01 of 08
Creating a Business Plan for Propagating & Selling Corals
Someone once said, "A marine aquarium is a bottomless pit that you pour money into." Most of us don't really like to admit (even to ourselves) how much hard earned money we have spent on our tanks and the occupants. We just abbreviate the admission with a sheepish "a bunch" when the question is asked. Wouldn't it be great if you could at least break even on your tanks? Well.... you can, and then some. The best part is that it isn't all that difficult.
Everyone who has a successful start up business, big or small, did the same two things. They identified an opening in an available market, then they filled it. Before you spend a dime on equipment or livestock though, you will want to make a business plan if you are even thinking about turning your hobby into a business. Even if you are not planning to hit up your local bank for some venture capital (very difficult to find in this industry without a very good track record in the field), the business plan will help you organize your goals as well as your thoughts.
Just in case you haven't noticed, and you probably have, there is a huge move on in the United States and Canada, as well as other countries around the world, to ban the export and import of wild caught fish, corals and live rock. At the same time the market for these products is rapidly expanding. With the expansion of the available science, techniques and products, larger numbers of people are getting into reef aquariums because the odds of having a successful marine reef tank are very good.
How many times have you been into an LFS that either had no quality live rocks or corals because "they are too hard to keep" or had only a few because, "I can't find a good supplier." There is your open market. The LFS that thought they were too hard to keep can be educated. The LFS that couldn't find a good supplier is a potential customer just screaming for a quality product.
While you are at this LFS take a close look at what they have in the tanks. Ask the LFS owner(s) what they are looking for the most - decorator live rock, corals, etc. Try to get an idea of the price of the products in their tanks. Ask them how much they are willing to pay for the product. If it is half of what they are asking for the product, don't be surprised or offended. They are in business to make money just like you. They have the overhead of the store, paying the hired help, the electricity bills, taxes, saving college funds for the kids, and other expenditures to take into consideration.Continue to 2 of 8 below.
02 of 08
Creating a Business Plan for Propagating & Selling Corals -
While you are researching your new venture, while online you might want to explore selling corals or live rock through the Internet. One of the great advantages of this is that you don't need a store front. You can work right out of your living room, garage or extra room (all tax deductible) in just a few minutes per day. Check out the potential and pricing by visiting other sites on the Net that are selling. This will give you a feel for the pricing of your end product. A good place to start is our Livestock Sources Index. J & L Aquatics, LiveAquaria as well as the many other livestock suppliers have good listings of both live rock and corals to look at.
Next you have to compute what your potential output will be for a given tank space. Here is an outline for a rack farming coral propagation room design from GARF that uses 55 gallon tanks for small scale coral farming, that you can build and add one at a time. This design incorporates using plug racks made from acrylic for propagating and storing approximately 200 frag cuttings. Another grow-out rack design has three plug racks with 60 holes each, and includes an extra plug rack that can be added to the front of the tank to increase the number of plugs to 240. There is still room at the bottom of the tank to grow decorator live rock at the same time. This is probably the highest potential per square foot of tank space. The reef plugs are what you will be mounting most of your coral frags on, and these fit into the plug racks. Research plugs (near top of article under Research Racks section), egg plugsare easy to make, or you can purchase them from a supplier.
Now you have to figure what your "turnover" time will be (time required from start to end to produce the end product). The "grow out" time for each type of coral or live rock varies. Under less than ideal conditions, six months is probably a good estimate. With time and experience your time should be shorter, but if you plan for the worst, you will be pleasantly surprised when you can accomplish it sooner. As far as the aspects of how to actually grow the corals for your coral farm, visit our Coral Propagation page. Here you will find link resources on how to propagate many types of corals, as well as get insight from other aquarists that share their own tips and techniques.
To begin with, you might want to just devote a portion of your existing tank to "production" to get started without any major cash outlays for more equipment. This will give you a chance to obtain brood stock or coral frags to work with and time to hone your coral handling technique. It will also give you a feel for what your grow out time will be.Continue to 3 of 8 below.
03 of 08
Equipment Buying Choices
If you have a functioning reef tank (skimmer, lights, pumps) you already have all the basics to get started. If you have existing corals in your tank you can begin by taking fragments from them for propagation. Another good place to get frags is from friends and other aquarists. Through our Saltwater Aquariums Community Bulletin Board and Salt Talk Chat Room you can find many supply sources available on the Internet. Lots of people have a variety of corals that they may be willing to trade a frag or two from for something of value (friendship?) from you.
