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#26
08/15/2006, 12:56 PM
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Well first the finishing of the operation plan has taken a back seat to a very interesting topic that I would like to get some feedback on.
First though a quick update. Because of the amount of water I will be using and the fact that there are waste materials in it (darn fish poo) I will need a septic system for the GH. No prob there is already one on site just list that and hook into it right, wrong. According to the County the property never had a septic system or they lost the paperwork on the builders submission of it. So now I am waiting for an inspector to come out and verify that the septic is really there and is working (trust me I would know if it wasn't), but this is going to take atleast another week. So I have been spending the last few days trying to figure out what to do. Reading over this thread (thanx for all the contributions) I started to thing about a couple of things. The most immediate of them was the following. Whaledriver posed the question Quote:
With this in mind I am posing the following to see if anyone has any info on the validity of it. ** I am looking at whether this sort of activity (Marine Ornamental Coral/Fish Farming) can be considered a "bona fide farm" activity. I am sure that this is subject to endless interpretation, but what do we all think. I have found a small amount of evidence that what is being proposed CAN be considered marine aquaculture. I have also found substantial information stating that aquaculture is indeed agriculture. Following this train of logic agriculture is a "bona fide farm" activity, so this leads me to believe it is so. The down point is that there is no licensing from my state aquaculture board so I am a little confused. I am especially interested in how everyone in how other jurisdictions (counties, states, countries) define coral aquaculture because my county does not even mention it. Like I posted earlier it is mentioned in the NC Ag site but states no permit is needed. What I would really like is to get some info that I feel comfortable that if the inspectors come I can put something together. What I have found just recently is that Shrimp (Fresh/Salt) and Clams farms are considered farms. So does that mean if I have a couple of them I have a farm as well. Let me know what you all think |
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#27
08/15/2006, 08:35 PM
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raaden,
In FL, aquaculture is indeed agriculture. I also have a wholesale nursery operation. My county tax collector comes out to verify that we are a bona fide agriculture "business". That is a key word because they do not want a home owner to throw some plants on and get the ag exemption for taxes. When I put up my new place the only permit I had to get was to put power in. And that was only because the power company would not hook up with out the inspection. BUT, All buildings that were for residential occupation were exempt from this. Any building, structure etc did not need a permit unless you or somebody was going to use it to live in. I hope this helped some. Try checking with the county, they may have an agriculture tax rate. Most areas do have an agriculture base. Matt
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State certified Aquaculturist The future is a self sustaining hobby. |
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#28
08/15/2006, 09:40 PM
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coral farming
I have been looking at doing something of the same thing only in around Benson....because of 95 have been working and plan to continue to work with the cummunity college at Morehead aquaculture dept. about reef farming in NC.... like your ideas!!!! like i said have been trying to do something of the same, but would have a house on site....have wholesaled some also and stores will say they will do 1500 but they rarely do.... with the cost of gas these days 3.00-2.83 and maybe going up in sept...traveling is lose of income!!!
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#29
08/16/2006, 02:07 PM
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You might look at collages in you state and see if they can help or direct you through the process. This project might be a good case study for a class. You might also find a few employees by doing this also. Another option is to find someone in Florida that can show your state what to do.
