advise on opening a pet store

[vinnyraptor]

Originally Posted by SnakeBlitz33
http:///forum/post/2915783
Vinny, Here's food for thought:
Rent: $1000/month for 1,000sq ft. ($1 per sq. ft.)
Water: $80
Electricity: $750 (which is cheap IMHO)
Advertising: $750+
Internet/phone: $140
Payroll: 4 people at $6.85/hr 160hrs a week = $4,384 per month (by the way, that is minimum wage) (I consistantly worked over 120hrs a week on average when I owned a store AND had 3 employees)
RETURNS and UNCOLLECTABLES: $500
STOLEN GOODS: $100
Debit/Credit card machine charges: $30+2.8%
CAR GAS: $200
Aquarium Maintenance Costs: $300
Fish food: $100
Live Goods: $3000
Dry Goods: $1200
You've already spent $12,534 your first month in business. That's not including security deposits for getting your electricity, water and gas started. That's also not including all of your live goods, dry goods, aquariums, lights, filters, skimmers, pos system, countertops, racks for dry goods, peg board, pegs, exterminators, plumbing parts, extra lighting for merchandising effects, planning materials to keep maintenance accounts in order, business cell phones
Also You have to think of something else too - you and your partners may want to buy a house if you haven't already - Mortgages range from $800 to $1500 a month. (that's an extra $3000 a month that your business has to make. Don't forget groceries and restaurant money. I was eating Rom'n'noodles at least once a day because I couldn't really afford anything else. Toilet paper, cleaning supplies, chemicals for your tanks, fish food - oh yes, fish food - ugh!
So, lets just say that all of that is true... your up to $18,534 in MONTHLY expenses. that's how much PROFIT your business has to make each month. To make any money, you will have to sell at least double the amount of profit that you want to make. IE 18,534 x 2 = $37,068 per month of live goods and dry goods that you will have to cover.
In my first month of sales, I only sold about $600 which means I only made $300 - couldn't even cover rent.
Lets just say that you need to absolutely cover all of your expenses for an entire year: you would need: $444,816 a year in sales to cover your monthly expenses. Are you sure you really want to do this?
I had 1000sq ft of selling space too, so I know what my expenses are.
There's probably a few more expenses in there that I haven't thought of that are monthly charges.
thanks Snake and OUCH! the only thing i know i can eliminate is payroll, the 4 of us would work the store.

 

[snakeblitz33]

Still, if you eliminate payroll - how are you going to eat? How are you going to pay your personal bills? How are you going to pay your own rent, water, food, entertainment, gas, internet/phone, etc?
If you eliminate payroll, you are still paying out $8,150 a month just to hopefully stay in business.
In my storefront, I was only covering 10,000+- dollars in sales each month. A "profit" of only 5k each month. If you don't keep buying live goods and dry goods, no one is going to come to your store if you have nothing to look at.
The mark up on fish, inverts, plants, cats, dogs, hampsters etc. isn't that much either. By the time you pay for the live good and overnight shipping, the markup might be only 1.5x or so.
So, Vinny, this is what I highly, highly, highly suggest - if you are going to do aquatics only....
One 150 gallon freshwater heavily planted tank on an average priced stand. Whatever fish you want - discus preferable - it shows your skills. 2x250watt 10k metal halides in a nice/average high rise frontal open canopy. Get this tank drilled in the bottom and then plug up the holes with bulkheads and caps. This is so that you can sell the tank easier when either your business fails or you want to get out of the business.
One 150 gallon saltwater reef tank - mixed reef, soft corals, LPS and SPS corals on a nice stand and canopy. 3x250watt 20k metal halides. Pre-built sump that you can buy from a supplier. Convert a section into a deep sandbed/refugium and have an external recirc skimmer.
more on the next post.

 

[snakeblitz33]

Don't find a place that costs a grand a month. That's suicide, especially on such a small budget. Find a place that is out of the way for 250 to 300 a month. Just get a one room place that is only 200 to 400sq ft. Have a few desks in there. Consulting, advertising, and accounting desks, I guess. lol. Do NOT buy an expensive POS system. If you are looking for one, however, I am selling one.
You are a store - but you do not directly sell live goods. You sell full setups at a time and do maintenance services and ponds and watergardens. You can also offer consulting services on setting up aquariums, ponds, watergardens, breeding systems, etc. Have package deals and offer customizations. Rent aquariums and equipment as well - if you can pull it off! I would rent just the equipment and the tanks and live rock and sand and let the customers stock the tank themselves while you do maintenance services on it.
Anyways, that's just my ideas, if I were to go into it again. That's probably what I will do when I get back in the business in another five to ten years or so.
All I'm saying is that you absolutely DO NOT have enough money to start a full line aquatics/pet store.

