a plant a sustainable size. You don't have to go and build a copy of a Federal plant, downsize a bit.
I haven't looked into it but I'd bet our government will have made it very dang near impossible to start a new ammunition factory. Just a guess.
Lastly, if you are a true-blooded Canadian, if quality and whatnot was all comparable...who wouldn't buy the Canadian ammo instead of American or whatever if they were the same price? I know I'd buy the Canadian stuff! Gotta support the home boys!
Um not impossible, I have looked into it, but definitely a few hoops to jump through that would discourage some. In fact I believe last week or last month a new commercial reloading company opened up. They have pretty much the same hoops to go through.
not to mention mr federal inspector must inspect the ammo before released for sale, and if he/she/or other now finds something he doesn't like, he can trash the entire lot. This is the largest unknown hurdle/risk to making ammo in Canada in my humble opinion, as it can kill your profits in one easy slash of the pen.
In pretty much every instance of manufactured-in-USA goods that get imported into Canada, the sales represented by the Canadian "market" are equal to the over-run or over-flow of the standard production runs of the USA manufacturer (magazines, the kind you read, is a good example). The USA does not do fair trade, or free trade, ever, with anybody. The only time they buy Canadian product is when they can't make it themselves, or when it is cheaper for them to buy it here. I know this from experience.
Well they sure as heck dont inspect American made stuff.....So much of it is junk.
sclifford,
I would invest in your mfg facility, but from a purely business standpoint it does not make sense. As others have stated, the market is too small and I do not see it growing. Given the political climate here, I would hate to invest my life savings in something that might be wrecked by Justin and co next election or sometime in the future. Have you done a business plan and worked up the ROI numbers? Obviously, there is no way of taking into account the political uncertainty of this venture compared to other such ventures.
Basically I am at a point where I want to just keep my money invested where it is with an advisor I trust with low risk and making a decent return and retire early so I can tell the young f*****s running the show where I work to go take a hike and run the farm that I inherited and perhaps do some sort of accounting work on the side for spending cash.
CD
I would invest in your mfg facility, but from a purely business standpoint it does not make sense. As others have stated, the market is too small and I do not see it growing. Given the political climate here, I would hate to invest my life savings in something that might be wrecked by Justin and co next election or sometime in the future. Have you done a business plan and worked up the ROI numbers? Obviously, there is no way of taking into account the political uncertainty of this venture compared to other such ventures.
Basically I am at a point where I want to just keep my money invested where it is with an advisor I trust with low risk and making a decent return and retire early so I can tell the young f*****s running the show where I work to go take a hike and run the farm that I inherited and perhaps do some sort of accounting work on the side for spending cash.
CD
I know reloading is an addiction, but I doubt if anyone has it that bad!
Crowd Fund.
I'm not a fan of it for most things, but how many million Canadians own firearms in Canada. Hell.
You get a single Looney from each, there's your facility.
Who needs to invest their life savings. Spread the cost around.
Do like most crowdfunds.
1-10$ you thank them profusely.
10-100$ you send them 50 rounds when from the first production run.
100-1000$ you send them a brick.
1000-10,000$... well you get the idea.
no one expects a full return, but getting even a token amount of ammo in return.. KNOWING that we helped.
Hell, you could print on the inside of each 50 round box the names of the larger contributors.
If people will spend $5K dollars on an internet pixel space ship, or internet tank, or internet pixel sword, they'll buy REAL ammo.
Contact CSSA, CFA. Hell, Calibre Magazine, and see if they're interested in sending a crowd funding letter out to their members.
I'm not a fan of it for most things, but how many million Canadians own firearms in Canada. Hell.
You get a single Looney from each, there's your facility.
Who needs to invest their life savings. Spread the cost around.
Do like most crowdfunds.
1-10$ you thank them profusely.
10-100$ you send them 50 rounds when from the first production run.
100-1000$ you send them a brick.
1000-10,000$... well you get the idea.
no one expects a full return, but getting even a token amount of ammo in return.. KNOWING that we helped.
Hell, you could print on the inside of each 50 round box the names of the larger contributors.
If people will spend $5K dollars on an internet pixel space ship, or internet tank, or internet pixel sword, they'll buy REAL ammo.
Contact CSSA, CFA. Hell, Calibre Magazine, and see if they're interested in sending a crowd funding letter out to their members.