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#30
08/16/2006, 03:57 PM
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Treeman,
I am not sure how this all works but it looks like the difference between NC and Fl is huge. I looked at the Aquaculture license for Fla and they state that tropical fish (and I assume corals) bred for profit are covered by the license whereas in NC it states that the license does not apply to tropicals or ornamentals. My concern is that this also means that the aquaculture "tag" also does not apply. It has been a very interesting set of research. Most recently in speaking with the DOA they think that I can certainly proceed as a farm and if the county looks into it they would have to make some sort of a determination for their purposes. Also the person I spoke with at the DOA seemed interested in my bringing this to their next board for discussion and possible inclusion, but my fear is that someone there decides they don't want this done in the state (not sure why they would say that but) then it would be certain and not interpretive. Not sure what to do about this. The plot of land I have is also pretty small for a farm 2.3 acres and I am afraid if I raise too much interest from the county they will shoot it down on size alone (I found some legal proceedings where in another county in NC they made a stipulation that plots under 5 acres could not be considered farms for county purposes). Treeman do you consider yourself a farm for Federal Tax purposes or do you go with a straight business return. WhaleDriver I am going to spend the rest of this week doing research specifically on how acting as a farm would affect my current plans. It seems that most of the affects are positive (no permits, lower taxes, less oversight, more support from the farming community) but since I haven't looked into I think I should. Your idea about the university is very interesting. NC State has a veterinary school here (pretty big one too). I may stop in there and see if there is anything that can be done through there. I know one of the girls studying there is actually doing a research paper on antibiotic peptides in Monti's so atleast there is some visibility of corals in the place. Things are definitely getting interesting |
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#31
08/24/2006, 10:22 AM
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Raaden,
Have you discovered anything more on the agraculture stuff for North Carolina? |
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#32
08/24/2006, 01:38 PM
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Quote:
I would be watchful about the farm size though. Try looking discreetly at the county level first. If the state decides that it is agriculture the counties don't have much choice but to follow. Here in Broward county they fought all of the small farms and did not want to adhere to the state laws about permiting and such. A group of small farmers got together and pushed hard enough so that when it came time for me to do my new facility they stayed waaaayyy back and left me alone. Quote:
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State certified Aquaculturist The future is a self sustaining hobby. |
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#33
08/24/2006, 04:13 PM
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One quick thing, I somehow missed putting the Startup Cost Estimate in the Financials zipfile when I was packaging it up. Apologies and those of you that asked me about it can get it here , I will also be including it in the financials zip as soon as my stinkin computer is able to upload it again, which may be tonight when I get home. Most of the prices are still valid although I do believe it may need a bit more padding as the price of lumber has gone up considerably.
Hamburglar, I have gotten, what I would consider to be, enough of a confirmation to go ahead with it. The DofA states that raising invertabrates are covered as aquaculture, and besides that I will also be raising some select algae so that would definitely be covered as a plant. I have even asked the question what if the county wants to fight me on it. The response was that I have a pretty good shot at winning, although I don't see the county doing so. I am pretty far out and none of the people around me are likely to be bothered enough to complain. I have also talked to them about what it would take to become permitted by the DofA and the guy was very surprised that I would want to do that. He suggested I take my free reign and run with it until somebody make a stink. My plan is to register another company with the county and this time it will contain the word Farm in it so that i can also fall back on that. I have learned that the tax benefits especially the accelerated depreciation and lower income tax brackets are very nice. I would suggest that if others are looking to do this sort of setup they try to qualify as well. Treeman, Agreed on the taxes, this is one of the reasons that I doubt the County would come after me. I am not a huge tax generator but they are looking for all the money they can get. The retail thing is interesting I had not thought of that (putting that one in my arsenal as well). I did some looking around at the laws themselves are pretty ambiguous and leave some room for interpretation, with one exception. NC State law has just recently enacted the No Farm Nuisance law. This basically says that no farm can be shutdown by a localized jurisdiction for being a farm. Basically you have to be negligent in some way for the County/City to want to take away your farm status. It is good to hear that others have been successful in fighting this although I do not anticipate having to go that route. I am not familiar with that return but will do some research. I have not spoken to my accountant about this but will. I was looking at the schedule F recently as well as the Section 917 changes. |
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#34
08/24/2006, 07:45 PM
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Time to buy a straw hat and some wife beaters
 Yeeeeee Haw!!!How about electricity? You might get a reduced kilowatt hour rate if you are designated as agriculture. That would be a big-time money saver if you are going to run any artificial lighting. |
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#35
08/24/2006, 08:00 PM
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The state of FLorida just decided that farmers do not have to pay taxes on electricity that is used to grow a crop.
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State certified Aquaculturist The future is a self sustaining hobby. |
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#36
08/24/2006, 08:18 PM
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Yeah, my wife was not real happy about me asking her to change her name to Farmer Jane
 Treeman, that is nice I need to find out if I can get in on that here in NC. Are they talking about a reduced rate for the electricity itself or a tax deduction for electricity bill. If it is the first then I would be only paying about .065 for electricity. |
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#37
08/25/2006, 01:21 PM
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I was just reading over you B plan and though of a few ideas.
I would get a package delivery company to do your local deliveries before you hire a delivery employee. You might find out that it is cheaper to outsource the delivery work. To stay in contact you might just spend time visiting stores on your own or talking on the phone I would also spend some money on a retail Internet web site and run it so that it doesn't interfere with your wholesale business. As an idea for a specialized product line. A rainbow of color of Zoanthids all the same size. You would be surprised how hard it is to find certain colors. I am looking for someone to sell me a 10-15 color selection as brood stock to grow out. Another idea that is kind of odd but might work out is finding a plant that can be sold to filter you water of nutrients and pollution. I was thinking of maybe a plant the state might want to use for shoreline restoration. |
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#38
08/26/2006, 05:58 PM
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Every LFS I have worked for was able to sell caulerpas and spaghetti algae in bunchs for $3-$5 per handful. These can be sold to people as food for tangs or rabbitfish. But the LFS will almost certainly be opposed (perhaps only passively) to selling them as a filtration method. The LFS business model depends on selling equipment and every owner I worked with saw plant based filtration as an undermining of that business. The plants are cheaper retail than the equipment, and once anybody figures out the can move plants to a new tank they stop buying filters and all the associated stuff. At least that is the fear of the owners. In reality habits are hard to break and most people still use their filteration equipment for years after learning that plants will "help".
