Do you want to start an alpaca farm? If YES, here is a complete guide to starting an alpaca farming business with NO money and no experience.
If you are interested in going into serious animal farming business; a business that is green and very promising, then you should consider starting an alpaca farming business. Alpaca farming is perhaps one of the most lucrative wool or fleece or fur related farming business an entrepreneur can start.
But that does not rule out the fact that it can sometimes be challenging especially if you don’t live around a farm community cum plain land where you can easily build your cattle ranch because it will pay you to farm alpaca and cattle.
An alpaca is a domesticated species of South American camelid. It looks a lot like a small llama in appearance. There are basically two breeds of alpaca; the Suri alpaca and the Huacaya alpaca. Beyond the general knowledge of rearing domestic animals, you would need to study the process of alpaca farming if you want to become successful in the business.
In order to maximize profit in your alpaca farming business, you have to learn how to help your alpaca go through the birth process and then groom their young ones to maturity. Besides, if male alpacas are well – groomed, they can participate in circus shows and similar games cum shows for animals.
Starting an alpaca farm business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture especially if you know how to reach out to industries that make use of fleece or fiber.
An aspiring entrepreneur can either choose to start an alpaca farming business on a small scale or on a large scale depending on their financial status.
Before launching this type of business, it will pay you carry out your economic and cost analysis and of course feasibility studies. If you get things right before launching your alpaca farming business, then it will not take you long before you break even and start smiling to the bank.
So, if you are serious about starting your own alpaca farming business, all you need do is to read this article and you will be well equipped.
Steps to Starting an Alpaca Farming Business
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 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. Work Out a Reasonable Pricing for your Services & Products
- 18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
The agricultural industry of which livestock farming or better still alpaca rearing is a subset of is no doubt among the leading industry in most countries of the world; it is the industry that produces food for the populace and raw materials for industries.
Because of the significant role the agriculture sector plays, the government of most countries ensures that they go all the way to subsidize seedlings, fertilizer, farm implements and machinery for farmers and also encourage entrepreneurs to go into various kind of farming including cattle rearing business.
There are several business opportunities available in the agricultural industry and one good thing about the industry is that there is market for all the produce from the industry. Alpaca farming is of course a thriving and profitable business because of the usefulness of the wool from alpaca.
Alpaca fleece is one of the finest fibers and it is in high demand in the fashion industry. It is light-weight, warm, durable, soft and not itchy at all. Hand spinners appreciate its quality and handcrafters find it pretty easy to work with. The natural hues are highly desirable, yet light colors can readily accept dye.
Research shows that alpacas were exported from Peru in the mid-1980s and in recent time, they have become premier livestock in North America and other countries of the world. For instance, in the united states of America, the national Alpaca Registry (ARI) was formed to ensure breed purity and high standards. It is not illegal to import Alpaca from South America.
In the bid to control alpaca breeding, each alpaca born in the US is blood-typed before registering. This practice helps keep North American standards high so as to grow the best alpaca fiber in the world. If you are looking towards leveraging on the agriculture industry to generate huge income, then one of your best bet is to start alpaca rearing business.
Alpaca rearing business is all about the mass – breeding of alpaca for the sole aim of making profits. In most cases, it is referred to as livestock farming business.
One thing is certain about the alpaca farming business, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to sell your wool/fleece because there are loads of textile industries out there who are looking for fleece or fiber from alpaca.
Over and above there are few barriers to entry into the alpaca farming line of business. Usually, all inputs are readily available. In the nearest future, players in this industry may face costs associated with accessing technology, especially in relation to genetic modification engineering in alpaca breeding.
So also, intellectual property rights protecting new inventions and technology may mean that new entrepreneurs coming into the industry will need to pay license fees and this of course will cause an increase in the startup fee for alpaca farming business.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographics composition of those who make use of clothes made from fleece or fiber derived from alpaca is not restricted to a group of people. People of different races and cultures make use of clothes made from alpaca hence the market for alpaca farm produce is all encompassing.
So, if you are looking towards defining the demographics for your alpaca farming business, then you should make it all encompassing. It should include all the players in the textile and fashion industry.
3. Decide Which Niche to Concentrate On
It is important to state that there are no niche areas when it comes to alpaca farming business. Basically, they that engage in alpaca farming raise alpacas for the purpose of generating fleece or fiber for textile and fashion industry, engage in mating alpaca and in some cases grooming male alpacas to perform in circus shows or animal games et al.
The Level of Competition in the Industry
The level of competition in the alpaca line of business to some extent depends largely on the location of the business and of course the capacity of your alpaca farm. If you can successfully add fleece or fiber processing and packaging to your alpaca farming business, you are likely going to experience little or no competition.
For instance, if you are the only alpaca farm that engages in selling well – processed and packaged fleece or fiber (running fiber mill) in your location, you can successfully monopolize the market for a long time before you start having competitions.
