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D

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. I would like to start a retail fish store. With both saltwater fish and corals and basic freshwater stuff(to help pay the bills). The problem is that like most people i am terrified of the unknown; but i figure if i don't try i will always wonder what could have been. I have been a Reef hobbiest for 8 years and know i have the skills required to keep the animals alive and healthy; and know what animals to avoid. The skills i lack are the business skills. The writing of a business plan confuses the heck out of me. I know what i want to accomplish but cannot put it into words that make sense to a banker.What did the owners of LFS do here when it came time to write a business plan?Did you do it yourself or hire someone. I realize this is not the industry to get rich in but i do need to make aliving and was wondering what i can expect as a realistic income after the initial loan is paid off.Should i even consider a loan or save my butt off. I figured it would take at least $100,00 - $150,000 to open and stock a complete aquatic store. Does this seem high or low.What would you do over again if you could redo somethnig about the way you started your business.Do any of you owners propigate corals or is it cheaper to buy them as wild colonies? This forum is the best thing i have run across in a long time. It is the only place where i can get answers from actual people in the industry. :D
 
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Anonymous

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What did the owners of LFS do here when it came time to write a business plan?

Get in touch with your local SBA. Write down what you know and they'll help you with what you don't. Believe me you need the business plan more than the bank. If you don't understand where you are going and how you are going to get there it'll never work.

Glenn
 

studboy36

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Hi D,

There is another smaller thread about starting a LFS farther down the list. I don't know if you have read it, but I thought I would post it here for your information. One of the persons participating in the thread own a LFS.

http://reefs.org/phpBB2/viewtopic.php?t=18257

There is another thread on becoming and importer/wholesaler. Its doesn't deal directly with opening up a LFS, but most of the information is relevant to what you want to do.

http://reefs.org/phpBB2/viewtopic.php?t=16224

:D

Efrain
 

JennM

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From what I've seen in the industry, business sense is the difference between success and failure of a store. I've seen places that could have made money hand over fist, fail because of bad decisions and poor management. And I've seen places do well on a shoestring, because the owner/manager had the sense to spend each penny wisely, and go without him/herself when necessary.

I cannot stress the importance of a business plan enough. Compare numbers as you go. You'll find that even though you anticipated the unforseen, spending will always be more, and sometimes revenues are less but if you create safety nets for yourself, use good business practices, you'll land on your feet.

I worked in small and medium sized business my whole career before taking on the task myself. I learned the good and the bad of the business world from places I've worked, and am applying what I learned along the way today.

Take Rover's advice and contact the SBA. Let them help you with your business plan but write it yourself because only YOU can decide what you want to do, and somebody who doesn't know a thing about the fish business won't have a clue. Do not forget to factor in mortality to your numbers -- it's an ugly part of the business but you have to consider that some of your aquisitions will perish along the way.

Don't borrow any money you can't afford to lose, or can't pay back another way. It's a big gamble at best.

HTH

Jenn
 

D

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I do realize the importance of a business plan; only problem is is that i dont know what part of the industry to get into. I am inetrested in retail but the high overhead costs such as rent and insurance kind of turn me away. Throw in other little things like cleaning a bathroom after sloppy customers and retail starts to look like a hassle. I thought about Wholesale distribution but i have to face reality. I live in WI and have no way to transport livestock up here cost effectively and still compete with the Large LA wholesalers a far as price goes. Besides the amount of disposable money i have would not allow me to compete at a national level. I have been doing tank maintenance for awhile now and that i very frustrating to say the least. It was a good way to get experiance in the industry with little cash outlay. But the problems that arise are a pain. People dont feed fish and than want new ones when they die is crazy. That is just one example but their are many more i wont even get into.I have been investigatinfg internet sales and coral farming. Both do require sizeble upfront investments but the overhead is lower in the long run. I realize that thereare alot of neatives asscoiated with E-tail and farming. I know there are positives to each situation and they alll have something to offer. Right now am basically exploring my options and trying to make an eucated decision. Hopfully the experiance of the people here will be big help.I jjust wish i had a crystal ball to se what to do. Any feedback is more than apreciated.
 

dendronepthya

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D,
I do not yet own a store, but I do know a little bit about writing a business plan. I am in an MBA program and taking a class on entrepreneurship this semester. There is a software package out there called Business Plan Pro. I have found it to be helpful in that it takes you step by step through writing a business plan. It explains what each section of the plan should contain. I think it is about $130. If you do not want to spend any money, there are literally hundreds of books available at the library that talk about writing effective business plans. You may want to stop in and do some reading.
 

JennM

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There's lots of free business plan software/shareware out there my bank even gave out CD ROMs with free plan ware -- but I ended up just using it as guide, as long as your business plan shows your numbers, your intentions and what it is that will make your business better than your competitors, it will do its job.

What I read in D's last post, though, makes me ask the question, WHY do you want into this industry? I'm not doing this to sound inflammatory -- but that last post seemed to dwell on all the negatives in this industry. If you're already doing maintenances and find them to be a PITA -- well no matter what branch of the biz you're in, if it involves livestock you're going to have the same PITAs... Shipper/carrier loses box, animals die, customer/reseller freaks. Buyer (customer or reseller) doesn't care for the animal, blames you for its demise, more grief. In dealing with people, you are always going to have easy customers and challenging ones...... BTW -- for maintenance clients who don't feed: invest in an automatic feeder -- flakes or pellets every day is better than starvation -- there are ways to work with/around even the most challenging customer. For me, therein lies the satisfaction: satisfying the client and helping him/her have a beautiful and thriving system. If people aren't your thing, then retail ain't for you.

The bottom line is you need deep pockets (or the trust of somebody who has deep pockets!), you need business savvy and sense, and you need to get up every day ready to do it all again - and LOVE it. No matter what business you go into, there will be challenging customers or individuals you have to deal with. A good businessperson will be resourceful and find ways to succeed in spite of the customer!

D, the first thing you need to decide is just what it is that you want to do in this industry (or, if nothing grabs you, do you really want to be in the industry??), and then research the bejeepers out of that thing specifically. If it speaks to you and you can see yourself getting up each day for the next umpteen years and doing the same thing, then by all means, write that business plan and DO IT. However if you have any doubts about whether you'll still love what you're doing in 6 months, a year, 5 years down the road, then my advice would be to seriously consider what you're about to take on, before you do take it on. I love what I do and I look forward to it every day. Sure there are days when I'm not motivated to do X or put off doing Y til tomorrow, but that's human nature -- in the end I get it done when it needs doing, and a satisfying day is hearing that wonder in somebody's voice when they ask about a creature they have never seen before, or telling a success story about their tank. Had a guy tell me last week that he kept a Regal tang for 22 years...WOW! But I digress...

It's about planning and numbers and projections and all that good stuff that bean counters want to see, but it's MAINLY about doing what you love. If you don't love what you're doing, then the best business plan in the world won't make you want to go to work each day.

Respectfully,

Jenn
 

D

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I do realize that my post may have sounded negative but it is quite the opposite.It is more like realistic planning. If i just had the attitude of "Hey great i am going to make my hobby a business" Than i would be rudely awakened when that first customer took a leak all over my floor 8O . I think that everyone who wants in the industry loves the hobby, The organism's and the people involved . With that said it would be very easy for me to get this fantasy picture in my head that would never happen and that is when i would burn out and quit. Yes i can see myself doing this everyday and loving it.But what "this" actually is i have yet to figure that out. But we are at a time when science and technology have given us more choice than were ever availible to us before. The internet, better understanding of coral reproduction and eqiupment advances all brought with them business opportunities that are uniqe to them. Ten years ago who farmed coral or made custom skimmers in there basement or sold livestock online. I am sure that everyone here realizes this but for a hobbiest ready to take the plunge into the business end it is an overwhelming choice of options. In my perfect litttle world i would have a LFS that did maintenance accounts and farmed coral in the back room to sell on the internet! Plus things like revenue generation scare me.Some times i think "I will never make $3000 a month to cover operating costs". Than other days i think no problem. My wife graduates from dental school in December and said she would support us while i make an attempt at a small business. I feel i have to get it right on the first try for myself and my wife. I am looking at leaving a $65,000 a year job for a business that will pay me nothing to start with. Not trying to make a statement or anything but this also one fact i have to face. Once i start i cannot change half way there. What are some positive things you enjoy about the industry from the LFS point of view. I would love to talk with some one who owns a internet company and get there views as well.I have dropped the wholesale deal all together. Thanks for the feedback. Lets hear some more!
 

JennM

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Honestly, I wouldn't leave a $65K/yr job to get into this business. Like you, I have a spouse that is willing/able to support the family and my habit so I CAN work a shop and not get paid. Sort of a recompense for many years of sacrifices *I* made for the family.

Having said that, since you are looking into doing some sort of Internet business, can you somehow arrange to do that on the side, and still keep the "day job?" Being Internet based you can still tend to orders, manage your systems etc., at your own convenience (evenings, weekends etc.) but still have the security of money coming in.

Many Internet based entrepeneurs begin this way, a friend of mine who has a successful skimmer/calcium reactor business started this way, and he recently rented warehouse space for his business.

This way, if you keep the "real" job *g* and your coral business takes off, you have that option to leave the sure thing.

Jenn
 

Lazyreefer1

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I own several small companies and have never failled in one. While most people here may know more about fish and corals than I. I know how to make money. First rule is keep everything simple. You have to make more than you spend. Sounds silly huh? Keep your labor way down. It will kill you the most. As for saltwater stuff. Order 2000lbs of life rock direct from Walt Smith. You will sell it all in time for 200% profit. And you know what? It doesn't die. Just display 400 to 500lbs and keep the rest in Rubbermaid containers. Keeping cost down. Next thing you sell is RO water. Cost you nothing and you sell it for 89 cents with a litlle salt in it. Once agaign all profit. After you have these 2 products them worry about life stock.

Keep it simple and good Luck
 

miken

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I would suggest working at a local store that you like for 6 months or so part time. You can learn best practices and learn from others mistakes this way, and there are a lot of mistakes to be made. You can also become familiar with suppliers, distributors, etc.

MIKE
 

LilFishInBigPond

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Lazyreefer, Unfortunatly, knowing money, and actually making money in this hobby are two different things. Selling rock & RO water may make money, but they don't come even close to making a business. You'd have to sell a lot of both daily. Being in retail, I sold 30 lbs rock daily on average, and 100 - 300 gallons RO water weekly. We had over 2,000g fresh and 2,500g salt. Overhead was huge, depending on rock and ro sales wouldn't of even covered insurance, let alone, support a business.

D, You've worked service, now try retail. Learn the business before jumping in. After retail, then try working for a wholesaler if that interests you. Don't just try opening of of the two with out working within.
 

D

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I think i am going to concentrate on the maintanence part of the business. It has the lowest overhead of any other option. I have made alot of really good contacts over the last year in the indusrty and am able to get things alot cheaper than most stores around here. I now actually supply about three stores with liverock,crabs and snails. I don't want a full blown wholesale operation but the extra money from the rock is nice. It also gives me a very good relationship with the local stores and that brings in more reccomendations from them for maintanence accounts.I may go retail eventually but would like to do it all cash with no loans. I think if i work the maintanence to its potential i can make a decent income off of it.
 

LilFishInBigPond

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Ok, LR, snail & hermit wholesaling, thats a different story. Very little DOA/DAA, not hard to go wrong. Your revised plan sounds good. I wish you the best. Sounds like your already doing it, and making it work.
 

Nancy Swart

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D,

Do you belong to a local club? You definitely don't want to attend meetings and give infomercials BUT this would be a wonderful venue to help spread the word about your new business. And it would only cost you the price of printing out some flyers and business cards at home.

No matter which direction you go, I wish you much success!

Nancy
MASNA Past Pres/Treas
www.masna.org
 

D

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Nancy one step ahead of you already! :D The local Reef club is one of my largest customer base.
 

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