Still have the itch to "make it in the bigs" in coral farming??? Keep in mind that it is "farming" and that the bigger you get, the more work it is. A farm is something that you get tied to. You can't just walk away from it for a week or two of vacation and then come back and pick up where you left off. Someone has to be there to tend the livestock, check each tank to see that it is running properly and to answer the phone.
Still want to do it? Then start planning the end facility that will be needed. You have a basic idea of where you want to end up, so start planning steps to get there. You might want to convert that spare bedroom, the basement, the garage (?) into a coral room to get started. Here is Jake Levi's plan for making $50,000 per year to get you started.
In my next article in this series we will be delving into the myriad of ways there are to save a lot of money in a large or small set up. Until then be sure to go to the Buy/Sell/Trade Folder in our About Saltwater Aquariums Community Bulletin Board and start posting away.Continue to 4 of 8 below.
04 of 08
Equipment Buying ChoicesThere is definitely a niche market out their waiting to be filled, so why not meet that demand. Keep in mind that if you are a beginner or new to saltwater aquaria, get some experience under your belt before venturing into this type of project. If you have decided to go ahead with your new business, large or small, you will probably want to get started and expand as inexpensively as possible. The larger your business gets, the more opportunities there are to save some major dollars. Let's get started!
First write out a list of all the equipment you will require for the type of set up you have decided on. It will include tanks, skimmers, power strips, lights, reef plugs, plug racks, live rock base, pumps, tank stands, etc. Probably all the things that you have on your present tank, just a lot more it, and perhaps bigger. None of it has to be fancy, unless you plan on having a show tank for marketing purposes.
Start price comparing the different components. You can create simple charts for each component and list the product names, manufacturers, selling sources, and prices for easy comparison. You will find that when you multiply the cost by the number of projected tanks, you will be talking about a huge chunk of change. Every good businessman cuts his costs wherever he can. Your greatest opportunity to cut your start up or expansion costs will be in the equipment column of your accounting ledger.
Here are some suggestions of where you can look for buying equipment to set up your propagation tanks, or add to your present system for expansion. Bargains can be had if you know where to find them.
Continue to 5 of 8 below.
- If you want to use commercially made equipment there are a number of places to go to save money. There is always your online aquarium stores. Their prices are usually lower than your LFS, but don't forget that you will have to pay for the freight with an online supplier.
- Keep your ear to the ground for LFS's in your area that are going out of business, or that may be selling off overstocked inventory. A lot of the times they are willing to sell equipment at a fraction of the normal retail cost just to liquidate assets.
- Garage/yard sales and swap meets are other good places to find bargains. If someone has had some aquarium equipment laying around the house for some time and just wants to get rid of it, you can quite often pick up bargains in the range of 10- 20% of the retail price for a new product. Be careful when buying used equipment, especially electrical items such as pumps, lights, etc. Make sure that they work and that they are in safe operating order before buying.
05 of 08
Equipment Buying Choices
- Your local newspaper or online classified forum and ad boards like are always good places to keep your eye on. A lot of people just want to "get rid" of entire tank set ups, or you can post your own "wanted" listings. The Lifereef.com site has an interesting Garage Sale page where they list items for sale that other hobbyists want to sell. Often they will also list any of their Lifereef products that may be damaged, flawed, or otherwise just in their way and need to move them. It is best to obtain equipment from someone within reasonable distance to where you live so you can check it out before buying it. If you are unable to do this, see if they offer a guarantee. If buying "as is" equipment you are at risk as to the condition and quality of it.
- Ebay or one of your favorite auction sites may offer some surprising deals. As an example, I used the Ebay search feature with the keywords "aquarium pumps" and it popped up with nine results. One was for a case of six new Rio 180 Pumps with a opening bid of $49.95, and included a six month warranty of them. Of course you want to do some price comparing before bidding to ensure you don't overbid and pay more for the items than they are actually worth.
If you are not an experienced do-it-yourselfer, become one, or cultivate a friendship with someone who is. This can easily be one the biggest and easiest ways to save money when it comes to a large set up, or when expansion is needed. The various options of building your own tanks, stands, hoods, skimmers and other components will be my topic of discussion next time, so stay tuned!Continue to 6 of 8 below.
06 of 08
Part 3 - Equipment Savings by Building It Yourself
The old "tried and true" way to get bargains is to build it yourself. You can easily and consistently save about half of the retail cost of some equipment by just making it yourself. You can't realistically build a pump or a lighting ballast. However, you can make tanks, stands, lighting assemblies, hoods, skimmers, reef plugs, plug racks, live rock base, and the many other things you need when building a propagation set up, or expanding on a present system.
