I'd like opinions from everyone on this...

[Anonymous]

As some of you know, I've relocated to Myrtle Beach, and have now moved my fiancee and her son down here with me. We've got a house, and everything is going well so far.

However, until the old house in New York sells, we're carrying around another $1,750 in expenses each month. Paulette does not currently work, and due to her increasing neck & back problems I'd like to keep it that way. My current work is doing very well, and I am gaining ground each week, but we're still a bit short with our current budget.

So, I'm looking for something that can done at home that will bring in around $200-250 extra per week. We are talking about different options, and one thing we're considering is selling some corals (and maybe fish) online just to generate that much cash each week. Nothing more is needed, and once the house in NY is sold we're home free.

Can it be done with 5-6 tanks set up in the garage? I know that most of you dislike internet-based salt business, and even more dislike garage-based ones with zero to little overhead. However, it's something she can learn about with me, something she can monitor from home while I'm working, and it's something I know how to make money at. We have the room, and it would not be a large investment for what we would gain (her not having to go out and get a temporary job in her condition).

I'd like everyone's thoughts on this, whether you are pro-internet business or not.

Thanks much!

Peace,

Chip

 

[Anonymous]

I can't give you any first hand advice Chip, but at least one particular vendor who I began doing business with back in 1996 started out pretty much exactly like that - and is still around and thriving today. His business grew to the point where he ended up setting up first a small facility for still dealing strictly mail order, then moved to a small warehouse to allow walk in sales, then finally expanded that aspect of his operation by moving to a facility the size of a small aircraft hanger.

On the other hand, I've also watched the demise of several companies who began the same way that I'd done business with.

 

[Anonymous]

I suppose that's where I have an advantage. I only need a few hundred in profit per week, and the investment/overhead is not much to start up. I doubt it won't work just due to the expectations and what I know I can do.

Peace,

Chip

 

[Anonymous]

I only need a few hundred in profit per week

Hell, bring in a bunch of acropora milleporas from the solomons farms and I'll meet your profit goals for a few weeks all on my own. 8O

 

[Anonymous]

Just don't underestimate the amount of start up it will take to actually turn a profit. You could end up just draining your already strapped finances even more.

 

[Anonymous]

Just don't underestimate the amount of start up it will take to actually turn a profit. You could end up just draining your already strapped finances even more.

Credit will be the investment, and that won't be a problem.

How much could I underestimate if it's only a simple 5-6 tank setup?

Not trying to be a dick here, just asking you to clarify what you think about it...

Peace,

Chip

 

[Anonymous]

I only need a few hundred in profit per week

Hell, bring in a bunch of acropora milleporas from the solomons farms and I'll meet your profit goals for a few weeks all on my own. 8O

Hee hee...well, I know where to start on my stocking, at least!

Peace,

Chip

 

[Anonymous]

So... if you can borrow to set up this business, can't you just borrow to pay your bills until your NY house sells?

I worry that what you need is short-term funds, and a business will take months to show a profit - thus draining cash from you now, when you need it most.

jayo

 

[Anonymous]

If the business remains profitable, then we'll keep it, thus bringing in a small amount of extra money to invest in other things (like my real estate career).

Of course, this is all determinate on the real estate market here. If it gets back to 2004-2005 levels, then I can fill those tanks with stuff I want to keep and discontinue the business.

Peace,

Chip

 

[Anonymous]

So... if you can borrow to set up this business, can't you just borrow to pay your bills until your NY house sells?

I worry that what you need is short-term funds, and a business will take months to show a profit - thus draining cash from you now, when you need it most.

jayo

What he said. It almost always costs more than you think it will.

 

[cardinal]

Agree with Rover. It will take a lot of money....to make a little money.

 

[clarionreef]

Chip,
I hear from some newly minted greenies that this trade easily and shamelessly makes "boo-coo", net-profit bucks and that its a goldmine.
A goldmine that easily converts profits with huge, huge mark-ups w/ little costs involved. [ little things like frieght, rent, taxes, salaries, insurance, electricity etc. etc.]
So, whats the problem?
Steve.

 

[JennM]

Credit will be the investment, and that won't be a problem.

That is an oxymoron.

Hate to rain on your parade, Chip - but if you're starting out in the hole, you'll likely stay there for a while.

Glenn's right - it always takes more to start it up than you thought - even if you over-estimate the costs, there's always a surprise.

By the time you'd get the infrastructure, cycle it *properly* and get stock in, you'll likely have sold the other property anyway.

You've been in this business - you know what it takes to do the grunt work but have you had to balance the books? It's not as easy as it may seem.

A "few hundred in profit a week"... we should all be so lucky!

Like someone else mentioned - if you have available credit, you're likely better to use that to bridge the gap til your other property is sold, and then use the proceeds to pay it off - much more clean that way.

Then, if you have funds left over, and you want to do this for fun and entertainment... then go for it.

IMO it's a bad idea to hedge any bets on a new business - not just in this industry, and not this way.

JMHO

Jenn

 

[Anonymous]

Thanks for the info, everyone...it helps a lot.

Back to square one, I suppose...

Peace,

Chip

 

[Anonymous]

Party poopers :lol:

Just what did you think the peanut gallery would tell yah Chip :lol:

One word, EBAY

 

[JennM]

Gresh - just being honest here. My feelings for garage-based biz aside, IMO he'd be getting into more than he bargained for, for the wrong reasons.

He has a short-term objective, but it will take a long-term committment to get there.

There's nothing wrong with calling them as we see them. If I were in Chip's shoes I'd rather hear it honestly *now*, than an "I told you so" later.

