number crunching for aquaculture

[jeremai]

retail LFS markup on corals is generally around 100%.

[Dasani]

that'll be $500 for the consulting fee. I accept paypal.

Ok. Lemme go rob a bank a real quick.

 

Are you hoping to do some kind of aquaculturing as a career? Otherwise, I'd spend your time getting a job in the field you hope to work in long-term.

This is probably the best option. Or get a job at an LFS.

Find something you enjoy, that you can do from home. Pursue that career and have some tanks set up in your house and sell frags on the side.

 

retail LFS markup on corals is generally around 100%.

I have heard some people say that markup can reach 300%

[jeremai]

for 'designer' corals like chalices and scolys, yeah. that's why I said generally.

[Dasani]

for 'designer' corals like chalices and scolys, yeah. that's why I said generally.

gotcha.

[wobar]

If you think you will triple your stock every year, you are going to need to triple your tanks. Maybe you won't be at capacity year one, but once you hit capacity, you will have to triple your water to sustain that growth. Will your parents let you have that much equipment in their house?

 

You also need to plan for disasters. What happens when the power goes out for an extended period of time, or the AC goes out during a heat wave? Do you like going on vacations? Who will manage it when you are gone?

 

You will need a business license and will probably need an aquaculture license.

 

To have someone build you a good looking website with proper security for handling credit card transactions will set you back a few thousand.

 

I would slow your growth so that you can sell year round. I know that isn't feasible while you are in college, but an online store that almost always has zero inventory is not going to compete well with the big boys.

 

Not saying it won't work out, but if it is so easy to have a 30k+ per year side job, I think more people would be on that.

[Colby88]

There are a few really big issues that end up sinking many aquaculture endeavors, both large and small...if you avoid these you have a shot at success.

 

1. Make sure you have a market first, do not raise/grow something expecting that a market will "surely" be there.

 

2. Be reasonable with expectations...I have worked for a company that well, lets just say they needed 80k liters per minute for what they wanted to raise and they only had 10k liters per minute...see the problem? Don't set yourself up for failure. Redundancy in every aspect of the facility is essential.

 

3. DO NOT go into debt for this. Use the income to grow, you get paid last. Example, I am farming RBTA's (multiple strains) as well as raising a few species of marine fish... I need to get a few new acrylic runs made, so I sell the number of RBTA's required to pay for the tanks. That way if things go down, I have no debt.

 

If you follow those three guidelines, you can do well. Buy consider that everybody and their brother has a frag/chop shop and prices are and will continue to drop. Basically, if it is easy to do...everyone will do it.

 

Best of luck.

[Pickle010]

Colby's advise is sound -

 

I've had people wanting to throw money at me to take my clown breeding to the next level a couple of times now. As tempting as it is, I've always resisted. I'm letting the clowns pay for the growth - as of right now they cover their feed, utilities, supplies and have recently covered a tank expansion and some new brood stock.

 

Yes it's slow - and no I'm not making a killing doing it - it's a fun hobby at this point. I can see real quick how with a little more stock and a few more tanks it will turn into a job.

 

I am not selling to the public only to stores and resellers so my overhead is very low - I don't have a web site, I did start a face book page but haven't kept it up since there really isn't much point to it. Right now I let someone else deal with advertizing, shipping and gaurantee's.

 

There have been reefers here in school that have subsidized their income selling frags. When I started with coral I would buy large frags, keep what I wanted and frag off the rest to resell. It covered my costs and I did it on a very small scale.

 

I say give it shot - keep it cash - don't charge things or borrow to get bigger, let the business pay for itself and network. Talk to store owners, join your local clubs and don't screw anyone over.

[oceancube]

Colby's advise is sound -

 

I've had people wanting to throw money at me to take my clown breeding to the next level a couple of times now. As tempting as it is, I've always resisted. I'm letting the clowns pay for the growth - as of right now they cover their feed, utilities, supplies and have recently covered a tank expansion and some new brood stock.

 

Yes it's slow - and no I'm not making a killing doing it - it's a fun hobby at this point. I can see real quick how with a little more stock and a few more tanks it will turn into a job.

