Toying with the idea of opening your own live fish shop (LFS)? Think again, then think again, then slap yourself, and think again. Operating any retail business is not easy. Running an LFS or pet store is even more difficult and involved than you might think. Here are some things to keep in mind when starting your business.
Even if you have years of experience with your own saltwater aquariums, working for a period of time in an LFS or pet store will greatly increase your odds of success if and when you open your own store.
There is so much to running a successful business that isn't immediately apparent.
Any successful retail business person will tell you that there are three things that are essential to succeeding: Location, location, and location. That cute little 2,000 sq. ft. spot in an alley that rents for only $500 per month will cost you more in the long run that that 2,000 sq. ft. storefront around the corner on Main Street that rents for $1,500 per month.
Financing for pet stores (LFS) can be difficult to find. If, when you are sitting down with your local banker (or the SBA, for that matter) and you can't put a lot of personal assets on the table for collateral, your odds of getting enough money in a loan to start up even a small pet store are pretty slim. The failure rate of small pet stores is pretty high, and lenders know it. There are some small business start-up loans out there if you look for them, but for the most part, your start-up money will come from your own assets, credit cards (careful with those), and whatever money you can scrape together.
Many people borrow money from friends and relatives to open a new small business. Careful with that one as it is a good way to lose friends and alienate family members if the new business fails and the money can't be repaid.
One of the very best tools you can use to make an honest determination as to whether your new LFS will survive, let alone thrive, is a well-researched business plan.
Most lenders will require that you submit a solid business plan before even considering a loan. Some of the things you will research are your competition (any other LFS in the area?), demographics (how many people are there in your area?), potential storefronts, local regulations, traffic patterns, potential cash flow, etc.
If you set up an LFS, you will need to have several suppliers for both livestock and dry goods. You can rotate between suppliers to get better prices and a better selection when placing weekly orders. Quite often, you can get a specific species of livestock from one supplier, but not another. The same is true with dry goods like sea salt mixes, fish & invertebrate foods, aquariums, aquarium lighting, test kits, and so on. In some situations you can go directly to a manufacturer, bypassing the middleman and getting a much better price on products.
Are you going to carry only saltwater fish, invertebrates, and corals? There are 17 times more freshwater aquariums in the U.S. than there are saltwater aquariums. You might want to seriously consider carrying freshwater fish and products. You also might want to consider at least carrying dog and cat supplies to expand the number of people who have a reason to enter your shop.
If you don't let people know that you are there, they will never stop in. It has been said that "word-of-mouth" is the best advertising, but, depending on your location and situation, it can also be the slowest.
Billboards can seem to be very expensive but depending on their location and the traffic count (the number of vehicles that pass by them every day or week) the can be a real bargain.
Knowledge and Advice
What keeps customers coming back to your LFS is solid advice. If you don't know what you are talking about, people will quickly pick up on it and take their business elsewhere. If you and/or your staff are not confident that you know the subject very well, you might want to hang off on opening an LFS until you are more knowledgeable.
It's a lot more work to set up an LFS than most people realize.