What's needed to start a reef store?

[BradsOcean]

I am sure some people on RC own a reef store. I was just wondering what you would do to start your own business? How much do you need to start? What you need? Does it usually succeed or fail? i know most small businesses fail but just wondering.

 

[Longchamp]

Established stores have trouble succeeding, let alone new stores.

The latest new store to open here, however, has been extremely successful with their business model:

they have a small unit in a strip mall (store is maybe 15' wide). They carry little to no equipment. A few random powerheads and pumps, supplements, some salt, sand/crushed coral. 80% of their store is dedicated to long shallow 120g MH lit tubs of corals they sell. They also have about 30 tanks of fish and some more of small inverts.

They can order big equipment like tanks, lights, etc, but they dont keep it in the store

It helps that their water is included in the rent, lol.


weird, it wont let me post the link. the store is Mr Coral

 

[seapug]

I don't own an LFS but have started retail stores in the past.

This is worthy of a book, but the basics:
You start by getting a DBA and Tax ID number from your local franchise tax board. This is what registers you as a retail business so the government can start picking your pocket from day 1 and will allow you to order from wholesalers. Prepare to get reamed every step of the way.

Cash needed to start up can vary depending on what type of business you want to get involved with (mailorder, brick and mortar, etc.) and where it will be located.

For a typical retail store location-- between paying rent, setting up and stocking the store, paying your bills, employees, yourself, and the government, you can probably expect your first year to be a total wash of around a couple hundred grand.

If you're lucky and play your cards right, you'll start to see some growth in sales after the first year and be able to convince your funding source to pour in another year's worth of cash in the hope you'll be close to turning a profit after the second year. If you make it that far, you've done well and might actually have a viable business that can support itself after the 3rd year or so.

 

[burton14e7]

Probably want to go to the library and do some research on how many people per day drive by the location you want to start up with.

Find out local $ per sq/ft prices.

Draft up a monthly expenses on excel to determine monthly costs and draft a business plan/model for 150% of your annual cost for a loan. There are records on business types and what their typical expenditures are.

Since you're in southern california I found all those stats at the newport beach library for a business law and business principles class.

 

[mm949]

alot of money and the ability to go without a paycheck for 12-24months.......

 

[Mako]

Don't quit your day job!

Seriously, plan on having enough funds to finance the operation for 3 years. I believe that is the average for a new start, in any business, before they come close to operating in the black.

 

[frednwilma1999]

One more note worthy item, Try and open with no partners. They have a way of getting in the way so to speak.

 

[greenmonkey51]

I think a better option is going out of a garage or basement. Hook up with you local clubs and advertise in the local classifieds.

 

[seanm001]

Mr. Coral is an excellent example, but you have to bear in mind that the guy who owns Mr. Coral has a good deal of experience as an entrepreneur in another industry. He's done an exemplary job of developing and implementing a good business strategy, and I really hope he does well because he's an inspiration to others of us who are entrepreneurs in our own way. And, by the way, he was a hobbyist first, and saw a way to turn his hobby into a job (that I hope he enjoys).

I think part of what makes Mr. Coral successful is that he essentially operates three different stores. There's the retail store in a small strip mall outside of town where rents are probably comparatively low. You can go into the store, get real advice from real people. Sure, they want to sell you something, but we all know to take what the LFS says with a grain of salt. They run in-store specials now and again, like buy 2 get 1 free, but you don't know the specials until you show up. This draws locals into the store (he definitely attracts some people who make a significant hike to get to the store).

Then he's got the website. He runs different specials on the site, and everything is WYSWYG.

Then there's eBay. Again, WYSWYG. He draws people into eBay auctions with low intro prices and lets people bid up to what they think is a fair market value. Plus, he gives you really comeptitive prices for shipping.

As far as I know, he doesn't cross the inventories or, if he does, he's got some really good inventory system in place to keep from double-selling an item. Plus, I think his cherrypicker does a really good job of picking outstanding specimens, even if they're not Ultra-Rare, Limited Edition, or tagged as ORA or Tyree or some other price-hiking pedigree. I've never had a problem with any of the stock I've bought from him (corals, fish, or inverts), so I can't say much about shipping / DOA / refund or replacement situations.

I live about a half hour from the store. I've bought stuff from him both on eBay and in the store. I'm probably in the store once a month or so. You can go in there and pick out some tiny frags for $5.00 each or you can buy enormous and beautiful specimens for big bucks, and everything in between. I don't doubt that his initial investment in equipment and stock was significant, but he definitely is doing something different than everybody else.