Do you want to start a minnow farming business? If YES, here’s a complete guide to starting a minnow farming business with NO money and no experience.
Many fishermen use minnows as bait in order to catch other larger fishes such as bass, crap and pike. Minnows themselves are a different species of fish and they grow at different sizes and rates. Because it takes a few months for these minnows to reach the desired size before they can be used as bait.
It is therefore essential that you know all there is to know about minnows before going into the business, so you won’t have wasted months on the wrong business. Asides from conducting a thorough research about minnows as regards the different species, it is also important that you understand the market which you are going to be selling your minnows to.
In starting this business, it is important that you decide on the type of minnow species you intend to raise as each species not only has a different growth rate and size but also different breeding patterns. The popular species of minnows include; creek chubs, fathead, shiners, slippery and many more.
It is essential that you are equipped with the right information so that you would be able to launch out on the right footing. This is really important because some people have started out haphazardly and that has cost them a whole lot of things in the long run. Here below is a detailed description on how you can start a minnow farm.
Steps to Starting a Minnow Farming Business
1. Understand the Industry
The fish and seafood aquaculture in the United States boasts of different industry activities such as raising and harvesting finfish such as minnows, raising and harvesting shellfish such as clams, raising and harvesting ornamental fish such as goldfish, raising and harvesting aquacultural species in order to augment wild habitats and raising and harvesting other aquaculture such as turtles.
There are no companies in this industry with a dominant market share even though the industry is one that generates $1 billion every year and has an annual growth rate of 1.8 percent from the periods of 2012 to 2017. There are more than 2,800 businesses in this industry employing more than 10,200 individuals.
This industry is one that has a low capital intensive level as every dollar spent on wages results in about 12 cents spent by operators on capital investment.
This industry is one that is largely labor intensive as workers are required to not only regularly feed the fish that is being farmed but also monitor the fish and the environment that they are in so that factors such as breeding cycles and water temperatures are in order and also that no damage has occurred to the enclosure in which the fish are being raised in.
Some advanced enterprises are however using a higher amount of capital in their operations as they have invested in advanced tanks, pumps and cages that do the job of the workers.
The baitfish industry is looking to have a bright future as more fishing licenses are being sold each year with the fishermen being convinced that using live bait will result in getting a good catch. This therefore means that the fortunes for large enterprises will continue to grow especially as most of these enterprises have large supply holding facilities and so are into more of wholesaling.
This does not mean that small producers cannot thrive in the same industry through retailing as they can develop local markets and then furnish the public with high quality bait fish. Wholesaling is done from trucks, while retailing can be sold in plastic bags or via minnow buckets.
One problem that all baitfish producers have to deal with is predators and this is because at every life stage of the fish, predation occurs. Fishes, snakes, minks, birds, raccoons, frogs, insects, turtles and even alligators all have an adverse impact on the population of baitfish.
It is therefore pertinent that a baitfish producer is able to carefully manage these predators as some of them usually are vectors of diseases. In order to have effective control, it is important to physically remove the offending species and even though this is usually a costly process, it is what makes a difference between the business making a profit or loss.
Another problem facing the baitfish industry is the variety of bait sizes that the fishermen always request for. However, most baitfish producers usually have a fixed group of sizes in order to be able to supply the market. So baitfish is usually sold between 1kg and 15kg per 1,000 fish.
There is also a sizeable market for the larger shiners that are between the sizes of 20 and 40 fish per kilogram. The smaller sized baitfish is usually called crappie minnows and the larger sized baitfish is used usually for whopper bass or surf fish. Most baitfish producers usually use prevailing demand in order to have a supply of baitfish sizes.
Most baitfish producers have little information on how to successfully sell their baitfish to wholesalers and retailers as there are no regularly defined channels as each individual has to find out what works for them and then use it. Pricing is usually dependent on how high the demand is and what level of competition exists between a particular region.
Regions or areas where there are numerous bait fish producers or suppliers competing for the same market usually see there being more reliance placed on the quality of service. However, in other areas, service can be regarded as secondary to price or supply.
In the United States, the state of Arkansas leads in the farming of bait and feeder fish as the state accounts for at least 61 percent of the industry value for cultured fish in the country. Every year, Arkansas raises 6 billion minnows such as golden shiners, fathead minnow and goldfish and then ships them all over the country.
