Do you want to start an insect farming business? If YES, here is a 20-step guide on how to start an insect farming business with no money or experience in 2021. Please note that if you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.
The bottom line is that you would need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open your own insect farm business in your city.
You can start your insect farming business from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand especially if you go into franchising.
20 Steps on How to Start an Insect Farming Business
Table of Content
- Conduct Market Research and Feasibility Studies
- Decide Which Niche to Concentrate On
- Know Your Major Competitors in the Insect Farming Industry
- Decide Whether to Buy a Franchise or Start from Scratch
- Discuss with an Agent to Know the Best Insurance Policies for You
- Protect your Intellectual Property With Trademark, Copyrights, Patents
- Get the Necessary Professional Certification
- Get the Necessary Legal Documents You Need to Operate
- Raise the Needed Startup Capital
- Choose a Suitable Location for your Business
- Hire Employees for your Technical and Manpower Needs
- Write a Marketing Plan Packed With Ideas & Strategies
- Work Out a Reasonable Pricing for your Services & Products
- Develop Iron-clad Competitive Strategies to Help You Win
- Brainstorm Possible Ways to Retain Clients & Customers
- Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Understand the Industry
Insect farming is the practice of raising and breeding insects as livestock, also referred to as minilivestock or micro stock. Insects may be farmed for the commodities they produce (like silk, honey, lac or insect tea), or for them themselves; to be used as food, as feed, as a dye, and otherwise.
A closer study shows that the insect farming industry has experienced volatile patterns, with rising import volumes and the threat of colony collapse disorder adversely affecting its performance.
Growth will continue to struggle over the next five years, though an expansion into territories like medicine and pollination services will help offset major revenue declines in this industry. Frames and containers are a necessary requirement for insect farming, and producers may also purchase nucleus colonies.
An insect farming business is not a difficult business to start and it is not capital intensive especially if you choose to start on a small scale within your neighborhood. Getting the right insects, feeds and effective farming techniques.
Over and above, there are fewer barriers to entry into the insect farming business. Usually, there is a readily available market for produce (like silk, honey, lac or insect tea).
Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographics composition of those who patronize insect farms cut across all genders and age groups, hence the demographic composition for an insect farm is all encompassing.
So, if you are thinking of starting your own insect farm, then you should look beyond marketing your products to just people in your city and other cities within your country, but also to packaging and exporting to other nations.
Decide Which Niche to Concentrate On
There are quite a handful of niche ideas to concentrate on if you want to start an insect farming business and I must say the niche you choose might be influenced by your location and the market available to you.
Having said that, here are some of the niche ideas you can choose from if you want to start an insect farming business;
- Silkworm farming
- Mealworm farming
- Buffaloworm farming
- Honeybee farming
- Lac Insects farming
- Cochineal farming
- Crocket farming
- Waxworm farming
- Cockroach farming (Cockroaches are farmed by the million in China, and became an area of growth in the early 2000s.)
The Level of Competition in the Insect Farming Industry
Irrespective of the line of business you decide to invest in, you are still going to compete with others who are into same business and insect farming is not an exemption.
The level of competition in the insect farming line of business depends largely on the location of the business and of course the capacity of your insect farm. If you can successfully add animal feed processing and packaging to your insect farming business, you are likely going to experience little or no competition. For instance, if you are the only insect farm that engage in selling well – processed and packaged insect feeds, you can successfully monopolize the market for a long time before you start having competition.
Know Your Major Competitors in the Insect Farming Industry
Here are some of the most popular insect farms in the United States of America;
- Cowboy Cricket Farms
- Entomo Farms
- Beta Hatch Inc
- Poor Valley Bee Farm
- Walker Honey Farm
- Wolf Honey Farm Inc
- Lazy Bee Farm
- Team BEE Farms
- Long Lane Honey Bee Farms
- Marshall’s Farm Honey
- Super Bee Orchard
- SemiosBIO Technologies
If you are considering starting an insect farming business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profit, grow the business and perhaps expand the business and start exporting live insects within your country and other countries of the world.
When conducting costing and economic analysis for your insect farming business, you just have to critically examine these key factors; access to the market, access to feed, access to medications, access to cheap labor and of course good climatic condition.
As a matter of fact, you would have to continue to review these key factors at regular intervals while running your insect farming business. As an insect farm owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
Decide Whether to Buy a Franchise or Start from Scratch
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise. Besides, from available research conducted, there are no known fully operational insect farm in the United States of America that is into franchising; most players in this line of business are adopting strategies that will help them sell their insects beyond the city, state or country where their insect farm is domicile to other parts of the world as against selling franchise.
Besides, it is easier to start and run an insect farming business from scratch to profitability without leveraging on a known brand name.
Please note that most of the big and successful insect farms around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Know the Possible Threats and Challenges You Will Face
If you decide to start your own insect farming business today, one of the major challenges you are likely going to face is the presence of well – established insect farms who also raise insects in your target market location. The only way to avoid this challenge is to create your own market; concentrate on smaller industries who need supply of live insects or processed insects and animal feeds generated from the insect farm on a regular basis.
Other threats and challenges that you are likely going to face when you start your own insect farming business are global economic downturn that can impact negatively on household spending, bad weather cum natural disasters, unfavorable government policies (The use of insect meal as feed and food is limited by the legislation. Insects can be used in Novel Food according to the guidelines for market authorization of products of the European Union.) and the arrival of a competitor within same location.
Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, limited liability company or a sole proprietorship for your insect farming business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale insect farming business especially if you are just starting out with moderate startup capital in a small neighborhood. But if your intention is to grow the business and have chains of insect farms across the United States of America via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Choose a Catchy Business Name from the Ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.
