Attention All LFS Owners

[Anemone]

A friend of mine made the jump from servicing tanks to retail store - it cost him $100,000 for the first 4 months. Had a very nice set up, unfortunately didn't have enough money to tide him through until he began to make money. He was gone by month 5.

That was 4 years ago. I noticed another small store opened in my area a month ago. After talking to the owner, I discovered he bought the service accounts from my friend when he went out of business 4 years ago. NOw he's making an attempt at a store. Smaller scale - we'll have to wait and see if he'll make it.

Kevin

 

[teevee]

i agree with GS. my father opened his own commercial greenhouse after being in the industry for twenty years. every bill is a struggle even after four years because he didn't not plan adequately. he is only making it because of his people skills.

small business may be a huge part of our economy, but that's because there are so many starting up at one time, and closing down soon after. think about all the little hole in the wall shops you've seen in the past few years that are gone now. in my own hometown, which is the main centre for 250,000 people, there is one pet store, petland (a chain). before they came along, there were at least three or four at any one time, but constantly struggling to stay in business. only one in my memory lasted for more than a decade (out of probably 15 shops).

the experts have the data that supports the fact that the vast majority of businesses close within 5 years.

 

[DontYouJustWish]

ss,

Isnt Jeff's up there around Downey? I haven't been to the store yet, but from what I hear its one of the better ones.

 

[Philippe Dor]

If you are going to start up you are the perfect candidate to use my Ezy-clean system for your holding tanks (will save you hundreds of hours of labour per year) and the Ezy-reef system for your display tanks and tanks you want to sell to your customers.
An Ezy-reef is the easiest and safest way to install a reef tank, the main question is , can you glue fishtanks yourself or are you buying the tanks from another manufacturer.
Please contact me if you are interested, [email protected]
I guarantee you won't regret it, good luck, Phil.

 

[Philippe Dor]

If you are going to start up you are the perfect candidate to use my Ezy-clean system for your holding tanks (will save you hundreds of hours of labour per year) and the Ezy-reef system for your display tanks and tanks you want to sell to your customers.
An Ezy-reef is the easiest and safest way to install a reef tank, the main question is , can you glue fishtanks yourself or are you buying the tanks from another manufacturer.
Please contact me if you are interested, [email protected]
I guarantee you won't regret it, good luck, Phil.

 

[Anonymous]

My only recomendation is to not specialize yourself to death. There is no reason that you can't do fresh and salt or even full line depending on the market in your area. The broader the items you carry, the broader your customer base will be.

Glenn

 

[Anonymous]

My only recomendation is to not specialize yourself to death. There is no reason that you can't do fresh and salt or even full line depending on the market in your area. The broader the items you carry, the broader your customer base will be.

I disagree - We are marine-only, many of our customers have commented favorably over the years. Specializing infers that you and your staff are specialists (of course you must be able to back that up!) It's okay to cater to niche markets - the key is to be sure you have an untapped niche that is large enough to support your planned operation.

In the LA area it seems like there is quite the market for a GOOD aquarium specialty store i.e. high end FW and Marine. Make it a trendy upscale shopping experience and you'll have people coming in droves. However you gotta ramp up slowly. The biggest death of a startup retail outfit is not paying attention to cash flows.

 

[kevinpo]

I am going to be starting my LFS March 1st Greg’s advice is very sound. After having built and managed MFG plants in Mexico (2), Poland, and Brazil I'm going to try something a little different than the corporate world in that the buck stops here

Here are a couple of tips that really helped (read saved) me a lot of work. Go to your local Small Business Admin. Office. They have a CD that has templates for your sales forecast, business plan, expenses, etc. to get you started and enable you to figure out how much it will cost and if you can afford it. They will also hook you up with a SCORE counselor who will be a great help. Best of all it's free! The SBA also has tons of books you can check out.

BTW it's costing me about 11K to startup so you don't have to have a 100K to get going just a sound business plan

Regards,
Kevin

 

[LFS42]

All the above sounds like good advise.
I agree a sound business is probably the best route to take first.
I have 2 stories that I think you should read.
(1)
The store I work for just moved into a bigger location, I think I overheard
the price was about $1,000,000 (no I didn't miscount the zero's)
The store has been setablished for at least 20 years, and the owner built instead of leased. It's a full service pet store that specializes in fish and reptiles. We hold free how-to seminars twice a week about everything from keeping a pet gerbil to advanced reef keeping. We are packed on the weekends, and can barly keep up during the week.
Staffing is realy the hardest to do. I'm only part time because the pay is crap, but discount are nice. In the 2+ years I've been there, I've seen at least 20 fulltime employee's go through the door. I say this, becuase your business is only as succesfull as your employee's.

The filter system was the biggest upgrade in the new store. In the old store, we used the gang tank sump method. (30 tanks linked to 1 sump)
The downside to this was if 1 tank was infected, soon the entire system was infected. Even with UV sterilizers. Now only the saltwater is on that type of system andf the coral system is seperate from the fish.
All the FW are on a drip filter.

(2)
about 10 years ago, there was a store that specialized in marine and had some FW. He only had 1 employee and made his tanks out of a sheet of glass, wood, and swimming pool paint. His displays where great, and the prices were the cheapest around. ($2/pound live rock)
His niche was to sell cheap. Well, after the florida live rock ban went into effect and the internet, he lost his customer base and went under.

