Opening A Fish Store

[calcofish]

Hi. I am contemplating openig my own fish store. I was hoping there was someone who has owned or is currently owning a fish store that could give me some advice.The store Im thinking of opening is going to be mainly saltwater fish, live rock, and invertabates with a small selection of freshwater fish. I would alson be carrying supplies n such. Could anyone tell me their experiences of owning a pet fish store. Was it profitable or a waste of money? How much was needed to open? Any information would be helpful. My target population is 44,000 people. Do you think it will work?

[redpaulhus]

some great reading:
http://www.birdsill.com/otc/archives/000041.html

[lfjewett]

Things to consider.

A. Median family income. Saltwater fishtanks ain't cheap. Your less likely to find tanks in areas where the population is working to make ends meat.

B. Competition, I'm no expert but lets say 1% of the population is interested in saltwater fishtanks. This is a customer base of about 440 people. Are all 440 people your customers? Do you have to share them with other stores?

C. Operating costs are going to be HIGH. Lights, pumps, livestock death are going to lead to high monthly upkeep. Start with Rent + Insurance + Electric bill + disposables ( food/salt/etc ) and figure out how much you need to make each month to pay the bills.

My guess is unless an abnormally high % of people in your area like saltwater OR you run a service business in addition that maintains large tanks for people your not going to be able to afford it.

[DHyslop]

My local LFS said they spent well over $100,000 just in dry inventory before opening the store: and this is a real small place. Starting a fish shop sounds like its most often a losing proposition. Starting a tank maintenance company, however, requires very little overhead to get started and you can really clean up.

There's a huge thread about just this in Antho...err, the "everything salty" forum.

Dan

[dystopian]

You could always consider opening an e-commerce store. ^_^

[dhnguyen]

Here's a thought. You should check into buying an existing store. I know of one guy who did and is seemingly successful.


Buying an exiting store takes less work and initial capital to start I think. A lot of times, you'll be getting a deal on the existing inventory as well.

You could always start out with an online store like dystopian mentioned and then depending the success of that gradually transition into a brick and mortar model.

I am curious about this as well as I too am considering having my own fish store some day.


D.

[calcofish]

Thanks everyone for Replying. I guess i shold have given a little more details on my wishes to open a shop.First good thing is the place I am planning on opening is 1200 sq ft. and the rent is everything included for $390 a month.Yeah i know the cost of living is dirt cheap where I live. And Secondly as far as competition in my area there is nil. There is a hardware store that sell a very limited supply of freshwater fish and no saltwater.Like I said their is 44500 people in my area and like Redpaulhus said say 1% are interested thats 445 people. Since their is no compettion I would assume I would get at least that many people a month threw my doors. Say i make 20 a person profit thats $8900 a month $106,800 a year. do you think with that info that my sore will work. My budget to open my dream fish store is 10,000. Will that suffice? Any help and opinions will be apprieciated

[dhnguyen]

Holy crap Batman $390/mo. for a 1200 sq. ft. is a deal

I would not discount the freshwater fish though. A couple of store owners I know have stated to me that their best sellers AND bread-n-butter so to speak are still and by far the freshwater fishes and stuff. Most people can't afford or are too afraid to jump into the salt side and it takes time for them to gradually ease into it. I know I was


D.

[areze]

I think 1% of the population spending 20$ a month is a high high estimate.

plus thats gotta be 20$ income. expenses, startup, upkeep, loss, ect. all factors.

and the internet is and always will be your number 1 competitor.

and freshwater fish will be your bread and butter.

honestly it sounds like your taking your hobby and trying to make it profitable. dont let your personal opinions cloud your judgement and force a business plan that is overly optomistic.

[hyperfocal]

Work on a Business Plan. Don't even think of starting a business without one.

[DHyslop]

I second the business plan. Back-of-the-envelope is fine for now, but you need to be able to make a professional-quality short-term budget.

Right now I'm considering starting a small business (not aquarium related) in about two years, and I'll need all that time just to prepare! I've been reading a lot of advice similar to that given above. A good business plan is what is going to make or break your company in the first year. Pick up a "how to start a business" book and read about some of the basic details.

