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opening an lfs..dinosaur business?

Hello all-

I am considering starting up an lfs in the central to north central area. It has always been a passion of mine, however, for every second I want to pull the trigger and make it happen, hesitation kicks in.

With places like craigslist, various online retailers, and everyone who sells frags out of their house, could it be considered a wise choice?

I have had tanks since the 90's , from fish only, to mixed reef and seahorse tanks, to now an sps dominate tank which houses a Moorish idol. Knowledge wise, I am certainly know Julian Sprung, or Bob Fenner, however, after having been to all the local shops (say 30 miles radius from Edison area) without coming across standoffish, or arrogant, I know my fare share.

I am not formally educated in business, I possess a master degree in education, but quickly got away from that. I am well versed in education, working in retail, and dealing with people. I can comfortably say when it comes to personality, and explaining various mechanisms in a reef tank, whether it be the eradication of crypto, balancing cal/alk/mag, or visually explaining the nitrogen process and the concept of extracting nutrients that go into tank, I could do that with ease.

In short, do you guys feel the lfs is something on its way out, or a place that can be improved and sustain itself?

My ideology would be complexed, and would be based on everything I have ever wanted to see from an lfs, and an avoidance everything I didn't.

*Place all fish, who are eligible to do so, through some sort of quarantine process. I feel the number one reason turnover runs rampant in our hobby is because of parasites. Nothing says get out quicker than losing 1k worth of fish because of ich, velvet etc. The process would be having all incoming fish be put through 3 different levels of copper, similar to the fashion or process seachem suggests. With gradual transistions to full strength copper, all fish would spend at least 14 days in copper, thus nullifying velvet and ich.

* Price wise, I never dreamed of being rich, and this certainly would not be my avenue for it. To me, it would be more advantageous to move fish, coral and supply quickly, and not celebrate fish birthdays in the store.

*Education..This is something I feel has really propelled me to even consider this option. Having had taught mathematics at different levels, one thing that has always stood out to me is the lack of "teaching" in...well just about everything Were told we need a skimmer to remove doc's, but were never told how to size it, and that how having too large of skimmer, where not enough organics can obtain a foam head, we are essentially not skimming. We are also led to believe that because we cant see white spots on a fish, that the fish is clean and free of parasites. This is where I feel my experience will kick in, and I will be able to demonstrate various practices in the hobby. Too many times I see someone spend hundreds of dollars on fish, to go into a tank that they just had admitted has been running 3 weeks. Or having seen someone be told with high phosphate, just start using nopox, and the carbon will reduce organice, with no regards as too how much, caution of algae blooms, and not removing too much nutrients at once, thus shocking live stock.

I also have faults. Having worked retail a long time, I have steadily gained a reputation of being the go to honest guy, the guy gives you an answer based on your questions and the knowledge I have at that given time. The guy who knows the activities you take place in, who in your family is interested in what you're doing, the guy who wants to know why my employee is out sick two days.

Perhaps being too nice, or understanding , or kind, is bad for running one of these shops. That is a question I ponder and will eventually have to face the music of I suppose.

I can also be too honest. All to often, I become frustrated with this hobby, when at a fish store, I see someone buy a panther grouper for there 90 gallon aquarium. Or a brilliant piece of stylo knowingly going into a tank lit by power compacts. The latest means of anger came when I saw a young hippo tang being sold to someone with a nano tank. That is stuff I wont ever be able get behind, and as one store told me, once it leaves the store, its not his/her problem, and the fish staying in the store wont keep the lights on.

To me, if someone comes in and says they just lost the majority of the fish they had, and they were coated with dust, I would not be able to sell them another fish. But I know, people will walk out, bad mouth me, and go to another place. In my mind, I tried, and didn't contribute to the problem, so in that respect, at least I will have my dignity.

