LFS OWNERS read this (and respond)

[stdreb27]

So I'm writing a business plan for the LFS I'm wanting to open within the next two years. I'm currently living in the houston area, but have family ties in houston, and the DFW area. So I've visited most of them in both locations. And most LFS stores that i've visited are stuggling, or charge way to much and are stuggling. The only ones I've seen that are not, are bigger and have fish quality problems. There is one store that i've seen that isn't, TranqualScapes, in arlington, (I haven't been since they opened True Perc) but the seem to make their money in custom work and the LFS is more of a showroom and a supply place for their clients.
What I was thinking was a horizontal company, with the LFS as the face of the company, while I spread into the construction of tanks and installation custom installs in a business or high end homes. Maybe landscaping for koi ponds selling the plants too ect.
I'm really good at retailing, but I don't think that there is enough money in just a store front.
What I'd really like to do, is pitch the eco-friendly aquarist. And aquiculture as much of it as I can and distribute to other lfs what I can't sell in house. Get most if not all fish through that association that certifies that the fish are caught in an eco-friendly manner frag tanks ect.
Then I'd love to start giving workshops get speakers in, lecture on breeding, husbandry, fragging ect. Start charging a few bucks a head, then getting some sponsorship from venders and local restarants. turn it into a place where the reef club can meet. (Free Advertising) And host frag swaps ect.

Please give me some Ideas to include, experiences ect.
Ruben

[Aliie]

Oooo, this isn't going to be easy is it?

[BrianD]

The "and if you want to invest" has put this thread on the edge. Be careful you don't bump it off the cliff into closureland.

[stdreb27]

Originally posted by BrianD
The "and if you want to invest" has put this thread on the edge. Be careful you don't bump it off the cliff into closureland.

As a note, that was a joke. ( I took it out) I'm just want some ideas from people far enough away that they don't see me as competition. hehe

[Scuba_Dave]

ummmm...you think LFS owners hang out in the Lounge??

[stdreb27]

Originally posted by Scuba_Dave
ummmm...you think LFS owners hang out in the Lounge??

Probably not, but it probably belongs here.

[BrianD]

The best way to be successful is to emulate those who are successful and improve on it.

[Cuby2k]

Do you want in for the money or for the love?

I would hope that I don't need to finish this thought.

[MandM]

Google the MARSH reef club in the Houston area. They will have lots of info for you. You may also be able to talk to John who owns YourReef here in the Sacramento area. He has something like the kind of store you are describing. It's nice when a store owner loves the hobby.

[stdreb27]

Originally posted by BrianD
The best way to be successful is to emulate those who are successful and improve on it.

Hence the question.

[stdreb27]

Originally posted by Cuby2k
Do you want in for the money or for the love?

I would hope that I don't need to finish this thought.

Hopefully both. I think you figure out what you love and then figure out a way to make money.

[stdreb27]

Originally posted by MandM
Google the MARSH reef club in the Houston area. They will have lots of info for you. You may also be able to talk to John who owns YourReef here in the Sacramento area. He has something like the kind of store you are describing. It's nice when a store owner loves the hobby.

Do you really polish turds?
I just moved into houston, i'd been living about 80 miles north of town in college. They really don't have meeting till January.
Will you give john a link to this thread?

[coralnut99]

There's a lfs near where I work that does most of what you're contemplating. The LFS is basically a staging area for livestock that go into maintenance accounts. What that's done is basically alienate the walk-in clientelle who see livestock come in one day, and the store barren two days later when they come back for a second look. The guys working the LFS get really tired of catering the maintenance guys' needs. The bookeeping is so basic they can't understand why the store runs in the red. I can go on and on, but I think it's VERY difficult to be successful in both areas.

[stdreb27]

Originally posted by coralnut99
There's a lfs near where I work that does most of what you're contemplating. The LFS is basically a staging area for livestock that go into maintenance accounts. What that's done is basically alienate the walk-in clientelle who see livestock come in one day, and the store barren two days later when they come back for a second look. The guys working the LFS get really tired of catering the maintenance guys' needs. The bookeeping is so basic they can't understand why the store runs in the red. I can go on and on, but I think it's VERY difficult to be successful in both areas.

