There was a common thread in some of the emails I received in response to the articles on used equipment and opening an aquarium store. It went something like this: "I was wondering if you would be willing to share what worked and what didn't with regards to opening a store. I too have more time than money. I am having sticker shock on store setup. I am looking at a 4,000 SQFT store, but initial store setup costs are in the range of $125,000 to $150,000. Wow." This particular writer showed he was on the right track by finishing with the request "Do you have any info or recommendations or a demographic calculator that I could use to see if my area can support another large fish store? Any info would be greatly appreciated."
Just realizing the need for a feasibility study before plunging into the unknown puts this person ahead of some folks I've talked to on this subject. I have dealt with folks who bet the farm on their love for fish and asked for help only after they were already committed and things were obviously not living up to their dream expectations. That he has done enough homework to actually have a handle on startup costs is good, although the estimate may even be light. When doing the background work for opening my first store in 1980, the cost per square foot to open a store was just over twenty dollars. Given 23 years of inflation, I'm not sure what today's cost is. In textbook fashion, that problem will be left as an exercise for the reader, but for now, let's assume the thirtysome dollars a foot is close, so he has a handle on what it costs to buy into the game.
That leaves the demographics and the rest of the feasibility study to go. I wrote a series of columns on the subject about ten years ago, but factors ranging from the growth of the internet to the invasion of the big box store have changed some rules, so perhaps it's time to revisit the feasibility study. There are a number of potential starting points for this part of the project. Aside from the cost questions mentioned above, I would suggest you also should be asking yourself the "newspaper questions" - you know, who-what-where-why-when-how. "What" is obvious, "who" is up to you (have a long talk with both your lawyer and accountant before entering a partnership), and "why" is something you should have a series of long talks with yourself about. That leaves us where, when and how.
I have found that the answers to "when" and "how" are usually directly based on the relationship between the answers to the cost questions and your current personal financial situation, and while that varies greatly from person to person, these questions really can't be answered until after you have completed a feasibility study and the numbers have told you it will work. That leaves us with the question "where", so by process of elimination, that will be our starting point.
Unless you are truly and unshakably convinced that you have uncovered a screaming need for an aquarium store and don't want to be confused by the facts, or you are just not going to be talked into living anywhere but where ever home is now, the first step is to objectively figure out where to locate. This actually seems to come as a shock to some people - where you are currently living may not be the best place to open, even if you don't think the shop serving your locale is up to snuff. The numbers game we are going to play here eventually, and in fact the entire point of a feasibility study, is to determine where to put your store so it will succeed.
Everyone has heard the business axiom about the three rules of success - they are (not necessarily in this order), location, location, and location. And it's true. And this not only refers to which side of the street and which part of town, but which city and even which state you ought to be considering. There are people who will tell you that in hobby oriented businesses, customers will seek you out no matter where you are, so don't waste money on a visible store front. I will tell you the store with a good location will blow your alley entrance hideaway off the map, so from here on out, I will be assuming that you are really interested not in just gathering information to back up your decision to put an aquarium store in that strip mall down the street from you, but in figuring out where to put that store so it will most likely succeed and most greatly reward your efforts.
Start by making a list of towns where you would prefer to live and think need your business - include where you are now if that's where you really want to be. I started with a list of four for my tropical fish business, and three for the restaurant I built. After you've got this done, it's time to head for your local library. Here is the first postulate - If your town is small enough it doesn't have a library, or the library is so small it doesn't have the information you will be looking for, the town is way too small to support an aquarium store. This may seem ridiculously self evident, but I could retire on the money I have seen people spend while going broke trying to bring aquariums to towns that don't even own a book on the subject. There is a converse of this that is perhaps more relevant to some of the folks writing me recently. In a larger metro area, you know the population will support x number of stores. The problem then becomes, not if there is a big enough base to live on, but if your store will be one of the ones good enough to attract enough customers to survive. There we get in to more subjective criteria I'll cover later.
Anyway, on to the library. While you can find much of this information online, I've found the yellow pages of the phone book is still about the quickest access to a complete listing of stores in a trade area. Most libraries will have the phone books and yellow pages for all major cities in the U. S. as well as all the towns and cities in proximity to your present location. I would assume you know the stores in your own town, but for each other town on your list, go to the yellow pages and look up both tropical fish and pets (most pet shops have aquariums, and these too will be your competitors, not just the aquatic specializers). You should also note any of the "Mega Mart" stores carrying tropical fish. along with auto parts and groceries - these too are competitors for the pie. Count up how many competitors you would have in each of the trade areas on your list, and read their ads to start getting a feel for them - the size, services, and specialties of each, etc. Copy down names and addresses, because if you are smart, you will be making a pilgrimage to each of these towns and visiting these stores in person to see what you will be up against.
While you are still in the yellow pages, look for pet supply wholesalers as well. These are the people you will be buying from. You may not find any in the local books - most of them are in larger metro areas where demand is greater, etc. You can start in close towns, but don't be surprised if you end up looking in the books for the closer large cities to find suppliers. Take down these names, addresses and phone numbers, because you will need them shortly.
Now that you have a list of who all the players are in the areas you are considering for your shop, you need to get the demographics of those areas. The best place for obtaining most of this info is from the Chamber of Commerce of each town you are interested in. They will have a packet of information prepared for just this situation - part of their job is wooing folks like you, who are starting new businesses, to their community. This packet will include population figures and projections for the trade area, median incomes, the community's strengths, business demographics, building and growth patterns, housing, educational, and recreational availabilities, etc. So, online or at the library, get the address and phone numbers of the Chambers in each town. If they don't have it on the web, you can either write or call and request this info and they will mail it to you, or you can drop in on them when you are doing your fact-finding pilgrimage and pick it up from them in person.
O.K., that's it for the first round research. Next month we'll start putting your newfound information to work.