 

I am not selling to the public only to stores and resellers so my overhead is very low - I don't have a web site, I did start a face book page but haven't kept it up since there really isn't much point to it. Right now I let someone else deal with advertizing, shipping and gaurantee's.

 

There have been reefers here in school that have subsidized their income selling frags. When I started with coral I would buy large frags, keep what I wanted and frag off the rest to resell. It covered my costs and I did it on a very small scale.

 

I say give it shot - keep it cash - don't charge things or borrow to get bigger, let the business pay for itself and network. Talk to store owners, join your local clubs and don't screw anyone over.

what he said^^^^

[28g nano noob]

yeah words of wisdom there i sell my guppies to lfs even if some become feeders its just fun as a hobby to do

[Alpha Aquaculture]

Hey Brian,

 

So good to hear your considering aquaculture long term. Please come by and work with me here in Wisconsin I think its unrealistic to think your gonna maintain and grow over 86000 frags and make 36000 profit. Trust me it will take a lot of money worth of work out of some employees to care for 86000 frags. Any disease and its over if you don't react quickly. This problem is worsened if you don't have enough help. Having enough help will eat away at your profits. I'm gonna skip through all the middle details and go right to the finale. You've got my number call me up if you want to talk more in depth as you know I am trying to start an aquaculture company now. My last consideration to you is advertising. If you want to just pay for it its gonna cost you a lot and cost you a lot of time. If you don't want to pay as much for it its gonna cost you more time. Selling any portion of 86000 frags will be a lot of advertising.

 

Kris

[xxbrianxx]

alright thanks a lot for the input guys. I really appreciate it!

 

And Kris, at 36000 a year I would only be selling around 4-5 thousand frags. The formatting is a little off haha. Man that would be great if I could...but wisconsin's soo far lol. Maybe once you expand, you could start a branch in cali and I could help out there just a thought. It would definitely help you save on shipping since there's so many reefers here. And yea quarantining would be huge if I actually go through with this, thanks for the heads up. I've got some thinking to do..and I've been playing around with a couple new ideas. Who knows they may give me an edge if I end up going through with this.

[FishEyeAquaculture]

Colby, Pickle, and Alpha said pretty much everything I wanted to say. Best advice was NOT TO GO INTO DEBT OVER IT.

 

If you can't pay for it with cash, you don't need it. If you follow that rule, you will be FAR ahead of the game.

[Alpha Aquaculture]

Electricity...I sure hope they don't charge me lol. To be honest I haven't looked into electricity too much. Does anyone know the approximate cost per wattage these days?

 

My electricity bill was $500-600 for 2400sqft. We are working on reducing this footprint by eliminating heaters and focusing on ambient air heating and cooling of tanks. I have two large HVAC units each capable of handling the full 2400sqft. If one breaks the other will still work. If we loose power I have a 30000-80000 btu/hr propane heater. If both HVACs break I also have the heaters. Haven't decided if I should keep them in but set low at like 74 just in case or just leave them out of the tank. Another large part of my heating cooling considerations is packing this place full of water, 5000g of saltwater with livestock and another 2000-3000 water holding. It will take a lot of energy to get all that water to change temps. I still need an all important generator but I'm holding off because of cost at the moment. Its not just about electricity cost but a consideration of what if there is no electricity. Don't wanna loose everything!

[jeff@zina.com]

Find a third year business major to do a business plan. Then decide why you want to lose so much money...

 

Jeff

[xxbrianxx]

My electricity bill was $500-600 for 2400sqft. We are working on reducing this footprint by eliminating heaters and focusing on ambient air heating and cooling of tanks. I have two large HVAC units each capable of handling the full 2400sqft. If one breaks the other will still work. If we loose power I have a 30000-80000 btu/hr propane heater. If both HVACs break I also have the heaters. Haven't decided if I should keep them in but set low at like 74 just in case or just leave them out of the tank. Another large part of my heating cooling considerations is packing this place full of water, 5000g of saltwater with livestock and another 2000-3000 water holding. It will take a lot of energy to get all that water to change temps. I still need an all important generator but I'm holding off because of cost at the moment. Its not just about electricity cost but a consideration of what if there is no electricity. Don't wanna loose everything!

