Tuesday, May 8, 2012

Alpaca Business Plan

Alpaca Business Plan

Its hard not to love alpacas.  They are sweet, cute, gentle, relatively easy to maintain.  Who wouldn't want one?  The real question is, what do you do with them when you get them and can they actually make money?


Many of us had these concerns, justifyably so,especially if we expect having alpacas in the back yard will pay our mortgage.


You need to ask yourself, what do I want to do with my alpacas?  How involved do I want to be with alpacas as an industry?  Outline what your goals are and create a checklist of what you want to do with your alpacas. 


For us, in order to get our loan to start our farm, we needed to create an alpaca business plan.  We knew we wanted to be in the alpaca industry full throttle. Many do not.  Some want just fiber animals as pets and/ or to make alpaca sweaters of out occasionally.  Some love showing.  We do not, but do so because it is important to see where your breeding program is compared to the rest of the regional (and national) herd.  Do you want to make and sell products?  This was initially not in our plan, but became an large part of our business over the past 5 years.


Here are some important questions you need to ask yourself:


Mission - What is your goal for this?  To create a fulltime job or just a hobby?
Short Term and Long Term Goals
Farm - What will it take to create a farm for your critters? 
Business Product / Service - What will you do with your alpacas?
How will you breed your alpacas? 
Marketing Plan - How will others know about your alpacas / products / services?
Competition - Who is your competition?
Risk/Opportunity - What could go wrong?
The Owners - What makes you qualified?  When we started, we had only worked with cats, dogs and horses.  We knew nothing about livestock.  But, we had the passion to want to learn about alpacas and how to make it work for us.
Capital Requirements
We will need $XXXXXXXX to be dispersed in several areas, including:
  • ___________ alpacas
  • Fencing
  • Advertising and promotion
  • Creation of a website
  • Health supplies and insurance
  • What else?
Financial Snapshot - It usually takes time to start making some money in any business.  How will you make it work?

Projected Gross Farm Income
(year 1)
(year 2)
(year 3)
(year 4)
$?
$?
$?
$?


Provisions for Health and Care: Feed, Pastures, Crosss Fencing, Safety / Predator Security, Shelters, Health Care, Manure Management, Shearing, Insurance.

Herd Plan - This chart can help determine how your herd can grow if you based on your breeding program projections.



 
Year 1
Year2 

Year 3
Year 4
Year 4
Year 5
Year 5
Breeding Females
Females Born
Males Born
Immature Females
Females Sold
Males Sold
Total Herd


Assumed birth rate: 85%
Chance of female birth:  50%


 
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Females Sold
Males Sold
Total Income
$


Average Female Cost/ Sale Price:
Average Male Cost / Sale Price:
Taxes  Because the alpacas are actively raised for profit, all the expenses attributable to the endeavor will be written off against the income.  

The Market - What does your market look like for your products?
Cash Flow and Break Even Analysis - When will you break even?  Better yet, when will you see cash flow?
Do not let all of these topics overwhelm you.  They are simply points that you should consider if they apply to you and what you want to do.  We can also provide a more extensive alpaca business plan if you would like.  Simply contact us to help us better understand what you are looking for.