Getting in to the Fish Store Business

[hyperfocal]

Starting a successful retail business is a lot harder than it looks; keeping it running is even harder. This fact is even worse in the hobby-retail market, where people who are passionate about their hobby dive into a business backed by their enthusiasm (which fades after 12 to 14 hour days, seven days a week) retirement nest-egg (which gets spent at a terrifying rate) and not much else.

Anyone who is interested in comic books, sports cards or tabletop gaming can probably list half a dozen or so failed hobby-retailers in their vicinity -- all victims of an owner with a passion for the hobby and a complete lack of business sense. The number of LFS that turn over seems smaller to me, maybe something to do with the higher initial cost of getting started but the principle is the same.

If you're serious, start work on a business plan (Google around a bit, you'll find lots of info). It's the single most important thing you can do when thinking of starting a business. You can spot businesses that opened without creating a solid business plan first -- they're the ones that close in the first few months.

[Macimage]

Originally posted by Funky_Fish14
Why are some Americans so ignorant? Do you think we have nothing at all, all the restrictions in the world, and live in igloos? Ofcourse you can!
Can you legally own a skidoo(snowmobile) in the United States?

Funky that is so insulting, I don't even know where to begin!!

Apparently you are totally unaware that many/most cities in the USA will not allow a homeowner to "legally run a retail store" out of their home.

In your ignorance and hypersensitivity, you've insulted an RC member who was asking a good question "Can you legally run a retail store out of your house in Canada?".

BTW, I can legally own a skidoo at my home, but wouldn't legally be able to run fish store business out of my home. Actually, I don't see your analogy at all between owning a motorized vehicle and running a business from my home.

Joyce

[Aeolius]

The scenario which intrigues me the most involves buying out an existing fish store; one that has been in business for 25 years and has an established customer base. Adding a service department would most likely not be an option, as many past employees have set up such businesses themselves.

In addition to purchasing the existing business, there would be the matter of relocation, as the store could be located in a more suitable location.

[rainmkr07]

I'd love to retire some day and own a nice LFS. Who cares if it doesn't make millions. As long as it breaks even and you're having fun, why not?

[martykarla]

There are several successful stores in my neck of the woods (Se Florida), but all of them offer an in house aquarium maintenance, ie, they will come in, clean your tank, change the water, dose it with chemicals, etc, for an average of about $75 per visit. This provieds them with a steady cash flow and I was suprised at how many people do this in their homes, along with offices and such.

[VikeBron]

I think there are pros and cons to both ways.
Buy existing biz, you are up and going instantly.
Build, and you spend alot of $ over period of time with no income.
With the existing, you can tweak it as you go to get where you want to be.
Depending on size, be prepared to spend $150,000-$250,000.
Most lending places won't touch it so you will probably need to have the majority yourself or investors.
Like said above, have a biz plan. Budgets, expenses, projected gross sales all will help even if they are a little off.
The main headache is the help. Getting people who are knoledgeable and will work for $9-12 hr and not rob you blind will be a chore.
And last but not least....have fun.

[Aeolius]

Originally posted by VikeBron Buy existing biz, you are up and going instantly.

The store in question is currently selling everything; used aquariums, koi tanks, and more. I think he intended to sell out of stock, before going out of business.

[r0bin]

I think one of the only ways to ensure its successful is to make sure you carry fresh and salt water at the very least. We had a small LFS store (saltwater only) and even though I can certainly appreciate the guys love for the "saltwater hobby", people were forever coming in there asking the guy if he had freshwater this or that. He would always reply "no we are only saltwater", I could not help myself but think hey dude take a hint, get some freshwater stuff in here, you are losing business. Next thing I know he was closing his doors and getting a "real" job as he put it.

Also it would not hurt to carry dry goods of all kinds for more than just aquatic hobbies.

[hyperfocal]

If you buy someone else's failed business, you better be *really* sure you know what he did wrong and how you're going to fix it...

