success of aquaculture business?

[ReefSharkDudeGuy]

Hi, I'm only 18 right now and I'm a freshman in college, planning a major in biology and possibly a masters in marine biology, and I was wondering how successful (on average) propagation business ventures are. Hopefully this is the right forum for this question...I apologize if it's not. Have these been known to fall through pretty quickly, or are they best left as small money-makers that supplement better paying jobs? I'm just wondering because the thought had crossed my mind just the other day that owning my own aquaculture business is something I had never considered as a career. But as I'm continually becoming more and more intrigued with reef tanks and experimenting with them, and being concerned with the conservation of and health of the oceans and their reefs (I'm the son of two wildlife conservationists!), I thought I'd look into it a little.

Also, if this is at all feasible, does anyone have the email address of any propagation business owners that I could get in contact with. Thanks so much.

- the dude

[Eric Boerner]

Having heard your short background already, about being the son of a conservationist, you wouldn't do very well at it.

Theres 3 ways to approach a propigation business.

1. Broodstocking. The slowest way to make cash, and the easiest way to go under. Almost all coral farmers that use strictly brood stock never get out of the basement business phase.

Broodstocking is having set mother corals that you've owned, or friends of yours have owned for multiple frag generations. They're stable, and will live through hell and back typically.

You cut frags off the mother colony and grow them till they're able to be fragged themselves, and you sell those frags.

This obviously takes a lot of energy and resources to keep the mother colonies growing, as well as a ton of time to get a group of frags from a cutting.

Almost all reefers that trade or sell as a hobbiest fall under this catagory. It is usually a way to help out other reefers, get new coral frags for yourself, or get a few scrappings of cash to pay for your electric bill.

As a conservationist, concerned about the welfare of reefs worldwide, this is as far as you'd go

2. Domesticating wild colonies. This second method relies on importation of wild colonies to be fragged and grown out, and later cut again. Usually these "cultured" frags are second generation and have good survival rates. They've proven stable by living through the initial frag process and then acclimating to the farmers system for 3 to 4 months.

This is still costly, as you need to use enough energy to acclimate the cut frags for several months. Your cash to sale ratio is much faster though, since you don't have to wait for your mother colonies to grow back to the point where you can frag them again. Just go and buy another wild colony.

Though you're no longer a self-sustained coral farm, you're still thinking of the corals well-being, and your customers. Mortality rates will be less

3. Chop Shop. This third method uses wild colonies exclusively. There is almost no cost associated with this method. You barely have to keep a decent set up running. Coral mortality is high though.

Using this method, you purchase wild colonies and chop them up as soon as you think they can survive the stress. Then frags get put up for sale immediately. Basically what you're doing is hacking apart a wild colony and selling off the frags.

This last method has the potential to turn the most profit. Unfortunately, at the cost of about a 50% coral mortality.

Most reefers that turely care about the animals they keep, would never resort to these tactics. However, people who see the "business" with a bottom line, wouldn't think twice.

So is it about money? or is it about the corals well being?

You can't have one without the other. You can get a middle ground, but thats about it.

[ReefSharkDudeGuy]

Wow, I feel like that idea got shot down pretty quick. Thanks for the reply though. OK, thinking optimistically, do you think there would be any way of attaining funding from organizations that are interested in wildlife conservation to at least jumpstart the business so that it starts off rockin and rollin with a healthy lot of propagated corals? There would most likely need to be something more than the idea that, by selling propagated corals, we are theoretically improving the condition of the oceans, to be given back to the organizations in return for their funding. Possibly return the funding to the organizations, whether directly or indirectly, by funding a reef project in an effort to research reef destruction or something of the sort. I'm just throwing ideas out here, so feel free to criticize, or more importantly lend me some ideas of your own.

[Eric Boerner]

GARF (www.garf.org) has been trying to throw that spin on it for years. I doubt they have any substaintial grants from it though.

You're better off being a purely scientific lab with research grants. But your research had better be for real. Again, there isn't much money in it, just fame. Ask Eric Borneman, he'll let you know all the details of grants for Coral Research.

On the other hand, you could immigrate to Austraila after you get your PhD and help out on the Great Barrier reef. There's a ton of research going on there and I'm sure you'd have no problems finding someone to back you.

But in reality, pure research never leads to profits. And for certain, you'd never be able to sell off frags in the name of research.

Your best outcome of that type of senario is that you'd caiter to the hobbiest that is a conservative, by only selling True aquacultured frags (see coral farm #1). But then, you'd always be going in the red, or barely struggling. I don't think anyone would grant you, or subsidise you because you're not taking from the wild. If that was the case, you'd see organizations like GARF doing really well.

Not trying to shoot you down like a thunderbolt, because, frankly, I have done my research for several years on the viability of starting a coral farm in a commercial lab type atmosphere. I always come to the same conclusions.

1. Broodstocking, will never pay off.
2. Domesticating, is not self sustaining.
3. Chop shops, are unethical and immoral.

I can't morally bring myself to attempt #2 and #3. Option #1 is not viable enough for me to quit a job that keeps the food on the table and my family comfortable.

Now don't get me wrong, there are "Niches" in the hobby that people seem to fall into. If you find the right niche at the right time, and do it well, you can profit in a type 1 coral farm pretty well. But you gotta know when to do it, and when to get out.

Rare ricordea colors is a prime example. Last year, ricordea fever was at an all time high. People paid upwards of $50 to $120 per polyp. Some true aquafarmers we're making a killing by propigating them. Now their a dime a dozen for all but the most pure rare colors, barely fetching $5 each. The craze is slowly dying down, and being replaced by something else.

If you can keep ahead of the trends and bail on them when they die out, you can do well. But, you're basically playing the reef stockmarket. One day it'll crash, and you'll end up writing a book about it. Of course, that'll be your next worldwind claim to success. ;)

[ReefSharkDudeGuy]

Thanks for taking the time to write this stuff Eric, I really appreciate the input. I guess I'll do a little more search for the fun of it, take a look at GARF's site and what not. If you ever decide to give that reef farm a go...I'm looking for a partner in crime;). I don't think I'll have enough financial stability to play this so-called "reef stockmarket" for a while, seeing as I'm a broke college student. Oh well, maybe I'll take up gambling and see how that goes...For now I can dream and mess around with what I've got at home. Thanks again.

Dash

[dendronepthya]

Another thing to consider is that the viability of a self sustaining coral farm is in large part a function of its size. The more space you have to grow out frags, the more likely you will have a sustainable stock. It also depends on how many different kinds of frags you will be offering. To carry a large selection and be self sustaining, you will likely need a VERY large setup. To give you an idea, Tropicorium in Romulus, MI is an established coral farm with over 50,000 gallons of water in a greenhouse. They are roughly 80% propagated stock. They still make orders for wild caught specimens for certain species. It may be something worth shooting for as a long term goal.

If you are serious about entrepreneurship, take some business classes as electives while you are in school. Business school is knocked by science types, but the information is absolutely invaluable. I would know. I have a degree in biology(minor computer science), and am about to finish my MBA. The information from the MBA program is like my left arm now. I can't imagine going through this life without it.

[sharkdude]

http://www.ctsa.org/upload/publication/CTSA_137631672857511427488.pdf

http://www.ctsa.org/upload/publication/CTSA_147631672852838521808.pdf

plenty of free sunshine, water and cheap labor will help your bottom line immensely. Not to mention the community development and reef conservation angles.....

www.ctsa.org

[arkman]

Reefsharkdudeguy – don’t give up the dream! This is a good idea and it is quite possible that in the future coral collection will be BANNED. Things like that usually make the “market� go up.

Sharkdude - great links! Nice site too!

[johnjr]

It also doesn't have to be your main source of income. If you can make an additional 10-20 thousand a year on top of another job, then do it. Just do it right the first time by doing lots of research.

Grow it, and ship it.

[Hurley675]

Hi
I am currently owning my own frag business and I am only 17, All i have is my 75 gallon and I just frag out of that tank but I also have a couple of frag tanks that hold all of my corals, The way that I make my money is that I sell my frags to all the LFS around here. I usually bring them the frags once a month. But soon I will have a on-line store that i will have open to the public. My other sytems are a 10 gallon all xenia tank (xenia are very popular around here) and a 40 gallon softie tank. I ussually sell more softies than anything else, but the SPS are starting to get very popular. I hope to be making more money after I graduate from college and get my own warehouse. Right now I am making about $900 a month on growing my own frags and selling them.

-Andrew

[MauiReefer]

I had my prop business for almost 8 years, I lease an acre of land in the Florida Keys and aquaculture Live rock too, I was fortunate enough for a friend/business owner to get me set up really cheap and I own all his equipment, its fun but patience is more of the business than money...atleast to do it with the ethical treatment of the corals...I take pride in my frags...IT is possible, you should really draw up aplan before you invest...but honestly for it I jumped into it and Im happy


Jared

[jackson6745]

The small xenia tanks are awesome!!! I had a 5 gallon xenia tank that made me $200 per month. I know its not a lot of money but it was cool to actually make some money back after spending so much! I was also selling to LFS's

[Hurley675]

I know they are really cool, and they do bring a good deal of money for me, about $300 a month.

[jman785]

MauiReefer: I'm confused, do you still have the business or no? Please contact me via private message Jared.

Thanks dude


- jared (my name is jared also)

[GACDIVER]

ReefSharkDudeGuy:

If you are intrested in the science side of it you should look into grants for aquaculture. Also check out harbor branch they are doing some crazy research there. Might be a good graduate program for you.

My roomate my freshman year and two girls on my swim team were from alaska...you guys are a different breed for sure!

http://www.hboi.edu/index_06.html


sean

[Tommyc]

Jackson,

How'd you get 200 a month out of a 5 gallon xenia tank? How many frags a month were you takiing, where'd you unload them and for how much (cash or store credit)? do tell.

Tom

[jackson6745]

I was doing about 20 frags per month at $10 per frag (cash not credit) and I sold to a few different LFS's. At the time I was very new to the hobby. My setup was a 5 gal tank with an eheim2213 and a plenum and 2 36" no's on top---------yes the light fixture was too long for he tank:)