# Has anyone started a retail store before?



## bmlbytes (Aug 1, 2009)

I was wondering if anyone here has either started a store (of any kind), or currently owns a store. I have been considering starting a store of my own for a long while, and I want to start planning a few things, and seeing if it would be feasible to start a store. 

A few things I would like to know before I get started. 

1. I know that I would need to order product from wholesalers, but how can I get a catalog from them without a retail license? I am just researching the money I would need to put into initial stock, and I don't want to purchase the retail license until I am sure I want to actually open a store.

2. What kind of unexpected costs did you run into when opening your store? Were they things you could have planned for, but didn't?

3. What kind of display furniture/store equipment did you use? Where did you buy it? Could you have found a better price?

My idea is a small retail store. I do not plan to spend a lot of money on making the inside of the store look modern, and stylish, but rather, keeping prices low, offering friendly and direct service, and offering ALL of the items the customer expects the store to have. I oftentimes see very good looking stores fail because one or more of those things is not listed (only Apple is good at doing that). I think that a quality store will do much better than a good looking store. Small floor space is a good way to save money on overhead costs, and it makes your store look fuller too. Wall to wall coverage of the items you sell makes it look like you sell a lot, even if your store is small. 

I would really appreciate it if any current or past store owners could answer the questions above.


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## emc7 (Jul 23, 2005)

I've watched 4 stores in my area close during the recession. One had to move and never recovered, 3 were new and nice, but died before they could build a clientele. A new store must burn a lot of cash. One had no posted hours and was often closed when people would try to check it out. Under-staffing is part of the 'death spiral' where expenses get cut that also cut revenues and so you cut more expenses and so on until you are losing too much to stay open. Spartan is okay, but not filthy. There is a store by me that has nice fish, clean tanks, and dusty shelves, poor lighting and smelly carpet. It isn't doing well, people turn around and walk out.

But our club's auctioneer bought a Petland that had closed and was going away and,after some renovation, has it open and making him money. But he sunk his retirement fund into it and is working 70 hours weeks. From talking to him, its clear that license to import fish is hard enough to get that you can make more with one than without one.

Wholesalers are sort of secretive and don't want the general public to know what they sell fish for. A friendly store owner may let you see his list, but you also need to know about shipping costs and die-off rates.

At least some of the stores around me use the marineland commercial systems, while others have what they want custom built, usually ordering drilled tank and doing the custom plumbing. I have seen the tank and systems of closed stores advertised on craigslist, some recent (as in still wet), some that have been in storage a long time. 

There are few people in the club that are planning to have a store 'eventually', they have the retail paperwork and sell fish by mail and by appointment, opening their fish rooms at designated times and to people who arrange to come by in advance. It seems like a reasonable way to get into the business, but neither has succeeding in being able to 'quit the day job' yet.


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## Albino_101 (Aug 14, 2008)

1.For pricing without a catalog look at the item in another retail store, and take 20% off of the normal non sale price, that is a good guesstimate, also consider wholesalers give discounts for bulk purchases and scheduled recurring orders of inventory, and that you have to pay shipping and any taxes(corporate sales, import duties, etc...) on the inventory.

2. I personally have not owned a store, but for a few years I worked at a locally owned computer store (started there for my high school internship requirement and became really good friends with the guy.) and what screwed him in the end was rising rent costs and lack of customers due to big box stores like Best Buy who can operate efficiently with razor thin profit margins by selling in mass quantity. Most if not all of his business was either repeat customers or current customers who recommended us to new customers. By the way get insurance to cover yourself in a lawsuit in case someone has a slip and fall in your store or your store gets robbed/burned down.

3. Well as a computer store we just had basic carpeting and white walls, with a main front desk for transactions, shelves on the wall for selling small things like keyboards, mice, speakers, etc..., and a nice long wooden table for displaying our computers we had for sale, and we also had a back room where we did most of the work. The main area of the store itself though was nice and clean.

