A military surplus store, also known as an Army Navy store, dates back to the mid-1800s. After the Civil War, Francis Bannerman purchased the military’s surplus supplies, adding the products to his already existing business. Store owners have recently begun to alter their business models, with less focus on civilian military enthusiasts and more on consumers looking for affordable gear for their outdoor, survival, and sports activities.
Learn how to start your own Military Surplus Store Business and whether it is the right fit for you.
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Start a military surplus store business by following these 10 steps:
- Plan your Military Surplus Store Business
- Form your Military Surplus Store Business into a Legal Entity
- Register your Military Surplus Store Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Military Surplus Store Business
- Get the Necessary Permits & Licenses for your Military Surplus Store Business
- Get Military Surplus Store Business Insurance
- Define your Military Surplus Store Business Brand
- Create your Military Surplus Store Business Website
- Set up your Business Phone System
We have put together this simple guide to starting your military surplus store business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
Luckily we have done a lot of this research for you.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Military Surplus Store Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
What are the costs involved in opening a military surplus store business?
When starting from scratch, your first action should be to invest in a location. Work with a reputable organization that can help identify affordable rental and leasing options in the community. Once you have your building, you will need to budget for necessary build outs, fixtures, inventory, sales and inventory software, and a website. Store signage, a logo, and marketing materials should also be included in your initial budget.
Estimated average cost is between $50,000 and $75,000, while the purchase of an existing business could set you back as much as $150,000.
What are the ongoing expenses for a military surplus store business?
Aside from rent, utilities, and insurance, you will also need to budget for the following:
- Payroll expenses
- Marketing and advertising
- Website maintenance and hosting
- Shipping costs for online orders
- Restocking inventory
- Travel costs and entry fees for attending auctions
Getting to know your customers and their needs will help identify how much and how often inventory should be restocked, keeping costs under control.
Who is the target market?
The targeted niche for this type of retail store has evolved over time. While civilian military enthusiasts is still a focus, most now cater to the needs of ex-military, outdoor adventurists, sports fanatics, fishermen, and survivalists. Store owners are urged to find out what the local community’s needs are and where they are lacking when defining their target market.
How does a military surplus store business make money?
Military surplus stores generate revenue from each sale. Many business owners are now offering additional services, such as classes and workshops, to increase annual profits.
How much can you charge customers?
While prices vary, depending upon the item, its cost to you, and the business’ ongoing expenses, it’s important to remember that customers frequent this type of establishment because prices are lower than other retail stores. If you plan to sell military memorabilia, partner with a knowledgeable appraiser to ensure fair pricing.
How much profit can a military surplus store business make?
Profits vary depending upon geographical location, community needs, and your ability to fulfill those needs. Since most inventory items you will invest in will be priced at 80-90% of their value, the profit margin is high. Many successful military surplus store owners report an annual profit between $45,000 and $95,000.
How can you make your business more profitable?
As mentioned, most Army Navy stores have gotten creative with the goods and services they offer, based on local needs. Many have found success offering basic and advanced weapons training, concealed weapons certification classes, self-defense workshops, and gun safety training. Before offering weapons training, consider becoming a National Rifle Association-certified instructor and visit the Bureau of Alcohol, Tobacco, Firearms and Explosives website to learn about specific requirements. Does your community have an indoor or outdoor range? If not, building one is an excellent way to generate more profits.
Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your military surplus store business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
FInd out what types of insurance your Military Surplus Store Business needs and how much it will cost you by reading our guide Business Insurance for Military Surplus Store Business.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a military surplus store business
When choosing your signage, make sure it is easy to see and clearly expresses the types of goods you carry. Distributing flyers to nearby businesses and homeowners is effective, as is involvement in the community. Your local chamber of commerce and police force can assist you in advertising and hosting events such as gun safety and self-defense classes.
Today’s business landscape makes it necessary for all businesses to have an online presence. Online community publications, social media, and paid ads are a great way to attract customers locally and nationally.
How to keep customers coming back
Consistently strong customer service is essential to building a devoted customer base. Let your clients know you value them by starting a rewards system. Interacting with them when they visit and asking for feedback are also effective strategies.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
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Is this Business Right For You?
Military, outdoor, and sports enthusiasts who are looking to turn their passion into profit are best suited for this business venture. For long-term success, owners should be knowledgeable and enjoy passing their wisdom on to those in the community.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a military surplus store business?
Your military surplus store’s team will spend each day stocking the shelves, maintaining the facility, and assisting customers in identifying the best product for their needs. You will work with various suppliers, reorder inventory when necessary, and conduct thorough research to ensure fair and competitive prices. Additionally, marketing and administrative duties must be tended to regularly.
What are some skills and experiences that will help you build a successful military surplus store business?
Managing any retail establishment requires strong business management and leadership skills. Communication and interpersonal skills will help you develop relationships with suppliers and customers, as well as lead classes/workshops. Attention to detail and a knowledge of the products you offer will, ultimately, define the store’s success. Awareness of emerging trends in sports and outdoor activities and a willingness to learn new things would also prove beneficial. If marketing isn’t your strong suit, consider taking a basic course online or local college, or hiring a professional to manage the business’ advertising strategy.
What is the growth potential for a military surplus store business?
At one time, Army Navy stores could be found on every other block. When the rules changed and online shopping became popular, only those who could adapt stayed in business. This, coupled with the introduction of sports such as airsoft, has again expanded the need for this type of store. Entrepreneurs with a carefully mapped out business plan that targets specific niche needs have an opportunity to build a successful business. Those who are flexible, able to adapt to evolving needs, will thrive and grow for many years to come.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a military surplus store business?
Because this is such a niche market, those entering the industry are urged to develop a sound business plan. The Small Business Administration’s website can assist you with everything from planning to managing and growing your new business. While there are a number of online resources for Army Navy store shoppers, new store owners are encouraged to have a fully functional and intuitive website, which will help reach potential customers outside of your geographical area.
How and when to build a team
Your need for additional team members depends upon the size of the store, how busy it gets, and how much downtime you want for yourself. This is a customer-service oriented job, so when you do bring on new team members, make sure they are friendly and knowledgeable, dedicated to helping fulfill your vision.