To open an LFS... Or to not?

[nagreen]

Hello,

I am an ambitious college student entering into my senior year, studying business.. I've been in the hobby for around 3 years now and have developed a passion for learning as much as I can about these little ecosystems we create.

I cannot help but want to open my own local fish store. I am very entrepreneurial-minded and I dream of taking on a challenge like this. I know that opening a storefront would require a great sum of capital up front in order to install that many tanks and purchase the equipment needed.

My thought, however, is that I buy 1 large frag tank, and start out of my house.. I'd become very involved in the local groups on facebook, and make a name for myself, fragging and shipping corals, reinvesting and saving any income that I get, until I have enough saved up to open an actual storefront. There I would take it on full time, doing maintenance and installations, as well as selling fish, coral, and equipment from the store.

That's my master plan.
But I know it isn't that easy.
So, to all of those who have opened, or attempted to open an LFS, what is your advice? Pursue it or run?
Anyone else feel free to chime in

Thanks!
Green

 

[Palyzoa]

My advice would be to do allot of research on the local market in your area and who you will be competing with. Find something unique that would drawl in customers from the competition.

 

[hdsoftail1065]

Lots of Research and a solid business case. Longevity of similar business, projected profit margins and a solid ROI exercise. Look at Competition risks Bick and morter against the internet sales. It's all doable but the majority of new business fails because they started out with a poor plan going in.

 

[Nburg's Reef]

I think a lot of $$ comes from also servicing tanks in homes and local businesses.

 

[lion king]

I wouldn't, lfs have a really had go these days. A brick and mortar can not compete with the internet. Lfs sometimes have to buy goods at a wholesale price that's close if not even more than what people can get online. Places like Marine Depot and so many others can offer lower prices and free shipping it just makes it impossible for a lfs to compete. Even livestock offered at lower prices and free shipping, the cost of maintaining livestock and the losses can just crush you, and an lfs really can't offer a guarantee. I watch a friend struggle nad the only way he makes it is because he runs another business in the same building.

I'll tell you where to make it in this industry, MAINTENANCE, a company that consults, sets up, stocks and maintains aquarium. Here in Vegas where I live that markets has boomed for the entire 27 years I've lived. Friends doing this can not even handle all the biz, and they make bank. We have a thriving aquarium culture hear, there are large public tanks, tanks at a restaurants, bars, apartment complexes, estates, I even have a friend living in an apartment that pays a service to maintain his tank. You could run a qt system in your home or a cheap non-retail spot or partner with an lfs to get your livestock. I use to help out a friend and it was awesome. I went to some fantastic homes, tanks beyond my wildest dreams. Back in the day even took a hiatus from my regular career and worked with a company that had contracts with some of Vegas hotels. This is bank.

 

[danreefman]

Goodmorning,

I do not own a fish store. But I do own a construction company. Never planned on it. It just happened. But either way. You'll probably hear alot of your crazy, retail is so hard, don't do it, and so on.

Business is hard, and good at the same time. The more you put in, the more you get back. Needless to say. Chase your dreams!! If you do your hobby for a living, than your making money and having fun doing it. No risk no reward.

Don't follow anyone, trust your heart.

Only thing I might suggest is move back in with your parents or other persons if possible, hopefully for low rent or free. So you can save some bucks. And go get a job at a fish store, for a while. See how that goes. First things first trust in God! He will not steer you wrong.

Oh yeah find a mentor, in any business.

 

[Waters]

I have no experience opening any business but I have seen more than a handful LFS open and close within a year since I have been in the hobby. These all appeared to be successful....not sure what happened but it must be A LOT harder than it sounds.....and it sounds difficult lol.

 

[nagreen]

Loving all of this! Thanks!

 

[andrewkw]

You're probably not going to get a good answer no matter how many replies you get but hopefully you get some things that you otherwise wouldn't consider.