A 6"+ multiple branched Halimeda can go for $10 retail even though you can buy it for far less in bulk. The size or weight doesn't matter so much as long as there are multiple branches. People see an single string of leaves as a frag, but mutliple branches are considered a plant.
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I am; therfore, I think. |
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#39
08/27/2006, 06:54 PM
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I did look into delivery services initially for the business but decided that there were more benefits to handling it within the business. The big ones are the personal touch, limiting DOA's and returns from the stores, and also the scouting of the stores. A delivery service would end up being more expensive than shipping and would require the same time in packing (this is a considerable expense) so it wouldn't really be affective to go this route.
The internet site presents a problem on a couple of fronts for me. First doing single orders is impossible for the type of operation I want to do. I would need to do hundreds of orders and all of the associated tasks (time prepping the order, packing, shipping, maintaining the site), and would be very hard to maintain the relationships with the retailers. I did put in the BP that if there was an overabundance of product I would look at selling retail but only as a last resort. I think internet sales work great for smaller operations but become huge time sinks for larger operations. I am definitely going to look at doing mixed colonies. I think this does quite a few things. You can put the same net amount of product out and get a better price for it. Plus I am hoping that I can market this and use it to create a brand that people will learn, because I think consumers will be more willing to spend if they see 2-3 things on a single purchase. Galilean has me seriously considering using plants for tank maintenance. I am not sure I am completely sold on using it for all of my tanks but I will be trying it on a couple of test tanks to see how it goes. I have to agree with him on selling it though. It is a tough sell and most stores already grow their own for sale so I am not sure there is much room for them to buy from me. The only exceptions to this I think are Red Gracilaria and possibly chaetomorpha (sp) as they are slow growers, but this will also make them hard to use as ATS media. I also agree with him on his perception of LFS's recommending the ATS model. Most stores make 70% of their money on dry goods and they are not about to give that up. |
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#40
09/01/2006, 08:31 AM
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exclusive website
I suspect you are right about internet sales for a large aquaculture operation. I've got a bunch of questions stored up for the Inland Aquatics people next time I take a trip. They use internet sales and I know they don't have much man power.
I think you may want to consider a password protected website for your LFS customers however. There is a huge plus to being able to see it before you buy it and it would not be to hard to get pictures of what is available on a weekly basis on the website if you organized it correctly. Customer loyalty would develop as well. I know it seems cheesy but everybody feels special if they get passwords. Every week the LFS will receive something from a typical supplier that was mislabeled and I think they would be a lot happier buying a known quantity (and quality) rather than something labeled "small zoo rock" or "large hammer coral". Most LFS buy sight unseen. The few that don't will insist on picking out corals themselves at your facility, but these picky customers might be happy to buy from pictures online as well because it will save them a trip. If they are already going somewhere to pick corals and fish by hand, they may not have time for a second trip to your place. But if you have documentation of the product they would be more likely to consider trying some. Pictures should show the scale; a ruler can be stuck next to the coral. Finally, there will be a positive externality that you will be forced to be more organized and can integrate this information into your record keeping. If you organize your prop system and your records correctly it will be possible to pick a particular coral online. At the end of the year whether things are going according to plan, better, or worse you will need careful documentation of what you did. Otherwise you will not be able to make an informed decision about what needs to change, where you have more profit potential, what might be a loss leader etc. I’ve seen businesses large and small continue making the same mistakes year after year because they did not have the documentation to prove exactly how much it cost them. Without proof, there is no rational for a change in pricing or operations or capital expenses. You may want to document your entire stock in this manner for internal purposes less often (maybe monthly or bi-monthly). This will allow you to learn what your growth rates really are and notice if they change.