Why do they run in the red? Is it because they need both to turn the profit? What does the basic book keeping have to do with it?

[coralnut99]

The store "runs in the red" because they do little more than bring in mostly bread and butter coral and fish to supply maint. accounts. The bookeeping isn't much more than a checkbook since they make no distinction of what comes into the store for resale, and what goes out to feed the coral death-pits they call maintenance accounts. So coral and fish come into the store, but when they move them out, the store doesn't see a sale, just a check written to cover the cost of the coral. They are located in a very well established, high rent district of north central NJ. They should be able to do way more than break even with walk-in business alone. But the owner spends 95% of his time and energy on the maint. side of the business, and the knowlegeable walk-in customers have largely abandoned the store because of the run of the mill livestock and the fact that it is stocked so sporadically based on the needs of the maint. business. I go there at least twice a week so that I don't "blink" and miss the lievstock. I've stuck with them mostly because I sense the frustration of the guys that manage the store and they work with me in giving store credit for my fags and grow-outs. I'm one of the very few left that is patient enough to wait for the few times a month that the owner turns them loose to buy quality livestock. This business model really needs a two-headed management team with a proper perspective on where the main busness focus will rest, and what it will take to keep both going so one doesn't drag the other down. In short, it's not a one-man operation you're considering.

[stdreb27]

Originally posted by coralnut99
The store "runs in the red" because they do little more than bring in mostly bread and butter coral and fish to supply maint. accounts. The bookeeping isn't much more than a checkbook since they make no distinction of what comes into the store for resale, and what goes out to feed the coral death-pits they call maintenance accounts. So coral and fish come into the store, but when they move them out, the store doesn't see a sale, just a check written to cover the cost of the coral. They are located in a very well established, high rent district of north central NJ. They should be able to do way more than break even with walk-in business alone. But the owner spends 95% of his time and energy on the maint. side of the business, and the knowlegeable walk-in customers have largely abandoned the store because of the run of the mill livestock and the fact that it is stocked so sporadically based on the needs of the maint. business. I go there at least twice a week so that I don't "blink" and miss the lievstock. I've stuck with them mostly because I sense the frustration of the guys that manage the store and they work with me in giving store credit for my fags and grow-outs. I'm one of the very few left that is patient enough to wait for the few times a month that the owner turns them loose to buy quality livestock. This business model really needs a two-headed management team with a proper perspective on where the main busness focus will rest, and what it will take to keep both going so one doesn't drag the other down. In short, it's not a one-man operation you're considering.

So basically he is selling his stuff at cost to his service customers. And not keeping his store front stocked. So he doesn't have the foot traffic that he need since people are now used to seeing empty tanks.
Does he just not have the room to order enough for both the walk in and service guys? Or is he just not smart enough to order enough?
Why does he not charge the service customers a mark up on the livestock?

[coralnut99]

What the markup to the maint. accounts is is open to question. I've seen them methodically list what's being boxed for maint. account service, and I've seen on equal number of occasions simply ransack the tanks for whatever softies and tough lps they had in the store. It appears obvious they don't do any cost allocation between the the store and maint. accounts; neither sophisticated or basic in nature. The severe swings in stocking the tanks has basically driven most knowledgeable customers elsewhere. Also since the maint. business apparently employs full-time staff, the store sees the worst of the "lean cash times" if the bigger maint. accounts are slow paying. I know several livestock suppliers have cut them off.

[stdreb27]

Originally posted by coralnut99
What the markup to the maint. accounts is is open to question. I've seen them methodically list what's being boxed for maint. account service, and I've seen on equal number of occasions simply ransack the tanks for whatever softies and tough lps they had in the store. It appears obvious they don't do any cost allocation between the the store and maint. accounts; neither sophisticated or basic in nature. The severe swings in stocking the tanks has basically driven most knowledgeable customers elsewhere. Also since the maint. business apparently employs full-time staff, the store sees the worst of the "lean cash times" if the bigger maint. accounts are slow paying. I know several livestock suppliers have cut them off.