A 1998 aquaculture census recorded at least 62 baitfish farms in the state. The farm value of the baitfish produced in Arkansas every year is estimated to be at least $23 million with an economic impact that is recorded at seven times the farm-gate amount especially in counties such as Monroe, Lonoke, Greene and Prairie where most of the baitfish are being raised.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those that require minnows for end-user consumption or for further use are usually fishermen, bait shops, pet supply stores, intending minnow farmers, researchers and scientists. Therefore, if you are looking to define the demographics for your minnow farm, you should look towards those basically in the fishing industry.
3. Decide What Niche to Concentrate On
Every business enterprise that gets started needs ways in which they can stand out from other similar enterprise, which is what gives birth to niche ideas. Another importance of a niche idea is that it allows the entrepreneur to generate extra revenue.
One of the reasons why it is important for you to conduct a thorough research into the industry you are going into is that it will allow you identify areas where others might not have thought of but which will be of high benefit to your business.
Before deciding on any niche idea or product, ensure that you test the market first by taking a survey so that you do not end up wasting resources and time on a niche idea that only few people will pay for. Below are some of the niche ideas that are within this particular business that you can specialize in;
- Minnows as bait fish
- Artificial baits
- Miscellaneous Aquaculture
- Ornamental Fish
- Sport Fish
The Level of Competition in the Industry
There is a high level of competition that exists in the minnow farm industry and this is due to the fact that baitfish producers can raise their minnows anywhere and then ship it to customers around the state. This sort of business that can be done anywhere is always having an intense level of competition than others.
What customers are usually after from baitfish producers is the availability of quality baitfish as well as other quality fish food.
Another thing that customers demand is the right price as well as a good quality of service. Therefore, if you are looking to start your minnow farm and run it competitively, you should ensure that the price is right and that you are offering quality services.
Arkansas might be the largest contributor to the baitfish industry but this does not mean that other regions cannot effectively compete as well as there are other 39 states where minnows are commercially farmed. This therefore means you have competitors all around the United States and should therefore be prepared.
4. Know the Major Competitors in the Industry
In every industry, there are brands that stand out and the fish and aquaculture cum baitfish industry is no different. Those that stand out usually do so depending on the quality of services they offer, their prices, the quality of their baitfish and how long they have been in the industry.
Even though there are no companies with a dominant market share in this industry, there are brands that most retailers prefer to use. Below are some of the well-known minnow farms in the United States of America;
- Harry Saul Minnow Farm, Inc
- I F Anderson Farms Inc
- Anchor Fish Bait Company
- Booths Minnow Farm
- Branch Minnow Farms
- Cranberry Hollow Minnow Ranch
- Kings Minnow Farm Inc
Minnow farming is considered as a unique American enterprise. There are more than 800 producers of baitfish in at least 40 states in the United States and the farm value of this market is estimated to be between $30 and $40 million. This segment of the aquaculture industry is considered to be of greater economic value than any other species of food for fish.
Before bait fish farming began, all the minnows that were used for bait in the 1930s were usually captured from the wild and the practice still goes on today as nearly 50 percent of the minnows sold in the United States today are those that are being captured from the wild.
This is causing an adverse impact on the natural ecosystem as harvesters sometimes accidentally remove other fishes or even exotic species.
While baitfish transfer has caused a great number of introductions of fish species to new environments, baitfish farming on the other hand has provided the industry with few select species of healthy and quality minnows that have been widely distributed.
Baitfish is usually purchased at local bait shops. Most of the minnows sold are usually from fish farms in Arkansas as well as other southern states in the United States. In 1989, Arkansas had an estimated 27,800 acres of ponds that were solely dedicated to raising minnows.
The income that the state generated from the sale of this baitfish surpassed $25 million in 1989 and by 1995 had exceeded $47 million.
5. Decide Whether to Buy a Franchise or Start from Scratch
One of the decisions that an entrepreneur has to make when looking to start a business is if to start the business from scratch or to buy a franchise. Whatever option you decide on should be one that totally aligns with your core corporate goals and objectives.
