Do you want to start a mealworm farming business? If YES, here is a complete guide to starting a mealworm farming business with NO money and no experience.
Okay, so we have provided you an in-depth sample mealworm farming business plan template. We also took it further by analyzing and drafting a sample mealworm farming marketing plan backed up by actionable guerrilla marketing ideas for mealworm farms. In this article, we will be considering all the requirements for starting a mealworm farming business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Mealworm Farm?
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- 8. Choose a Catchy Business Name
- 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 Strategies to Boost Brand Awareness and Create a Corporate Identity
Why Start a Mealworm Farm?
If you are looking for one of the cheapest and easiest businesses to start up with no need to bother about space and infrastructure, then a mealworm (darkling beetle larva) farm is one of them as this is the best protein meal used by those that have animals.
Those that have animal – omnivore – farms or pets know that protein is one of the most expensive supplements that can be bought and yet it is regarded as one of the most essential components of any omnivore’s diet. Animals that get their protein supplements have been known to have a healthy growth rate. Mealworms can be taken by humans too especially in situations where there is a dire need for protein and there is no other source to get the protein from.
Mealworms are very easy to raise and keep, a reason why many farmers do so. Some people actually raise mealworms in their living rooms by buying a multi-tier plastic storage container and keeping the worms in there, and because the worms do not smell, no one can know you are raising them unless you tell them.
However, if you intend to start a mealworm farm that is commercial in nature, it is essential that you take your time and study the business thoroughly by knowing all there is to know about mealworms and who will eventually buy them from you.
There is a whole lot you can get from this article as you will find comprehensive details on how to start a mealworm farm in America.
Starting a Mealworm Farming Business – A Complete Guide
1. Understand the Industry
As the population of the world continues to climb and it is expected to reach 9 billion by 2050, rising incomes has led to a greater demand for meat-based source of protein. This has therefore led researchers, entrepreneurs and even the UN to source for animal feed that are less expensive giving way to mealworms and fly larvae that is fingered as the perfect replacement.
There is expected to be an increase of between 70 and 80 percent in demand for animal protein between the years 2012 and 2050 as the current animal production sector is already a major cause of environmental degradation. Even though edible insects are regarded as a more sustainable source of animal protein, there are few available data regarding how much of an impact these insects have on the environment.
However, when a study of the lifecycle of the production of mealworm was conducted using factors such as energy use, land use and greenhouse production, it was found that conventional protein source such as pork or beef resulted in more use of energy, land and emissions. This therefore showed mealworms as a more sustainable source of edible protein.
The shift in focus to edible insects is likely to drive the demand for this market on a global scale as more people are looking towards consuming foods that are healthy for themselves and their animals. According to estimation, one hectare of land can produce about 150 tons of mealworm protein in a year.
This industry’s growth is not likely to come from only demand as the economic cost in raw materials, transactions, transportation and set up is likely to contribute to the growth of the industry as well.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who use mealworms are farmers who own livestock, owners of pets, scientists, intending mealworm farmers, pet stores, researchers and even certain individuals who consume mealworms.
3. Decide Which Niche to Concentrate On
In every business, entrepreneurs usually look for ways that they cannot only stand out but also generate more revenue for their business; this is why some go into niche products or services. While it might be difficult to get niche ideas when it comes to mealworm farming, an entrepreneur in looking to stand out can offer other products or services and then be known for that.
Below are the few niche ideas that exist within this particular business;
- Mealworm farming
- Sale of mealworm waste as fertilizer
- Sale of other edible insects
The Level of Competition in the Industry
The mealworm farm is one that is quite easy to run as it does not require too much capital and space to start-up. This has caused many farmers who are looking to make their own protein feed to do so without having to buy, thereby making it difficult for those that intend to start the mealworm farm commercially since they will be competing against Do-It-Yourself farmers.
This does not however mean that there is no market for mealworms; there are still plenty of people who will not mind buying mealworms especially those that own pets. The number of pets and pet owners in the united states is quite huge, and since a mealworm farm can be run from anywhere, you can have customers from all over the country.
Therefore, if you are looking to start your own mealworm farm in the United States of America, it is essential that you understand that you are not only going to be competing against other commercial mealworm farmers within the country but also against those that will be running their own mealworm farm for their private use.
4. Know Your Major Competitors in the Industry
In every industry, there are brands that stand out and this market has few that have stood out as well. There are several reasons why brands become prominent in an industry and some of them are; their marketing and publicity strategies, their scale of operation and how long they have been in business.
Below are some of the most popular mealworm farms not only in the United States but globally as well;
- Zega Enterprises
- Wildcare Australia Inc
- Haocheng Mealworm, Inc
- Terracycle Mealworm Farm
- Southern Bait Worms
In a 2010 study, scientists from the University of Wageningen in the Netherlands, found that cultivating mealworms for food not only allows for the production of a more sustainable source of protein, it also allows for use of less land and energy when compared to the same production for conventional meats. Mealworms were found to be more climate friendly than conventional meats.
According to UN estimates, livestock production accounts for approximately 18 percent of all the emissions globally and since the world population is constantly increasing, the demand for animal protein is also expected to grow by at least 70 percent by the year 2050.
Mealworms can help to solve this problem as they aren’t warm blooded which means they expend less energy as part of their metabolism and won’t need to eat much in order to survive. Mealworms are becoming a conventional meal for those in Asia and even some people in the United States as there are many recipes cropping up that involve mealworms.
5. Decide Whether to Buy a Franchise or Start from Scratch
One of the decisions that you will get to make when starting a business is whether to start the business from scratch or to buy a franchise. Either option is not bad as it has its pros and cons but it will depend on what your corporate goals and objectives are and which option will likely help further these objectives. While the mealworm farm is one that can be started by anyone as it is an easy farm to start-up, starting the business on a commercial basis is a different ballgame altogether.
Buying a franchise in this regard can help with certain challenges that you are likely to encounter during the course of starting and running the business such as space issues, dealing with the mealworms on a large scale, having to attract customers and also dealing with paperwork. However, in buying a franchise, ensure that you study the franchise opportunities well and pick only the one that will help further your true goals and objectives.
This does not however mean that you cannot start the business from the scratch as it is an easy enough business. Starting from the scratch on a commercial basis means that you will have to deal with paperwork and how to attract the customers you need for your business. If this sounds overwhelming, you can start on a small scale and slowly expand. Ensure that you have a business plan on hand as this will be helpful to you.
6. Know the Possible Threats and Challenges You Will Face
When starting any sort of business, it is necessary that you envision the threats and challenges that you are likely to undergo so that you can ultimately prepare for them. This will show how serious you are about the business you are looking to start. It is worthy to however note that not all threats and challenges can be easily handled and when this occurs, the best you can do is remain optimistic and hope for the best.
Some of the challenges and threats you will be facing are intense competition from already existing mealworm farmers (commercial and private owners), unknown brand name and market, as well as competition from intending mealworm farmers.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- Best legal entity to use for this type of business
choosing a legal entity is very important for an entrepreneur because it determines how far the business can grow in future. It is therefore vital that you have an idea of what you intend for your business to be so that you can choose the right legal entity for it. As a farmer, some of the legal entities that are available to you is the sole proprietorship.
A sole proprietorship is one of the easiest legal entities to form as record keeping is quite straightforward and taxes are filed on the personal income tax return of the entrepreneur. Also, it allows for easy winding down of the business. However, the entrepreneur has unlimited liability under this kind of legal structure.
8. Choose a Catchy Business Name
When looking to start a business, one core aspect that you will need to worry about is what you will call your business. A business name is very important because not only does it make the business become legal, it also enables the business to stand out from its competitors, which is why a business name must not only be distinctive, memorable and easily pronounceable, it must also be indicative of the industry it is in so that the general public can easily identify what you do.