Everybody knows that in order to make a small fortune in this business, you need to begin with a large one

Jenn

 

[Anonymous]

I just wanted some clarification on some points from you, Jenn...

Glenn's right - it always takes more to start it up than you thought - even if you over-estimate the costs, there's always a surprise.

Can you tell me what would be a 'surprise' if I'm putting up 4-5 coral tanks? Tank, filter, skimmer, heater, salt, substrate, rock, lighting and stand for each...what else would there be that could be a surprise?

By the time you'd get the infrastructure, cycle it *properly* and get stock in, you'll likely have sold the other property anyway.

Infrastructure? You mean equipment?

How long would it take to cycle with cured rock? 2 weeks, tops?

You've been in this business - you know what it takes to do the grunt work but have you had to balance the books? It's not as easy as it may seem.

Again, running a business out of one's garage...how difficult can it be? I've been involved with a full-time store, and this is much simpler. Total retail price earned minus total operating costs = profit.

A "few hundred in profit a week"... we should all be so lucky!

How are you paying your mortgage/gas/food if you don't make quite a bit per week?

Like someone else mentioned - if you have available credit, you're likely better to use that to bridge the gap til your other property is sold, and then use the proceeds to pay it off - much more clean that way.

The cash available that way would be finite...this could be an ongoing thing.

Thanks for the input, Jenn.

Peace,

Chip

 

[Anonymous]

little things like frieght

...paid for by the purchaser.

rent

...already included in the house.

taxes

...from selling online?

salaries

...the $200/250 per week we're trying to generate. It doesn't seem that diffiucult.

insurance

...for what? It's in the garage for a reason.

relectricity

...the only other increase to everything that I can think of.

Again, just playing along as devil's advocate here. Please reply with your thoughts, Steve.

Peace,

Chip

 

[JennM]

Can you tell me what would be a 'surprise' if I'm putting up 4-5 coral tanks? Tank, filter, skimmer, heater, salt, substrate, rock, lighting and stand for each...what else would there be that could be a surprise?

There are plenty of things that can catch you by surprise. When I first opened up shop I got a shipment of fish with Vibrio... that was one hell of a surprise. By the time it was over, I had 16 fish left. Took quite a while to rebound from that. If you're not dealing with fish, that's not a good example, but a case of white band, brown jelly or other pestilance can cause big losses. It's part of the risk we take.

Infrastructure? You mean equipment?

How long would it take to cycle with cured rock? 2 weeks, tops?

Yes, infracstructure is equipment - assembled and up and running.

You'd stock a system with rare and unusual stuff in only two weeks? 8O

I assume you wouldn't be carrying garden-variety stuff since everybody sells that... but I wouldn't even load a new system with brown corals and damsels if it was only 2 weeks old.

Again, running a business out of one's garage...how difficult can it be?

Can I quote you on this at a future date?

I've been involved with a full-time store, and this is much simpler. Total retail price earned minus total operating costs = profit.

Where you gonna find those retail customers? Advertising costs... nobody goes from zero to profit in 2 weeks.

How are you paying your mortgage/gas/food if you don't make quite a bit per week?

When my ex-husband and I started this business, he had a full-time job, which he kept (and still does). THAT is how a fledgeling businessperson pays the bills - with a spouse who works full time. Ask many of the people here in business - nobody gave up their day job without at least one person in the household bringing in a paycheck, unless they had a fat inheritance or some other resource to fall back on. I'm nearly 5 years into the biz - not "two weeks". It takes time for any new business to turn a profit. Startup costs are likely to be more than you think. Have you written a business plan? If you do a pro-forma cash flow in your plan, you should be able to see in black and white that you'll likely run in the red for a while - even with low overhead, you still have to make the initial investment, then you have to find customers. It's not as plain and simple as you may think.

The cash available that way would be finite...this could be an ongoing thing.

All the more reason to think twice about this. What happens if you run out of credit before you get it up and running? Then you're stuck with bills due, interest piling up, and either product and no customers, or customers and no means to buy product (likely the former).

Suit yourself - you're going to do what you want to do regardless - but I'm just offering up what I know from personal experience.

If owning and running a business was easy, everybody'd be doing it.

Jenn

 

[JennM]

little things like frieght

...paid for by the purchaser.

How you gonna get the stuff *to* you? The freight he was referring to was for your procuring stuff.

rent

...already included in the house.

OK how about business licence, animal protection licence if required by your state, what's zoning like in your area - are you even allowed to run such a business from the house? And if you're renting, how does the landlord feel about it? There may be clauses in your lease that you could be violating. And if you bought your house, you could be breaking zoning ordinances.

taxes

...from selling online?

If you are selling within your home state, you're required to collect and remit sales tax. Once you register your business, you have to provide reports each month, even if most or all of your sales are tax exempt.

salaries

...the $200/250 per week we're trying to generate. It doesn't seem that diffiucult.

How many sales is that, and what's the profit margin on each one? Like I said, customers just don't materialize out of nowhere - you'll have to do some sort of advertising - and that's not cheap. Word of mouth takes time.

insurance

...for what? It's in the garage for a reason.

Got a water escape rider on your homeowner's or tenant's insurance? I don't care who you are - everybody creates a flood sooner or later. If you're renting and you're on the hook for water damage - or even if you own - you'll have to repair water damage. What if you have a power failure and everything dies? There are policies available to cover that - but they aren't cheap either. Better add a generator into your startup estimates.

electricity

...the only other increase to everything that I can think of.

How 'bout that water bill? That will go up too.

I'm not playing devil's advocate here - I'm throwing out a reality check.

I don't think it's all as simple as you make it out to be.

Jenn