Starting my own fish store?

[Logzor]

After 4+ years of college and hopefully internships, your interests will change. I would at least hope that they would, one of the most important things that you learn in college is what you like and what you don't like (and how to equip yourself to do the things you enjoy doing as a future career). So, just keep that in mind. You'll probably even change majors a couple of times. Focus on finding challenging tasks that you enjoy doing. If the coursework in your major doesn't fit that, then move on.

In addition, if you're going to spend all of that time in school, and lord knows how much in tuition, then think big.

 

[donwilson]

A buisness degree will not help your store in any way. Im not telling you not to go to college, im just telling you the way it is.

That way of thinking is a good start to wasting the money he saved.

 

[ezerasurfr]

Work at an LFS, hands on is more important than a business degree. most business programs dont focus on small businesses. Save a lot of money and write a REALLY, REALLY....REALLY good business plan. Nobody is going to lend you any money unless you have planned it out extremely well. Expect to be eating light for the first 5 years, retail is a killer, put a cot in the back of the store and plan to sleep there most nights (unless your home is above your store). And the only piece of advice I can give you as a business owner myself is this:

anticipate failure at every corner so you are ready before every turn, business is competitive and tough and everyone is out for their piece. good luck and get researching your business plan, this should take you at least a year if you're serious.

 

[snorvich]

Any takers on the break even point problem? :lol2:

 

[mess7777]

I think the main point in the degree vs. no degree issue is that having that paper does not make you a good business person. It teaches you the tools that you can use to become successful. It also teaches you a whole lot of expensive bullcrap such as electives and other money making schemes for the university/college. However, in the end you will be more prepared than the person who didn't get that education.

Similar to the medical profession. Not all MDs are good doctors, although they have a piece of paper saying they are just as competent as the next. We can't teach interpersonal skills. It is the same with business. If you don't work hard to get your clients and keep them, you will fail. Customers won't just walk in the door and spend 1000s of dollars simply because your store exists. The difficulty of success is multiplied by the exitence of online outfits that can use cheaper real estate in warehouse districts.

 

[Joce]

Hey there! I skimmed through the suggestions posted and I don't mean any disrespect to anyone here. I don't work in this industry but I do have my own business..

A business degree is not necessary to have a successful business and most owners of successful businesses do not have formal education in business.

I agree that you should start working at a LFS. Get to know business operations. Start networking. Know your suppliers and your future customers.

While you are working, you should also start writing a business plan. It should include the amount of funds you would need to start up and operating costs...this includes supplies, rent, utilities, wages. You should also be able to predict when you would expect a turnover...I can say that most retail businesses do not break even until at least 6 months in. Sometimes even 1 year..so you would need funds that can carry you into this period. Last but not least, competitor analyses. Identify your competitor(s) and do some research to see their figures. Within this industry, find your niche..why and who would buy from you.

Remember that your business plan is always dynamic. You should keep fine-tuning it over the years before you actually start. Good and thorough planning goes a long way in any sort of business ventures.

 

[Nick_P]

`math am bad

 

[organism]

Having acted as a consultant to a couple LFS, I can tell you that their business model ONLY works if there is a sizable maintenance business. An LFS business model in a brick and mortar store simply cannot break even.

Agreed, a business degree is a good plan too, regardless of what people who don't know what they're talking about say.

I had an LFS for a long time, so to the OP, please get that business degree because once you do you'll realize that LFS aren't about profit, it's about doing something you love. You're not going to make much money from having an LFS, very few do, and these days the only fairly profitable ones are online, hyping bland corals, photoshopping, and creating fake "rare" demand. You know, the Sexy Corals/WWC/Cherry Corals business model. Basically, moral choices that most people wouldn't make, and either way there's a lot more money to be made in other industries if you're willing to compromise your ethics. A business degree will teach you that having an LFS is not a great business decision.

You're going to work minimum 60 hour weeks running an LFS, probably closer to 80, and the online market is so saturated with clowns these days that you'll have a hard time getting your name out there. You'll need both an online and physical storefront if you want to make much of an impact, and the entire industry revolves around getting good suppliers and contacts which is another game in and of itself. It takes years to get good connections and even longer to maximize their potential, which is why most shops fail. I know shops with 10+ years out there that still don't have good suppliers.

You're going to have to deal with scammers, a lot, and will come across some of the most despicable people that share the planet with us on a fairly regular basis. Even though I didn't mind the long work weeks, it was the neverending stream of scammers that burned me out in the end.

You can have a chance with an LFS by starting out with arounds $150,000. That will get you a clean decent sized shop, a good website, and enough money to get your name out there. It'll give you enough to buy into the good favor of the best suppliers once (if) you come across them, and you might see a decent return after the first couple of years.

 

[Nick_P]

For your entertainment and edification. The very first thing you do with your business model is compute your break even point as a measure of feasibility. So, let us assume we are going to open an LFS. It has 1700 square feet of space in industrial quality space (a good foot traffic retail space would cost about 60% more minimum). You have one employee (you) who you must pay a salary to (otherwise why not work for someone who will pay you a salary; it is a function of opportunity cost). You have electricity (remember all of those lights to make your tanks look nice and keep your corals alive) costs of about $1200 to $1700 per month, salt for changing water on those 1500 gallons of tanks, water and RO/DI filters, shrinkage from deaths, telephone service, yellow page advertisement, etc. Before paying for inventory, your costs are running conservatively about $7,000 per month. So how much must you sell per month at 50% margin to break even?

1 more time.

$7000 at 50% margin. $21000 in sales to make $7000 in order to break even.