Below are some catchy business names that will be suitable for you when you are looking to start your mealworm farm;
- Wriggly Farms Inc
- Mealworms and Edible Insects Farm
- Worms and More
- Wiggle Worm Farms
- Calder Mealworms
9. Discuss with an Agent to Know the Best Insurance Policies for You
Insurance policies are very necessary for a business as they help transfer the risk associated with the business to another party called the carrier. If you want to run your business with as less hassles as possible, then it is important that you get an insurance policy.
Knowing what insurance policies to get might be difficult, so it is advisable that you engage the services of an insurance agent or broker to help in deciding which insurance policies will be best for your mealworm farm. Below are some of the basic insurance policies that you will have to purchase if you are looking to start your mealworm farm in the United States of America;
- Workers’ Compensation Insurance
- Health Insurance
- Overhead Expense Insurance
- Employment Practices Liability Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
The mealworm farm kind of business is one that requires you to have the basic knowledge involved in raising mealworms commercially. The subject of applying for intellectual property protection in order to be able to run this kind of business does not come into play as most people in this industry do not have to worry about this sort of thing.
If however you wish to protect our company name, logo or any other material you deem worthy enough, then applying for intellectual property protection is necessary. If this is what you wish, then it is vital that you get in touch with a lawyer to help you out.
11. Get the Necessary Professional Certification
In starting a mealworm farm, all that would be required from you is to ensure that the mealworms are adequately fed, exposed to moisture and kept in the right environment. This basically means that just about anyone can go into this business and so there won’t be any need to acquire any sort of certification professionally.
12. Get the Necessary Legal Documents You Need to Operate
Any entrepreneur looking to start a business in the United States knows that for the business to run without hitches of any sort from the regulated authorities, it is vital that the business be made legal in every way possible and some of the ways by which this can be done is to ensure that you have all the necessary documents required for you to be able to run your mealworm farm.
If you aren’t sure of what documents you will need in order to run your mealworm farm, it is best that you ask other mealworm farmers in your state or you engage the services of an attorney who will help you with all the necessary documents needed to start your mealworm farm.
Below is the list of documents that you will need to run your mealworm farm;
- Certificate of Incorporation
- Insurance Policy
- Business Permit and License
- Business Plan
- Federal Tax Identification Number (TIN)
- Employer Identification Number (EIN)
13. Raise the Needed Startup Capital
Anyone starting a business understands that having the required amount of start-up capital is necessary to the existence as well as continuous growth of the business. If you have a business idea and have no funds with which to startup the business, then the business idea will never become a reality.
Entrepreneurs starting a business know how daunting it can be to source for start-up capital in which to start the business, which is why serious minded entrepreneurs usually have a business plan at hand so that it makes it easier for them to approach investors.
Starting a mealworm farm might not be as financially tasking as other businesses but it still requires a substantial amount especially if you are looking to start on a huge scale. Below are some of the ways you can source for start-up funds for your mealworm farm;
- Start off the business with your private savings or sale of stock
- Source for soft loans from friends and family members
- Get a business partner and spilt the start-up costs
14. Choose a Suitable Location for your Business
When looking to start any business, one detail you will need to take into consideration is where you are going to locate the business as this has an effect on how your business can generate revenue, grow and also make an impact. Entrepreneurs who haven’t done their homework have found out too late that the importance of a location cannot be overemphasized as it has caused many businesses to fail.
Fortunately, the mealworm farm is not only an easy business to startup in terms of capital; it is also a business that does not require a vast amount of space especially if you are looking to start small. Many mealworm farms are run in the homes of the entrepreneur especially those that are starting out on a small scale, and if this is how you intend to start your business, then if you have space in the corner of your living room, then this might be a good place to start your business.