Why some entrepreneurs usually seek the franchise option is that it frees them from having to deal with so many start-up challenges that are likely to occur and also provides them with the mentoring needed to make the business a success.
Even though there is no guarantee that buying a franchise will mean success for your business, it is an opportunity to learn from those already in the business and your ability to succeed will depend on your business plan. There is however no known franchises in this industry.
Starting a minnow farm from the scratch can be a little overwhelming to an entrepreneur. However, that is the only way to go with a minnow farm.
6. Know the Possible Threats and Challenges You Will Face
As an entrepreneur, you should know to expect challenges and threats in certain areas either when starting or running a business as they are considered part and parcel of everyday life, more so the business environment.
However expecting threats and challenges is one thing, being prepared on how to tackle them is another thing. You should however note that not all threats and challenges can be handled and when this occurs, you should remain optimistic.
Some of the threats and challenges that you are therefore likely to face when starting your minnow farm include; shortage, oversupply, changes in weather patterns as well as the changing whims of fishermen regarding the ideal bait.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When starting a business, one of the most important decisions that you will have to make is what kind of legal entity will be most appropriate for your business and even though a farm business might be a little different from other types of businesses, the legal entity chosen for it will go a long way to determine how much of an impact the farm will have in the short and long run.
Choosing a legal entity requires a bit of research as you will need to know what entrepreneurs in your line of business are up to.
There are however several factors that should guide you when looking to pick a legal structure for a minnow farm. The factors are; ease of setup and control, liability type, taxation structure and flexibility. Whatever legal entity you choose should be one that will further your corporate aims and objectives.
If you aren’t sure of what legal entity to choose for your minnow farm, you can always get in touch with an attorney or accountant to help you in choosing what you feel will be best for you. Ultimately, for a minnow farm you would need to operate with a sole proprietorship.
8. Choose a Catchy Business Name from the ideas Below
While having a business idea can be a fantastic thing, giving the business a bland name might affect the business negatively. Having a business name is the first step towards legalizing the business and so it is essential that you carefully choose what name will represent your business idea.
Ensure that you choose a catchy, memorable, easily pronounceable name that is indicative of the industry that you are in. Below are some of the catchy business names that will be suitable for your minnow farm;
- Smurk Minnow Farms Inc
- Easy Baits Farm Inc
- Quick Baits Inc
- Quality Minnows and Mo Farms
- Mink Minnow Farms
9. Discuss With an Agent to Know the Best Insurance Policies for You
Insurance policies are one of the ways entrepreneurs seek to protect their investments especially if the business is one that carries a high risk as having insurance will mean that the entrepreneur transfers the risk involved in the business to the carrier.
Not having insurance can be very risky as it leaves not only your business but also you exposed. Below are some of the basic insurance policies that you will need to consider purchasing for your minnow farm;
- General Liability Insurance
- Property Insurance
- Equipment Insurance
- Workers’ Compensation Insurance
- Health Insurance
- Commercial Property Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
Running a minnow farm is a business that is labor intensive as you will need to constantly check the environment of the fish and their water regulation; however, this is not a business that requires any sort of intellectual protection.
11. Get the Necessary Professional Certification
Running a minnow farm requires that you understand the different species of minnows in existence and know what sizes most customers usually need. This is not a business that requires the entrepreneur to get any sort of professional certification.
12. Get the Necessary Legal Documents You Need to Operate
While picking a business name and getting the necessary funds you need to run your business is very important, equally more important are all the necessary documents that you will need in to be able to run the business without hitches of any sort from the regulated authorities.
If you do not know what legal documents you will need for your business, it is best to ask other minnow farmers in the same region, or visit a city council or engage the services of an attorney to help you out. Below are some of the legal documents that you will need in order to be able to run your minnow farm;
- Certificate of Incorporation
- Business Certificate
- Business Plan
- Business License
- Insurance Policies
- Employment Agreement
- Seller’s Tax Permit
- Employer Identification Number (EIN)
- Federal Tax Identification Number
13. Raise the Needed Startup Capital
Entrepreneurs often find sourcing for finance daunting but as finance is a vital part of any business, this is not an aspect that can be wished away.
