Do you want to start a sheep farming business? If YES, here is a complete guide to starting a sheep farming business with NO money and no experience. Sheep are kept for a variety of reasons such as to earn a living from their wool, meat, milk and hides; as a hobby farming in order to obtain organic meat that has been homegrown; to control vegetation or as a pet.
Due to the multi-purpose nature of sheep, it is important that you realize that you cannot use your sheep to satisfy all the purposes mentioned above especially as different breeds are more suited for different purposes and therefore the feed, pasture and production practices will vary.
Deciding to raise sheep can be very rewarding regardless of the purpose you have in mind, but before success can be attained, it is important that careful planning be made. As a sheep farmer, your duties include feeding the sheep, giving medication, shearing wool, maintaining the farm buildings as well as fences, giving assistance during difficult births, checking the flock for any signs of disease and managing waste.
You might also be responsible for engaging in activities that will publicize your sheep farm to distributors of meat and wool, maintaining farm equipment, harvesting hay and also ensuring that the sheep are duly transported to show rings.
First of all, it is important that you are aware of the different sheep breeds that are available depending on what you need them for. Once you have decided on the breed, you will need to make a decision on how many sheep you intend to purchase.
If you are going to be raising sheep for livelihood, then you must take into consideration the market prices and the returns you are likely to get. It is important to note that if you intend starting on a small scale, it might be difficult to make profit especially if the environment is not so conducive.
Since the highest quality meat is produced from lamb, it is vital as a sheep farmer that you understand how critical this aspect of the business is. Lamb processing usually surge during spring than at other times of the year and so most sheep farmers usually schedule lambing in the fall so as to be able to produce lamb in the spring.
However, there are only certain breeds that lamb during the fall as most of the breeds usually lamb during late winter or early spring. If you are going to breed ewes, it is essential that you engage in careful selection so that you can make a profit.
Finally, it is important that you have a business plan for your business. Even though a business plan might look cumbersome, it is necessary because it enables you have an idea of how the business is likely to turn out after factoring in the negatives and positives.
Also, a business plan can help you source for loan from either a financial institution, an external investor or even get a grant to start your sheep farm.
19 Steps to Starting Sheep Farming Business
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss With an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
- 17. Develop Iron-clad Competitive Strategies to Help You Win
- 18. Brainstorm Possible Ways to Retain Clients & Customers
- 19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
The sheep and wool industry is considered to be in a long-term decline due to decreasing inventories, farm numbers and shrinking revenues. The rate of return that the industry has experienced has resulted in instability. Per capita consumption within the United States has been fairly steady within the past decade; however, that is caused mainly by the increased importation of lamb meat.
And so even though the sheep industry has made some gains in productivity, domestic supply has however fallen due to the decline in inventory which has far outpaced output per animal. The revenue generated by the sheep industry according to IBISWorld is $971 million and there has been a negative annual growth of -0.9 percent between the periods of 2012 and 2017.
There are more than 95,500 sheep farms in the United States employing about 97,000, which means that most farms are either run by the owners or by less than two hands. The industry is one where no companies hold a dominant market share.
Sheep farms have not streamlined their growing operations unlike other sectors in the livestock industry. The decline in wool production is due to textile producers having a preference for synthetic fibers. Most of the sheep farms are in locations where the markets and environmental conditions are favorable. Most of the factors that influence where sheep farms are located are good pastures, proximity to water supplies as well as downstream markets.
Most farms are also located in areas where other livestock exist as well as where there are industry enterprises. Nearly 17 percent of sheep farms in the United States are located in the West due to the fact that there are large lands available for grazing and also that it is quite close to regions that grow major grains, which means the sheep farmers are close to feed inputs.
More than two-thirds of the sheep produced in the United States are produced in the Mountains, Southern Plains as well as Pacific regions. The number of sheep farms as well as the number of sheep in all the regions except that of New England has seen a significant decline since 1975.
Even though several states have registered slight gains in recent years due to growth of hobby farms, states that are into major productions have however registered loses due in large part to the exit of medium and large scale sheep farms.
However, Texas, California and Wyoming are still the major sheep producing states. The sheep meat industry according to history was developed as a byproduct of the wool industry and the conditions in the wool industry over time has had a large influence on the direction of the sheep industry.
The decline in wool demand started after World War II due to a reduction in the use of wool by the military service personnel. Also, synthetic fibers started becoming popular amongst consumers due to being more attractive and less expensive when compared to wool.