It is important to also state that the competition in the alpaca farm line of business or cattle farms industry depends on the scale of your alpaca farm. There are alpaca cum cattle farms in the United States that are competing with leading cattle farms around the world and there are alpaca cum cattle farms in the United States that can only compete at the local level.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others.These are some of the leading alpaca or cattle farms in the united states of America and in the globe;
- A & R Alpaca Farm and Store
- Alpaca Magic
- M&M Alpaca Farm of North Carolina
- Magical Farms, Inc
- Bully Hollow Alpacas & Alpaca Farm Store
- Alpaca Farm BC
- Safe House Farm Alpacas & Ye Olde Alpaca Shoppe
- Rainbow’s End Alpacas
- Sunset Hills Farm Alpacas
- Happy Hills Alpaca Farm
- Island Alpaca Company
- Crescent Moon Ranch
- Sawdust Hill Alpaca Farm
- Misty Acres Alpaca
- Cedar Hollow Farm Alpacas
- Faraway Farm Alpacas
- Maple View Farm Alpacas
- Villa de Alpacas Farm
- Flatrock Alpaca Pug Farm
- Painted Sky Alpaca Farm & Fiber Mill
When starting an alpaca farming business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business, and start exporting fleece/fiber within your country and other countries of the world.
When conducting costing and economic analysis for your alpaca 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 alpaca farming business. As an alpaca farm owner, you just have to have proper grasp of your competitive landscape if indeed you want to succeed.
5. Decide Whether to Buy a Franchise or Start from Scratch
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 alpaca farms in the United States of America that are into franchising; most players in this line of business are adopting strategies that will help them sell their fiber/fleece beyond the city, state or country where their alpaca farm is domicile to other parts of the world as against selling franchise.
Besides, it is easier to start and run an alpaca farming business from scratch to profitability without leveraging on a known brand name. People will patronize your fleece/fiber based on accessibility and pricing as against relying on a brand name.
Please note that most of the big and successful alpaca farms or cattle 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 and of course you can build your own alpaca farm to become a successful farm in your area of specialization and even go ahead to start exporting alpacas and fibers/fleece to other countries of the world.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own alpaca farming business today, one of the major challenges you are likely going to face is the presence of well – established alpaca farms who raise alpacas and other livestock for fiber and wool et al in your target market location.
The only way to avoid this challenge is to create your own market; concentrate on cottage industries or fiber mills who need supply of fiber/fleece from alpaca farms on a regular basis.
Some other threats and challenges that you are likely going to face when you start your own alpaca farming business are global economic downturn that can impact negatively on household spending, bad weather cum natural disasters, unfavorable government policies and the arrival of a competitor (alpaca farm or cattle farm) within the same location.
There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the options of choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as alpaca farming business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale alpaca farming business especially if you are just starting out with a moderate startup capital, but people prefer limited liability Company.
As a matter of fact, if your intention is to grow the business and sell your alpaca and fleece/fibers all across the United States of America, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your alpaca farming business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
8. Choose a Catchy Business Name
Generally, 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. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own alpaca farming business, here are some catchy names that you can choose from;
- Peter Parson and Family Alpaca Farms, LLC
- Paul Collins Alpaca Farms Ltd
- Percy Jones & Sons Alpaca Farms, LLC
- Gareth Denis Alpaca Farms, Inc.
- Joe McQueen Alpaca Farms Ltd.
- Ray Thomas Alpaca Farms, LLC
- Lewis Niles Alpaca Farms Ltd.
- George Mendez Alpaca Farms, Inc.
- Texas Brothers Alpaca Farms, Inc.
- Golden Fence Alpaca Farms, Inc.
- Blue Sky Alpaca Farms, LLC
9. 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 policy covers 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 alpaca farming business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own alpaca farming business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Animal Mortality Insurance
- Farm Equipment and Auto Insurance
- Commercial Agribusiness Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own alpaca 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 livestock 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. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Aside from the results you produce as it relates to providing fleece/fibers, professional certification is one of the main reasons why most alpaca farmers stand out. If you want to make an impact in the alpaca farming line of 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 alpaca farm business;
- P. Livestock Certification
- (Cert III Level) or Wool Classing (Cert IV Level).
- Wool Preparation and Wool Classing qualifications
- Livestock Production certificate
Please note that the average local alpaca farmer in suburbs in the United States do not have certifications and that does not in any way stop them from growing their alpaca farms to enviable heights.
12. Get the Necessary Legal Documents You Need to Operate
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own alpaca farming business in the United States of America;
- Business and liability insurance
- Commercial Vehicle Operator’s Registration for distribution truck
- Appropriate driver’s licenses for drivers
- Assistant’s license for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Farm Partnership Agreement
- Operating Agreement for LLCs
- Insurance Policy
13. Raise the Needed Startup Capital
Starting a standard alpaca farming business can be capital intensive especially if you choose to launch a large alpaca farm with the capacity to supply fiber/fleece et al beyond your immediate community.