If you however intend to run the business on a massive scale and do not have space in our home to run the business, you can rent or lease a small facility where you can conveniently run your mealworm farm from and as the mealworms do not require as much attention as certain kinds of businesses, leasing a facility might not be such a bad idea as you can even run some other kind of business there as well.
If you are going to be leasing a facility, ensure that you choose a place that is easily accessible by road so that your customers who prefer to pick up their mealworms themselves will not have to go through so much stress to get to you. Also, ensure that the facility is in a conspicuous place that can be easily identified so that you do not have to spend extra in creating awareness about your location.
Knowing how important your location is, it is best that you set aside a budget that will take care of leasing the facility as well as carrying out an renovations that may be needed so that you do not end up spending more than you should and causing a strain on your overall budget.
15. Hire Employees for your Technical and Manpower Needs
The environment that you will require in order to be able to run your mealworm farm should be one that is warm and dry, which is why most farmers usually setup their mealworm farms inside their homes due to the fact that the temperature stays constant as opposed to outside where the weather cannot be easily controlled.
Those who do not have spaces in their homes probably because they are running it on a large scale usually have to build a structure in order to be able to accommodate the large number of mealworms they intend to raise. Another reason why mealworms are being raised inside rather than outside is because they prefer a little darkness and so can easily be hidden in the back corner of the room.
In feeding mealworms, you can use wheat bran as they are a cheap byproduct of wheat production. Other foods that can be given to the mealworms are rolled oats, cornmeal, dried grass, dry herbivore manure, or carbon matter. To get your mealworms to take in moisture, you can give them fruits and vegetable scraps as well as peels and rinds. If you are going to be raising them inside your home, ensure that you avoid giving them wet fruits especially those that can easily rot.
A mealworm farm isn’t expensive to startup and can be completed in a matter of days, as 15 square feet of space can produce nearly 11/2 pound of mealworms every week. The materials that you will require in order to be able to start and run your mealworm farm efficiently include; lumber, wood scrapes, storage baskets, aluminum foil, nylon, window screen, wire mesh cloth, paint, silicon, plastic containers, wheat bran and oats and mealworms. The tools that you will need are scissors, silicon gun, tape measure, marker, drill, wood saw, duct tape, drill bits and square.
The mealworm farm business is one that requires just a little of your attention each day and so this is a business that can not only be run from home or a small place but can also be run by one or two people. If however, you intend to hire employees later, ensure that you have generated enough revenue that will be able to pay whoever you intend hiring so that you do not run at a loss.
From the above analysis, one or two persons can efficiently run a mealworm farm and still enable it achieve its corporate objectives.
The Service Delivery Process of the Business
The processes involved in starting a mealworm farm starts with the setup. In setting up your mealworm farm, it is essential that you first gather your supplies – food, organic source of moisture, plastic containers, bits of cardboard and mealworms. Put the food into the bottom of each plastic container and then deposit some slices of moist vegetable into the container.
Once they have been thoroughly mixed, pour the mealworms in and then seal the containers with duct tape or scraps of cardboard to create a dark environment for the mealworms. Ensure that each container is labeled – larvae, pupa- beetles – so that you can easily identify them. Place the container in a warm place as the right warmth ensures that the mealworms pupate faster.
The next step is the upkeep of the mealworm. While raising mealworms isn’t hard, it is necessary that you maintain their containers periodically either daily or every week by removing rotted vegetable or dead insects and adding more as necessary. It is also essential that you move the bedding around in order to prevent mold. Once your mealworms start to pupate, separate them from the larva and the adult so that they don’t get eaten. Check the adult beetle container for eggs and once they hatch, move them into the mealworm container.
Ensure that you continue this cycle daily or weekly. Advertise to your target market so that you can keep clearing out your mealworms whenever they are ready. Feed the excess to your pets but do not release them into the wild as they will not likely survive.