A big question you should ask is are you motivated by profit or having an enjoyable life?
It's certainly debatable if you can sustain an LFS depending on your local market - some places will obviously have an easier go than others. If you have a GOOD livestock store you can probably still attract customers who would potentially buy other stuff because its convenient to get it there and not necessarily cheaper. It's already been mentioned maintenance is how you make your money. Some people would be happy spending 40,50,60 hours a week cleaning tanks, either customers or their own at the shop and others would not. Even under the best circumstances you're not going to get rich but you can potentially break even / make enough money to live.

The biggest concern I would have outside of the financials is you've been in the hobby such a short time. You probably have not experienced any burnout yet. Almost everyone does at some point. Either due to crashes or things beyond their control or just plain bored. You probably want to get through some of those setbacks on a personal level first before you go to professional level.

I run a small business which I purchased as an existing profitable business. Basically doing things similar to the previous owners. It's safe in the short to medium term as far as sustainable but I probably would be happier running a reef business breaking even. That being said I can at least pay my bills and enjoy my reef now as much as I did in 2005 when I got into the hobby. My personal biggest fear in getting into the industry is not going broke. It's losing the joy of my own personal reef tank.

 

[LuizW13]

I would get a job at a LFS to learn about owning one from the inside. You might learn that it may really not be worth it, or you may find all the little things that place is missing that you would be able to capitalize on when you start your own.

 

[ca1ore]

That's a NOT .....

 

[nagreen]

You're probably not going to get a good answer no matter how many replies you get but hopefully you get some things that you otherwise wouldn't consider.

A big question you should ask is are you motivated by profit or having an enjoyable life?
It's certainly debatable if you can sustain an LFS depending on your local market - some places will obviously have an easier go than others. If you have a GOOD livestock store you can probably still attract customers who would potentially buy other stuff because its convenient to get it there and not necessarily cheaper. It's already been mentioned maintenance is how you make your money. Some people would be happy spending 40,50,60 hours a week cleaning tanks, either customers or their own at the shop and others would not. Even under the best circumstances you're not going to get rich but you can potentially break even / make enough money to live.

The biggest concern I would have outside of the financials is you've been in the hobby such a short time. You probably have not experienced any burnout yet. Almost everyone does at some point. Either due to crashes or things beyond their control or just plain bored. You probably want to get through some of those setbacks on a personal level first before you go to professional level.

I run a small business which I purchased as an existing profitable business. Basically doing things similar to the previous owners. It's safe in the short to medium term as far as sustainable but I probably would be happier running a reef business breaking even. That being said I can at least pay my bills and enjoy my reef now as much as I did in 2005 when I got into the hobby. My personal biggest fear in getting into the industry is not going broke. It's losing the joy of my own personal reef tank.

I agree. I know that I could go out and get a job and make more money by working 9-5, but that just wouldn't fulfill me. I have always dreamt of working for myself. I don't expect to become a millionaire from opening an LFS but it does seem like something that would be a fun challenge, and allow me to turn my hobby into a full-time job!
You are right about the burning out. I know that will probably come eventually with some major issue that causes a tank failure etc.. But I think it's a part of life. Everyone gets burnt out on things that they do for awhile. I'm sure everyone hates their job at some point in their career too.

Thanks a lot for responding! Glad to hear from someone who has the experience running a small business! I'm putting a lot of thought into this..
And thanks @danreefman .. I agree, one thing I think I do need to do is get a job at an LFS so I can see behind the scenes the way everything works

 

[tablesalt]

I had this same thought while I was in high school and in college. I went to the LFS and got a job so I could see what it was like. I would not think of opening up a store like this unless I had worked at one for at least a year to see what things are like. I worked at the LFS from 2005-2007 while in college. The place I worked at had around 200 fish tanks, half salt and half fresh. It is a hard business running an aquarium store. The following are some things (in no particular order) that you need to think about. Bear in mind these are lessons learned from a LFS in 2005-2007 that may or may not still be applicable.

