call me crazy?

[Kodiak5500]

I have some crazy ideology ideas. I wont go into details. However I want to do something I love, then worry about the money.

blah blah blah...

I would love to start a coral farm. The guy that was taught me almost all i know and gives me sweet deals, very cheap corals ect.. He owns a coral farm and sets up tanks for a living. I would love to do something like this. I always had the idea before I meant him, but now i can see it for real.

What if I started a 125-220 tank. I set it up for a perfect reef, and I sold what I fraged ect.. What do you think the turn around on money could be.

I guess this is just to elaborate on ideas.

ALL input is requested. thanks!

[baitshopboy]

YOU'RE CRAZY!!!!!!!



I have no idea what the profits would be but RC isnt for people to make a profit.

[ludnix]

I would think it would depend entirely on the market in your area. Setting up a tank that big would be an expensive initial investment and carry a large monthly fee.

Would this be a display tank? The usual display tank isn't usually setup for coral propagation, but if you set it up for fragging it might not look as nice, but make the most efficient use of the space(which is essential for a profitable business).

Were you going to sell locally or online? Where are you located?

[sassafrass]

I do this ,if setup as a reef you will be lucky to pay for your power and supplies ,A coral farm and a reef tank are very different.

[DiscoReefRover]

Insert chimp.....

[Kodiak5500]

Originally posted by ludnix
I would think it would depend entirely on the market in your area. Setting up a tank that big would be an expensive initial investment and carry a large monthly fee.

Would this be a display tank? The usual display tank isn't usually setup for coral propagation, but if you set it up for fragging it might not look as nice, but make the most efficient use of the space(which is essential for a profitable business).

Were you going to sell locally or online? Where are you located?

I would want it to be set up as a display, but wouldnt mind it looking a little off for a better way for propagation. I would want to pay for the tank at first. Like, I wouldnt mind making extra money then in the long run slowly expand, ect then start my own business.

I would want to sell local.

I am just getting some suggestions and ideas.

[Chihuahua6]

Suggestion: Write a business plan, then proceed.

[TXAlbert]

Ok. Crazy..Loco

[dancewithethan]

look under BUY/Sell thread, there are many reef keeper that are already doing it. you can PM some of them to get some ideas of how to go about doing it.

[AMcLeod]

Not to rain on your parade, but from what ive heard and read, you will be lucky if you break even.
But then again, maybe you will be one of those few lucky ones !

[cook]

It is very hard to make anything this way. Remember the big guys get things cheaper than you, much cheaper.

[crvz]

depends on your goals. if you're looking to make a living doing it, don't even get started. but, if you can sacrifice some amount of start-up costs, you may be able to break even on operational costs for a single display geared towards selling coral. I've been doing this hobby for 10 years now, and it's taken me a while to get to the point of successful propagation. Granted, thats because I'm not in it for the cash, and I was pretty ignorant for a long time. But on a single tank that size, you could look at getting a couple hundred dollars a month if you were efficient and had a good customer base (and if you learn the tricks of shipping). I wouldnt expect more than that, and even then it's a bit aggressive.

[Kodiak5500]

Why would it be so hard. I keep hearing this without the details. Why couldnt I make more than 200 a month. I would love to make closer to 500 a month off a tank of that size.

If i geared it towards JUST corals, and an environment were I grew and fraged them as fast as I could. no aesthetics involved.

[SaltyMember]

You will need to do some figures.....a business plan......as previously mentioned. Look at total costs of equipment, supplies, monthly electrical costs, initial corals, etc.. Then figure in the amount of time needed to operate it until the corals get large enough to frag. Then get an idea from websites that sell corals as to what you can charge for them. That will give you a better idea as to if it can be profitable or not.

[Sk8r]

I know a guy who has more than broken even, but it is a vulnerable kind of business. Power outs, tank cracks, you have to anticipate things and take precautions. And it takes time. But a tank totally dedicated to growth, under 10000 k Ushio (insane growth for me, with that one) you could break even---if you start with used equipment, the cheapest supplement sources, and want to be tied down. (Long vacations are difficult). Get rich, not likely.
One thing: start a ledger and account for all the capital you put in, gear at current value; and every can of salt you buy. Those records are essential.

[phenom5]

Your crazy...


Not really, but you said to call you crazy, so...


Here's what jumps out at me, both from a business & reefing standpoint. You'll need to figure out your startup costs, along with your operational costs. That will start to give you an idea of what kind of volume you'll have to do to break even or turn a profit. Of course you have to realize that there is going to be some lead time between setup, and the point that you have inventory level that will allow you to consistently be open for business. A business plan that goes out 3 years (absolute minimum, 5 years would be better) is a must. That will get you started, but...

The biggest problem I see is that selling locally, your talking about a very small, niche market. Do you know how many reefers there are in your area locally? Regionally? If you expand out beyond local, then your going head-to-head with the big boys, who have deeper pockets, and more resources then you do. How do you plan to get the word out about your business? I'm pretty (not entirely) sure that you cannot do so on RC, you'd have to check out the EULA. Do you think that LFS's are going to let you advertise in their shops? Not likely. So your faced with a problem of a small customer base, with a finite amount of tank space, and the challenge of finding those reefkeepers, and getting the word out to them. Plus, even selling locally, your still competing with the large online vendors. Perfect example, I can order an SPS frag pack from one of the RC sponsors and get a dozen frags with shipping for just shy of $12/ frag. Can you compete with that? If you focus on more high-end stuff, your typically looking at starting out with smaller frags, which will need to be grown to the point that you can frag & sell them, and typically carry a higher price.

I'm not saying all of this to be overly negative, but just looking at it honestly, and asking the kinds of questions that I would ask myself if I were looking to do something like this. Too me, if you want to do this, you almost have to scrap the idea of this being your hobby, and look at it like a business. You'd want to setup the tank strictly as a prop tank, which wouldn't be much to look at. IMHO, to keep this as a hobby, your best bet is to setup a display tank, and use your frags as ways to absorb some of the costs to run your tank, or to get new corals, but to move beyond that turns reefing into more of a job than a hobby.

Or you could do what one of the local RC members did here...go out and buy a LFS.

[tkeracer619]

If your trying to make money I think you should skip it. IMO if your tank isnt grown out enough to the point you have to start cutting it you are waisting your time. If your main tank isn't flourishing and overgrown there is no reason to start a frag tank.

Just set up a larger reef for yourself and sell frags out of it untill you have enough coral/experience to pull it off. Don't do a dedicated frag system untill you need one.

I use soap dishes from walmart stuck to the glass to hold frags while they are healing.

[crvz]

Originally posted by Kodiak5500
Why would it be so hard. I keep hearing this without the details. Why couldnt I make more than 200 a month. I would love to make closer to 500 a month off a tank of that size.

If i geared it towards JUST corals, and an environment were I grew and fraged them as fast as I could. no aesthetics involved.

You show me why it would be so easy. I'm not going to write a business plan for you.

From experience, having an SPS dominated tank, its still hard to find locals to buy stuff from me, so I've recently started shipping. You've got a lot of costs to consider, and making $500 a month will be challenging. It takes a long time to grow corals out to the size where you're making more than 1-2 frags a month on them, and if you're selling for $10-$20 a frag you're going to need a lot of colonies to get to your mark.

[unbreakable]

not crazy. i thought of doing the same. easiest way to do this is to go to an lfs that sells large colonies for like 50 bucks or so and just frag them and sell them back for like 15-20 bucks a frag. for example, i bought like an 8 headed hammer for like 50 bucks, by the time i fragged it it had 13 heads total and if i sell each frag for like 20 bucks.. roughly 260 minus what i first paid. even if i fragged the 8 headed hammer and sold each frag for 20 i make 160-50=110

i wouldnt count on making a lot of money on it though, just something to do on the side. for me, i dont really want an 8 headed hammer coral in my biocube 14, so i can just frag it and trade it for other types of corals with hobbyists or throw them in my 75

[phenom5]

Originally posted by crvz


From experience, having an SPS dominated tank, its still hard to find locals to buy stuff from me, so I've recently started shipping. You've got a lot of costs to consider, and making $500 a month will be challenging. It takes a long time to grow corals out to the size where you're making more than 1-2 frags a month on them, and if you're selling for $10-$20 a frag you're going to need a lot of colonies to get to your mark.

That's the real problem. If you take a real rough estimate, and yes there are those that would argue it could be done for cheaper, just like you could argue that it would cost twice as much...rough estimate, let say from now to getting a tank up and cycling it cost you $4000. Add in the time to cycle, then the time to mature, then corals, then the time to grow frags, you could easily looking at a running total of $6000...maybe more. So right there your looking at 300 frags at 20 bucks a pop just to break even. And then, you've got to continue to sell ~15-20 frags a month to continue turning a $200ish/ month profit. 40-50 frags to maintain a $500ish/ month profit.

Originally posted by unbreakable
not crazy. i thought of doing the same. easiest way to do this is to go to an lfs that sells large colonies for like 50 bucks or so and just frag them and sell them back for like 15-20 bucks a frag. for example, i bought like an 8 headed hammer for like 50 bucks, by the time i fragged it it had 13 heads total and if i sell each frag for like 20 bucks.. roughly 260 minus what i first paid. even if i fragged the 8 headed hammer and sold each frag for 20 i make 160-50=110

i wouldnt count on making a lot of money on it though, just something to do on the side. for me, i dont really want an 8 headed hammer coral in my biocube 14, so i can just frag it and trade it for other types of corals with hobbyists or throw them in my 75

That's something completely different IMO. Your looking at the setup & operating costs as a sunk cost, and just looking at the cost of the colony vs. the gross from the frags. Which is fine, but as you stated, not a huge money maker. It is a good way to stock your tank though. But that's doing more from a hobby/ trade standpoint, not a money making business standpoint.