 

[jackri]

I totally agree with not limiting yourself. You have to provide services as well to tank maint and cleaning for stores, doctors offices etc. The more services you can offer the better odds you have of not going out of business during slow times and have something carry you through it. The cleaning and set up service you can always start now from your home and as you work your way into the business the store front can come later... and hopefully you would have some customer base set up from doing a servicing side. Just all ideas but go slow and try and minimize the costly mistakes. You may find profits lead you in a different direction than what you orginally planned.

 

[snakeblitz33]

Here's another suggestion!
Start a home based business for now. Take that 12k and put it in maintenance equipment and advertising. Put ads in free classifieds all over the internet, buy business cards and put them everywhere that you can think of. Put them in saltwater and freshwater books at the book store - put them in the magazines as well. Leave business cards on tables after you get through eating.
Buy vinyl for your car - cover it in your business name and number and tell what you do on it as well. Buy a cheapo used truck - something for like 1500 so that you can have enough room for water bottles and tough work - (and oh yes, owning a store isn't all laid back... you do hard manual labor)
Buy Google Ad space. Buy a mailing list from your local clerk of court. Oh, and make absolutely sure you buy general liability insurance - just incase you

[hr]
up and bust someone's tank wide open - insurance will pay for it. OR also - just incase when you are working on a tank and there's water on the floor - if someone comes by and slips, that will be covered as well.
If you are going to start the business as well, go ahead and when you get your business license, get the paperwork done to become an LLC. Limited Liability Company. Just incase your business does fail - and you get out and shut down your business - if you owe a bunch of money to creditors, the creditors can't go after your personal belongings and bank/savings accounts or retirement money. IF they can, they will even take your houses just to pay off a little debt. Also, another thing is that when you get your business license, they are going to try their hardest to put "retail pet store" on your license. Tell them that you are going to sell drinks and cloths and gifts too - that will make them put "retail pet store and sales miscellaneous." It will let you buy a whole bunch of other wholesale goods that are not related to the pet industry. IT might save you a little money.

 

[snakeblitz33]

Oh, and by the way - if you don't know some of this advice that I am telling you right now - you don't need to go into business anyway. You are going to get run over. If you or your brother or your wifes don't have people skills, paperwork skills, and experienced personal knowledge about the hobby - your not going to make it.

 

[jackri]

I know the pet stores here get their bread and butter from the dog/cat side of the sales. The saltwater fish portion is a small portion... not sure if they make any money at it.
One of the pet stores set up a nice saltwater section... let it all go in about 6 months.... and oh after a year later they still haven't done anything to it.... yeah their laziness... me having one less option in town.

 

[snakeblitz33]

Big box pet stores like pet co and pet smart can make their sales in dog and cat stuffs and then when it comes to the aquatics section, they can take a loss. The aquatics department in any big box store just bring some people in - they don't necessarily know they can make a profit in it. Live fish stores can only sell aquatics and they HAVE to make a profit at it and HAVE to be dang good at it. It's a lot of work!!
If I were you, I would take that 12k and either invest it in the stock market OR ...
I would buy and build a "water and ice" dispencer on the corner of some lot. Think about it - replace the membranes, collect the money - put more bags of ice in the machine - advertise it a little. Then, when you can get some sales data for the ice, sell some advertising space on the bags. hehehe.

 

[snakeblitz33]

So, any progress with the decision? I'm anxious to hear if you are going to go through with it or not?

 

[snakeblitz33]

And the verdict is.....??

 

[vinnyraptor]

Originally Posted by SnakeBlitz33
http:///forum/post/2916460
Still, if you eliminate payroll - how are you going to eat? How are you going to pay your personal bills? How are you going to pay your own rent, water, food, entertainment, gas, internet/phone, etc?
If you eliminate payroll, you are still paying out $8,150 a month just to hopefully stay in business.
In my storefront, I was only covering 10,000+- dollars in sales each month. A "profit" of only 5k each month. If you don't keep buying live goods and dry goods, no one is going to come to your store if you have nothing to look at.
The mark up on fish, inverts, plants, cats, dogs, hampsters etc. isn't that much either. By the time you pay for the live good and overnight shipping, the markup might be only 1.5x or so.
So, Vinny, this is what I highly, highly, highly suggest - if you are going to do aquatics only....
One 150 gallon freshwater heavily planted tank on an average priced stand. Whatever fish you want - discus preferable - it shows your skills. 2x250watt 10k metal halides in a nice/average high rise frontal open canopy. Get this tank drilled in the bottom and then plug up the holes with bulkheads and caps. This is so that you can sell the tank easier when either your business fails or you want to get out of the business.
One 150 gallon saltwater reef tank - mixed reef, soft corals, LPS and SPS corals on a nice stand and canopy. 3x250watt 20k metal halides. Pre-built sump that you can buy from a supplier. Convert a section into a deep sandbed/refugium and have an external recirc skimmer.
more on the next post.
dude im keeping my day job and so is my brother and his wife. my wife will open say 9am, my brothers a baker and gets off on the early am and can work there for a few hours in the am and early afternoon. i get off at 4:30 pm and will close the store. my brothers wife kept good books at there restuarant and will handle that aspect. my wife is excellent with birds dogs cats etc. and i'll handle the fish.
thats what i was gonna email you about is mark up. i have some ideas on how to make/charge alittle more that i will email you about but dont wanna post it here.
i dont plan on opening with any display tanks especially a reef. the LFS i go to is huge like a warehouse and only has a few display tanks. one fresh planted with discus and neons, driftwood etc., and like a 29 gallon reef. the "gourmet" LFS that was x3 the price of the warehouse place had giant display tanks custom built... awesome tanks, koi ponds, the place was laid out. its out of business after 9 years and the warehouse place is still doing well.

 

[snakeblitz33]

Vinny, you need to show clients what you are capable of. You do not have to do large displays - even a 100g reef and a 100g planted tank will show people what you can do. I suggest just doing two displays.

 

[snakeblitz33]

And by all means, don't quit your day job. I had to work two other part time jobs to make rent - worked 120hrs a week. The store will not pay for itself, especially when this economy is so bad.
I highly suggest waiting a couple more years until we pull out of this recession. That way you can know that you can make some money and you will have saved up more money to start it.

 

[nwdyr]

I agree snake but if he does 2 nice big displays he will blow 75% OF HIS BUDGET! this is going to be very interesting. Kid I wish ya the best but I don't think you will last 2 mo's. With no advertising where are the people coming from? walk in traffic? no way like snake said and I have seen it too , location does not = instant success , you have to get them to walk in....then you have to have a FULLY STOCKED store , answer ALL their questions....about EVERYTHING and then beat everyone's prices. Including the Internet! people in this hobby are very aware of how cheap stuff is on line , If I were you I would totally do a at home/ Internet biz! now for that 12k is a very good start! like I said I was going to do it and could have pulled it off for about 10k. Just do me one favor and reconsider that before the retail store...I am sorry if I sound like a negative guy , that has nothing to do with it. its business and i hate to see people loose money.

 

[snakeblitz33]

Originally Posted by nwdyr
http:///forum/post/2919088
I agree snake but if he does 2 nice big displays he will blow 75% OF HIS BUDGET! this is going to be very interesting. Kid I wish ya the best but I don't think you will last 2 mo's. With no advertising where are the people coming from? walk in traffic? no way like snake said and I have seen it too , location does not = instant success , you have to get them to walk in....then you have to have a FULLY STOCKED store , answer ALL their questions....about EVERYTHING and then beat everyone's prices. Including the Internet! people in this hobby are very aware of how cheap stuff is on line , If I were you I would totally do a at home/ Internet biz! now for that 12k is a very good start! like I said I was going to do it and could have pulled it off for about 10k. Just do me one favor and reconsider that before the retail store...I am sorry if I sound like a negative guy , that has nothing to do with it. its business and i hate to see people loose money.
Agreed. Every dime you make at your day job will hopefully keep you in business - but your personal bills might not get paid.
12k was my budget for dry goods when I opened my store. That wasn't everything else - just dry goods. I didn't even make it in business because of this recession!!!

 

[stdreb27]

Originally Posted by SnakeBlitz33
http:///forum/post/2919045
Vinny, you need to show clients what you are capable of. You do not have to do large displays - even a 100g reef and a 100g planted tank will show people what you can do. I suggest just doing two displays.
Low budget warehouse type stuff may work, ESPECIALLY if you pitch it as a warehouse. "direct to public" type advertising. "Don't pay for my store to have a nice display, save that $$ when you buy the fish, coral and additives." Or play it like, a distributer that has opened his doors to walk in customers...
Then try and remove the distribution layer vertically, and buy straight from the collector... Like what SWF does.