Seahorses, the often talked about, less tried form of aquatic life is something that has amazed me since I was a kid. Having had tried my hand with them based on advice from an lfs place, I lost many nights of sleep. It wasn't til I actually became close with a breeder who supplies CB seahorses to various zoos, Disney destinations etc, that I understood why people fail with them and promised to not make the same mistakes. Having been through that horrendous learning experience, I found great joy in advising and setting up people with them who were able to successfully keep them for many years. From getting healthy specimens, to nailing down a proper feeding schedule, maintaining power heads that effectively lift detritus, while not causing harm to the horses, were all steps I had to learn, and its moments like that, the ultimate satisfaction of keeping them, that has sparked me to educate and help others do the same.

Thanks for any and all input
 

Russell Bennett

Officer Emeritus
Officer Emeritus
Have you worked out who would be your suppliers? Not only for livestock but also for dry goods? I think a better entry into the aquatics field is tank maintenance (at least I have seen that said). I could be wrong, but I think that is the better margin business. I think you should look at the prices you can get from suppliers on stocking out your shelf for dry goods, and then compare it to BRS and Marine Depot. How familiar are you with requirements to start and run a business? There is a pretty steep curve there I think. (Permits, employment taxes, sales tax, unemployment tax etc etc)

From personal experience I think the folks over at Absolutely Fish are excellent. I have talk to the owners staff for many hours and got tons of advice. Yet anytime it is time for me to buy something from his shelves I have to remind myself, that I am paying a premium because of the service. In my mind I know he has provide me a service free of charge, and he deserves probably all of my business. That said I will shop some of the bigger items.

I think you absolutely need a business plan, and a budget. It will take awhile for it to turn profitable what cash burn can you afford? How are you going to acquire customers and what is that going to cost?

From an education perspective I like the aquarium service model. Maybe you start a blog? Maybe you help people with their setups and advise them? That would be a low overhead business where you are paid for time, and you get to focus on what you really want to do which is educate. I am thinking something like Mr. Saltwater Tank (Front Page). You could even have different aquarium set up suggestions. I mean that was the hardest part for me when I got into the hobby 3-4 months ago. What equipment do I buy how much is it all really going to cost. How do I avoid buying something not liking or using it right and needing to buy a replacement? I got a fluval m90 and it is a great entry tank that said I am already wondering do I want to change the lights and the skimmer. Virtually the whole value proposition was it came with that stuff and now I am replacing it.
 

Trio91

Administrator
Staff member
Moderator
Would you consider adding a fresh water selection to supplement income? Would you also provide tank maintenance services?
 

Trio91

Administrator
Staff member
Moderator
I do think lfs's have competition with guys operating out of garages but I also feel that over the long haul, with additional merchandise and services added to your business model you can definitely outshine them.

Also keep in mind that going to an lfs and speaking to knowledgeable staff is part of the total experience
 
Ahhhh, the elusive dream. I'd be willing to bet most serious reefers have thought about opening a store at one point or another. Who wouldn't want to earn a living doing what they love?

While clearly it is possible (There are several examples here in NJ alone), it is extremely difficult. I have done enough research to realize that like a lot of businesses, more fail than succeed. Their are several good threads around explaining many of the pitfalls associated with fish stores specifically. You mentioned some. It is an extremely difficult venture to start.

That being said, of course it is possible.

Two Suggestions:
1) Before you invest any serious money, put together a VERY WELL THOUGHT OUT and complete business plan. You want to go in with your eyses wide open. Be sure to cover things like: All your expenses, potential problems, all your revenue sources, etc. (Again there is information scattered around online)

2) Have you thought of starting small (as a craigslist type of place out of your house). I know it is not as glamorous, but it is a great way to "test the waters" and get your feet wet. If it goes well, you can always get bigger.
 
Good morning-

All great dialogue, and all things that have forcefully entered my head. Funding at the moment is most certainly an issue, and something I would solidify before venturing out.

