Tuesday, May 8, 2012

Starting with Alpacas

Getting Started with Alpacas

First and foremost, prospective alpaca breeders should realize alpacas are a business, not an investment. Investments have traditionally been thought of as financial stocks, bonds, gold, silver, and real estate. All of these things can be owned passively, and when need be, you can sell them by calling your broker and asking him to liquidate the asset on your behalf.
Alpacas are a business opportunity. They need to be fed, cleaned up after, shorn, housed, and marketed before you can profit from them. And, you need to pay the bills before you can determine your profit. While I may be stating the obvious, this is an important concept to understand. There is no better tool to help make this clear than a business plan.
A business plan helps you through all of the decisions that a prudent person would make prior to committing their hard-earned capital to start an alpaca business. First, it is important to choose your alpaca marketing niche and decide how much money that you would like to make. You will also need to make decisions about whether you are going to treat alpacas as a business or hobby, what business entity to use, the tax consequences of your investment, the initial start-up costs, ongoing expenses, and decisions about whether to pay cash or to buy your alpacas on terms.
Alpaca Education
The first step down the path to discovering whether raising alpacas might be a part of your future is to educate yourself.  There are hundreds of books and hundreds of websites available.  Of course, if you ask 10 people the same question, you will get 10 different answers.  Absorb the information and see how it can apply to you.
An alpaca business plan should answer the following questions and contain the following elements:
1.             Which alpaca breed do you intend to own, huacaya or suri, or both?
2.             The identification of your market niche.
3.             When do you require income from the herd?
4.             How much income does your family require from the enterprise?
5.             A breeding plan.
6.             A farm expense budget.
7.             Will you pay cash or buy on terms?
8.             The tax benefits of alpaca ownership.
9.             A marketing strategy.
Creating a Farm Plan
Designing a safe, well-organized plan for adding barns, fences, and accessory buildings is crucial to your success in the alpaca business.
We have created 3 of our own farms and helped many others with their set-up.  We can give you practical advice on selecting the ideal location, the type of fences you will need, the size of gates, which type of pasture to plant, how to build effective shelter, where to place water troughs, how to select hay, layout your barn, protect against predators, and dispose of manure.
Animal Selection
One of the most critical decisions you will make involves selecting your breeding stock.  There are many different directions you can go in picking alpacas, and one is not necessarily exclusive of others:  breeding females, do you need a herdsire, pet quality males, will you have cria?
For instance most new purchasers come to our ranch knowing what breed and what color of animal they want to select but few are looking at several, even more important issues:
1.             What pedigree they would like to have in their purchase
2.             To whom is the animal they are buying bred
3.             Who will they be bred to in the future
4.             To whom the alpacas will their purchase offspring be bred.
The answers to the above questions can be even more important than whether or not the alpacas exhibit good fleece and confirmation.  
Marketing Strategy
Marketing is one of the most crucial elements necessary for the success of any alpaca breeder. There are many different ways to go about promoting your alpacas, including websites, alpaca shows, local events, farm events, kids’ education.  We have spent a lot of time at the local farmer’s markets, schools and hospitals among other places promoting our alpacas and alpaca textiles.
The first step to understanding how to market alpacas is to learn: 1) who buys alpacas in the first place; 2) how buyers find out about alpacas and where they go to buy them; and 3) what sales strategies work in today's marketplace.