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I am; therfore, I think. |
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#41
09/01/2006, 09:52 AM
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Quote:
That's good for those of us getting in on the ground level, makes it somewhat easier to get started. But I see it as bad for the long term as no guidelines can lead to some shady characters making all of us look bad. -Sonja trying to catch up on RC |
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#42
09/01/2006, 09:53 AM
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Quote:
-Sonja |
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#43
09/01/2006, 12:10 PM
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Galilean reminds me of a really good point that was a bit misleading in my business plan. The SBA guy that I was working with suggested very strongly that I write the business plan to focus on one outlet, and not make it appear that I was trying to spread my sales too thin. His point was that (while I was still looking for investors/loans) that by trying too many outlets I would spread myselft too thin. That is one of the cardinal rules of startups... Owners always think they can do more than they are capable of. From that we had discussions on which would be the best outlet to focus on. I decided that selling direct to retailers (LFS) had the best upside with the smallest downside. That is what the plan is based on, and for the most part that is the position that I still hold... but I have done some research on internet/shipping sales, and large scale sales are possible if the right conditions exist. Markup has to be much more ~80% more than what I have for wholesale, and to make it worth it you have to do enough volume that you can keep a person employed with shipping and fulfillment ~ 3-400 orders a month. These numbers will basically give you a break even on the person and the bottom line is that you get the extra sales. In a startup situation this was a bit more work than it seemed to be worth.
The big issue is that it is hard to quantify what you can sell online. I trolled ebay for a while and tried to contact some of the larger online retailers to find out what they were selling and at what price. On ebay it seemed to fluctuate so much I wasn't comfortable using the date, and I got no response from most of the people I tried to contact. All told I figured it was much better to just go with what I could put a finger on and it happened to be the retail/LFS. I am not opposed to selling online and even foresee doing it at some point (with a few stipulations listed later) but that would be once I saturate the local market and only be if I were still looking to expand at that point. Even then I would probably have to put a few limits on how and who I sell to so that I can keep my LFS customers. The LFS owners I talked to did not like the idea of my selling the same things to them as I would online. The minimum set of guideline I think I could get away with are to: 1.not sell to people located in the markets that I do LFS sales in. I would probably do this by not shipping to certain zip codes 2.Make sure the LFS customers have first choice of all stock, and then sell the leftovers. I didn't get the idea that my pricing would be an issue since I am not directly competing. On the point Galilean was actually bringing up: I glossed over this in the busines plan and I think there is only a couple of lines about it, but your point is absolutely spot on. I will have a virtual storefront for each LFS I deal with where they can go and see the stock, as well as see what their specific pricing is. From this they can also leave information for me, and procure and schedule their deliveries as well. The last part will be implemented at the point when I start looking for other people to do the deliveries. This way I don't have to worry about the delivery person exchaning money or keeping track of ordering. I am planning on even taking it a couple of steps further. Becuase I should be able to foresee production within a pretty good margin I am planning on listing upcoming 'crops'. In this section you can see what will be on offer in the next couple of weeks. This was something that I took from the organic growers community. They have pretty much the same situation; a year round crop production but with large gaps between yeilds. What they do is list what crops will be ripe within the next couple of weeks so that stores can prepare display area for them as well a preorder. I hadn't really considered the fact that I could use this information for adjusting operations and financials though. Not sure how I missed that but it would be a good thing to provide a concrete estimate of current procedures and use it to tweak thing to increase yeild. Sonja, Good to have you back with us. If you look back over this thread and the large scale prop thread you will see that I did finally get information by spending a fair amount of time in their offices. I agree with your comment about lack of procedures and quality... but I would say that those that produce quality will always have a market looking for their products. Others will come and go once people realize what they are getting. |
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#44
10/08/2006, 10:25 PM
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Any updates?
__________________
60 Gallon Clear-For-Life 390w PC lighting Kole Tang Yellow Tang Maroon Clownfish Bi-Color Blenny Firefish 10 Turbo Snails 20 Margarita Snails 10 Hermit Crabs Blue Green Mushrooms Assorted zoanthids Colt Coral Favites spp. |
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#45
10/09/2006, 08:23 AM
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No good updates to speak of. With all of the delays in getting things setup logistically and some delays in equipment I decided it was best to put off construction of the GH until late winter/early spring. I wouldn't have enough livestock in to justify heating the GH for the whole winter (heating would cost ~$2500). I am looking to start construction in late Feb, and I will hope to have stock in and working by late March/early April. This will give me the cooler part of the spring to get setup and get some water volume in there to help with the heating/cooling for the worst of the year.