Problem I have with running something out of my basement the choice of suppliers. It would be relatively easy to get a tax id and go to some local wholesale joints, however, the more reputable place, the quality marines, the reef dwelling creatures, would not sell to someone in that position. And truthfully, I feel a big part of getting fish to survive is knowing the chain of command. One of my ideas of running a store, would inherently be total avoidance of inexpensive, improper wholesale places that leads to high fish mortality.

As far as tank maintenance goes, my initial answer is yes, prior to opening that day, or on a given off day, I would have no issue doing that. I personally know, and will not drop names, of people that maintain tanks for customers of stores most of you probably shop at, and truth is, unless I was unable to care for my own personal tank (disability, long term vacation, injury) I would never allow them near my set up. I am too cautious/paranoid, about the upkeep of my tank, striving for 100 percent detritus removal, bi-weekly testing of paramaters that I concern myself with (alk/cal, po4, no3) and so on that I cant feel good about letting the aforementioned use their practices on the tank. Plus, being I quarantine all living creatures before they enter my tank, I disinfect all tools I use via dishwasher and air drying as to not allow cross contamination.

As far as bringing people there, I would learn, not mimic, from the guys in the area. I will refrain from dropping names, even locations of places I have frequented and conversed with on different levels. I have seen what they do that are positive, email notifications of incoming fish, sales, etc. I have also seen what doesn't work. For example, I will not charge 400 dollars for a French angel fish. Nor will I sit behind my computer in the front of the store, disregard, and more or less ignore people as they walk thru my door, and run my place as a convenience store.

I am pretty good with social media, but anyone can photoshop and sell transshipped items for cheap. I would prefer to provide excellent information, healthy live stock, worthwhile equipment, have people refer and advertise for me. As stated before, I am the guy who goes into lfs, stays for hours, ask questions, converses, makes comedy over prior mishaps, and leave knowing exactly what I am buying, and what its intended purpose is.

Lastly, I will not, be able to go work there, and leave with any self respect knowing I did someone a disservice with unethical selling, dishonest information, or overcharging. I am sorry in advance, but live rock does not need to be sold for 7 dollars a pound. Using the old adage of a pound per gallon when it comes to rock, I would not be able to charge 900 dollars for aragonite based rock to fill a 125 gallon aquarium. Same goes for someone stocking a tank the second ammonia finally read zero.

I recall a time when I broke into the hobby in the mid 90's, where 60 dollars would net you a nice sized colony. Today, that same currency will yield you two broken pieces of coral, or frags as they call them. I am in all favor of frags, especially with the status of the ocean, however, the price not need to be that high. That same 60 dollar colony, can now be cut into 15 pieces, times $30 a frag.....that to me spells taking advantage of general public, and making the hobby cater more towards one side of the wealth spectrum.

Again, this is an idea, a mere fascination with the ocean, and not set in stone. The barriers are funding, the decision the enter a business which encourages impulse buys, (hence the nemo movie explosion) and lastly, the state of the hobby itself, upcoming bans on wild caught fish and coral, and the tendency to find suppliers on craigslist with no real over head.

I have visited a couple of these places, often mislead by the description being along the lines of "rehoming aggressive fish", but when you arrive there, it turns out its a small scale fish store. Not sure why the need for deception, perhaps the message boards for which they post on are not favorable for their selling, in comparison the paying vendor sales adds.

Thank you for the great input. I have always been a guy not afraid of change, and certainly not stuck in old ways. As long as I feel I am ultimately doing the right thing, and making the correct moral choice, I would be more than happy to make accomodations. Being a relatively young guy with no children, I would also have incredible availability, reachable via telephone at anytime, and being the place I am looking at is more than an hour from my house, I most likely would be able to deliver hard goods, such as salt, additives, pumps, bulkheads etc, to and from my work travels. Think of it as ordering online, except the product, if your location is within reason on my route, would be at your house that day (or night)
 
I think opening an LFS is a great idea. Central and north jersey? I'd be your number one customer. I think you can be successful as long as you care. Ive walked into places that don't give a rats A** about what they do or how they treat you, or what they sell. Customer service is a must for me. If you can't take the time to even acknowledge someone and say Hi, especially when you are the only person in the store, then you need some serious help. I only go to certain places because I don't have another choice. From reading what your saying it seems you are pretty serious and would most definitely do better than the LFS's around here. If you do decide to do it let me know. I'd lend you a hand with any tips of labor you need for free.
 
