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    12 Replies Latest reply on Oct 27, 2011 9:17 AM by chris1985

    New Start Up, Fairly discouraged by reading some things.

    dennyc716 Wayfarer



      This is only my second post on here but i have read hundreds of posts.  I have read on here how difficult it is to get a loan and i would like some input. 


      First off, I am a 36 year old police officer who is looking to open a tropical and saltwater fish store in my community.  There is a high market for this and limited resources in my target area.


      • I have completed my business plan about 95%, just finishing up some last minute bells and whistles such as proof reading, additions etc.
      • i have found a prime location that the real estate company is willing to work with me and give me the first 2 months free just to get me in the spot. The location has a grocery store, mcdonalds, several other fast food places, retail stores, bargain outlets and health stores.  
      • Im not looking to open until January 2012 for personal reasons and my current job.
      • I have saved up close to $5,000 plus i have $25,000 in retirement that I am going to use to start up the business.
      • I am going to lease a portion of the equipment and will be asking for approximately $75,000 loan to completely get the business up and running.
      • I have 12 years experience in retail pet management prior to becoming a police officer.
      • My credit is fair to good
      • I bought a house last year and have about $15,000 equity in the property that i would use to assist me.

      After reading a bunch of posts on here, i found that there really isnt a great chance in this economy to secure a loan or maybe im reading this wrong?  Can i get your thoughts on if i should wait until a better time to try for a loan or what is your opinions. I have heard that it isnt good to apply for many loans on the credit because it will negatively affect me.  I dont want to start throwing apps out there trying for a loan and continuously get turned down. I have a good job now making descent income, so im not in a hurry, i just want to do the right thing.  I have great ideas for this business and with the lack of other stores in this area, i think it will profit very nicely. 


      Thank you all for your opinions and I look forward to hearing from some of your professionals  .  

        • Re: New Start Up, Fairly discouraged by reading some things.
          CorpCons08 Ranger



          I admire you for how much time you have put into planning out this business venture. The economy really isn't the problem that people have been having trying to secure a loan. It is a number of things, but it is not the economy. Financial Institutions make money off of lending, and are not stopping anytime soon. It is how they stay profitable and satisfy their shareholders. You have a very well written post here, and I would be interested in taking a look at your Business Plan when it is completed to give you the best advice that I can. There are many types of financing, and depending on how the money will be distributed, you may qualify for one loan over another. As you said, you don't want to just throw out a whole bunch of apps and hope one goes through.


          Let me know when your business plan is completed.





          • Re: New Start Up, Fairly discouraged by reading some things.

            You are correct about loan applications negatively affecting your credit score. I recently applied for a store card and it took my credit score down 4 points just with the hard inquiry to my report. Ironically, I didn't even GET the card so it was just that inquiry hit that did 4 points worth of damage. Be very selective about the type of financing you choose and make sure it is best suited to meet your needs as Corp said.




            Another thing that will make or break your business is the product and more importantly supply and demand of the product. Where the economy comes into play here is that people are strapped. They may want something but that doesn't mean they are willing to spend money for it when they are struggling to keep a roof over their heads and food on their kids plates. Sure, there are people who will say to heck with the bills and go buy whatever it is they want ... that latest PS3 or High Def 3-D TV whether it's the "responsible" thing to do or not. Not everyone is concerned with their credit and the world is full of those consumers seeking instant gratification, but you still need to be selling something people want to buy.




            You said there is a high market for a tropical and saltwater fish store in your area. How did you determine this? Having worked in a pet store, I am familiar with both the cost and maintenance of such a product and know that it requires continued investment to provide appropriate maintenance. That knowledge alone would make me hesitant in this economy because I just can't see many people being in the market for a luxury aquarium when most can't even meet their monthly bills, however, every location is different and you could be placing your business in a much different socio-economic area than where I am located.




            The bottom line is that you shouldn't give up on your dreams or hold off solely because of the economy but you should be much more careful, do your research and make sure all of your ducks are in a row before proceeding. As Corp mentioned, jumping I in head first causes many problems and the way I look at almost everything is that it isn't a race but a journey full of choices that will make or break my outcome so I must make educated choices to ensure success.



            I wish you the best of luck in your endeavour and much success with your new business!!




              • Re: New Start Up, Fairly discouraged by reading some things.
                dennyc716 Wayfarer

                Monie, thank you for you post. In reference to how i determined there is a supply and demand.


