jimmy frag
New member
hey chew...do we have plumbing and sewage. how did you make out
Starting my propogation business...
- Thread starter chewitback
- Start date
chewitback
New member
Jimmy, they are connecting it right now as i type this! Also, i came to a realization that with all the unexpected problems (plumbing, sewer, insulation, leaking roof, etc) that has had to be taken care of, im running short on both time and money from my business loan. I realized i have to viable options: 1) put up studs in the inside of the brick walls and ceiling then insulate the ceiling by putting up fiberglass between them and covering it with a vapor barrier (hedging my bets on production and somehow coming up with a few grand here and there to buy the rest of my needed supplies and equipment) or 2) shut work down through the winter and redo the roof some time in the spring, and while ripping up the roof i could place insulation in the ceiling's existing framework (while saving $250 a week and paying off the loan by summer).
The bank explained to me that my potential is so great that they want to give me more money for the extra renovations (basically doubling my approved loan amount) and are willing to work around loan deadlines instead of going through with either of my two options. Apparently they really liked the work that i have done, my maintaining a positive attitude through all this, and my business plan. So suffice it to say, work is going to be going full speed ahead!
The bank explained to me that my potential is so great that they want to give me more money for the extra renovations (basically doubling my approved loan amount) and are willing to work around loan deadlines instead of going through with either of my two options. Apparently they really liked the work that i have done, my maintaining a positive attitude through all this, and my business plan. So suffice it to say, work is going to be going full speed ahead!
I have been following your thread from the start and find what you are working on interesting from not only a hobby point of view but also a business one.
That being said, I feel compelled to offer a bit of advice.
I am a small business consultant and work with many small business owners like yourself daily. The fact that you created a business plan puts you leaps and bounds beyond most and the advise that you have gotten from Anthony will certainly point you in the right direction.
That being said, running into unexpected problems and expenses should not be a surprise and should have been figured into the original equation to start with.
Don't let the bank mislead you here. They are not overly excited about your plan any more than most small business loans they make on a daily basis. They simply want to loan you more money. If memory serves from the start of the thread you secured a LOC for $10K and are running tight and they have agreed to increase it to $20K. Although they are willing to extend the terms, in the end, the increased interest is what they are looking for.
Also keep in mind that you are a hard asset rich business. That is, if you go belly up, they can sell your equipment to recoup some of their costs in addition to going after you personally for the rest. (I know....you wont go belly up, no one starting a business thinks they will). What happens though if you are in a car accident, or get sick? You are still on the hook for the loan.
You stated at the start of the thread that you were making money now through your culturing, or had the means to do so. My best advice to you, and this is professional advice, is to work VERY hard with what you currently have and do what you need through cash flow that you can currently produce. This may set you back for 6 months or so, but I assure you the need will still be there when you are in full swing.
You will enjoy your business much more, and make much better decisions if you do not have a mountain of debt over your head.
Please remember, the bank is only interested in your success to the extent they can lend you more money and make more money. NEVER forget that.
You CAN do this with no debt. Again, it may take a little longer, but I am pretty sure all businesses that were closed by the banks and all bankruptcies are due to owing the banks money!
Finally, please take this as simply advice from someone you will never know and I can understand if you think to yourself "this can can jump off a bridge". You wont hurt my feelings. It really appears that you are passionate about this, and I would hate to see you struggle down the road.
Good Luck to you in your endeavor!
That being said, I feel compelled to offer a bit of advice.
I am a small business consultant and work with many small business owners like yourself daily. The fact that you created a business plan puts you leaps and bounds beyond most and the advise that you have gotten from Anthony will certainly point you in the right direction.
That being said, running into unexpected problems and expenses should not be a surprise and should have been figured into the original equation to start with.
Don't let the bank mislead you here. They are not overly excited about your plan any more than most small business loans they make on a daily basis. They simply want to loan you more money. If memory serves from the start of the thread you secured a LOC for $10K and are running tight and they have agreed to increase it to $20K. Although they are willing to extend the terms, in the end, the increased interest is what they are looking for.
Also keep in mind that you are a hard asset rich business. That is, if you go belly up, they can sell your equipment to recoup some of their costs in addition to going after you personally for the rest. (I know....you wont go belly up, no one starting a business thinks they will). What happens though if you are in a car accident, or get sick? You are still on the hook for the loan.
You stated at the start of the thread that you were making money now through your culturing, or had the means to do so. My best advice to you, and this is professional advice, is to work VERY hard with what you currently have and do what you need through cash flow that you can currently produce. This may set you back for 6 months or so, but I assure you the need will still be there when you are in full swing.
You will enjoy your business much more, and make much better decisions if you do not have a mountain of debt over your head.
Please remember, the bank is only interested in your success to the extent they can lend you more money and make more money. NEVER forget that.
You CAN do this with no debt. Again, it may take a little longer, but I am pretty sure all businesses that were closed by the banks and all bankruptcies are due to owing the banks money!