If you are considering starting your own insect farming business, here are some catchy names that you can choose from;
- Reel Week® Insect Farming, Inc.
- Martins Snow® Bee Farming and Honey Processing Company, Inc.
- Off Shots® Insect Farming Company, Inc.
- Cyntia Willock™ Bee Farming and Honey Processing, LLC.
- The Collectors® Bee Farming and Honey Processing Company, Inc.
- Tech Net® Insect Farming Company, Inc.
- Larry Ben® Bee Farming and Honey Processing Company, LLC
- Big Sammie® Insect Farming, LLC
- Jerry Ash and Sons® Insect Farming, Inc.
- Triumph Texas® Insect Farming, Inc.
Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own insect farm in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Animal Mortality Insurance
- Farm Equipment and Auto Insurance
- Workers compensation
- Building/Property insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your insect farming business;
- Allstate Insurance Group
- Liberty Mutual
- Progressive Insurance Group (PGR)
- Health Care Service Corporation (HCSC)
- New York Life Insurance Company
- Lincoln National Life Insurance Company
- MassMutual (Massachusetts Mutual Life Insurance Company)
- Northwestern Mutual Life Insurance Company
Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own insect farming business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even production concepts especially in relation to genetic modification engineering in bird breeding, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
Get the Necessary Professional Certification
Apart from the results you produce as it relates to effectively farming insects, professional certification is one of the main reasons why some insect farmers stand out. If you want to make an impact in the insect farming business, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own insect farm business;
- CPD Certification & IAO accreditation
- (Cert III Level) or (Cert IV Level)
- Professional Diploma in Livestock Farming
Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
Raise the Needed Startup Capital
Starting a small scale insect farming business is not capital intensive especially if you choose to launch a large insect farm with the capacity to supply live insects or processed insects beyond your immediate community. Securing a large farm land, building well – secured and conducive farm with the right fencing, purchase of the first set of insects, purchasing insect feed and medications are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.
The truth is that when it comes to financing a business, one of the first things and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your insect farming business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Source for soft loans from your family members and your friends.
Choose a Suitable Location for your Business
Starting an insect farming business comes with its own challenges; it is a business that cannot be started in any location of your choice. As a matter of fact, you will not be allowed to start an insect farming business in a residential estate in the United States of America, Canada, the United Kingdom and Australia. The only location you can be allowed to start an insect farm is usually in the outskirt of town.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing / renting in your budget. If you are new to the dynamics of choosing a location for your insect farm, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your insect farming business.
Most importantly, before choosing a location for your insect farming business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
Having said that, these are some of the cities in the United States of America where you can locate your farm;
- Indiana, Fort Wayne
- Fort Smith, Arkansas
- Nampa, Idaho
- Iowa, Omaha
- Wichita, Kansas
- North Platte, Nebraska
- Dallas, Texas
Hire Employees for your Technical and Manpower Needs
When it comes to choosing between renting and leasing a farm land for your insect farm, the size of the insect farm you want to own, and your entire budget for the business should influence your choice. If you have enough capital to run a pretty large and well – equipped insect farm, then you should consider the option of long lease or out rightly purchasing a farm land; when you lease, or purchase a farm land, you will be able to work with long – term planning, structuring and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard insect farm on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), General Farm Manager, Accountant / Cashier, Sales and Marketing Executive, Insect Farmers/Field Employees, Cleaners, and Security Guards.
Over and above, you would need a minimum of 5 to 10 key staff members to effectively run a medium scale but standard insect farm.
Service Delivery Process of an Insect Farm Business
When it comes to operational activities of a insect farm, the process is simple and straight forward, and as a matter of fact, an insect farm business can successfully run on auto – pilot with little or no supervision from the owner.
Basically, when the insect facility has been put in place and the juvenile insects placed inside, then every morning and evening and perhaps afternoon, the insects are fed.
For example, if it is bees you are farming, once the bees are matured and starts producing honey, they are harvested with the aid of honey harvesters and then sold to buyers or they are transported to farm markets or to drinks and beverages factories where honey is used as part of their raw materials.
It is important to state that even though the above stated is the ideal business process of a bee farm, an insect farm may decide to improvise or adopt any business process and structure that will guarantee them good return on their services and investments.
Write a Marketing Plan Packed With Ideas & Strategies
The fact that the entry barrier for starting a small – scale insect farm business is not too high means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with unique marketing strategies if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your live insects or processed insects and animal feeds generated from the insect farm.
Here are some of the platforms you can utilize to market your insect farm;
- Introduce your business by sending introductory letters alongside your brochure to households, hotels, restaurants, food processing and packing companies that need steady supply of insects and animal feeds.
- Advertise your insect farm and honey production business in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your insect farm and honey production business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your live insects or processed insects and animal feeds generated from the insect farm at rock bottom prices is to purchase your feeds and medications directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your live insects or processed insects and animal feeds generated from the insect farm at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
Develop Iron-clad Competitive Strategies to Help You Win
The availability of different types of insects in your farm, steady supply of live insects or processed insects and animal feeds generated from the insect farm in commercial quantities, your business process and of course your pricing model et al are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your insects can favorably compete with the some of the best in the industry.
Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.
One of the secrets of larger corporations is that they are willing to spend good money year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your insect farm;
- Place adverts on both print (newspapers and farm related magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your insect farmDistribute your fliers and handbills in target areas
- List your insect farm business in local directories / yellow pages
- Advertise your insect farm in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your insect farm is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.
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