The process of sourcing for finance can however be made easier if the entrepreneur has a business plan at hand as it will be easier to convince investors when there is a written plan in place. Below are some of the ways by which you can source for finance for your minnow farm;
- Use savings and revenue from sale of stock as part of start-up capital
- Get a business partner or private investor in order to get start-up capital
- Source for soft loans from family and friends
- Apply for loan from the bank
14. Choose a Suitable Location for your Business
When starting your business, choosing the right location is very important for the growth, success and sustainability of your business. The right location is therefore not something that can be overlooked and it is essential that you take your time in looking for the right place especially if you are looking to start the business on a massive scale.
If you are going to run a small scale minnow farm, then this is something that you can totally run at the backyard of your home especially if you are going to be raising only one species of minnows as all you will need are two sizeable tanks – one for hatchings and the other for breeding and mature minnows.
If however you intend to run the business on a massive scale, then it is important that you buy a property that is sizeable enough to accommodate all the species of minnows you intend to raise. If you will be getting a sizeable property, then you must ensure that you engage the services of a consultant that will help draw the plans regarding the property you have just gotten.
It is important that you acquire a property in an area that will be easily accessible by those you intend to employ as well as your clients that will want to pick up their orders themselves. Your facility must also be in a conspicuous place so that people do not find it difficult locating your farm. Ensure that you engage the services of a real estate agent to help you in picking the right area for your minnow farm.
15. Hire Employees for your Technical and Manpower Needs
Once you have decided on running a minnow farm, it is essential that you acquire a tank for the minnows you are intending to farm.
The minnow farm business is one that requires low maintenance especially for those that already have the natural resources such as a pond. This doesn’t mean that those that have to purchase tanks to raise their minnows will be spending too much.
Get a fish specialist to instruct you regarding the aerator that should be installed in the tank. If you are using a large tank, then getting an electric aerator or solar-powered aerators will be highly cost beneficial for your business. If you are going to be using ponds, then there will be no need to get an aerator.
Ensure that there are accessories in your tank such as plants as this will give the female minnows a hiding place to lay their eggs and then fill the tank with water that is not chlorinated.
In starting and running your minnow farm efficiently, you will need a pond or tank, aerator, non-chlorinated water, spawning ground materials, and minnow feed. If you are going to be running the business on a commercial scale, then you need a specialized haulage truck, vehicle, packaging materials amongst others. Administratively, you will need a phone, computer and office supplies.
Building a solid business structure is very essential for the growth and success of the business as this is a business that is labor intensive in nature. Ensure that you hire only individuals that are competent and knowledgeable enough about minnows or are willing to be trained.
It is essential that your workers understand your core objectives and look towards fulfilling them. Those you might need to hire include; farm supervisor, driver, cleaner, fish feeders and environment maintenance personnel, front desk officer and accountant.
From the above break down, you will need at least 6 key individuals to help you run your minnow farm effectively.
The Service Delivery Process of the Business
The farming production cycle of baitfish begins in the spring when the adult brood fish are being spawned. Minnow species such as golden shiners and goldfish usually spawn in groups, so farmers usually put in accessories such as coconut fibers to be able to collect the eggs.
The egg laden accessories are then transferred to a hatchery with clean oxygenated water so that the eggs can incubate. Once hatching has occurred, the baby fish is moved to another tank or pond. The size of the pond or container will usually differ depending on the species.
During the summer, the fish are fed daily with floating pellets consisting of soybean meal, plant products, cottonseed meal – that have been prepared with the form of feed varying according to the size of fish. The baby fish (fry) are fed a fine powder meal; the young fish are fed with broken pellets while the large fish are fed with intact pellets.
The fish can also consume natural foods that are available in its environment such as insect larvae and zooplankton. It is important that the water quality is checked regularly and many farmers make use of aerators to make sure that the fish have sufficient oxygen.
Once the fish has reached market size, they are then harvested into a hauling tank and taken to a minnow shed. In the minnow shed, the fish are unloaded into shallow concrete tanks that have clean and aerated water.
Salt is added to the water and the fish are left for a day in order to allow them harden. The fish are then separated into size categories and graded. Once they have been properly graded, they are ready to be sold. In shipping baitfish, special hauling rigs that have been equipped with tanks supplying oxygen are used.