Securing a large farm land, building well – secured and conducive cattle ranch with the right fencing, purchase of the first set of alpacas, purchasing livestock feed and alpaca cum cattle farming equipment 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 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 alpaca 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
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Starting an alpaca 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 alpaca 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 alpaca farm is a farmland designated for cattle rearing and it is usually in the outskirts of town – countryside.
It cannot be overemphasized that the location you chose to construct your cattle ranch is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power, and a location that has minimal predators and the right climatic condition for the types of alpacas you intend raising.
If you make the mistake of renting or leasing a farm land for your alpaca farming business in a location that is prone to predator attack and has poor climatic condition simply because it is cheap, then you must be prepared to spend more in protecting your alpaca and welcoming potential customers.
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. These are some of the key factors that you should consider before choosing a location for your alpaca farming business;
- The demography of the location
- The demand for fleece/fiber and wool et al in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of fiber mills and textile mills in the location
- The local laws and regulations in the community
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
When it comes to starting a standard alpaca farming business, you will need the following equipment; wool/fleece collectors, water trough/channel, fencing, shovel and rake, and wheel barrow/cart. These equipment can be purchased as fairly used if you are on low budget.
When it comes to choosing between renting and leasing a farm land for your alpaca farm, the size of the alpaca 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 alpaca farm, then you should consider the option of long lease or out rightly purchasing a farm land.
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 alpaca farm business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), General Farm Manager, Veterinary Doctor (optional because it can be contracted), Human Resources and Admin Manager, Accountant/Cashier, Sales and Marketing Executive, Field Employees, Cleaners and Security Guards.
Over and above, you would need a minimum of 15 to 20 key staff members to effectively run a medium scale but standard alpaca farm. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some job function.
If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you which is why you should make plans to partner with vet clinics around you.
The Service Delivery Process of the Business
When it comes to generating fleece from an alpaca farm, the process is simple and straightforward, and as a matter of fact, an alpaca farm can successfully run on autopilot with little or no supervision from the owner.
When the alpacas are matured enough to produce fleece, a specific period of the day is chosen (usually in the morning) when the fleece are collected. Once the fleeces are collected, they are stored in a neat container or directly supplied to a customer as requested. The fleece/wool is sold to fiber mills and textile companies.
It is important to state that an alpaca farm may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated alpaca farming business process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
As an alpaca farmer, you would have to prove that you have the capacity to not only manage an alpaca farm but to also supply fleece/fibers et al in commercial quantities on a consistent basis. So, if you have plans to start your own alpaca farming business, it will pay you to first build your capacity before sourcing to supply fiber/fleece to larger fiber mills, textile and fashion companies who require a regular supply of fiber.
The fact that the entry barrier for starting a small – scale alpaca farming business is low 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 be creative 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 and strategies for your alpaca farming business, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to the industry you intend starting your business.
This will help boost your chances in the market place when marketing your alpacas and fleeces/fibers. Here are some of the platforms you can utilize to market your alpaca farming business and its produce;
- Introduce your business by sending introductory letters alongside your brochure to fiber mills, textile and fashion companies that make use of fleece, wool or fiber, textile companies and related businesses in the United States (if you are just starting out, you may want to concentrate on start – ups and smaller businesses)
- Promptness in bidding for fiber/fleece and wool supply contracts et al
- Open your alpaca farm with a party so as to capture the attention of residents who are your first targets when it comes to alpaca circus shows and games
- Advertise your alpaca farming business in community based newspapers, local TV and radio stations
- List your alpaca farming business on yellow pages (local directories)
- Leverage on the internet to promote your alpaca farm
- Engage in direct marketing
- Encourage the use of Word of mouth marketing (referrals)
- Leverage on the internet to promote your business
- Join local chambers of commerce and industry around you with the main aim of networking and marketing your products; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your fibers/fleeces at rock bottom prices is to purchase your alpacas, alpaca feeds, medications and other cattle farming tools and equipment 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 fibers/fleeces 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. Asides from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost of paying sales and marketing executives.
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting an alpaca farming business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of alpaca farms and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
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. Your corporate identity has a lot to do when it comes to building a profitable business.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your alpaca farming business;
- Place adverts on both print (newspapers and agriculture and fashion 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 products (fleeces/fibers)
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your alpaca farm
- Distribute your fliers and handbills in target areas
- Contact fiber mills and textile and fashion companies that make use of fleece, wool or fibers, textile companies and related businesses in the United States informing them about your business and the products you sell
- List your alpaca farming business in local directories/yellow pages
- Advertise your alpaca farming business 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 alpaca farm is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo