Basement hobby or online business? Which one should I go for?

[rjw1989]

You want to determine if you are more interested in frag reefing or running a business. If you excited and eager to start a business and business related workings, then that could be a consideration. If your more excited by having a huge frag setup and the propagation side of things then I would start off in the basement as you say and transition over when you find that you are selling enough that you have to or should at that point. Jumping too deep into the business side if that’s not a prime interest may spoil it when you find yourself doing more work than reefing at times, that is unless business working in general is just as important an interest of yours.

Basically, don’t mix pleasure and business unless you find pleasure in business.

 

[Cassian]

You want to determine if you are more interested in frag reefing or running a business. If you excited and eager to start a business and business related workings, then that could be a consideration. If your more excited by having a huge frag setup and the propagation side of things then I would start off in the basement as you say and transition over when you find that you are selling enough that you have to or should at that point. Jumping too deep into the business side if that’s not a prime interest may spoil it when you find yourself doing more work than reefing at times, that is unless business working in general is just as important an interest of yours.

Basically, don’t mix pleasure and business unless you find pleasure in business.

thank you!that’s great advice!

 

[pdxmonkeyboy]

good info! Thank you!

There are mandatory minimums and various things that you have to show. But with a business license, a website with ordering info, etc. It is pretty easy to show that you are making some kind of effort to turn a profit. Most businesses operate at a loss for the first couple years, that is certainly the case with coral businesses! But there are limits to how much you can deduct if you are operating a total loser business.

 

[Cassian]

There are mandatory minimums and various things that you have to show. But with a business license, a website with ordering info, etc. It is pretty easy to show that you are making some kind of effort to turn a profit. Most businesses operate at a loss for the first couple years, that is certainly the case with coral businesses! But there are limits to how much you can deduct if you are operating a total loser business.

That makes sense. I’ll have to do some research on it. Thank you!

 

[sharpimage]

If you are going to sell on any time a regularity, I would set up some type of corporation. Be it S type or a LLC. If something goes wrong and you get sued, your personal assets will be protected.
Edit, cash sales face to face are one thing. Mailing is another

 

[Cassian]

If you are going to sell on any time a regularity, I would set up some type of corporation. Be it S type or a LLC. If something goes wrong and you get sued, your personal assets will be protected.
Edit, cash sales face to face are one thing. Mailing is another

I agree with you about protecting my personal assets. Thank you!

 

[pdxmonkeyboy]

you will be spamming people about live sales in no time. LOL

 

[swiss1939]

Basement hobby.. Until you actually see sizeable income. See above.. And the sponsor section for how much competition there is out there.

The actual process of starting a business is simple. Making it work and survive is hard. Try it in your basement for 6 months and revisit this question after a year. Then you have your answer based on experience.

If you can make enough to remove your own costs in doing this hobby then you win. If you make enough to quit your job and do this for a living, you win the lottery.

 

[swiss1939]

Also can't stress enough something a few posters barely touched on... Liability. Do you really want to be dealing with liability? Insurance is also a must in something like this. Your business depends on livestock, and a simple unavoidable mistake or disaster out of your control can cost you all the money you put into it. Something like pests, water contamination, a hurricane, etc. Insurance is a must and doesn't come cheap.

Think about the repurcussions of a shipment gone wrong which for whatever reason can't be insured through shipper, or the losses you will take from covering live arrive guarantees. Even more so.. think about those customers that will never be happy with any steps you take to solve problems and just want to ruin your day. Is this something you look forward to dealing with even if only occasionally?

I see a lot of feedback glossing over the difficult stuff of running a business that causes most to walk away and give up with heavy financial losses.

For all of these reasons, try it with no expectations for a decent amount of time and let it expand or contract naturally.

 

[John08007]

Tax-wise though, I think the threshold is something like $2000. Make over that in a year and you arent considered a hobbyist and need to file as a small biz I think.

I use to have a business selling on ebay, at the top of the business prob around 7-800k/yr in gross sales. Never had any type of business license. Paypal sends you a 1099k at end of yr if over 10k in sales. Just add it into taxes on turbotax as a business. You also need to keep track of all your expenses, home office, etc to offset your income. I wouldnt get an llc yet, with an llc you then need to file taxes for the llc along with your own taxes, gets more complicated. Work as a hobby on r2r, keep money earned and reinvest a certain amount of it into growing your business, more tanks, controllers, dosers, etc. Outgrow r2r then think about a website.

 

[mbarber87]

Awesome! I think this is a great idea. I can offer you some free marketing tips if you're interested. I own and operate a pretty sizable marketing firm and can share some simple tips to get your name out there/sell online. Just pm me if interested!

 

[Epic Aquaculture]

The best way to end up with a million dollars selling corals is to start with two million dollars!

 

[Cassian]

Awesome! I think this is a great idea. I can offer you some free marketing tips if you're interested. I own and operate a pretty sizable marketing firm and can share some simple tips to get your name out there/sell online. Just pm me if interested!

I’m definitely interested! I’ll pm you! Thank you!

 

[Cassian]

The best way to end up with a million dollars selling corals is to start with two million dollars!

haha!So true

 

[Cassian]

Also can't stress enough something a few posters barely touched on... Liability. Do you really want to be dealing with liability? Insurance is also a must in something like this. Your business depends on livestock, and a simple unavoidable mistake or disaster out of your control can cost you all the money you put into it. Something like pests, water contamination, a hurricane, etc. Insurance is a must and doesn't come cheap.

Think about the repurcussions of a shipment gone wrong which for whatever reason can't be insured through shipper, or the losses you will take from covering live arrive guarantees. Even more so.. think about those customers that will never be happy with any steps you take to solve problems and just want to ruin your day. Is this something you look forward to dealing with even if only occasionally?

I see a lot of feedback glossing over the difficult stuff of running a business that causes most to walk away and give up with heavy financial losses.

For all of these reasons, try it with no expectations for a decent amount of time and let it expand or contract naturally.

great advise! Thank you!!