$10k does seem awfully meagher. I would think your startup paperwork fees (including lawyer/accountant) would suck up a lot of that. The pet shop I mentioned above is smaller than the space you're thinking about, but like I said, they spent over $100k just on inventory.

Dan

[xrunner1234]

Where do you get the 1% from? Do you have data to support this or is it just a guess? Out of the 300 employees at the company I work at I'm the only one with a fish tank.

[Reefdaddy1]

I own and E store and head foundation to save reefs around the world, Either way you go online or LFS, your gonna need quite few things. LIke drop shipping and such, Its an expense and a pain in the beggining, Alot of people drop out quickly, If you have any questions PM me. I can fill you in.

[calcofish]

i just estimated what 1 percent would be as an example.I have also calculated .25 of 44500 and that comes out to about 1300.00 a month I dont think that saying a 111 people out of 44500 is that extreme. do you? Yes 1 percent is rather high though

[areze]

well for what its worth, this website has 100,000 members. that on an international scale; not claiming this as a factual count of all the reef owners in the whole world. but just saying, 100,000 here, and that surely includes many who dont have a reef at all, just signed up to see what its about. but if you consider this as a rough estimate with offsetting differences for an american count; thats more like .03% rather than 1%. making it 13 people...

ok, with that said i want to be completely clear that I believe the true number to lie somewhere in the middle; but thats a big middle.

other big problem your looking at this as the store being your only expense.

number 1, and its a big one, is your time. I dont know who you are or what you do, but we can assume your time is worth atleast 30,000 a year. so theres expense number 1. and this store will surely require longer hours and weekends that a typical 30k/year job wouldnt.

banking costs, always have the credit card companies good for a nice 2% off the top.

of course cost of goods sold. I have no clue what the typical margin is on fish.

supplies, we all know fish tanks are expensive. lot of salt. electricity, water, filters, ect.

losses, your dealing with live goods. and they are coming to you stressed, and you'll be expected to gaurentee that they then live through the another stressful move. more costs. a stroll through even the nicest fish store and unless they never clean their tank(I doubt it) they must lose a couple dozen fish every day.

now Ive just laid out a bunch of reasons to not do it. IMO you have all the reasons TO do it already. what you need to do is disprove my reasons with reasonably correct budgeted forecasts. maybe go to a neighbooring town or the next closest fish store, and just sit there and see how many people come in each day.

around here there are a few MAJOR stores, petland(most of its business is in mammals and fw, Id be suprised if the SW breaks even) then theres a hard core SW store that seems to do great. but that is serving basicly all of metro atlanta, a few million people.

[eshook]

I don't have the sources to the information I am about to provide but I have read up on this subject as I just like to read things about my hobbies and basically some suggestions that stuck out in mind head as a smart thing to do:

#1 Start at home
This removes rent, heat, water, etc. I know your rent is cheap but still when starting a business money is money. Start by selling frags and frequently purchased fish (dare I say nemo ...) Build a small customer base from local reefers and other reefers in the area. This will also allow you to get #1 a feel for the market #2 some "word of mouth advertising" before going brick and mortar (B&M). When doing this make sure to stay true to your word and above *all* else make your customers happy. Because they will be purchasing from you when you go B&M By starting at home this will provide a way to start slowly and see if this is truly what you want to do. Build/buy a few grow-out tanks and some tanks to store fish. When you go B&M this will be that much less for initial purchase.

#2 Service/Maintenance
Do service/maintenance work on saltwater aquariums. This will provide steady income and can be done in parallel with home and B&M. As someone stated above this requires almost nothing in terms of overhead (other than salt, additives, food, etc) but that will be almost immediately offset by the customers. Plus you could use what you have for your tank already. I know this is not the fun part but by doing this you can get the word out about your B&M store and word of mouth advertising is everything. You could also tank sit while local reefers go on vacation. That will build trust in the local community and hopefully another future customer ;o)

#3 Support local reefers
Like I said these people will be your customer base. If you slide them an extra frag here and hold some of their cuttings temporarily it will only show what a nice guy you are. Go to the local events and make it *well* and I do mean *WELL* known that you will be going B&M and will be happy to service to their needs.