Even though the wool sector has had much support from the government, the act has been unable to sustain the sheep industry. The emphasis on wool before the Second World War resulted in the meat production being less expensive as mutton (meat from older sheep) weren’t really desirable especially as the sheep were kept for successive shearing purposes.
The fact that wool and mutton are joint products in the sheep industry means that they are produced in fixed proportions even though some sheep produce more meat than wool, while others produce more wool than meat.
However, due to the fixed proportions, the wool market has a direct impact on the mutton market. And due to the fact that demand for wool and its prices have dropped drastically over the past few decades, as the cost of adding value to the wool exceeds the cost of producing the wool, it has by a large extension also threatened the mutton producers/market.
Attempts by the sheep industry in the United States to differentiate and promote sheep from other meats have failed drastically which has had the industry focusing on high-value meat for the domestic market without looking to neither capitalize on market segmentation nor look to develop its export markets.
Most of the lower-value cuts are usually rendered or used as pet food. Only little of whole mutton carcasses are exported mainly to Mexico.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who consume sheep and its products can said to be certain Americans, wool production factories, laboratories, pet stores, other livestock farms as well as a host of other people.
Therefore, if you are looking to have an accurate demography for your sheep farming business, it is essential that you conduct a thorough research in order to determine who your true target market is.
3. Decide What Niche to Concentrate On
As a sheep farmer, you are expected to raise sheep in order to sell their meat, wool, milk or lambs to those that want them. There are also sheep farmers that raise sheep as a hobby or for pet purposes.
If your purpose of raising sheep is for livelihood purposes, then it is vital that you choose a niche in order that you might stand out from other sheep farmers. However, before choosing any niche, ensure that you have conducted a thorough research so that you do not end up wasting time and money.
Below is a list of niche ideas within the particular business that you can specialize in;
- Breeding Ewes
- Replacement lambs
- Market lambs and sheep
- Breeding rams
The Level of Competition in the Industry
Starting a livestock farm is not usually an easy venture because asides from sourcing for capital and waiting for a while before you can generate revenue, the nature of the business is an unpredictable one.
Sheep farming in the United States even though going through a decline, there is still a level of competition which you might be expected to face when looking to start your business.
The sheep farm industry might not be as dominant as other livestock sectors but the industry is fragmented because even though there are large scale farms in operation, small scale farms also have a chance to compete and still get a share of the market. The advantage that the large scale farmers have can be said to be economies of scale.
Therefore, if you are looking to start your sheep farming business in the United States, you should be aware of two factors; the decline in the industry and the level of competition that you will get from those that are already in the industry.
4. Know the Major Competitors in the Industry
Even though there are no dominant farms in the sheep industry; there are however farms that have long been in existence and can be considered successful, and so as an entrepreneur looking to go into the business, it is essential that you know what farms have been successful and how they have kept at it.
Below are some of the well-known sheep farms in the industry;
- Whispering Pines Sheep Farm
- North Star Sheep Farm
- Kissane Sheep Farm
- Superior Farms
- Woolley Sheep Farm
In the Agriculture Census taken in 2012, there are more than 84,000 sheep farms in the United States of America with about 80 percent of the sheep owned by those with large scale operations primarily located in the Western part of the country, and states with the most sheep are Texas and California.
Those running a small scale operation of less than 100 sheep are actually the majority of sheep operations even though they only have 17 percent of the total market share.
The sheep industry is a small one when compared to other livestock sectors such as cattle and hogs. For more than two centuries, the sheep population in the United States which was at about 7 million in the 1800s and climbed to about 56 million in 1945 has drastically reduced past 7 million by 2003.
The numbers have slightly increased by 1 percent between 2015 and 2016 due to the fact that the trend in the industry has shifted from wool to meat.
Even though the sheep industry in the United States is largely dominated by a small number of large operations, there has continued to be a steady decline in the number of these operations.
However, in the eastern part of the country, small flocks are increasing due to the fact that this is where most of sheep and lambs are consumed. Sheep are very popular in small farms that practice sustainable farming.
Sheep farming is not for any entrepreneur looking to get rich immediately as the profit margins are quite small. This does not mean that the business is not a profitable one but to be able to turn in substantial profit, you will require at least more than 500 ewes, which is why most farmers do not run sheep farming as full time but as a secondary enterprise or hobby.
Income from sheep farming is usually derived from sale of lambs, wool, milk, lease of sheep for grazing, and for bio-medical purposes.