[atwinparadox2]

A realistic look at this is the time it takes to grow out frags. Yes you can purchase large starter corals and frag them out and sell them for an initial "profit" so to speak. But once that initial hit is gone then you will be waiting on frags to grow out. Even if you keep buying large corals and fragging them, you will still find yourself behind because you will never really make any substantial money. Something like this needs a huge initial capital to get it all up and running. Things to think about are selling over the internet, which will take time to grow a name for yourself, and going the patience route. Set up your big tank and wait for things to keep growing out. Frag and grow, frag and grow...then when you have a huge frag base you can start to think about making some money. Sorry but something like this does not happen fast. Good luck though!

[Aj Flip]

from that small a system, you would only make enough money from frags to pay for salt, elctric, water, food, and some extra pocket food

[reefing102]

i have to agree start with a business plan. something else you could think about doing is ask the guy you can get some of your corals from if you can work for him.

[seapug]

Great, ambitious plan. Ditto on everything else said above. Just some things to keep in mind:

Remember that if you are selling locally, you have a limited market and if you've been in the hobby only one year, you can guarantee that other people in the area have nicer stuff than you. You'll end up spending more money buying things from them than selling to them.

In that case you need to start buying wholesale. Doing that requires business licenses. Business licenses require tax IDs. Tax IDs involve the IRS and state Tax board. Then your tank cracks. Then you get an infestation of nudibranchs and flatworms. Then a big shipment to someone across the country dies and they want a refund. Then someone doesn't like what they buy from you and post bad things on RC and ebay. Then you have a power outage and your entire stock dies.....the list of perils goes on and on and on.

Not trying to discourage you, but it's always wise to know what the potential perils are of going into any type of "for profit" venture involving living products. Go for it, but be realistic and smart about it.

[greenbean36191]

I've got formal training in mariculture and I know two people who have made real money farming corals, one of which now owns a commercial coral farm. Based on what I know and what they've been successful with, here's my advice, most of which you've already been given.

1) Make a business plan. Factor in how much it's going to take you to set things up and stock the tank, plus monthly/ annual maintenance costs (electricity, salt, RO membranes, water, cal and alk supplements, bulbs). Keep records of how much you actually spend and revise this estimate as you go. Also, you HAVE to know your market. Go to the LFS and see what kind of corals they carry. Ask them how much they're paying for their corals (though they might not tell you). This is a number you should aim to compete with and use for your profit estimates. Talk to reefers and find out what kind of corals they like, how often they buy new corals, what size frags they like, how much they're willing to pay for different sizes, colors, or species. You can grow out Acropora like crazy, but if there are no local SPS keepers you're going to have a hard time. Also, when figuring out how many corals you can sell locally, consider saturation of the market. You can only sell the same corals locally for so long before everyone that wants one of a given specimen has one. You'll have to continuously change your stock or be willing to ship. Also, like seapug pointed out, you want to start out selling corals that are better than what locals already have. Since you won't be able to frag your stock for a while, that means planning ahead.

2) Build up lots of broodstock- the larger the better. If you have one Acropora that has 5 branches that put out an inch of growth per month you can get 5 frags per month (this is unrealistic, but just for illustration). Now if you take one of those frags and let it grow out to the same size, you've doubled your output. If you let them both grow another branch, you get 2 more frags a month. Simply put, smaller corals put out less frags per period of time.

3) Keep your hobby and business separate. Either choose to keep a hobby tank or try to farm. Don't try to combine the two in the same tank. You'll end up with an ugly tank that's not making much money. If you decide to try to make money, keep things as simple as possible. There's no need for pretty tanks or fancy stands and light setups. Use shallow plastic tubs, even $10 wading pools, with a single halide over each. Use a common pump, skimmer, and calcium reactor, and sump if you can get away with it.

4) Have backups and redundancy. Relying on a single failure point like a bad heater or a power outage isn't a risk you can afford when you have so much invested. You need a generator. You need not only multiple heaters, but temperature controllers. Be careful to design your plumbing so that if a pump goes out, you don't end up with overflows or drained tanks. Test all these systems too. Turn the pump off and see where the water goes. Heat the water up and see what the controller does.

5) GET A WHOLESALE LICENSE! It will take a loooot longer to recoup your startup costs if you're paying retail prices.

6) Quarantine. You really can't afford to introduce pest into a grow out system. Not only does it threaten the health of your stock, but it will be unsellable until you fix the problem. If you sell infected frags, you stand to lose the trust and possibly business of customers.