#4 Make a business plan
If you start at home this will allow you to make a better business plan because you will already have a start. Hopefully this will increase your accuracy and improve your chances for success. This is a tedious task but well worth the time and effort.

#5 Document *everything*. Every cost, transaction, profit, customer, etc. If you don't it will be hard to convince the govn't that you don't just want tax cuts on an expensive hobby. I believe many people get screwed on this because the govn't didn't think they were a business.

#6 Lawyer/Accountant
Everyone hates them but businesses need them. They will provide necessary knowledge about local laws and taxes that you must be aware of. What are the zoning laws? Are there any chemical restrictions in that area? How much will taxes cost? the list goes on but all questions must be addressed *disclaimer, some of the questions were very fictional and only used to stress the point*

#7 Time
Find a quiet room where you will not be disturbed for one hour. Set a timer and sit and think to yourself about your business plan and how likely this business will succeed. When the timer goes off ask yourself how much that hour was worth to you?

After you have answered the question multiply that number by 55. That is how much money you will need to make in a week to make this business worth your time. Starting a business requires a *lot* of time. Time away from family, friends, kids, pets ... Is the time *really* worth it?

Like everyone here I don't mean to discourage you but I believe looking at all angles will help you become more successful if you decide to explore this endeavor. I have asked myself that last question many times in my life and ultimately I would like to own my own business, maybe even an fish store, but I won't start my own business until I can answer yes to that question. Although it is *very* dependent on your current job. If you hate your life because of your job and think this would improve quality of life then answer the rest of the questions and go for it! Just remember that its a risk and you might fail. If you're willing to take it and want any more detailed information send me a PM and I will elaborate or try to dig up some links of what I described.

My $0.01 (after taxes ;o)
eshook

[Opcn]

Where are you? I doubt anyone will swoop in and stealthe market, but knowing what area you are looking at and the economic situation would help. Also next quarter promises to be a pain in the neck for starting up a fish shop, the comodities market is up so durrable goods sales are down, it seems that the only people making money are companies like catapiler big business is finally starting to spend a little but the high comodities prices have us in a bind, However if yourlooking at an area that stands to make money with exports things are looking up because a weak US dollar (and you know its weak) will increse exports and more money will pour into those areas, encouraging employees to losen thier belts so to speak and spend a little money on durable goods, like fishtanks.

[boxfishpooalot]

With business you should think first of: what do people really need in life that I can make money from?

Answer: food and shelter and warmth.


Now ask yourself: Which business's are most succefull/prominent?

Answer: grocery stores(food), fast food(food), hotels(shelter), real-estate(shelter), clothing copanys(warmth),ect.



Now ask yourself: How can I combine the hobby I love into somthing wich has at least one of those 3 most important things involved, that will make me decent money, with minimall failer?


Answer: Well, for me I plan on having a resturaunt one day with an aquarium surrounding your eating area. As you eat you get to watch the fish swim by you! Thats how you combine what you love with what makes money!

People always need shelter, food and warmth. If your starving, will you eat your fish?

[dtaranath]

i also agree with nguyen. don't forget about also selling freshwater. If all you keep are saltwater fish, you'll never get the freshwater people into your store so you can convert them. I had been doing freshwater for years, and I always looked at the saltwater fish in the store, dreaming for the day.

Then one day I happened to be in the store to buy some fancy goldfish. I walked out of the store with a bag of salt, live sand, and a saltwater test kit. Couple days later I went back and got some damsels.

Now I'm a reefaholic.

someone please help me.

[saycheessee]

Ok... here's my opinion....

