Starting a gun company in the U.S. is not for the faint of heart. Between the layers of federal and state regulations, licensing requirements, and financial hurdles, entrepreneurs in this space face a unique blend of opportunity and complexity. Traditional banks and payment processors often shy away from firearms-related businesses, leaving new manufacturers, dealers, and online sellers struggling to find the right financial partners to grow and operate legally.
High Risk Pay understands the challenges that come with building a firearms business from the ground up. In this guide, we’ll walk you through how to start a gun company in the U.S., from the legal groundwork and business setup to the payment processing solutions that can help your company thrive in a high-risk industry.
Understanding the Legal Landscape
Before you can open your doors or launch your website, you need to understand that the firearms industry operates under some of the most stringent regulations in the country. Every aspect of the business is heavily monitored at both the federal and state levels. Firearm businesses must secure the proper licenses, follow all record-keeping laws, and adhere to strict security and compliance requirements. Ignoring or misunderstanding these obligations can result in costly penalties or the permanent loss of your license.
Federal Firearms License (FFL)
The Federal Firearms License, or FFL, is the key that unlocks your ability to legally manufacture, sell, or import firearms. There are multiple types of FFLs depending on your business model. For example, a Type 01 FFL covers standard firearm dealers, while a Type 07 license allows for manufacturing. If you plan to import guns or ammunition, you’ll need a Type 08 or Type 11 license.
Applying for an FFL begins with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The process involves submitting an application, paying the appropriate fee, passing a background check, and undergoing an in-person interview with an Industry Operations Investigator. Once approved, your FFL must be renewed regularly and displayed prominently at your place of business.
ATF Oversight
The ATF is the primary federal agency that oversees firearm businesses in the United States. Its role is to ensure compliance with federal firearms laws and regulations, conduct inspections, and investigate potential violations. As a gun business owner, you should expect periodic ATF inspections and maintain open communication with your assigned field office.
Compliance & Security
Compliance in the firearms industry goes far beyond obtaining a license. Businesses must follow strict requirements for background checks, transaction documentation, and inventory management. Every firearm sold must be logged in your Acquisition and Disposition (A&D) records, and all buyers must pass the National Instant Criminal Background Check System (NICS) review before completing a purchase.
Security is another critical component. Firearms must be stored securely to prevent theft or unauthorized access, and your business should have alarm systems and restricted access protocols in place. Regular audits, employee training, and proper documentation ensure your operation remains in good standing with both the ATF and local law enforcement.
Business Planning & Structure
A well-organized business plan and the right legal structure set the stage for long-term success. These steps not only keep your operation compliant but also make it easier to attract investors, apply for funding, and manage day-to-day operations.
Firearms Business Plan
A strong business plan helps turn your idea into a sustainable operation. Start with an executive summary that gives a quick overview of your mission, goals, and business concept. Follow it with a detailed look at your target market and competitors, outlining what makes your company stand out.
Your plan should also include financial projections that account for startup costs, licensing fees, inventory, insurance, and ongoing compliance expenses. Investors and lenders will want to see that you’ve done your homework and that your plan reflects both the opportunities and risks of operating in the firearms industry.
Choosing a Structure
Your business structure determines how your company is taxed and how much personal liability you take on. A sole proprietorship is the simplest option, but it offers no protection for your personal assets. Many firearm entrepreneurs choose an LLC because it separates personal and business liability while keeping tax options flexible.
A corporation is another common structure, especially for larger operations or those seeking investment. It involves more paperwork and reporting but provides strong liability protection. Consulting a legal or financial professional who understands firearm regulations can help you choose the structure that best fits your goals.
Registering & EIN
Once you’ve decided on a structure, register your business with your state. This process usually involves submitting formation documents and paying a small fee. After registration, you’ll need to obtain an Employer Identification Number (EIN) from the IRS.
An EIN works like a Social Security number for your business; it’s required for paying taxes, hiring employees, and opening business bank accounts. You can apply for one directly through the IRS website.
Inventory Management
Inventory management is one of the most important parts of running a firearms business. Every item you carry must come from a legitimate source, be tracked accurately, and remain compliant with federal and state laws. The right systems and supplier relationships help you avoid costly mistakes and maintain trust with both regulators and customers.
Distributors
Finding reliable distributors is the first step in building your inventory. Firearms and accessories must come from authorized, licensed sources, so take time to vet each partner carefully. When evaluating potential distributors, consider:
- Licensing and compliance: Confirm that each distributor holds a valid Federal Firearms License (FFL).
- Reputation: Look for suppliers with a proven track record of timely deliveries and accurate documentation.
- Product range: Choose distributors that offer the types of firearms and accessories you plan to sell, including popular and in-demand brands.
- Support: A good distributor should provide transparent communication and help resolve issues quickly.
Establishing dependable relationships with reputable distributors keeps your inventory consistent, traceable, and compliant.
Inventory Protocols
Proper inventory protocols help you stay organized and in line with ATF requirements. Every firearm that enters or leaves your business must be logged accurately. Make sure you:
- Maintain an Acquisition and Disposition (A&D) record for every firearm.