 

[vinnyraptor]

Originally Posted by nwdyr
http:///forum/post/2919088
I agree snake but if he does 2 nice big displays he will blow 75% OF HIS BUDGET! this is going to be very interesting. Kid I wish ya the best but I don't think you will last 2 mo's. With no advertising where are the people coming from? walk in traffic? no way like snake said and I have seen it too , location does not = instant success , you have to get them to walk in....then you have to have a FULLY STOCKED store , answer ALL their questions....about EVERYTHING and then beat everyone's prices. Including the Internet! people in this hobby are very aware of how cheap stuff is on line , If I were you I would totally do a at home/ Internet biz! now for that 12k is a very good start! like I said I was going to do it and could have pulled it off for about 10k. Just do me one favor and reconsider that before the retail store...I am sorry if I sound like a negative guy , that has nothing to do with it. its business and i hate to see people loose money.
no, no, i asked for and appreciate everyones honesty and opinions. there is no serious reef store with 30 miles of where i live and no saltwater store within 15. advertising will come from the a local free magazine that everyone in northeast Ohio reads and wont cost much at all for a decent sized full color ad.
my whole concept will be a green eco friendly and non impulse store. im not gonna sell anyone a tank, skimmer, salt, test kit, and fish in the same day. never! we will keep all dry goods, replacement carts, media, foods (live, dry, and frozen), fully stocked and only the best natural and eco friendly available. as far as marine fish available for purchase i would only keep a few clowns, chromis, 1 or 2 tangs, 1 or 2 carnivores like a lion or grouper, a dwarf angel, etc. not much though. everything else would be special order and i would quaratine and guarentee health of that fish charging a nice mark up. i would always offer and suggest captive breed animals.
all tanks, filtration, etc would be sold via catalog and ordered after a deposit was made. we'll keep birds and small mammals in the store as well as freshwater fish but again not many. the idea is to get animal lovers to shop at my store, not impulse animal killers and even in this economy i think there are LOTS of animal lovers who can would appreciate a pet store like this.
think about it fellow hobbyists if you knew the guy down the road would give you honest advise, sell you high quality foods, order anything you want and guarentee its health wouldn't you go to him?

 

[stdreb27]

Originally Posted by VinnyRaptor
http:///forum/post/2920377
no, no, i asked for and appreciate everyones honesty and opinions. there is no serious reef store with 30 miles of where i live and no saltwater store within 15. advertising will come from the a local free magazine that everyone in northeast Ohio reads and wont cost much at all for a decent sized full color ad.
my whole concept will be a green eco friendly and non impulse store. im not gonna sell anyone a tank, skimmer, salt, test kit, and fish in the same day. never! we will keep all dry goods, replacement carts, media, foods (live, dry, and frozen), fully stocked and only the best natural and eco friendly available. as far as marine fish available for purchase i would only keep a few clowns, chromis, 1 or 2 tangs, 1 or 2 carnivores like a lion or grouper, a dwarf angel, etc. not much though. everything else would be special order and i would quaratine and guarentee health of that fish charging a nice mark up. i would always offer and suggest captive breed animals.
all tanks, filtration, etc would be sold via catalog and ordered after a deposit was made. we'll keep birds and small mammals in the store as well as freshwater fish but again not many. the idea is to get animal lovers to shop at my store, not impulse animal killers and even in this economy i think there are LOTS of animal lovers who can would appreciate a pet store like this.
think about it fellow hobbyists if you knew the guy down the road would give you honest advise, sell you high quality foods, order anything you want and guarentee its health wouldn't you go to him?
That I couldn't pick up that day. No, I have the internet for that...
You aren't going to compete with the internet and win.

 

[snakeblitz33]

I swear, my suppliers bought stuff from the internet and shipped it to me. If you don't have a fish or coral or dry good in-store - they aren't going to order it when they can just buy it online.
Plus, most suppliers have minimum orders. So, if you are in business your first week and someone orders a $1.50 worth of airline tubing - you have to purchase $300 +shipping to get them their good. Fish suppliers have a min. order of 350 to 500$, what if someone orders just a damsel one week? order $500 worth of fish so you can make $4 from a damsel? Why wait a month to get a fish from a live fish store when you can buy it online - like this site and have it here the next day?

 

[snakeblitz33]

oh, and by the way, the way I got by getting just one or two goods for customers instead of meeting the minimums from my suppliers was to buy goods from online sources like the two doctors and custom something or another.
Why buy from a live fish store if they don't immediately have the good that you are looking for?