[pelochas]

some LFS make more money doing maintanence contracts with loyal customers and i mean loyal with big $$$ who have no time to mess with the aquarium but just to feed the fishes

[ludnix]

Originally posted by r0bin
I think one of the only ways to ensure its successful is to make sure you carry fresh and salt water at the very least. We had a small LFS store (saltwater only) and even though I can certainly appreciate the guys love for the "saltwater hobby", people were forever coming in there asking the guy if he had freshwater this or that. He would always reply "no we are only saltwater", I could not help myself but think hey dude take a hint, get some freshwater stuff in here, you are losing business. Next thing I know he was closing his doors and getting a "real" job as he put it.

Also it would not hurt to carry dry goods of all kinds for more than just aquatic hobbies.

I agree with this, it'd be smart to open your market to the obviously more popular freshwater hobby. You can always maintain emphasis on saltwater but it couldn't hurt to have some freshwater too. I know when I go to my LFS I usually get items for both my saltwater aquarium and my freshwater tank and freshwater pond.

[afex]

i think the answer is simple. you don't compete with the internet by starting a brick and mortar store, you compete by starting an online store.

all online fish stores have a local presence wherever there are. think about it: what is the difference between a LFS and an online store? the online store accepts online orders and ships stuff. THAT'S IT. they still have a big room full of tanks with all their livestock, and most of them also have traditional storefronts to allow walk-in customers.

for example, http://www.atlantisaquarium.net/ is right across the bay from me.

i wouldn't waste my time unless i was selling online.

[areze]

most cities just arent big enough to support a fish store. its a very niche market.

many have blinders on to the fact that just because they enjoy it, not everyone does.

also, everyone wants the rare stuff, and they want it cheap, its how you manage to turn a profit with the 5 rare items you manage to get shipped to you each month when you really need to be turning over percs and mushrooms to put dinner on the table...

[Aeolius]

Originally posted by areze
most cities just arent big enough to support a fish store. its a very niche market.

There are probably four or five dedicated aquarium stores within 25 miles of here, not counting all of the mom-n-pops and PetSmart/PetCo's that have a few saltwater tanks.

The owner of the fish store that is closing was scared silly by the internet, as he knew it hurt his profits. He didn't even want his customers to have a local club, for fear that they might all "get smart".

[glh156]

My two cents - I think if you take in the clubs and embrace the local community, i.e. offer meetings, training, used equipment and a cup of coffee you might do well... the days of the old fish store are gone and it's been replaced by experts in the art of the reef tank that know how to use a computer

[Zegg]

Originally posted by Diatome
Basement to open store is a way to go. You do have to look at zoning laws and neighborhood associations and all that good stuff.

Out of home business in the city i live, you can not have any additional traffic curb side outside the home, no shipping trucks, etc, etc. The only employees you are aloud to have are family members and or people that live in the home and 1 additional secratary that does not live at the home. You are not aloud to have any "foot traffic" either. But if I live 5 miles north(different city) than it doent really matter. Or 7 miles south Then doesnt matter as well. Its all about what city you live in and even what your home owners assoc allows you to do as well. Just as the above stated.

[Aeolius]

I suppose it's all a matter of time, now...

Aquamain's is closing:
http://www.aquamains.com/

[spsfreak]

Well, its ashame to some extend, of course I really never bought anyhting from them, but did drop in from time to time. I go to the Kernersville shop on 66, it is small and carries most anything one wants.... they took my buisness from Auquamains with no contest. I think for Aquamains to do better than it has will take a move to a new, nice, clean location where fish are healthy and corals are not rpiced so high that you literally laugh when you look at the price.... just my 2 cents. I personally would never venture to such a risky move... he has a good reason to be worried.
Most people I know will not buy from him (slatwater fish and corals that is). When I buy for my new 100 gallon, most everything will me from the Kenersville store and the internet; and frags from good buddies in the hobby.