- Perform regular audits to confirm physical stock matches your records.
- Use secure storage to prevent unauthorized access to firearms and components.
- Train staff on how to properly handle and record inventory transactions.
Payment Processing Challenges
One of the biggest hurdles for firearm businesses is payment processing. Many traditional banks and merchant service providers refuse to work with companies in the firearms industry because they are seen as high risk. This often leads to frozen accounts, withheld funds, and sudden terminations that can disrupt cash flow and damage customer relationships. Finding a processor that understands your industry and supports your business model is critical to long-term success.
Flexible Gun Merchant Accounts
High Risk Pay offers merchant account solutions designed specifically for firearm businesses. Whether you run a brick-and-mortar gun store, an online retail site, or a mobile operation, HRP provides flexible options that keep your transactions secure and compliant. Our services include:
- Firearm merchant accounts for in-store firearm and accessory sales.
- eCommerce payment gateways that allow online transactions while staying compliant with firearm regulations.
- Mobile POS systems for gun shows, events, and on-site transactions.
- Virtual terminals for processing orders taken by phone or email.
These specialized merchant accounts are built to handle the unique challenges of the firearms industry without the risk of sudden shutdowns or fund holds.
Seamless Integration
High Risk Pay’s systems integrate easily with the tools firearm businesses rely on every day. Our technology connects with popular eCommerce platforms, point-of-sale systems, and inventory software to streamline transactions from start to finish.
For businesses offering firearm training, memberships, or subscription-based services, our systems also support recurring billing and automated payment schedules. This flexibility helps you manage payments more efficiently and deliver a seamless checkout experience for your customers.
High-Risk Support
As a leader in high-risk payment processing, High Risk Pay goes beyond basic transaction handling. We provide:
- Custom underwriting that takes your specific business model and compliance history into account.
- Advanced fraud prevention tools to safeguard every transaction.
- Dedicated account support from specialists who understand the firearms industry.
Our goal is to help firearm merchants operate confidently in a space where traditional processors often fall short. With High Risk Pay, you gain a partner that knows your business, respects your compliance requirements, and provides the reliable financial infrastructure you need to grow.
eCommerce Considerations
Selling firearm products and accessories online opens up new opportunities, but it also comes with additional layers of compliance and security requirements. Choosing the right platform and product mix can help you build a compliant and profitable online presence.
Platforms
Not every eCommerce platform will meet the needs of a firearm business. Two of the most popular options are WooCommerce and Shopify, but each comes with different levels of flexibility and compliance support.
- WooCommerce: Built on WordPress, WooCommerce offers complete control over your site’s functionality and integrations. It allows you to work with firearm-friendly payment processors like High Risk Pay and customize checkout processes to include verification steps or FFL transfer options. This makes it a strong choice for gun retailers that need more freedom to stay compliant.
- Shopify: While Shopify is known for its ease of use, it places strict restrictions on firearm and ammunition sales. Many businesses using Shopify must rely on third-party apps or external checkout systems to stay compliant. Before choosing this platform, review its terms carefully and confirm that your products and merchant account integrations are fully supported.
Expanding Products
Beyond firearms themselves, consider offering related products that attract a wider audience and encourage repeat purchases, such as:
- Ammunition for both recreational and professional use.
- Protective gear such as ear and eye protection.
- Accessories like holsters, cleaning kits, and storage cases.
- Branded merchandise for loyal customers and range partners.
Adding these products helps diversify your revenue stream and strengthen your brand’s position in the market. It also gives you more flexibility if firearm sales face seasonal or regulatory fluctuations.
Training & Instruction
Firearm training and education build customer confidence and create steady, long-term revenue. Offering structured instruction shows that your business values responsibility and safety while helping customers develop practical skills. Adding classes or private lessons to your business model can turn occasional buyers into loyal clients and trusted advocates for your brand.
Group Classes
Group instruction is a smart way to engage your community and create new income streams. Popular options include Concealed Carry Weapon (CCW) certification courses, firearm safety training, and introductory range sessions for beginners. These classes give customers hands-on experience while reinforcing safe firearm practices. Promoting your classes through social media, local shooting ranges, and partnerships with instructors helps attract new firearm owners who are eager to learn from certified professionals.
Private Instruction
Private instruction offers a more personalized experience for customers who want individual coaching or advanced training. One-on-one lessons allow for tailored instruction that focuses on specific skills such as accuracy, tactical handling, or home defense preparation. Customized instruction enhances your service offerings, builds trust, and expands your reputation as a comprehensive resource for both education and responsible firearm ownership.
Conclusion & CTA
Launching and managing a firearm business takes dedication, precision, and a deep understanding of compliance. From securing the right licenses to managing inventory and ensuring every transaction follows federal and state regulations, there’s no room for error.
High Risk Pay offers firearm merchant accounts built for real-world challenges. Our solutions are designed to keep your business running smoothly, whether you sell online, in-store, or on the go. With flexible integration options, advanced fraud prevention, and personalized support, you gain a trusted partner who understands your business and helps it grow. Apply for a firearm merchant account with High Risk Pay today and experience secure, compliant payment solutions that move your business forward.