1. Lots of fish die in shipping and in the store. Something like 15% were DOA. You would lose around 3% of inventory from death in your store every week. Life expectancy at the store is low. By the time you as a customer get a fish home you've already gotten a fish of above average quality.
2. It is a PIA to clean 200 tanks on a weekly basis.
3. Competent aquarium store help is hard to come by. It generally commands minimum wage staff, and people on that budget are generally not knowledgeable about the hobby. My co-workers were all college students or ex-cons.
4. Disease is a huge problem at any aquarium store. Look how many LFS have Aptasia crawling through their tanks or worse. Most stores can't quarantine things and generally have to just dump the fish in. If they are sick they go into a "treatment tank" until they are better.
5. We had around 200 nets we would rotate through and dump into the "dirty bucket". We had a big bleach vat and a dechlor vat and would sterilize the nets after every use. Same thing with siphon hoses. Many LFS don't do this and you can see the results. You need to know about setups like this before you can start.
6. Our place had an automatic water changer set up on all the freshwater tanks. Essentially, we had a giant RO system that dripped water into each fish tank, there was an overflow on each tank leading to the sewer, so all the tanks had their water changed 100% once a week. This is a huge deal at the stocking levels you are talking about.
7. Something is always breaking. With 200 tanks, there is always a light that needs fixed, a broken powerhead, or, my least favorite, a broken heater. I got shocked atleast once a week from a broken heater.
8. I didn't do servicing of the tanks, but the commercial servicing of tanks was profitable for the company I worked for. They stopped doing residential because people would always be late or there would be some problem.
9. It only takes one leaky tank in an upscale customers house with mahogany wood floors to bankrupt your company or make your insurance skyrocket.
10. Some people will listen to you, but you will always have ******* customers. People will shoplift fish food. People will shoplift fish (it has happened). We have banned customers from the store for dumping fish we wouldn't give a full refund for in the parking lot. People can be jerks.
11. Like many things, LFS business follow's the 80/20 rule. 80% of your business comes from 20% of your customers. For us the big hitters were the local gynecologist (who always had gross stories) and the local school district. The doctor was a ******, but you have to deal with these people sometimes when they keep the light on.
12. The power bill was insane.
13. The water bill was insane.
14. The exit strategy for a LFS is difficult.

These are just a few of my experiences.

Overall, I had a lot of fun working at the LFS. It is an experience I would strongly recommend to you before opening up a business like this of your own. If you live in Ohio and want to open and operate one locally, email some other LFS in other states. Let them know who you are and what you'd like to do. Maybe see if you could come on as an "unpaid intern" and sign a "non-compete" in another state. Many stores would be happy to have a free set of helping hands and share their knowledge. I ended up skipping out on the LFS and joined the USMC after graduation. I now work as a federal contractor making much more than I would have at the LFS while still getting to play with fish. Whatever you decide, good luck!

 

[danreefman]

Your young enough to fail 8 times before you make it.

When you get that job. Take ownership no matter the pay. Get the clients to love you. When you get your own place you will already be known and loved.

Never listen to the neigh sayers. There around every corner.

I listened to the negitivty. Only listened to it as mistakes made before me. So I don't have to learn that way.

Stay hungry. If you get burnt. Listen to some motivational speeches, and get back up.

 

[Jboulerice]

I would also run with the crowd; I grew up in miami and saw the finding Nemo boom hit the industry so hard... I got into the hobby around 2006 and there was a LFS on every corner, three years later; that number plummeted.

I assumed Miami store owners where laundering money due to their preference for cash transactions, not even joking these guys all loved the coral and no idea what turning profits are.

I moved to Minneapolis for a few years; saw all the LFS close but two. And they have a huge reef scene

Move to NorCal, saw every store close in a year; there’s only 1 LFS worth visiting and they just took down all their tanks to fix leaking systems that are in horrible operating condition.

Insurance; utilities, labor all of those factors will price you out unless you’re born with a silver spoon. If you have endless money to tick down the drain go crazy!