Morale of the story, don't just sell stuff to get the money, You've got to go the extra mile to make yourself standout. Find the niche that the internet stores can't do.

Just my 2 cents.

 

[Anonymous]

I disagree - We are marine-only, many of our customers have commented favorably over the years.

I understand. I'm just saying that if there aren't enough local reefers or marine keepers to get your store going in the beginning, there isn't anything wrong with expanding your scope. I don't think a good marine only store will work if there are no other pet stores any where near it as the customer base won't be as dense.

 

[kevinpo]

The decision on what products and livestock to carry needs to be based on your market (not on the stuff you want to see in your tank ). If you plan to sell only locally then that market should be your target. If Wal-Mart and Petco are in a small town/market area and are selling fresh water fish for less than you can buy them for wholesale, it's probably not a good idea to carry fresh water fish. On the other hand if it's a 50 mile drive to the nearest fish store......You get the picture. There's an old saying, "know your competition better than they know themselves". This is true for your market area and target customers also.

Here is a fictional (well maybe) scenario about a LFS that demonstrates the above point.

A LFS employee is on Reef Org. a couple of hours a day. He sees all the fantastic tanks, setups, equipment, and livestock. Since he is the manager at the LFS he thinks, if we would carry these products our customers would be more successful and we would sell at ton of stuff. So he gets the owner to OK an order for a bunch of Oceanic RR tanks, metal halide bulbs, calcium reactors, rare angels, fairy wrasses, etc. for a total of maybe 25K. Well the fish die off from weeks in store tanks and the equipment won't sell.
Why you might ask? Well it's a blue-collar town with 7% unemployment and a very low average income. When the customer sees the $100 price tag on a Scott's fairy wrasse and $120 for a light bulb he buys the $12 clownfish and gets a shop light from HD
Their average customer never heard of any BB and 60% don't even have internet available even if they do own a computer so why would they even consider spending that kind of money.

This is just one of a hundred different marketing/management snafu's that could occur if you don't know your market/customers. The flip side is you can create a market through free/low cost classes, advertisements, etc. but these types of things need to be thought through carefully before you plunk down your hard earned/borrowed cash

Regards,
Kevin
Oh yes I have some inventory/turns examples too

 

[Anonymous]

If Wal-Mart and Petco are in a small town/market area and are selling fresh water fish for less than you can buy them for wholesale, it's probably not a good idea to carry fresh water fish.

On the contrary, you have those guys creating the market for you. Provide better quality, information, and service and you'll do okay.

 

[kevinpo]

Rover,
Yes that can certainly be true but not in every market. So you still have to know your market in advance.
I hear it often in the LFS talking to customers wondering why the LFS is charging so much compared to on line or giant retailers. They really think the LFS is gouging them and don't care very much about service, or information, and they don't know anything about quality (except of course what the fish store person tells them). In my market price is everything unless you can make the customer understand the justification for the expense. This applies mostly to equipment.
For fish you better just carry cheap run of the mill fish here. If it costs more than $30 it's not going to sell very easily. 7-8 months ago not one employee or customer I knew of had ever heard of any fish BB's I couldn't believe it. I tout the boards any chance I get and plan to put a few of the links on my business cards. I really believe education is the key.
One thing I think that really impresses customers is a great display tank with lots of color and fish. That is something chain stores have difficulty duplicating and gives you some instant credibility.

Regards,
Kevin

 

[MarkO1]

Well, here's my 2¢ worth....

Don't try to outsell Petco... it ain't gonna happen.

Knowledge pays... consider your operation as "services" as opposed to "sales".

People oooh and aahh over reef and salt setups. Show a nice display in the window and you may generate walk-in traffic and maybe a new customer.

You might want to consider supplementing your income fragging corals in a greenhouse and selling them online. I think there's a market for that :wink:
_________________
Mercedes Benz C Class

 

[Anonymous]

Well, here's my 2¢ worth....

Don't try to outsell Petco... it ain't gonna happen.

Thats not necessarily true - usually as you grow and shop carefully with your distributors you can match or even beat PetCo's prices. This is a common misconception and worry left over from 5-10 years ago when the big warehouse stores initially threatened the "mom & pop's." M&P's failed because they didn't adapt not because it's impossible to compete with the big guys.

 

[Reeffreak]

This is a great topic for a thread. I have thought about doing this same thing, but the financial risks have me too scared. If it takes anywhere between 10K-40K to start and get running, how does one recover from failure. I work as an IT admin and if I spent 2-3 years of my life working on a dream that fails........not only would I be out the investment but I would have a difficult time getting back into the computer industry due to my lack of experience with the latest software.

Maybe I am just chicken, but I keep thinking how would I support my family if a my new business went under. To all of those that try, good luck and I wish the best.

 

[Anonymous]

Well, here's my 2¢ worth....

Don't try to outsell Petco... it ain't gonna happen.

Thats not necessarily true - usually as you grow and shop carefully with your distributors you can match or even beat PetCo's prices. This is a common misconception and worry left over from 5-10 years ago when the big warehouse stores initially threatened the "mom & pop's." M&P's failed because they didn't adapt not because it's impossible to compete with the big guys.

Agreed, have you actually checked their dry goods pricing lately? Like most retail stores I am sure they price goods at a certain 'level' depending on the market they are in but aside from loss leader items I see there (like the 30 dollars for 200 gal salt) most of the prices are pretty high. I won't comment on livestock there for fear of someone pulling a pwhouse suit on me.