I would say that it would be extremely difficult to open an LFS and be competitive in this day and age. As much as people say they want quality and how they want service, most are going to shop price. Your competition is going to be the online merchants and the large chain stores.

You may want to do things right, but this means your going to need to charge more. That will cost you sales.

Most important, can you give up being a hobbiest and become a businessman? Can you think in terms of how much revenue something will generate if you carry the product? Are you willing to not carry a product because there is no profit in it for you?

Most important, as a business owner you'll work twice the hours you would work for any normal type job. Are you willing to give up a lot of your aquarium hobby to run the business? You just will not have the time to do the hobby anymore.
 
How many turtles hatch each year to make it to adulthood in the ocean? how many businesses start up in New Jersey (the best tax free state - sarcasm) and fail within five years?

The best way to make a million dollars with an LFS store - is to start with 2 million.

You'd be better served acquiring an existing store that has done well for a few years and already has a set of clientele than to start from scratch.
 

njtiger24 aquariums

Officer Emeritus
Article Contributor
I have thought about opening up a store cause I feel the area I am in is a great market for a LFS. I did minor in business in college and I understand that in perfect situation the first year you will lose money, the second year you hope to break even, and third year you hope to make a small profit. So if you want to open a business be prepare to go 3 years with no profit and again if this goes perfect which most likely will not happen. I hear more and more people going into the service business and selling stuff out of their basement which might work better for you.
 

TanksNStuff

Officer Emeritus
Officer Emeritus
It is a dream of almost every hobbyist that has any success with their own tank to want to open a LFS. We all learn from mistakes (our own and others we know or hear about) so we tend to be confident that we could easily do better than any other LFS.

As a successful hobbyist, we discover what works and what doesn't for our own tanks. That can fuel the fire to live that dream. And although some LFS's are very good... you will always find some flaws as not everyone is perfect. The fact is, to be competitive and keep the business profitable, you need to cut some corners somewhere because you have a lot of overhead invested in livestock, equipment, dry goods, and all the expenses associated with running the store (rent, employees, taxes, etc.).

Keep in mind that all of these other LFS's likely had the same ideals that you did originally. They saw what else was around (or lack of what was around) and decided they could do better. But unfortunately when it comes down to failing due to profits to keep you afloat or cutting corners... it's really hard not to choose cutting corners.

Now, having said all of that, I do believe that the biggest problem for all the "inadequate" LFS's is that they jump in too fast and try to be the "best" store right from the get go. This puts undue pressure on them to over invest and the need for recouping those debts becomes overwhelming.

So, my suggestion would be to take you time and build your business and reputation slowly... well, not necessarily slowly, but perhaps carefully... with as little startup cash as possible. You can start by strictly concentrating on a tank setup business where you can consult with people at their location, help them decide on the best size tank and equipment to fit their needs, then do the actual installation. This would cost you almost nothing except your time because you can have them order the equipment and then you just show up to put it all together. Once done, you can explain to them how everything works, how/when to test water parameters, when it's safe to add livestock, make suggestions on appropriate livestock that are all compatible, etc. Educate them!

You can advertise for free or very cheaply on many forums to get you started. Maybe you could even work with another LFS so they give out your card and you could repay them by directing the client to buy certain things from their store. Maybe a 10% discount on livestock could help direct the business their way?