                I grew up in Baltimore Maryland and moved away about 11 years ago.  As a young kid graduating college, I had several fish tanks from managing pets stores all around Baltimore since i was a young kid.  When I moved, i still had to maintain my tanks.  I had invested a large amount of money into my salt water tanks and when i moved, i was unable to maintain them because of lack of stores that sold salt water items. 


                I found a location that i could purchase basic items from and then eventually had to start special ordering all my items.  Well, I purchased a vehicle from a auto dealership and they delivered the truck to my home.  The sales manager seen my tanks and asked me if i would be interested in setting up a tank in their showroom.  Long story short, I set up that one tank and eventually ended up setting up 8 tanks over 2 months for local dealerships.  I found that I was being overloaded with work and trying to maintain all these tanks and keep up with my full time job was to much.  As a police officer, in the summer time, I routinely work 55-65 hours per week.


                Well, I began turning people away due to lack of time.  I then noticed that I was having a very tough time finding quality fish to fill the tanks that i had set up because, once again, lack of supply in the area. I was forced to drive 68 miles to a repuitable location to find salt water fish.  In June of 2010, i decided to start determing if I was the only one who had problems or if this was a local issue. 


                I opened a facebook page and began sending out friend requests to people in my surrounding zip codes.  In 90 days, from June 4, 2010 to August 28, 2010, I had built up 359 friends of my business facebook page.  I set up a survey to find out if people had salt water tanks, freshwater tanks or ponds.  I was blown away by the results i got.  I quickly found that majority of the people that were friends all had some sort of aquarium but limited amount of livestock due to lack of stores in the area.  My friends page on facebook is now up to 1,954 friends and I am continuously getting posts about stores outside a 60 mile radius that people are forced to travel to. 


                I then came up with the thought of possibly taking advantage of the lack of supply and open my own store.  This store will not be a huge store, it will be big enough to supply the area with high quality fish and supplies, but not to big that on slow months I can not afford to cover overhead. 


                In reference to your comment about investment to continue maintenance, Im not really certain what you are referring to.  We are investing in a aquarium system and the overhead on these systems to keep them cycled and running smoothly is minimal.  I have worked many years in this business and if taken care of properly, there is very little investment with the exception of adding some chemicals over time if levels are off. 


                Thank you for your comment 

                  • Re: New Start Up, Fairly discouraged by reading some things.

                    It sounds like you have indeed done your homework!  It is great that you are thinking outside of the box and looking to set up tank systems in other businesses rather than just marketing to the hobbyist as your target demographic.


                    You understood what I meant about the maintenance. I was always under the impression based on my experience in the pet industry that salt water tanks were much more expensive to maintain than fresh water tanks hence why I never invested in one. If I had, I know that at this point in time I would not have been able to maintain a healthy living environment for the fish. Perhaps things have changed since I worked in this field and prices have come down while technologies have improved. After all, it's been years since I worked in a fish store.



                    All the best to you!


                • Re: New Start Up, Fairly discouraged by reading some things.
                  chris1985 Tracker

                  Hi Denny, have you looked into SBA loans yet? I'm guessing you have but if you haven't I would suggest doing so. SBA loans are easier for banks to swallow because of the large % that the government backs.

                    • Re: New Start Up, Fairly discouraged by reading some things.
                      dennyc716 Wayfarer

                      Hi Chris, I have been reading about the SBA loans.  I have gone on their website and have looked into different loans.  Once i complete the business plan in full, then i will start the loan route.  I just didnt want to go burning all this time (literally, when i say i burn every minute i have, i get up at 8am, get on the cpu until 3pm studying and checking different topics, get a shower, go to work from 5p-3a, home and get up at 8 to do it again)  for nothing.  I have also gone on to the website SCORE but didnt really find much on there. Like i said, im hoping to have this plan done by friday and can move on next week to the next step. 

                        • Re: New Start Up, Fairly discouraged by reading some things.
                          chris1985 Tracker

                          That's good to hear that you are doing your research and staying busy. If you have a local SCORE office around you, it might be a benefit to you to make an appointment and run thru your business plan with someone there and maybe network a little. I know our VP of our SBA department and some senior lenders have been to our local SCORE office at least a few times each and even a 10-15 minutes with someone there could help. Hope it all works out for you.