5. Decide Whether to Buy a Franchise or Start from Scratch
Deciding whether to start your business from scratch or whether to buy a franchise will depend on a number of factors such as what kind of business you are looking to run, what franchise opportunities are available, what your budget is, and what goals and objectives you are looking to achieve.
The livestock industry has little franchise opportunities available except in areas such as processing and packaging and so there is no franchise opportunity for those in the sheep farming industry, which means entrepreneurs looking to start this business have to go for it from the scratch.
There are so many factors that you will need to take into consideration when looking to start your business from the scratch such as capital, pasture, building, marketing, revenue generation, experience in handling livestock and so many others and so this is not something that should be started by one who isn’t ready to dedicate time and resources to it.
One good thing about running your business venture yourself is that you are able to control the pace of your business.
6. Know the Possible Threats and Challenges You Will Face
Any entrepreneur looking to start a business should be aware of the threats and challenges plaguing the industry he intends to start the business and therefore have laid down strategies in place to combat or reduce the effect of the threats and challenges on the business.
Be that as it may, it should be noted that not all threats and challenges can be easily handled and the best the entrepreneur can do when faced with them is to try and focus on why he or she started the business in the first place.
Some of the threats and challenges that you are therefore likely to face when looking to start your sheep farming business in the United States include; decline in demand for wool, loss of sheep to predators, low prices for lamb meat, labor shortage, dealing with competition, and the perceived threat of industry concentration.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Whether you are running a farm, retail store or technical business, one important decision that you will need to make before the business can be started is the best legal entity for the business venture.
The reason why the decision of a legal entity is important is due to the fact that whatever legal entity you choose will have an impact on the business in the short and long run. It is therefore important that you conduct a research to know what other sheep or livestock farmers in your area are using or you engage the services of a legal attorney to help you out.
As a farmer looking to start your sheep farm, there are five basic legal entities which you can choose from and they are; sole proprietorship, partnership, cooperative, Limited Liability Company (LLC) and corporation.
The entities have attributes that make them different from each other and the major attributes are; ease of ownership and management of legal entity, taxation structure, extent of liability and flexibility of the legal entity.
Most entrepreneurs starting their businesses in the United States usually choose a sole proprietorship due to the fact that it is the simplest and easiest legal entity to form. Farmers aren’t also left out of using this kind of legal entity as about 35 percent of livestock farmers in the United States are sole proprietors.
Under the sole proprietorship, the sheep farmer is in complete control of the business especially when it comes to profits and even losses. However, his sort of legal entity does not protect the farmer much when losses occur as his personal assets are at risk.
The partnership kind of legal entity is similar to the sole proprietorship with the major difference being that the risks are borne by all the partners.
The LLC is the next popular legal entity used by entrepreneurs in the United State of America and there are about 35 percent of livestock farmers using this kind of legal structure.
While an LLC is not as simple to form like the sole proprietorship, it is more flexible when compared to a corporation. Farmers under this legal entity have their personal assets protected should the business incur any losses.
The corporation is also similar to the LLC but more formalized. It is split into the S and C Corporation. Under a cooperative, the goal is usually to maximize profit for participating members and farmers who form this kind of structure do so to gain various benefits. Each member farmer takes part in all the business decisions that are involved in running the market. Whatever legal entity you plan on choosing, ensure that you have conducted a thorough research.
8. Choose a Catchy Business Name from the ideas Below
Having a name for your business is necessary to ensure that you stand out from your competitors and can easily be identified by your target market.
Whether you are looking to use your name or a fictitious one, ensure that it is something that is catchy, unique and indicative of the industry you are in.
Some of the catchy business name ideas that will be suitable for your sheep farming business include;
- Bliss Sheep Farm
- Sheldon Livestock
- Sheep Ranch
- Ben Sheep Farm
9. Discuss With an Agent to Know the Best Insurance Policies for You
There are a number of calamities – natural or man-made – that can occur when one is running a business and when they occur, it is important that you are able to rebuild, which means that you should be adequately prepared.
Every endeavor comes with risks and not being prepared will mean you aren’t taking your business seriously enough. Buying appropriate insurance policies means that you are looking to protect yourself, employees (if any), your investment as well as your bottom line.
Some of the insurance policies which you should therefore consider buying for your sheep farming business include;
- General Liability Insurance
- Casualty Insurance
- Livestock Blanket Coverage
- Health Insurance
- Hazard Insurance
- Property Insurance
- Equipment Insurance
- Business Interruption Insurance
- Home-based Business Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
As a sheep farmer, you will not require to apply for any sort of intellectual property protection before you can start your business.