16. Write a Marketing Plan Packed with ideas & Strategies
- Marketing ideas and Strategies
Marketing is one sure way a business cannot only generate revenue for itself but it can also create awareness for its products and or services. Marketing involves understanding what it is the customers want and then looking to ensure that these needs and wants are met satisfactorily. Any company that has created effective marketing strategies will find that they are able to not only penetrate the market and get a fair share for themselves but they are also able to compete favorably against their competitors.
Before effective marketing strategies can however be created, the entrepreneur must study the market he or she intends to go into well as this will allow the entrepreneur to be able to determine who the target market is, what the target market expects from the business and what the entrepreneur should expect from the target market. Studying the market thoroughly also allows you identify who your competitors are and how they matter in the scheme of things. Once you are able to determine what you will need to succeed, it makes your job easier.
Writing out your marketing goals is very essential as this will allow you to be guided when drafting your marketing strategies. It is also very necessary that from time to time, you review your marketing strategies as some might not become as effective as they were in the initial stage. Ineffective marketing strategies can either be modified or completely replaced. Ensure that all strategies are in line with your overall corporate goals.
The internet has made it very easy for entrepreneurs to be able to advertise their products or services easier than before when they had to rely on only offline means that did not reach a wide range of people. If you are considering using the internet, ensure that you have a website and that you have an account on popular social media platforms.
Below are some of the ways that you can advertise your mushroom farm to your intended target market;
- Distribute handbills and fliers in various strategic locations in order to get more awareness for your mealworm farm
- Partner with pet shops and animal stores in order to be able to create more visibility for your mealworm farm
- Create a website and ensure that it is interactive enough so as to attract the customers that you will need
- Use your social media platforms such as Facebook, Twitter and Instagram to promote your mealworm farm
- Place adverts in local newspapers and magazines regarding your mealworm farm
- Ensure that you physically market your mealworm farm by visiting potential customers and telling them of your mealworm farm
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Every business that is being started needs not only finance to ensure it remains in existence; it needs a degree of publicity to ensure that it is noticed by the intended target market. Publicity for a business does not stop at people getting aware of the business because a large amount of the awareness is usually converted to revenue generation, which goes to show how important publicity is to a business.
If you are able to cultivate your publicity properly, you are likely going to be able to not only penetrate the market and get a fair share of the market for yourself; you are also going to be able to win over your competitors.
Due to how important publicity is to the growth and sustainability of a company, successful companies who have already had their own share of the market do not mind spending a huge amount of money either monthly or yearly in order to be able to stay on top of their competitors publicity-wise because they know how much benefit they will reap in the short and long run.
Knowing how important publicity is to your business and how much you are going to benefit from it, it is only fitting that you craft the right strategies that will put you on top. Before you can however craft the right strategies for your business, it is necessary that you understand the industry you are in and those that are likely to purchase your mealworms from you.
The internet has made it a lot easier for entrepreneurs to be able to increase their publicity campaigns to a large number of people and it has also been cheaper for most entrepreneurs as well. Every entrepreneur needs to draw up a plan that will allow them know how much they intend to spend and which publicity medium will be best for their business. It is also important that the publicity strategies used are being reviewed on a continuous basis so that those that are deemed ineffective can be removed or modified to make them more effective.
Below are some of the strategies that you can use to boost awareness for your brand and also create a corporate identity for your mealworm farm;
- Ensure that you install a creative and conspicuous signage that will allow customers from afar know about your mealworm farm
- Create an educative website and deploy SEO strategies so that your website can rank on top in search engines, thereby increasing publicity for your mealworm farm
- Visit and participate in popular forums and blogs especially those that are related to your kind of market in order to increase publicity for your mealworm farm
- Use your social media platforms such as Facebook, Twitter and Instagram to raise awareness about your mealworm farm
- Install flexi banners in various strategic and conspicuous locations in order to generate more awareness for your mealworm farm
- Encourage your loyal and satisfied customers to help spread the word about your mealworm farm