I personally owned a pet shop in the past.... (key word) in the past. I loved it and did make money on it. The area that I am in only has a few pet stores around... so I had that part licked... But the problem you have with Freshwater is that Wally World (no pun intended) is a BIG Competition that you have. They can sell food and equipment lower than what you can buy it for unless you want to buy a large quanity of them. (which you still can't hardly compete with them) 2ndly... Time.... You can either have fish delivered to your door.. at an extra cost... or you can have (if you are lucky to have an airport locally) your fish delivered to the airport and pick it up yourself at a discounted price... BUTTT... then you have the layovers of the livestock delayed or they didn't make the plane or ..... they just didn't get put on the plane they were suppose to and then you are sitting at the airport for 8 hours waiting on fish... then when you get them to the store... you feel like you have to GET THEM OUT right then because they have been in those bags for HOW MANY HOURS?? OMG.. you freak and you end up sleeping in the floor on cots or on blankets trying to wait on them to acclimate and then the next morning (which it is almost by this time) you have to find someone to work because you spent all your time at the store trying to get livestock out and didn't' get hardly any sleep (those floors get hard) THENNNNN You hire someone to work and the cost of having employees eats your profits to no end. Workmen comp, ins, utilities. My opinion.... Try the Ecommerce. You may not have the volume as a storefront but time wise... you can at least sleep, spend time with your family and have a life.

There's a lot to a storefront pet store (I had more than just fish though... I had fish, dogs, reptiles etc) and a lot to dedicate yourself to cause Good Help is hard to find.

Think really hard!

[raskal311]

Consider freshwater also, they are cheap but you move alot more fish and drygoods with freshwater then you do with salt.

[redpaulhus]

I posted the link above because it focuses ALOT on the importance of the business plan, etc etc etc.

If you haven't done so yet, read Birdsill's columns - he's been there and done that, and has alot of great insight. It makes a great "LFS for Dummies" (or at least the first chapter).

Plan on a fair amount of overhead in drygoods - For example, even if you specialize in SW/reef, you'll want to carry a line (or more) of "classical" hang-on filters (for FW customers, or Fish-only customers, etc) --- Whisper, Aquaclear, Penguin, etc. You're going to want to have 4-6 of each model on hand, along with cartridges, refills, medications, airpumps (etc), nets, food (lots of foods to choose from now), lighting, etc.

If you add in good quality skimmers (euroreefs etc, not seaclowns) , high end lighting (MH ? PC? T5 ?), sumps, calcium reactors, etc - you just easily tripled your dry goods inventory cost, maybe more.

Then there's the livestock systems - are you prepared to design and build a system yourself ? Or are you going to be using "off the shelf" units like the Marineland MARS units ? Or simple individual tanks with UG filters ? Theres a cost associated with each, and that cost is a blend of initial time (pre-open), install time, purchase $, operating $, and maint time. Some will cost you more in one area, some will cost you more in others.

15 years ago the store I worked for dropped over $40,000 on a 48ft unit of livestock tanks (3 level rack, plumbed into huge wet/drys with UV etc, all acrylic) - I don't know what a comparable system would cost today.

What clientele are you looking for ? Is this a fairly affluent area or more blue-collar ?
(I just saw a good local store go under after about a year, and I'm convinced they didn't take their location and customer base into consideration -- they decorated the fishroom in teal with brass, very high-class look, but pricey. They were charging about 1.5-2 times what the chain stores were charging (for everything) - and they were in a fairly low income area. There just wasn't a demand for $8 odessa barbs and $100 bigeye squirrelfish
I think if they had focused on lower cost fish and spent less on decor they could have found a niche and then brought in the higher end items once they had a stable customer base paying the lease )

I was a store mgr for a LFS for years (fish dept mgr before that) -
generally we barely broke even on livestock (but we didn't mark up very highly) - mostly the livestock got people in and out the door, and they had to walk past the rest of the store to get to the fish (lots of impulse buys on high margin items).
That was before the internet (early 90's) took off, and before walmart became the number one seller of tropical fish in the usa. Now the margin on supplies is pretty meager (at least around here) so its a balancing act.

If I hit the lottery tommorow I wouldn't open a LFS. I might start breeding FW fish and culturing corals semi-commercially, and maybe selling drygoods online. If I could build those up enough, I might setup a small boutique-y shop in a high-income area.

[toastman]

OK, my two cents on this, I owned a full line petshop, that was around 3000 squarefeet, we had somewhere around (20)20highs, (10)29s,(4)55s, (2)75, all for saltwater, two central systems one for the fish, one for the inverts, and had about 4 times that for freshwater, various show tanks etc...like I said we were full line, dogs/cats/small animals/ grooming/ fish/inverts/salt/reptiles/birds/and large birds. We grossed around 500,000.00 a year in sales, and owned our own building after a move 3 years after openning, that was when we started to make a decent profit, after we bought our building. Store was open 7 years from 91-98, so its been closed for a while, and the internet has come on full steam. I closed the store after trying to sell it, and not getting any decent offers after 1.5 years, we carried about 85k in wholesale stock, so we liquified and made a good chunk of money.