As for pricing, keeping prices low in a small business is only a pipe dream, you have to price inventory enough so you make enough profit to stay in and expand your business if only slowly, also people don't mind having to pay 10-15% more than a retail store if you treat them like valued customers and human beings and not like they are customer number 23456354, excellent service above and beyond what people expect is key here.

As for what I would want in a store, greet me when I walk in, ask if I have a question or need help finding something. If I reply I'm just looking around kindly let me do so with a friendly reminder that you are here to help if I need you. Also don't do what big box stores do when it comes to sales or specials, I really hate when a store says most items are 10 to 60% off and when you get there most actually means around 20% of the stores inventory and of that around 80 to 90% of that has the smallest discount while the inventory with the largest discount are most likely things nobody wants to buy.

Also don't shoot yourself in the foot by doing what Walmart did, either last year the year before on their Black Friday sale, a Walmart store was caught not stocking any of the xboxs at the Black Friday price, all of the ones on the shelves were still at the normal price, and Walmart got hit with a nice false advertising lawsuit.

Also, to help my credibility, I'm almost done with my second year for my Business Management degree at UTSA.


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## TheOldSalt (Jan 28, 2005)

I had a fish store once. 6500 gallons of awesomeness.
Wiped out in 8 months by a jerkwad who sold for less. Price matters.


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## Fishpunk (Apr 18, 2011)

Where are you thinking of putting it? We've lost a bunch of stores locally, including another one going out of business right now. I'm not convinced this market can support another store right now.

Still, you might try to hook up with some LFS in another state, say one very far from here so you are clearly not in competition. Also, dig very deep into the WetWebMedia website. Bob Fenner has a lot of information about retail buried in there.


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## Fishfirst (Jan 24, 2005)

as a person whos been in this business for nearly a decade, bottom line is you need a lot of capitol, a niche that current stores don't offer, and a reliable staff. TRACK what you sell, TRACK what dies, make adjustments accordingly.


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## blindkiller85 (Jan 8, 2011)

First and foremost you need to look past the negative within all the posts. As it's not intended but it's there for a reason. No one wants to see anyone else start up something blindly, just to fail. You having no experience is just that, hence your asking for advisement. But your drive is what will make or break your business. The will to push past the hard initial startup, build a clientele, and then focus on making money. Most fish store owners that I've talked to locally strive for 20-30 thousand dollars ontop of their costs for stocking, space, and staff, basically the business and strive to make that money for them. Not much, but enough to stay alive, and that is a rather established business to make that much for a retail fish store. But they all love their life, and their job. Because it's their passion. If you don't have the drive and you're scared by reading these posts. You need to delay yourself rather than chase a pipe dream.

Like stated above, the initial start up is all about capitol. A generic successful business plan includes you planning on hopefully a little worse than what you hope will happen. But that is guessing most of the time anyways if you don't have the proper niche in your area for what you're wanting to do. The cost is pretty big even without a retail space. And it's generally double for the first 6 months that you have a retail space. Like fish first said. Track everything. Every time you lose a few cents and let it slide, you become more complacent. It can become a landslide if you just let things go. To start an initial company, you need to focus on making back what you spent for electric, rent, water, staff, and stocking. Not making a profit initially.

For most retail stores of any type, you need that space to sell products. And you'll need staff because there are more important things for you to do than sit there all day, or at least most days. You need to be the advertisement, working on the inventory, making sure you have proper contacts with wholesalers to get the product in that you want and you can make a small profit on. As well as checking on the staff making sure they are up to your standards.

Even one of the fish stores that had approximately 5,000 gallons and open for 17 years downgraded to about 500 gallons within this recession. It mostly does SW only, and now only keeps a very minimal stock. But he's smart about it because he keeps an open line with his wholesalers to get him fish that he/clients wants. Orders them only to give them to the client. The other LFS had to let go one of their senior staff members of 7 years, the two others in my area are still open but their prices went up a little trying to just stay afloat. They had to partner up, and one of them downgraded from 3000 gallons to about 1000 within the past few months. But they move a lot of product because of the area's they are in and the stocking they have.