But if you want to make money off your hobby; with little overhead. Start with som; get a huge plastic bins, premium equipment and run a bounce mushroom and collectors zoa online store... pump money into marketing a brand similar to the high end guys.. and cut costs below 20% of your competitors. Otherwise you won’t stand a chance from the big dogs.



With only 3 years of experience dude you’re asking for failure. The hobby rewards loyalty, time and patience... something store owners usually have to put aside for keeping the lights on. Last thing you want is killing animals for fun business idea.

If you want to immerse yourself in marine biology try donating your time at a local marine institution. Karma will go a long way vs trying to manage a sinking ship.

If some is telling you to go for your dreams.. ask them how many businesses do they run and how long have they been in business... lol most of buddies that owned LFS are out of the game for good and would never do it again.

 

[lion king]

Even here with our vibrant aquarium culture, the only lfs that thrive offer set up and maintenance. One lfs owner told me 2/3 of his income is set up and maintenance. I know independent maintenance guys making more than a $1000 profit a week and enjoying what they do, not even working a 40 hour week. If you enjoy what you do and are good at it, the money will follow. I asked an the lfs owner of the store I consider the best around, "How do you guys compete with the internet", he said "They don't"; the shelves are stocked with stuff covered in dust and many times I'm the only customer in the store. These guys were avid hobbyist and the store is likely a tax write off.

 

[nagreen]

I would also run with the crowd; I grew up in miami and saw the finding Nemo boom hit the industry so hard... I got into the hobby around 2006 and there was a LFS on every corner, three years later; that number plummeted.

I assumed Miami store owners where laundering money due to their preference for cash transactions, not even joking these guys all loved the coral and no idea what turning profits are.

I moved to Minneapolis for a few years; saw all the LFS close but two. And they have a huge reef scene

Move to NorCal, saw every store close in a year; there’s only 1 LFS worth visiting and they just took down all their tanks to fix leaking systems that are in horrible operating condition.

Insurance; utilities, labor all of those factors will price you out unless you’re born with a silver spoon. If you have endless money to **** down the drain go crazy!

But if you want to make money off your hobby; with little overhead. Start with som; get a huge plastic bins, premium equipment and run a bounce mushroom and collectors zoa online store... pump money into marketing a brand similar to the high end guys.. and cut costs below 20% of your competitors. Otherwise you won’t stand a chance from the big dogs.



With only 3 years of experience dude you’re asking for failure. The hobby rewards loyalty, time and patience... something store owners usually have to put aside for keeping the lights on. Last thing you want is killing animals for fun business idea.

If you want to immerse yourself in marine biology try donating your time at a local marine institution. Karma will go a long way vs trying to manage a sinking ship.

If some is telling you to go for your dreams.. ask them how many businesses do they run and how long have they been in business... lol most of buddies that owned LFS are out of the game for good and would never do it again.

Thanks for your input.. Don't chase your dreams.. Got it.. Haha. I'll put that into consideration..

 

[lion king]

USC or Clemson, I grew up in SC lol.

 

[ca1ore]

Never listen to the neigh sayers. There around every corner.

Grammarians too LOL ......

The LFS is a dying business model ...... whether nay-sayer or yeah-sayer. Most of the ones in my area have gone out of business; the ones that do survive do so because they have a robust services business. Newsflash: you don't need a physical store for that. In fact, one of the local places closed his physical store (all that overhead and fixed cost gone), and relocated the coral frag operation to his house. He still does tank servicing and online frag selling - which was 125% of his profit. If I were going to go into a reef tank business, that is what I would do.

 

[Oldreefer44]

As someone who worked in retail most of my life and ended up managing over $140 million in worth of stores I agree those recommending working in an LFS for awhile. The world is littered with people who started a business because they loved a certain hobby only to find out that they hated everything else about running that business. What that business is, is less important than your skills as a leader and your ability to make good business decisions. And as someone with an MBA, I can tell you that your degree is only a ticket to the big leagues and will have very little to do with your ultimate success.