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.