[iamthereefguy]

Originally posted by pex
Personally I can't figure out how a LFS can even make a profit these days. Consider the cost of rent for the building, cost of electricity (which continues to rise), cost for employees, cost to initially set-up the store with tanks and equipment, cost to buy the livestock which will probably stay at the store for a minute before selling, etc, etc....that's a lot of overhead. Just doesn't seem profitable to me. I think it might actually make the "hobby" part of it not much fun anymore.

Most of these mom and pop LFS don't make money any more. Can't compete against the internet store. The overhead pretty much wipe out on any profit they would make. Most of the LFS pretty much run on credit cards. Once the cards are all max out, they close the shop and file for bankruptcy.

[Reefer08]

Originally posted by pex
Personally I can't figure out how a LFS can even make a profit these days. Consider the cost of rent for the building, cost of electricity (which continues to rise), cost for employees, cost to initially set-up the store with tanks and equipment, cost to buy the livestock which will probably stay at the store for a minute before selling, etc, etc....that's a lot of overhead. Just doesn't seem profitable to me. I think it might actually make the "hobby" part of it not much fun anymore.

That is exactly how I see it also. But then again im not an lfs owner so I can't comment.

But in southern california there are several mom and pop lfs operations that are successful. If they can manage to afford a mortage payment and several kids, then obviously owning a fish store must be profitable. Especially in southern california with really high real estate prices.

But I wouldn't consider the internet to be a threat to LFS owners. For equipment yes (most people would rather buy online equipment and save themselves 10-15%), but thats also why I rarely see small LFS stocking up on tons of equipment. For livestock and coral, the internet only boosts their sales, especially since online livestock is always priced much higher and shipping is expensive.




As for running a business out of your garage or basement, the only way this would be profitable is through heavily advertising yourself online. But remember your only going to get experienced hobbyists that know the going rate through other hobbyists.

[FishNFun]

Originally posted by Funky_Fish14
Why are some Americans so ignorant? Do you think we have nothing at all, all the restrictions in the world, and live in igloos? Ofcourse you can!
Can you legally own a skidoo(snowmobile) in the United States?

Perhaps we ignorant Americans should buy a Canadian fish store given the current state of the U.S. to Canadian exchange rate? Or we could just go build a nice igloo up there on the cheap!

[iamthereefguy]

The LFSs that make money these days are the one who do aquarium maintenance along with store. Aquarium maintenance isn't that easy either. You can make easy money but there are lots of headache to with it.

[Reeferon]

I wish somebody would build a new fish store in my town.
There are two stores.

In one store, the owner is a crook and an a**hole.

As far as the other store, the owners are nice but they just got back into the hobby after a 10 year break. So they are still learning about everything. They also would rather go through mistakes themselves than hire people that know what they are doing and could really help them.

This town really needs someone to open a store who knows what they are doing and is an honest person.

[Electrobes]

Like many above me the reservations about starting a LFS is abundant. If you really want to be serious about any business you HAVE (not should, not consider) to make a business plan and be as thorough (i.e. critical and cynical) as possible. This will project what will happen with everything in the business for the next few years. If the result doesn't at first scare you... then you've done it wrong and you need to do it again.

I know this from experience. I plan on starting a Coral Farm and have been in planning for the past 6 motnhs or so. You will never get everything accounted for but you need to get as much as possible or you risk financially unaccounting something and putting yourself in an even deeper hole.

If this doesn't at least frighten you a little.. then you may want to postpone the thought of doing this

[60Cubed]

Originally posted by RyanMcLaughlin
Talking to the lfs owner where I go he said that business is pretty slow lately but the store used to pull in 45000 - 60000 bucks a month. About 30000 of that was profit.

That is absolutely crap! Maybe $4500.00-$6000.00. No way any average fish store generated $60,000 a month with $30,000 profit. Let's be realistic here! I have known too many LFS owners and none have even come close to those numbers you mentioned. If there were even half that # involved there would be a lot more of them out there! A lot more!