If I buy wholesale product for $7000 and can resale with a margin of 50% for every $7000 I spend I can make $3500. In order to do this I must sell $10500 just to make $3500.00 double that and its $21000 to make $7000.

Final answer

 

[snorvich]

1 more time.

$7000 at 50% margin. $21000 in sales to make $7000 in order to break even.

If I buy wholesale product for $7000 and can resale with a margin of 50% for every $7000 I spend I can make $3500. In order to do this I must sell $10500 just to make $3500.00 double that and its $21000 to make $7000.

Final answer

Not quite but we differ only on semantics. If your fixed costs are $7,000 you need to sell enough so the profit contribution is sufficient to cover $7,000. If your gross margin is 50%, you would need to sell $14,000 per month for a profit contribution of $7,000. That is a markup of 100% (which is what LFS normally do on livestock, more like 30% on dry goods). You marked up 50% (probably because my problem was semantically unclear) which makes the answer worse and more realistic given the lower markup on dry goods. Just an interesting exercise but what would be essential to demonstrate in a business plan.

 

[snorvich]

`math am bad

Actually your math is fine! :love1:

 

[Nick_P]

Before paying for inventory, your costs are running conservatively about $7,000 per month. So how much must you sell per month at 50% margin to break even?

I read this as cost before buying product to sell. I also just took for granted margin = mark up. I am now off to dictionary.com to learn about margins.

 

[jlylec]

I read this as cost before buying product to sell. I also just took for granted margin = mark up. I am now off to dictionary.com to learn about margins.

I purposely didn't answer this thinking it was a trick question after having worked with so many consultants with my company!

Seriously though...he's right. You're going to struggle greatly to make a nice life for yourself and family unless a lot of things fall into place for you. That's no reason not to pursue your dreams though. You should just do so smartly and calculated. You're on the right track just asking the questions I think.

I stated before that my plan is to open a reef store when I sell my business, but I never once said I thought I'd make money. I'm making money BEFORE the store. The store I'm going to do just to keep me busy and because I could mess with this stuff all day. I'll shelter some expenditures I'll enjoy making and if I can help out my local reefers by getting cool stuff in then even better. Knowing me I'll probably not sell anything because I won't want to risk anybody else killing it!

Another good piece of advice I wish somebody had given me...don't major in business. Major in engineering. Any kind of engineering, although industrial or mechanical are probably your best bets. There are never enough good engineers and every market in every economy needs them. Make a pile of money in engineering and then start your own store once you're set for life!

 

[Nick_P]

Another good piece of advice I wish somebody had given me...don't major in business. Major in engineering. Any kind of engineering, although industrial or mechanical are probably your best bets. There are never enough good engineers and every market in every economy needs them. Make a pile of money in engineering and then start your own store once you're set for life!

This is partly true. Major in Engineering and get a job as a banking analyst. Thats how you make piles of money with engineering.

 

[snorvich]

As a hobby, they are "fun" but they are time consuming for sure. And profitability is questionable. But jlylec is correct. Engineering is the place to be, and these days electrical engineering is very hot. You would not believe what we used to pay engineers directly out of school.

 

[snorvich]

I purposely didn't answer this thinking it was a trick question after having worked with so many consultants with my company!

You are not far wrong. We speak "consulting speak" and charge a fortune for doing so.

:spin2:

 

[Anthony.Luciano]

Just follow your dreams. I had a thread like this a couple of weeks ago and everyone just bashed my idea because I'm a sophomore in high school. That night i just threw the whole idea out the window, then i woke up in the morning and thought to myself I'm not going to let a bunch of people on the internet ruin my dream because they think it wont be successful. Well i followed up an everything got all my legal stuff in order and now my business is doing great. i've made over $1,000 in profits in the first month and I'm working on more professional things for it. So no matter what anyone tells you just do what you ultimately think is best because if i had listened to everyone that night i would have missed this amazing opportunity.

 

[jlylec]

Just follow your dreams. I had a thread like this a couple of weeks ago and everyone just bashed my idea because I'm a sophomore in high school. That night i just threw the whole idea out the window, then i woke up in the morning and thought to myself I'm not going to let a bunch of people on the internet ruin my dream because they think it wont be successful. Well i followed up an everything got all my legal stuff in order and now my business is doing great. i've made over $1,000 in profits in the first month and I'm working on more professional things for it. So no matter what anyone tells you just do what you ultimately think is best because if i had listened to everyone that night i would have missed this amazing opportunity.

if a sophomore in HS has a 1M gallon pond with a 1 mile plus easement for piping the water to it IN THE BRONX you're doing right by following your dreams. that sounds awesome man. keep it up!

what is your new idea/business though. just curious. i won't bash it. i don't bash anybody's stuff. i have my own stuff to ridicule.

 

[albano]

That is a markup of 100% (which is what LFS normally do on livestock)...

I would bet that most LFS (especially, in this area, and certainly online) are marking up livestock, a minimum of 200%, probably 300%! (Divers Den...5-10X cost) If not, there is no way to cover the cost of DOAs, both in store, and to customers.

Long story short...to OP, don't waste your time, $, or education on a LFS.

You want security... forget college and get a grossly overpaid Gov't job, with pension and benefits...you'll be retired 20 years before your friends!

PS...and NEVER take advise from a 15 yr. old!:lmao:

 

[reefstore]

This thread got a lot more responses than I expected.

Some thoughts.
- I'm going to college no matter what. I won't have a ton of debt at the school I'm going to, but I will have some loans to pay off.
- I don't think my parents would support me with this financially at all - I would be all on my own.
- The school I'm going to is located in an urban area, that doesn't seem to have many good LFS, and no great ones. However judging by the reef clubs on these forums, there's a decent amount of interest.