They need to have a "normal Quanity on Hand" for their store, and then order stuff in over that for their service side.
I think this boils down to, they need better a better service side of their business, if they are going through livestock in the "Death Tanks" I think the problem would be solved by addressing the poor maintenance of their tanks. Fish don't just up and die.

I don't really see a problem sharing inventory, so long as your not costantly having to replace fish that died, on your watch. Even if it is, It isn't that hard to differentiate between your service and retail side of your business. (I did it for a while at Orielly Auto) All you really have to do is make one "department" buy the product from the other, and include enough of a markup where it helps with the fixed cost of running all those tanks.
But it sounds to me like the real issue is why are all those fish dying in their service customer's tanks.

I was thinking along the lines of, (when it is big enough) set up the accounting where the different parts "Koi Gardens", "Aquarium maintenance", "Custom Aquariums" would be set up as different businesses at least as far as inventory goes. I'd use the LFS as the distributer to these departments. To me I'd think that the service customers could expect waiting from one service call to the other for their fish, (that would give me time to order and recieve the fish, that are already accounted for.) I could order retail fish, and on top of that order the fish that they want to stock in their tank.

If I'm building a custom aquarium, the stocking list would be pretty much set deturmining the needed equipment, and that would give me the lead time to get the fish for these people too.
the key would be understanding the lead time needed to ensure the approprate inventory levels. Good think I write project schedules now for a living.

[stdreb27]

Originally posted by coralnut99
The severe swings in stocking the tanks has basically driven most knowledgeable customers elsewhere.

I'm sure that does a number to the water quality of those tanks too.

[coralnut99]

Actually the two guys that take of the place do a really good job with water quality. They honestly care, and don't do all the idiot things lfs are known for. That's one of the reasons I've stuck with them. The problem they have is lighting the tanks. The owners invest as little in proper lighting as they do in keeping the tanks stocked regularly.

[Rendos]

Keep products that customers want.
Keep quality (healthy) livestock.
Sell them at resonable prices.
Have friendly...knowledgeable staff.
Treat customers with respect.

That will make a successful LFS. Take any one of those out...

[stdreb27]

Originally posted by Rendos
Keep products that customers want.
Keep quality (healthy) livestock.
Sell them at resonable prices.
Have friendly...knowledgeable staff.
Treat customers with respect.

That will make a successful LFS. Take any one of those out...

But how do you balance that...

[itsthesong]

Originally posted by stdreb27
But how do you balance that...

Isn't that the million dollar question?
I would say, start small, maybe a few tanks, and as business starts to grow, start adding more and more. That way, you decrease the output of cash, and allow for growth. My two cents, and I wasn't a business person...my entire life has been spent in academia.

[coralnut99]

Originally posted by itsthesong
Isn't that the million dollar question?
I would say, start small, maybe a few tanks, and as business starts to grow, start adding more and more. That way, you decrease the output of cash, and allow for growth. My two cents, and I wasn't a business person...my entire life has been spent in academia.

In this hobby, this can be the most successful business model. There's another LFS I frequent that pretty much accomplished what itsthesong suggests. The business actually started in a one and half car garage in the back of a private residence, crammed with tanks. Started as just livestock and only opened on weekends. Added a website and sold drygoods at very competitive prices, storing inventory in the attic, or anywhere there was an available opening. Eventually moved about 2 miles down the road with about 10X the space and 100X more water volume. Still open weekends only, and hires staff to keep up. They used to close up for the whole summer, but now paying rent, they stay open most every weekend. A real success story.

[stdreb27]

Originally posted by coralnut99
In this hobby, this can be the most successful business model. There's another LFS I frequent that pretty much accomplished what itsthesong suggests. The business actually started in a one and half car garage in the back of a private residence, crammed with tanks. Started as just livestock and only opened on weekends. Added a website and sold drygoods at very competitive prices, storing inventory in the attic, or anywhere there was an available opening. Eventually moved about 2 miles down the road with about 10X the space and 100X more water volume. Still open weekends only, and hires staff to keep up. They used to close up for the whole summer, but now paying rent, they stay open most every weekend. A real success story.

Who feeds the fish during the week?