Finally, please take this as simply advice from someone you will never know and I can understand if you think to yourself "this can can jump off a bridge". You wont hurt my feelings. It really appears that you are passionate about this, and I would hate to see you struggle down the road.
Good Luck to you in your endeavor!
chewitback
New member
Thanks dbraun for the input. My loan is currently $8k, and while the bank is willing to give me more, I have no intention of taking out another $8k or more. I will however take out what I do need to make this business happen.
I could do the route you have proposed (building myself up here and there via propagation), but as many of the other readers on this post can attest smaller scale cloning and operations naturally have much more overhead. Most people growing out of a tank or two in their basement make little more than enough to pay for their hobby. For instance, a blower that operates all my air lifts will cost me exactly the same if I am running one tank off of it than if I'm running 30 tanks. I could use a smaller blower in the mean time, but that just ends up being more cost to me because it's simply another thing to purchase. I have been working on this idea for 6 years now, and have seen more than a few friends wanting to start similar business ventures. They don't have the bank backing that I do and are always strapped for cash on building their business and seem to just be treading water. I went that route for almost 5 years, and while it got me a lot of experience and helped me define what I want to do, it didn't physically or financially build my business even a fraction of what has transpired in the past 5 months with the bank's help. I'm not saying it can't be done, because I know it can; I was living off of my coral sales alone for the first 3 or 4 months of this year, but taking out a loan when a bank sees a good thing come along (note I used a small town bank, not a blood sucking corporate or larger type bank), with a manageable amount of debt is not a problem. The bank isn't trying to scam me; if they wanted me to take out more money they would have offered it from the start. If they wanted me to ride out the loan and build interest they wouldn't have given me a one year term on the original loan. I know they are out to make money from me, but I also know its a long term working relationship with me that's their higher goal. I might need $12k to start my business now, but when I want another 50k later to acquire the property next to mine to expand and build a greenhouse for SPS or algae production, they know I'm going to come to them. Thats why they are willing to help me now. Hell, my lender was even willing to contact some roofers to help me get the roof work done in the next couple weeks before the cold really set in to ensure I stay on my personal goal of getting things moving in the garage by January. I wish I could go the route you advise and build things entirely from the ground up on my own, but it boils down to that being a long and tedious process of treading water like my peers. And I know I would love and enjoy that natural progression, but I also know I would love and enjoy propagating 200 anemones a day and selling those clones to 3 or more wholesalers on a regular basis, quite possibly making well into six figures within a year's time. To me, its worth the risk, without a doubt.
I could do the route you have proposed (building myself up here and there via propagation), but as many of the other readers on this post can attest smaller scale cloning and operations naturally have much more overhead. Most people growing out of a tank or two in their basement make little more than enough to pay for their hobby. For instance, a blower that operates all my air lifts will cost me exactly the same if I am running one tank off of it than if I'm running 30 tanks. I could use a smaller blower in the mean time, but that just ends up being more cost to me because it's simply another thing to purchase. I have been working on this idea for 6 years now, and have seen more than a few friends wanting to start similar business ventures. They don't have the bank backing that I do and are always strapped for cash on building their business and seem to just be treading water. I went that route for almost 5 years, and while it got me a lot of experience and helped me define what I want to do, it didn't physically or financially build my business even a fraction of what has transpired in the past 5 months with the bank's help. I'm not saying it can't be done, because I know it can; I was living off of my coral sales alone for the first 3 or 4 months of this year, but taking out a loan when a bank sees a good thing come along (note I used a small town bank, not a blood sucking corporate or larger type bank), with a manageable amount of debt is not a problem. The bank isn't trying to scam me; if they wanted me to take out more money they would have offered it from the start. If they wanted me to ride out the loan and build interest they wouldn't have given me a one year term on the original loan. I know they are out to make money from me, but I also know its a long term working relationship with me that's their higher goal. I might need $12k to start my business now, but when I want another 50k later to acquire the property next to mine to expand and build a greenhouse for SPS or algae production, they know I'm going to come to them. Thats why they are willing to help me now. Hell, my lender was even willing to contact some roofers to help me get the roof work done in the next couple weeks before the cold really set in to ensure I stay on my personal goal of getting things moving in the garage by January. I wish I could go the route you advise and build things entirely from the ground up on my own, but it boils down to that being a long and tedious process of treading water like my peers. And I know I would love and enjoy that natural progression, but I also know I would love and enjoy propagating 200 anemones a day and selling those clones to 3 or more wholesalers on a regular basis, quite possibly making well into six figures within a year's time. To me, its worth the risk, without a doubt.