If you are not a certified do-it-yourselfer, become one, or cultivate a friendship with someone who is. This is the biggest and easiest place to save money. Generally speaking, you can build an item for less than half of what it would cost to buy it. Other than a few fancy cabinets, I have yet to see a DIY project that couldn't be completed in a few hours or less. The first one takes all the time, until you figure out easy ways to do each step in the instructions. If you are building more than one of the same thing at the same time, you can save even more time by using the "production line" method.
Let's start with building your own glass tanks. The great thing about building your own tanks is that you can make them in any size and shape that you choose. If you find the need for a "deep" tank, just design it. Then go to your local glazier, have him/her cut the glass, take it home and put it together. Assembling a glass tank takes all of about 30 minutes. No more waiting for your LFS to special order the tank for you, then have to wait another 2 weeks for it to arrive. You can get up in the morning, decide you want a special tank and have it running by the next night if you make it yourself. Building a 55 gallon tank should run you about $30.00. In Part 1 of this series I touched on computing what your potential output will be for a given tank space and gave an example of GARF's DIY rack farming coral propagation room. This was using 55 gallon tanks for small scale coral farming, that you can build and add to one at a time. This design incorporates using plug racks made from acrylic for propagating and storing approximately 200 frag cuttings.Continue to 7 of 8 below.
07 of 08
Part 3 - Equipment Savings by Building It YourselfNow let's consider tank stands. All it takes is a plan, some basic lumber, a drill motor, a saw, a few nuts and bolts and an hour's work. Since you aren't really too concerned about a fancy appearance, you don't have to worry about the finish work that takes all the time and effort when building a good quality stand or cabinet. You can also build "over and under" tank stands so you can stack your tanks and save even more time, space, and money. During the 10 years that I ran my Hawaiian fish collection business, using the "over and under" method, constructing the set up with 4 x 4's and cement cinder blocks, I was able to store 16-55 gallon glass aquariums in a small area measuring 10 feet x 20 feet. Talk about simple, inexpensive and compact!
Lights are easy to make as well. Some people are hesitant to work with "electrical stuff" because of the fear of getting electrocuted or starting an electrical fire, but the wiring diagrams are easy to follow and almost fool proof. A quick note, here: Don't buy "cheap" electronic components. There are good buys on name brand equipment that will last a long time. The stuff you buy from "fly by night electronics recyclers" undoubtedly doesn't come with a guarantee, and may not even work once you get it home. There is a full array of lighting parts and accessories made by top brand name manufacturers such as IceCap, Triton and Coralife, and many others to buy all the parts you need to assemble your own lighting fixtures. By buying through a reputable dealer you can expect to pay less than $400.00 for a 4 bulb set up for a tank, if you spend the hour to assemble the parts. Compare that to what you would have to pay to buy a set up already assembled. If you use a couple of Visi-Lux electronic ballasts instead of the IceCaps, you can save about $30.00 - $40.00 per setup. You might want to consider using PC DIY Kits, MH Retrofit Kits or other types of retrofit kits to save some money as well. There are a large number of lighting choices and hood designs to choose from, but you can easily build and save another $20.00 per tank by making them yourself.Continue to 8 of 8 below.
08 of 08
Part 3 - Equipment Savings by Building It Yourself - Page 3
Skimming is a mechanical function of water, DOC's and bubbles. No real big mystery about them once you understand the basic principles. Take time to read Don Carner's article series about Protein Skimmers to learn more about them, how they work, and the various types and choices for setting one up. There are a number of very good commercially made units, but you can save some really big bucks here if you make your own. You won't be interested in a nice acrylic reaction chamber so you can see the bubbles coming up or a fancy stand. All you want is something that works and is inexpensive to install. You can buy a Berlin Hang-On for about $170.00, and any other number of brand name pre-made skimmers for more, or you can build your own skimmer for $30.00 or less.
Making your own reef plugs (these are what you attach your coral frags to and put in the Plug Racks to grow out), aragonite base rock, or other forms of do-it-yourself live rock base and coral propagation tools is easy and fun. If you have a couple of kids around the house, this would be a fun project for the whole family to take part in. You can make the plugs using a plug mold, or you can just use small Dixie Cups.
As you can see, if you built a majority of your own equipment you will save, at the very least, several hundred dollars per tank set up. Multiply that figure times the number of anticipated tanks. It can add up to quite a tidy sum saved! To help you get started with building your equipment, go to the DIY Projects Corner resources page on this site for aquarium, stand, light/hood, protein skimmer, live rock base, and many other types of do-it-yourself plans I discussed in this article.