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## emc7 (Jul 23, 2005)

Of course we wish you the best. I'd just hate to see another dream get devoured by the economy and become just a debt that drags on you like a student loan. Make a business plan, run the numbers and see when the time is right. Sorry we can't help more.


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## Fishpunk (Apr 18, 2011)

What concerns me is that in Phoenix you still have Aquatouch catering to the upper income aquarists and several still catering to the lower income demographics. None of them are thriving at the moment. You know Pets Inc and now Top of the Reef have gone out of business in the past 2 months, and Pet Safari went out of business a few months before that. So, where will you locate and how will you compete?


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## Obsidian (May 20, 2007)

There are several LFS I have been to in the Phoenix greater area and most I am less than impressed with. There is only one that isn't dirty. 2 of them are so crowded that 2 people can barely walk past each other sideways. I hate trying to browse through a store when I am feeling pressured by the people behind me. 

One store is both great and not great at once. They keep fish in R/O water- great for the fish in some ways. However the majority of the people who are going to buy the fish are not going to be using R/O water. This causes a huge problem with acclimation and I will no longer buy any RO related fish from that store. Not all fish are kept RO so there are still fish I could purchase. Keeping the fish in the local water source would be best. People won't get frustrated and think you sell them bad fish. You should have the capacity to acclimate your fish to the local tap. Obviously you can still give them preferred Ph levels etc, just within reason of how the majority of the buyers will be doing it. RO is expensive in many ways, many just don't have that kind of output. 

Keep algae off the glass. Some algae in the tank isn't bad, but on the glass= bad store upkeep. My Prescott LFS has issues with this. 

Keep the tanks on separate water sources if possible to reduce loss of stock due to disease, and you can QT one tank with disease in it without worrying about the others. If there is disease in a tank I would personally turn off the lights so it's less obvious to the buyer. It's good for them to see the QT because it means you take care of your fish and won't sell something bad. If the fish is just riddled with ich you don't necessarily want it that obvious. 

Those are the things I look for in a LFS and the things that bother me when I am in one. Carry the good stuff like Aquarisol and Flourish. I can't find those at either my LFS or PetCo/Petsmart. I have only been able to get them out of Phoenix. I might be able to get Flourish up here now though. I haven't looked.


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## Obsidian (May 20, 2007)

And one other thing: If you can do it carry crickets. I have heard that those things make stores money. It might not as well since you won't be selling the reptiles but you would get people who wouldn't mind getting those from you since they are there anyway.


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## bmlbytes (Aug 1, 2009)

Thanks everyone. It's good to hear all the negatives. It allows me to think about how I can overcome all the issues that people are saying there are. 

Are fish really the biggest money maker at a LFS. I always assumed that the fish at a LFS were a lot like the gas pumps at a gas station. They are just there to get you to go to the store, and buy something else. Like I said, I don't have wholesaler catalogs to know what things cost, but I guess I always assumed that the fish were not the big money makers.

Fishpunk, here's the thing I think went wrong with other LFS. Pets Inc was huge. They had tons of unused space, and they had like a million gallons of tanks. Their store was big enough to separate an entire reptile section off from the rest of the store. There is a ton of overhead in a storefront that big. 

Top of the Reef had a lot of unused floor space and they made everything look pretty. Making things look pretty is expensive, and unused floor space is wasted money. You can only afford to waste money on floor space if you are as big as Petsmart or something. Even Petsmart only makes it look like there is floor space, they put low racks filled with dog toys and food in the isles to use up that floor space. You need to be selling something everywhere, or you are spending money on square feet you are not using. 

I can't comment on PetSafari since I never visited them. 

Aquatouch is way too high end for most of the Phoenix demographic. Their prices are high, their store is "fancy", they have a lot of open space. I also got the impression that only Phillip was really very knowledgeable about anything they were selling (its important to have staff that are passionate about what they sell). 

Aquarium Arts is pretty much only saltwater. Saltwater is expensive, and again, does not tailor to the Phoenix demographic. If you notice, they are starting to increase their freshwater area, probably to attract more people 

So here is my plan. Again, it will be small and packed to the brim with product. This not only makes it look like you have a lot of stuff, but it also makes it so that not a single square foot is wasted. The store will border on questionably legal with how much space is used. Until we start making money, only my business partner and I will work the store. After that, we will attempt to be around as often as possible. People like interacting with the store owner in most businesses. Probably because they have the most invested in it, so they will work the hardest to make people feel welcome. Picking the right area is also something that will be investigated well. It needs to be visible from the street, but it does not have to be huge or expensive. Every penny will be calculated beforehand, and every single item in the store will be properly checked out once the store is operational. We plan to get an import license, so that we are able to order anything the customer wants. We also plan to stock those things that hobbyists want, but big pet stores do not. For example, discus breeding cones, inline heaters, fry food, blackworm cultures etc. Its all about making sure you have what the customer wants, and giving them a quality experience in the store. If you can offer that, I don't think that making everything pretty like some stores try to do is even needed. Obviously it needs to be clean, but other than that, metal shelves and base white colored walls are fine.

Does anyone that has owned a shop, still have access to any of their wholesaler catalogs? If you are not allowed to share because of NDAs and what not, I understand.


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## bmlbytes (Aug 1, 2009)

Obsidian said:


> And one other thing: If you can do it carry crickets. I have heard that those things make stores money. It might not as well since you won't be selling the reptiles but you would get people who wouldn't mind getting those from you since they are there anyway.


Feeder animals, I have heard do make a lot of money. I plan to at least carry feeder fish, live blackworms, copepod cultures, etc. Crickets might be a good idea, but I would think to wait on those until I can assess the demand for them in a LFS.


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## emc7 (Jul 23, 2005)

Petland (Dunwoody) makes money off fish. They get $29.99 for big mbuna that are given to them free because they outgrew the 10 gallon tank PetSmart sold them with. They have a large turnover with many people working in the fishroom all the time. If people have to wait, they will go somewhere else. But they are now the only decent freshwater store in a 15 miles radius. Petland also profits from SW. The prices on SW fish there are lower then surrounding stores. The goal is to price the fish so it sells before it dies. They don't want SW fish to stay in the tanks for months. Most of the small LFS that survived have gone salt only. At Petland tank prices are reasonable and they sell a lot supplies also. My nearest salt only store has much higher prices on tanks, filters and supplies. Some that work for FW, but mostly the high end of things. They also make money selling salt water in buckets, frozen and live foods and doing services for SW tank owners. 

The newest store to fail was doing planted tanks and nano fish such as are popular in Europe and Japan. I think they had the right idea as this is the area that is growing, the chain stores suck at, and like SW, has customers willing to pay more for quality equipment and expert advice. They also tried blackworms, but blew it on maintenance. Worms were great the first day, but need clean water and rinsing every day to avoid getting nasty. There is an ongoing demand for live foods but it is labor intensive to keep them in good shape,.

You don't dare lose money on fish. There are only so many tanks a customer will buy and most people eventually discover that supplies can be ordered online for your wholesale cost with free shipping and no sales tax. Atlanta has SunPet which is a huge wholesaler. So every non-chain store got fish from the same list and competed for the same customers. Any store that also gets fish elsewhere has an advantage. 

I totally agree about QT. Good store have the ability to take any tank "offline" and isolate it to medicate. Not sure QTing each individual tank is practical, though. Fish were in shared water at the wholesaler anyway. The PetChains got some of their competitive advance by going to central filtration first, thus reducing labor cost.

There are some exceptions to minimum wage and child labor laws for family businesses. Choose a spouse that wants a large family.


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## Fishpunk (Apr 18, 2011)

Petland also charges $6 for a black molly. 

I would suggest trying to find a location that is reasonably close to the northeast valley where all the money is located, yet close to the east valley where there seem to be a lot of fishkeepers. You may be able to find something in south Scottsdale with reasonable rent and the sales tax is marginally lower than Phoenix. That part of the valley is really unserved. There are no LFS north or east of Aquatouch, period.