Jeremy Blaze
Former Reef Addict
Made it a little more readable.
chewitback
New member
Thanks jimmy! I might have had a drink or two at the time of posting, but it all still holds true, but definitely in a more literate sense, with your editing. And again thanks to you, dBraun! I don't want it to seem like a retort, because I do appreciate your support and criticism. I won't get in over my head on this loan, which has also been a defining factor with the bank. I'm comfortable with what I owe and with the repayment period, and if it all hits the fan and bovines a wash (God forbid), I know it's an amount I'm willing and able to handle.
chewitback
New member
yes. The rubber roof repair can't be done with the current outside temps (need to be at least 65ºF and on the rise). So, I am going to a variant of dbraun's advice and pay off the loan during the course of the winter. however, once it does start warming up (around mid march) i will be ripping up the roof, adding in insulation while the roof is ripped up, do all the needed repairs, then make the vapor barrier. once the roof is insulated, then the epoxy and other finishing touches can be done and i will hopefully be able to start things in the start of april. In the mean time, i will hopefully be starting a few separate propagation tanks with my friend Spencer (who currently holds my brood stock at his place) in his reef room that he has all but finished. We have come to an arrangement that i think both of us will be happy with, at least until my property is ready. I will be posting updates on progress/mishaps (hopefully not any of those) between now and march, as they come along. happy holidays everyone!
best of luck to you. Seems like the building location has turned into a series of problems for you. What do you think you could have done differently to be more successful? If the roof isn't completed until April, when are you anticipating selling your first group of corals?
It looks like to me by all the post that December of 2012. I would not call any of these build out solutions to be setbacks at all. Since this building is not being rented and he owns it then he is just adding to his bottom line. Improving the property at this stage is the best thing that he can do instead of trying to do it while there is coral in there. This year and the next will probably be a loss as far as bottom line and taxes are concerned. this just sets him up for success in the future by far. Not to mention the peace of mind knowing that he has a sound building to start with.
redneckgearhead
Active member
Yea too bad about the roof. Your patience will pay off. I agree with trademark.
freetareef
New member
double post....
freetareef
New member
glad you are sticking with it. are you familiar with angel investors? like venture capitalists, except they have less controlling interest and are geared more towards small startups....you should Google it.
chewitback
New member
Major harvests are scheduled for some time late this year, if things go well. I have already told the restaurant/microbrew where i work that they have me for more or less another year (i told them when i got hired i would only probably stick around for 6 months to a year).
I am familiar with angel investors, freetareef, and have had several try to swing money my way. However, money isn't my issue right now, its weather. Its just something im going to need to wait out. I also would prefer to NOT have an investor simply because that leaves singular ownership to a potentially very profitable business...
I am familiar with angel investors, freetareef, and have had several try to swing money my way. However, money isn't my issue right now, its weather. Its just something im going to need to wait out. I also would prefer to NOT have an investor simply because that leaves singular ownership to a potentially very profitable business...
jimmy frag
New member
hew Chew, it was -12 up here the other day and there are still roofing companies out there working. saw one today re roofing a mall. i dont understand why you must wait till spring to fix your roof seeing as you are contracting it out and im sure the new roof comes with a warrenty. Time is money
I can't recall if I read what type of roof you are putting on at the moment as it has been a week or so since I started following your thread.
[Awesome venture by the way !]
I do understand this is a flat roof and do know that you can put a EPDM roof on at low temps due to chemical bonding.
Just a thought...
[Awesome venture by the way !]
I do understand this is a flat roof and do know that you can put a EPDM roof on at low temps due to chemical bonding.
Just a thought...
Last edited:
skaiter1007
New member
very informative 
chewitback
New member
i could build a slanted shingle roof on to of the existent roof, but that would cost around $2500 more, and that still does not include the insulation. I had discussed the roof work with several local contractors that I trust and all of them gave me the same answer my friend (who is doing the work on my building... not a standard contracting company) being that to put a long term roof on top and to have it done correctly for a non-extortionate price I would have to wait until its 65º and rising. The adhesive alone just for that is going to run several hundred dollars per five gallon bucket (and i think it was estimated that 2 or three of those would be needed for my roof as it is). I want to do this right the first time. I could take more money out in the loan, and spend it on this roof and the other required repairs right now, and maybe it would go off without a hitch. Then again, maybe there wouldn't be enough money, or there would be other setbacks, etc etc, then i have a larger loan payment plan, more debt, and still no business. The opportunity cost (which defines how much money my time is worth) may be greater with the business, but the risks involved would also climb greatly to keep going for now. Instead I'm working more (and still selling coral here and there), to pay off the loan quickly, then i will retake it out when things get warmer. It will provide a much more manageable debt with little risk. as eager as you may be to see this thing happen and watch things unfold on this thread, im more concerned with it actually being a success the first time around. Hell, i have spent years working on this plan and stream lining facet i could think of for my business plan, so 2 more months isn't going to keep me up at night. And if time is money, then i'm already rich because no one else seems to be doing this or competing with me... so all i have is time. Don't worry, I'm not giving up; I'm just resetting the loan to zero while i wait for the weather to improve, as the professionals who do roofing as their job have advised me. In a couple of months things are going to fire right back up and the roof, insulation, flooring, plumbing, and garage door will all get done one right after the other.
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