If you however deem it important to apply for an IPP on the name of your company, logo and any other concept, you can do so. Talk to a lawyer to find out what is necessary for you.
11. Get the Necessary Professional Certification
You do not require any professional certification if you intend running a sheep farm as most farmers usually possess high school diploma as a minimum. There are however several sheep farmers who have college degrees in animal science or a related field.
Additional educational opportunities are usually offered through memberships in a credible professional organization such as the American Sheep Industry Association (ASIA) or any other reputable organization as they also offer farmers networking opportunities as well.
12. Get the Necessary Legal Documents You Need to Operate
If you do not want to run into trouble with the law, then it is necessary that you have all your documents in place before starting the business.
The livestock industry is highly regulated and so not having legal papers could cause you to pay a fine or be banned from running the business. if you aren’t sure of what documents you will need, approach other sheep farmers in your area to find out.
Below are some of the legal documents that you will need to run your sheep farm;
- Business Plan
- Certificate of Incorporation
- Business License and Permit
- Insurance Policy
- Employment Agreement
- Contracts Document
- Operating Agreement for LLCs
- Sales Tax Permit
- Employee Identification Number (EIN)
- Federal Tax Identification Number (TIN)
13. Raise the Needed Startup Capital
No matter what your purposes for raising sheep is and no matter how rewarding the venture might eventually be; you will require money to start before you can begin to reap the benefits. Aside from money to buy the sheep, you will also require money to build a shelter, handling facilities and other equipment which you will need to raise your sheep.
If you do not have the capital to start your business with, it might be necessary for you to explore other options and most of the options you intend to source for capital from will require you to show a plan on how serious you are about the business and how you intend to repay.
Some of the financial options that you can explore include;
- Generating part of your startup capital from personal savings and sale of personal property
- Applying for grants from federal, state and private institutes
- Sourcing for soft loans from family members and friends
- Applying to commercial bank for loan
- Partnering with an investor in order to split capital
14. Choose a Suitable Location for your Business
Location is crucial in raising sheep because of the pasture, handling facilities and feeding that you will require for your business. If you are looking to raise your sheep as a pet, then you might not need to bother about getting a large place, and so if your backyard is large enough, you can raise your sheep there.
If you are however looking to raise sheep for livelihood, then you will need a large number of sheep in order to become profitable, and in running a large herd of sheep, you will need to acquire somewhere that is suitable for the sheep.
If you are going to be buying or leasing a land to start your business, then you should consider the building and handling facilities that will be erected and then ensure that it will readily accommodate the sheep and where they will graze.
You will need to consult with a real estate agent in order to help you secure a location that is within the zoning regulation as livestock cannot be raised from just anywhere. Ensure that the insurance agent has an idea of your budget so that you do not end up spending more than you had intended and then causing a strain to your overall budget.
You should ensure that your location can be easily accessed and is also conducive for the sheep you intend to raise as well as whatever employees will be working there.
15. Hire Employees for your Technical and Manpower Needs
The buildings that you will need to raise your sheep will depend on several factors such as the size of your flock, the environment or climate as well as when lambing is likely to occur.
Most sheep farmers build a barn because not only do they get to store feed and supplies in the barn but the sheep are also protected from wind and rain. Also, the barn is very critical if lambing occurs in winter. If you are however raising a small flock and will have lambing occur in the summer or spring, you might just need a small shed.
Regardless of the size of your flock, you will still require handling facilities as sheep always need individual attention. Handling facilities are always used to gather, sort and isolate the sheep for procedures such as medical, shearing and trimming.
A good handling facility will reduce the chance of injury to the animals as well as the handlers and also reduce the time spent on procedures. Handling facilities include a gathering pen with spare room for salt blocks, water tanks and feed; a forcing pen, sorting pens and chutes.
Sheep are meant to graze and so having pasture (which includes a mixture of grasses, brush, legumes and leaves) is an important part of raising sheep. The carrying capacity of the land will depend on factors such as plant species, soil, temperature, precipitation and also the layout of the land. One acre of high quality pasture should be able to accommodate four sheep.
Nutrition is essential in not only maintaining one’s flock but in also ensuring that the sheep grows fast, can produce greater wool and milk and also higher fertility. The primary components of the sheep’s diet are pasture and hay, vitamins and minerals are added as supplements when needed. Grains are often added in situations when the ewes are pregnant or during lambing.
Another important nutrient that sheep need are mineralized salt in order to help prevent bloating. It is important that the feed and diet of the sheep are balanced. While one person can run a small sheep farm, more hands are usually needed to run medium or large scale sheep farms.