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## bmlbytes (Aug 1, 2009)

emc7 said:


> There are some exceptions to minimum wage and child labor laws for family businesses. Choose a spouse that wants a large family.


Haha, nice.

It wouldn't be that difficult to take individual tanks offline for QT. I already have thought of a PVC system that would be efficient for water changes, and would be disconnected from the rest of the aquariums. Most shops that do it that way have large sponge filters in each tank, and an air compressor to power all of them. 

My biggest question right now is how can I get realistic wholesaler prices? Am I going to have to get my retail license first? In most retail stores, stocking the shelves is more than 65% of the start up costs. I want to be able to accurately calculate my start up costs before moving forward. Assuming that most stores mark up 20% is not good enough. I know from experience that different products are marked up different amounts. Its not always 20%.


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## Fishpunk (Apr 18, 2011)

I wonder what the cost structure looks like if you make local breeders a major source of livestock. I don't know if anyone else is doing this (for a number of reasons) but it is thinking outside the box for sure.


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## emc7 (Jul 23, 2005)

Local breeders can give you a supply of fish that are hard to get from wholesales. Things that don't ship well such as CPDs and you will know the fish will thrive in customers tanks if they are bred in the same water. But you have to read the local laws. In Georgia, you need a license to sell "pet fish" for money, so stores only do store credit rather than check. Breeders won't get the license without a buyer, since stores don't habitually buy from individuals and the big wholesaler just won't. 

You can likely get a rough estimate from looking at online prices like liveaquaria.com and aquabid,com, http://www.davesfish.com/. If wholesalers are more than that, you can buy online, if they are less, you have more $ than you expected. You can send e-mail to people like Discus Hans and ask for an idea of the volume discounts and shipping costs. Also talk to UPG and SeaChem, there is so much consolation in the fish supplies market, stores often need only a few company's stuff.


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## TheOldSalt (Jan 28, 2005)

You'll need a license before any wholesalers will even talk to you. I'll tell you that freshwater makes money, saltwater barely breaks even.


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## TheOldSalt (Jan 28, 2005)

Also, the drygoods tie up a lot of money while making you very little. Live foods are pure gold, though. Your idea was backwards. Fish make the money, drygoods don't.


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## TheOldSalt (Jan 28, 2005)

In such a large & crowded market--> specialize! Unless someone else already does it, try carrying only those gems that can't otherwise be found anywhere else in town.


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## TheOldSalt (Jan 28, 2005)

Freshwater fish wholesale @ around 30% of retail, = profitable if they live & get sold.
Saltwater? Wholesale around 85% of retail. Not worth it even if you sold them all.


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## Fishpunk (Apr 18, 2011)

Even worse than that for salt. There is still a lot of local competition and the owner of the higher-end store collects his own fish during several excursions a year. There is also a low-end marine store who undercuts the prices of everyone.


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## bmlbytes (Aug 1, 2009)

Thanks TOS. That will change my business plan a lot. I really didn't want to do much saltwater anyway. There are too many reef shops in the area anyway. They all sell tons of corals and saltwater fish. Plus the upkeep costs for keeping reefs alive would be very expensive. Freshwater fish are not so much. 

I was planning on keeping some of the more interesting freshwater fish. I think that is something that many stores fail to do. The import license will allow me to order any fish the customer wants as well (as long as its legal).

I always assumed that the dry goods were where the money was. I know that at a regular pet store, the money is all in the 50 pound bags of dog food. I figured it was the same for fish. Good to know that the fish offer more money. It will mean I will plan my store to have more aquariums, and a bit less shelf space. I will want to be able to offer all the dry goods people need. Especially in the breeding area. It seems like most stores do not stock breeding supplies at all.


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## Fishpunk (Apr 18, 2011)

I think you also want to be able to stock things you can't get at Petsmart, things like sponge filters, brine shrimp eggs, and so forth. I wish you the best of luck with it (and not only because I will likely bring in fish).


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## Ladayen (Jun 20, 2011)

Staff will break you if you cant manage properly. As good as you are a single employee can sink you.