While you are growing this setup/install business, you should also begin building a grow out system for your personal corals. You want to start with things that are easy to frag like zoas, acans, leathers, softies, and various "stick" sps's. You would ideally want one or two large tanks that would promote fast growth on mother colonies, and then have several smaller frag tanks that you can keep frags and let them heal after being glued to plugs/discs.

As you continue to do setups for people, you can start to offer sales on "starter" corals or frag packs to both help supplement your income and give you a little something extra to offer new clients. Growing your own will cut out the supplier middleman and you can sell them cheaper than retail. Chances are, your price point will keep your clients returning for more frag sales and also build your reputation in that regard. Best of all, since your frags are tank raised and not chop shop imports... your corals will have a much better chance of thriving in your clients tanks. This can only help your reputation.

If you noticed, so far you have very little startup cash invested and really all you put money into was some business cards and minor advertising expenses... and some tanks for your grow out plan. But you would have spent much more than this and tons more tanks/equipment if you had started with a brick and mortar store to begin with. If things don't work out, you could sell the extra equipment you bought to sort of break even.

Once you get steady customers coming in, you can start delving into wholesale equipment sales to your new clients. If you keep profits to a reasonable amount, you can be cheaper than a LFS and offer better quality equipment to your clients. I'm sure this is one of your goals for your LFS plan anyway, right? The key here will be to start with specialized things that most of your clients will want. Maybe powerheads, lights, skimmers, RODI's, etc. If you stick to only a few brands you prefer or recommend, then you can keep your overhead low... or perhaps workout a ship direct option from manufacturer/wholesaler so that you don't need inventory on hand.

You could also start out with wholesale pricing on salt and test kits and other basic dry goods that your clients will need. They can buy direct from you and get good pricing with the convenience of you delivering when you do your installs. And you can make a small added profit on these items too.

But the whole key here is to start small and only invest/expand as your client base grows. You can eventually get to where you can open a storefront LFS and run it the way you want. But you will be doing it with profits earned instead of starting out in debt. Not only that, but you should already have a good client base from your previous endeavors.

I wish you luck with any direction you choose. But I feel this is your best chance at success.
 
Couldn't have said it better myself.

That is exactly what I would recommend if someone is serious (and without unlimited capital for investment). That is what I had come up with after a lot of research on the subject. I just didn't have the time to spell it out the way George did. Thanks George for consolidating it into the beginnings of a business plan. Very nice of you to take the time to help (probably a lot of people)! Great job.
 
Thank you for all the responses, I sincerely mean that. Mostly ideas I knew of already, and I am leaning towards not doing it.

The place actually is an existing business, that does ok. I purposely left it vague as far as location goes for that reason. I felt with advertising, word of mouth, bringing in people I know who currently shop elsewhere would help make it more successful.

As far as pricing goes, a lot of the more quality pieces of equipment, have their prices protected, which allows Joes Goldfish in Edison compete with Marine mega depot online. As far as fish and coral goes, I would be head scratching cheap. I have seen the cost of colonies lfs bring in, and how they slice and dice them, and sell at sometimes 20x mark up. I don't have that in me to do that. Nor do I have the desire to see a naso tang, at triple the price what it cost to bring in.

I currently service a few tanks, more for the fun of it than anything, and test paramaters each time I go there. I am not talking about dipstick test kits that give you whatever results you desire, I only use salifert liquid kits, Hannah digital meters and refractometers. That's something I would incorporate into the place if I were to service accounts prior to opening, and to me, anyone who wishes to keep anything stony, would appreciate as to just dropping 10 gallons, replacing 10 gallons, scraping the glass and leaving.

Again, I am leaning towards not at this point, but its ever so changing in my mind. I can tell you from my own experience, I have started to shop online, not because of pricing, but because I feel the pc which I order my purchases on is friendlier and more inviting then some of my local stores I used to shop at.

I would love to support local places, at the same time see the fish up close and personal as compared to a picture online. However, begging for someone to get off of their chair to bag the fish, doesn't create the positive vibe I am paying for.
 
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