16. Write a Marketing Plan Packed With ideas & Strategies
Marketing is a very important aspect of any business and entrepreneurs looking to start a business must first define their marketing goals and objectives so as to be able to have the right perspective as to how what they intend to achieve it.
With marketing one can simply identify the needs of the customers and ensure that these needs are being met in such a way as to allow the entrepreneur penetrate the market, get a fair share and also compete favorably against existing competitors.
Before you can conveniently identify the needs of your target market, you have to conduct a thorough research of the market which will allow you to know who your target market is, where they are congregated, what they expect from you and what you should expect from them as well.
Also, the market research will enable you identify your competitors and know their weaknesses and strengths so as to be able to exploit them.
Location is very imperative for your marketing and therefore you should ensure that you are located in a place that will allow you to easily market your products to your intended customers. Asides from your location, ensure that you create a website and deploy Search Engine Optimization Strategies (SEO) to ensure that the website ranks tops in search engines.
Most of the baitfish markets in counties and states have strong association rules guiding them so ensure that you check which local associations are available and how you can join them so that you can have easier access to the markets. Below are some of the marketing ideas and strategies that exist for your minnow farm;
- Ensure that you get in touch with pet shops and local retailers and inform them about your minnow farm
- Use your social media platforms such as Facebook, Twitter and Instagram to advertise our products
- Create a website and ensure that your products and services are prominently displayed
- Place adverts in local newspapers, related magazines as well as local radio stations
- Install flexi banners in strategic locations in order to create awareness for your business
- Distribute handbills and fliers in various strategic locations
17. Develop Iron-clad Competitive Strategies to Help You Win
As an entrepreneur looking to start a business, one of the challenges you will face will be how to create strategies that will allow you to win your competitors in the industry. Competition is part and parcel of the business environment and as such it is essential that you are prepared for it if you do not want your business to fail.
Some of the possible competitive strategies that you can use to win over your competitors in this industry include; ensuring that you give your customers quality baitfish all the time, have affordable rates for your baitfish as well as provide quality customer service at all times.
18. Brainstorm Possible Ways to Retain Clients & Customers
Every entrepreneur knows the importance of customers to a business because a steady stream of customers ensures a steady stream of revenue that will sustain and grow the business tremendously, which is why businesses are constantly creating strategies that will allow them attract the customers that they need for their business.
However, while attracting customers is essential to the growth of the business, ensuring that a high number of these customers are retained is equally as important. According to statistics, businesses that did not retain a high number of their customers usually spend more than those that do.
There are several reasons why customers stick to a particular brand and one of them is due to the quality of services that they get. If your customers are assured of getting quality service from you all the time then they are likely to stick to your brand.
Another way to increase customer retention for your minnow farm is to ensure that you offer other services as well. If your customers know that they are likely to get not just minnows from your farm but other baits as well, then they are likely to want to patronize your business.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Every entrepreneur starting a business knows how important publicity is to the business and therefore looks for means to ensure that the business gets the adequate awareness that it deserves. If you do not create adequate publicity for your minnow farm, you are going to run at a loss because you will have mature minnows ready to be sold but no one to buy them because no one is aware of your business.
To this end, publicity helps a business achieve a whole lot because not only do you get to create the needed awareness for your business, you also get to generate revenue from the awareness that has been created, which is why already successful businesses do not mind spending a fortune every year in order to ensure that they are able to publicize their business.
Asides from getting the attention of your target market and generating the revenue that will sustain and grow your business, publicity also allows you to penetrate the market and compete favorably against already existing competitors.
It is vital that effective publicity strategies are created so that the business will be able to achieve its intended goals and objectives. Ineffective strategies can be removed or modified as long as reviews are constantly being made. Below are some of the strategies that you can use to boost the awareness for your brand and create a corporate identity for your minnow farm;
- Use social media platforms such as Facebook, Twitter and Instagram to create awareness for your minnow farm
- Join popular aqua forums and blogs in order to raise awareness for your minnow farm
- Tell your loyal customers to help spread the word about your minnow farm
- Ensure that your minnow farm can be found in yellow pages as well as online directories
- Create a website and use this to constantly promote your minnow farm
- Ensure that you create a distinct logo as well as signage so as to get people’s attention