If things start to go bad, have a predetermind bailout point. You may lose your shirt, but at least you still got your pants and your shoes and your house. Seen way too many people go down with the ship believing the whole time they could make it work. Wind up with destroyed credit and are back to relying on their parents when they should be getting ready to retire themselves.

Oh.. NEVER NEVER NEVER sign a personal loan for a business. This will make it much harder to get going but again allows you to walk away from the business should things not work.


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## bmlbytes (Aug 1, 2009)

Ladayen, we are looking into the possibility of an LLC. It would make the business a separate entity from ourselves, so any debt acquired by the business is not personal debt. Sole proprietor can be a dangerous thing.


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## Obsidian (May 20, 2007)

I like Pets Inc, but they are the ones who do RO water. The tanks are stuffed in there but not so stuffed that you are over crowded between them. Very well set up. Plus I enjoy saying hi to the dog faced puffer. I have no idea if he is still there though LOL. They also carry everything for my tank except the lights. I have 30" bulbs and so far only Big Als carry those. Most 30" units only have 24" bulbs. That's pretty stupid if you ask me.


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## emc7 (Jul 23, 2005)

A LLC will cost you at least a few hundred buck in paperwork, depending on location. But you can do it online at legalzoom or get a local lawyer. the taxes get a bit more complicated, but not ridiculously so. Its not a panacea. If you do something judged "criminally" reckless or negligent you can still lose everything. So get good liability insurance and don't break any laws.


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## bmlbytes (Aug 1, 2009)

Obsidian, that puffer is not likely to be there anymore since Pets, Inc. is out of business. I am about 99% sure that they just had too much overhead with that giant store. 

emc7, the cost of the legal fees would be a lot less than the cost of potential debt if the business is a flop. Think of it as "success insurance". As with any retail store, good liability insurance is a must. Following laws is also always a good thing.


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## emc7 (Jul 23, 2005)

Oh I agree. LLCs are likely worth it and are pretty easy to do.


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## Obsidian (May 20, 2007)

Oh man that bites! My friend will not be happy. When did they close?


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## bmlbytes (Aug 1, 2009)

It closed almost exactly a month ago. They say they are looking for a new place to relocate to. They have a new website as well.
http://www.petsinc.co/


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## iheartfish:) (Jan 19, 2011)

Just another piece of advice to keep customers happy: definitely buy from local amateurs! My local lfs owner takes fish and baby gerbils from me for a tiny fraction of what he sells them for, but it definitely encourages me to buy most of my equipment and fish from him. Also, live foods are a definite plus. He hatches brine shrimp and sells them, and its great to just hop in and get a small container of bbs for three bucks. Yeah, hatching them yourself is easy, but that's why he sells them, for lazy people like me!  keeping good relationships with customers is key.
Buying locally is risky, but worth it.


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## Fishpunk (Apr 18, 2011)

I did an LLC in Scottsdale a couple of years ago. It was not really all that expensive. Yes, for sure do it.


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## Fishpunk (Apr 18, 2011)

You might be interested in this from Phoenix Craigslist.
http://phoenix.craigslist.org/evl/bfs/2798855007.html


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## bmlbytes (Aug 1, 2009)

Do you happen to recognize this store at all? The ad makes it sound good, but I would like to visit this place before even considering it.


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## TheOldSalt (Jan 28, 2005)

You can build a new store for a whole lot less money, and it will have that new store buzz which brings in customers.


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## bmlbytes (Aug 1, 2009)

I figured that, but I still haven't gotten numbers on how much the inventory will cost. My previous boss started a computer shop for $15k cash, and it is very successful. I have a feeling the inventory for the fish store will cost a bit more, but I have yet to see that for certain.

The only thing I can say about turnkey stores, is that if they have a good reputation, that can be worth all the money in the world.


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## Fishpunk (Apr 18, 2011)

Well, it's the business broker's job to make it sound like a dream business. Due diligence is required.

I have no idea what the store is. We've been trying to figure that out for a few days on the local boards but as far as I know, nobody has been able to identify it yet.


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