The Service Delivery Process of the Business
Once you intend to purchase the sheep you intend to use, ensure that you know all there is to about the sheep’s history as well as its physical condition at the point of purchase. It is best to purchase the sheep directly from the person that raised them and also necessary to have a vet inspect the sheep you intend to buy so that the best sheep can be chosen for you.
Ensure that the sheep are fed with their favorite treat and that you coax them to follow you without them thinking that they are being chased. This is because when sheep think they are in danger, they usually bunch together and try to escape. You need to find a way to get at least one sheep to come to you because others will naturally follow.
Even though sheep do not require much protection, it is still best that they are fenced in using a woven wire or smooth-wire electric fencing. In order to keep the pasture fresh, ensure that the sheep are rotated into different paddocks.
16. Write a Marketing Plan Packed With ideas & Strategies
One way you can generate revenue that will sustain and grow your business is via marketing. Marketing is crucial for every business because it involves the entrepreneur rightly anticipating the needs of the consumers and then crafting the strategies which will ensure that the needs are met.
Through marketing, you not only create awareness for your business but you also get to penetrate the market and get a fair share for yourself while competing fairly against your competitors. Before any marketing strategy can become effective, it is best to conduct a thorough survey so that you will have an idea of who your target market is and what they expect from you.
It is only after you have an idea of your target market that you can begin to write out your marketing plans and policies and then create the marketing strategies that will enable you meet your core goals and objectives.
It is essential that you monitor your marketing strategies from time to time so that you can find out which ones have been effective and which ones need to be modified or removed.
Below are some of the marketing ideas and strategies that you can use for this particular business;
- Ensure that you place adverts in local newspapers, agricultural and other related magazines as well as on local radio and television stations about your sheep farm
- Create a website in order to maintain an online presence
- Ensure that your sheep farm business is listed in farmers’ guide, yellow pages as well as online directories
- Attend livestock farmers seminars and conventions in order to remain upgraded of industry trends and changing government regulations while also using the opportunity to network
- Use social media platforms such as Facebook, Twitter and Instagram to create awareness about your sheep farm business
- Install flexi banners in various strategic locations in order to create awareness for your sheep farm
17. Develop Iron-clad Competitive Strategies to Help You Win
Every entrepreneur will have to face some form of competition either directly from the industry or indirectly from other industries and therefore it is vital that the entrepreneur be prepared by having competitive strategies in place.
Some of the possible competitive strategies that you can therefore use to win over your competitors include; engaging in sustainable farming and providing value added services to your customers.
18. Brainstorm Possible Ways to Retain Clients & Customers
While attracting customers is one of the toughest part of running a business, ensuring that majority of the customers which you have attracted stick to your business is something that most businesses often fail at.
Retaining a high number of customers for your business means that you will be having a steady stream of income as opposed to the business that has to keep attracting new customers all the time.
Asides from having revenue stream steadily, you will also end up spending less than you would have if you constantly had to engage in promotional activities that will attract new customers. It is therefore advisable that you find out what strategies will make customers stick to your brand.
Some of the reasons why customers always stick to a brand is due to the quality of products and services that they are getting. Now that customers are getting conscious of what they consume, livestock farmers who are conscious of the practices in their farms in alignment with current trends in the industry are likely to get loyal customers than those who run their farms anyhow.
Another way to increase customer retention for this particular business is to ensure that you offer customer service during and after sales. Customers like to feel valued and so engaging in support after a sale is likely to make them not only happy but also to stick to your company.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Boosting awareness for one’s brand is an important way of communicating your corporate identity to your intended target market and also generating revenue for your business. This is because the more people are aware of the business; the easier it is for some to want to patronize the business.
The benefit that boosting one’s brand brings is why several successful brands do not mind set aside a certain amount of money in order to be able to generate the awareness that they feel will be of benefit to their business.
Below are some of the strategies that can be used to boost awareness for your brand and create a corporate identity for your company;
- Join a professional organization such as the American Sheep Industry Association (ASIA) in order to create awareness for your sheep farm
- Ensure that you install flexi banners and signage in various strategic locations around the area where your sheep farm is located
- Encourage your loyal customers to help spread the word about your sheep farm
- Create a website in order to showcase your sheep farm
- Ensure that you place adverts about your sheep farm in local newspapers and related magazines as well as on radio stations
- Get a Facebook and Twitter account and use this to create awareness about your sheep farm
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