The good part is that I can use the winter to try out a few things I have been looking at (ATS, reworking the layout, and some new vendors/customers), and to gather up some choice broodstock and get it growing a while. If I were to try and put a number on what the delay is going to cost me I would say it puts me only about 2 months behind where I would expect to be in late March (if all goes well from here on). |
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#46
10/09/2006, 04:08 PM
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Hey Raaden I should have thought of this before,
contact Prof. Doug Sanders if he is still at North Carolina U., they did have an aquaculture dept, he should be able to give you straight info on the states regs on aquaculture. They have done some fascinating work there on recyling aquaculture/aquaponic systems. He isNOT a BS artist. The cooperative extension office can get you an office and phone number for him. He is worth checking out. On some things NC is right up there in the space station heading for Mars, and on other things they havent heard the 'war between the states' is over. But on food fish aquaponics they are doing some real good work. For that they have the regs. I personally am a believer in ATS, there is plenty of info out there, starting with Adey's book. What part of NC are you in ? I lived for a year or so near Chapel Hill, but if I was to do it again I think Hickory would get my attention, except for lack of an airport its my pick.
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jake |
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#47
10/16/2006, 11:09 AM
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I must say I think I have been converted on the ATS subject. What started as an idea of something to use on test system to see how viable sexual repro would be has now become what I think will be my main setup. Between Jake and Galilean double teaming me
 I have decided to redesign the layout of the greenhouse to incorporate some sort of plant scrubbing. I still think I am leaning more toward plants that have some saleable value to a true ATS but for large scale economic setups I think this is definitely the way to go. If some new numbers pan out, It looks like there is a significant advantage to this even in the first year with a 20% higher net from sales (plants can be sold while the corals are multiplying), equipment, and operating costs. Even long term the numbers are 5-15% better as long as I can keep the systems stable. I also think that long term if sexual repro is viable then I can look at raising some hybrids which is a whole other story. Agreed on Adeys book it is definitely something that should be read for those looking into aquaculture. It is so much more than just ATS talk. I haven't looked at UNC for their aquaculture info yet. I spent most of my time at the NC State Vet College and the AE office, but I will definitely look up Prof Sanders. My problem is that once I tell them what it is I want to do I can tell their "mood" changes and I become a quack to them. I think part of it is that I don't have anything concrete to show them yet, but once I do I think I might get to join "the club". I am just north of Raleigh so Chapel Hill is not far at all. I thought about Asheboro a little bit, but Raleigh seemed like a much better place with 5 mid sized markets within 3 hrs drive for doing distributions, and land prices are still pretty decent if you get past the Raleigh boundary. |
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#48
10/16/2006, 02:44 PM
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Thats not a bad area at all. I never liked driving through part of Raleigh as I wanted to hold my breath, huge amount of black lung disease there, not from coal mines but the main industry.
The scrubbing will work best if some at least can be reverse cycle with the corals lighting. I think Doug Sanders will give you a good reception, he knows the regs there having gone through it many times, just tell him you're doing an aquaculture op with an aquaponic part and you want to know more about the regs, I first got acquainted with him while in Israel so just tell him an Israeli had reccommended him. :-) He sent me a lot of the stuff developed with McMurtry one of his grad students. Part of their greenhouse op had submerged tanks to hold the heat during the winter. From them water was drawn periodically to growing beds of veggies, mostly tomatoes and cukes. Tell him you'd like to replicate it for growing corals and marine plants. That would hook any genuine researcher. But you're getting hung up on what the real NC regs are on aquaculture. One thing on that, your product not being for human food you are out of some of the worst parts of the regs.
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jake |
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#49
10/16/2006, 11:52 PM
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For physical security, besides visible cameras, wouldn't some type of fencing provide enough to deter frag snatchers? Maybe with some friendly wire atop. (Of course with a relative distance between the GH and the fence in case of weather, structural problems, etc) Or even privacy fencing.
But, with predicted grow rate in the company; is it worth it to have such high security if you are going to move to a new facility within a short period of time. I don't think the company would have much exposure in that regards. I'm probably wrong, would like answers more then anything. Josh
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Bigger is always Better!! |
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#50
10/17/2006, 12:49 AM
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I used to live near a large greenhouse facility that was in a rural location. I know that they didn't even lock the doors to the green houses not even at night. They had over a dozen houses. Now they didn't sell corals, but all flowers, plants, and seasonal growths. I think that there would be more of a demand for higher security in that sort of business than in a coral farmer biz. I know our stock and supplies are costly, but in rural locations one can skimp a bit on security because of the lack of foes.
thanks, Rick
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Thanks, Rick Absorbing information through OSMOSIS. President of NCPARS |
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