Now my input, if your spouse has another form of income or you do, than by all means jump in and give it heck, there are not enough little guys out there. Now if you need to make money at it right away, have no nestegg etc....dont do it, its a tough tough tough business.... long hours..... for little money. You could safely run the store yourself working 9am-10pm every day, Monday through Saturday, and take an easy day on Sunday say 12-6pm, remember it will take you at least 1/2hr to open and close, so add up the hours and you work 84 hours a week. I took around 40k a year total out of the business for my family and myself that was it. So what I am saying is, dont go into business thinking you are going to get rich, its a labor of love, but you can live on what you make, but if you worked 84 hrs a week at say Mcdonalds you would make much more than what you would in your own Petshop, and you would have free acne to boot!

I closed up my shop, gave the grooming shop to the groomer, and rented the building to the groomer and a toy shop, now I make more on rent than I did running the store! I still miss it, and I took me 6 years before I ever stepped foot back into a pet shop. Its an awesome business to be in, but its scary as hell, I ate alot of Ramen Noodle Soup, and Peanut butter and Jelly sammiches, but always liked what I did. Anyway thats my two cents, btw the name of my shop was Amazon Pets, just imagine if I had registered it on the net back when I openned up, I bet I would have been able to sell that name for a chunk to Amazon....oh well..... good luck...

P.S. 390 a month? Does it come with a building? My rent was about 2,800.00 amonth....fyi

[hyperfocal]

Like most hobbyists, I've often thought about opening my own store. It doesn't matter what hobby you have and love, it seems that eventually you'll start to fantasize about getting out from underneath The Man's (tm) thumb and making a go on your own

I've just recently returned to the aquarium hobby after a very long absence. When I was active back in the 1980s, the best local fish stores had a fantastic selection of hardware, dry goods and livestock. You'd see the full line of Hagen, Marineland, Eheim, Magnum, etc on the shelves. If you saw it in TFH, you could run down to the store and buy it that same afternoon.

The same thing was true with dry goods -- all the different vendor's flake, pellet and frozen foods were stocked. There were multiple versions of the regular test kits available, and racks of lighting.

Of course, there was livestock too -- though not as varied or as healthy as what I see now. The advances in reefkeeping in particular are amazing.

That all being the case, you can imagine my amazement as I started visiting local fish stores last autumn. I'd visit store after store after store, and while each one was different there was one startling similarity -- none of them had a decent selection of hardware and dry goods. Sure, some were better than others but none were even close to a lightly stocked store from the old days. Internet retailers are gutting the LFS like, well, a fish.

I just ordered an Eheim 1250 from Marine Depot for about $60. Locally, I can't find it or the equivalent Mag pump at all... the crappy Rio that pumps the same volume cost *more* locally. I certainly understand the business realities that force LFS prices to exceed online/mail-order, my point is that I don't even have the *opportunity* to buy the higher margin goods I want locally.

LFS carry less hardware and dry goods because people are buying them at a significant savings online. Fine for the customer, but very bad news for the LFS since the bulk of their profit came from these high margin items.

Looking to the future, I think the outlook for the LFS is even more grim. I suspect that fewer and fewer fish are going to be available from the wild. The world's reefs are in trouble, and fish harvesting *will* continue to dwindle over time. This fact, combined with the increased success with online livestock orders, will put an unbearable squeeze on the friendly neighborhood fish store. Even now, an increasing number of hobbyists are getting their livestock online. It'll just get worse as the online retailers tap into livestock farms that will provide us with the bulk of our animals.

So, low sales of high margin goods + reduced sales of livestock + increased competition from lower overhead online retailers = Ouch.

Sorry this is so negative, it just seems to me that getting into the LFS business right now is a terrible idea. Those suggestions about backyard coral farming and aquarium maintenance look like much better ideas.