 

Yea definitely wouldn't want to lose all your livestock. I was thinking that a greenhouse would probably reduce your electricity bill by a significant amount. I haven't done the calculations but a greenhouse would probably cost much more to heat and cool...right? So why not instead of a greenhouse, just get skylights installed to take care of lighting and get a bunch of solar panels to chip away at the electricity bill. I'm not sure what the weather's like in Wisconsin but at least in Cali it's nice and sunny for most of the year (normally). Would that be viable?

[21093r53]

Find a third year business major to do a business plan. Then decide why you want to lose so much money...

 

Jeff

 

 

jr in college for business marketing here

[bensanders]

Skylights and solar panels? Way too expensive.

[Alpha Aquaculture]

Yea definitely wouldn't want to lose all your livestock. I was thinking that a greenhouse would probably reduce your electricity bill by a significant amount. I haven't done the calculations but a greenhouse would probably cost much more to heat and cool...right? So why not instead of a greenhouse, just get skylights installed to take care of lighting and get a bunch of solar panels to chip away at the electricity bill. I'm not sure what the weather's like in Wisconsin but at least in Cali it's nice and sunny for most of the year (normally). Would that be viable?

 

I eventually would like to move into a building that has more natural sun and uses geothermal, solar, and possibly wind. These ideas are surely the directions we are going in as a population so why not begin to think this way as a business.

 

Skylights and solar panels? Way too expensive.

 

It all depends on how resourceful you are. I have a friend that just remodeled her house. She found solartubes on sale brand new for $150 with only a $100 install from a contractor. They produce a large amount of light and look great in person. I have seen aquaculture facilities that use similar solartubes, example PacificEastAquaculture.

 

As far as solar panels, they will come down in price. For now why not enjoy some government subsidies and let the government pay for part of them. There are a lot of ways you can save money on energy efficient improvements. Plus they will save you money on your electricity bill While there may be more cost effective solutions, these issues are something that should be discussed. If the issue is they are too expensive lets discuss ways of keeping costs down. If your intentions are to aquaculture to help the environment, the use of electricity and its indirect impact on the environment should also be considered.

[Pickle010]

I've been looking at both - solar tubes and a solar system here for the house.

 

The tubes will be a part of my add on build - I've seen some pretty impressive reef tanks that where primarily lit by solar tubes and supplemented with t5's.

 

As for solar the quotes are not cheap but with the government subsidies currently available and the rising costs of electricity over the last few years they are looking more and more attractive. I think it would be nice to lock in my costs for power for the next 20+ years.

[euphoricgear]

I've aquacultured zoanthids for over a year and to tell you the truth, you will need to get named corals to make your money back and then start making a profit. But with that, you will have to first buy the corals at street value then grow it, let's say a year. By that year, it would be worth less than what you bought it for.

 

Then consider maintenance costs, water, electricity, pests, tank crashes, unknown coral loss, etc.

Plus you have to consider if you will sell locally, how many will buy the exact same coral from you.

 

When I used to grow zoas, I had a mixed of named and unnamed zoas and made about $200 on a good month. But that doesnt even cover my time and costs. You will have to go big time to make a decent profit, a good reputation, return customers and more money.

 

I did the same calculations as you, it didn't work out for me that way. So I just got rid of the frag tank and

made another display tank and enjoyed the hobby. I got sick of looking at the frag tank everyday and seeing frag plugs. hahaha

[sean151]

Find a third year business major to do a business plan. Then decide why you want to lose so much money...

 

Jeff

+1 to this

Many unforeseen problems (see costs) arise in start ups because they don't write up a business plan and critique about 40 times until every single cost can be identified, then times it by 1.2. Then make a realistic expectation for revenue, now cut that by a third as I guarantee you won't sell every coral or will have to have sale prices. Now look at what your profit margin and see if the amount of time you would be putting into it is really worth it. Being a fourth year business student has its perks. I commend people like Alpha who really look at every angle to see every hidden cost because those are the ones that make or break a company more so than those you can see on the surface. I also like Jer's idea and I would price that one out too if it was me.