The Business Side

So, can you make a living doing this? The short answer is yes, but let’s be clear: alpacas represent a significant initial investment, so you have to recognize that it’s not a get-rich-quick scheme. Do your homework, develop a business plan including a financial proforma, be realistic in your expectations and then enjoy the tax and financial benefits of raising and breeding alpacas.

Business Plan

As they say, "If you don't know where you're going, any road will take you there." Be sure you know where you're going: set goals, create a plan to achieve your goals, evaluate your progress and adjust your plan if necessary. Then enjoy your success and set new goals!

Your business plan should include a clear statement of what your breeding goals are, how you expect to capitalize your business, how you will pay operating expenses until you become profitable, and how much income you expect to earn from your business when it becomes profitable. It should spell out exactly how you will manage your farm and take care of your alpacas.

If done properly, a business plan takes a lot of work, but it is worth it to “force” yourself to think through the various aspects of running a business (especially if it is one with which you are unfamiliar). There are a number of examples of business plans on the Internet. You probably don’t need to pay anyone to do it for you (after all, you will be supplying all the information, so you might as well write it yourself), and you probably don’t need any special software. It might help to have an example or a template to go by, so find one you like and tailor it to your circumstances.

Your business plan should include an overview of the marketplace and where you fit into it. Such an overview should identify your customers, your competition, your suppliers, industry trends and other external factors that might impact your ability to meet goals as well as internal circumstances that might impact your business.

The plan should be specific about the resources required to run your business: will you have to hire employees or occasional help to manage your alpaca farm? Where will you purchase your hay? How many alpacas do you plan to keep in inventory? Will you use herd software to keep records on your animals or a paper system? How will you track financial information? Do you have a vet lined up to help out as needed? Do you understand the basics of good animal husbandry? Do you plan to enter your alpacas and/or their fleece in shows? How will you transport them? How will you market your animals? Will you have a website? Will you advertise?

It is very important to make sure that your plan includes a realistic proforma financial statement. This means you’ll have to think through all the costs associated with starting and operating an alpaca farm. This will take a lot of digging, but it will help you avoid unpleasant surprises. It will also give you a realistic target of when you might expect your farm to turn a profit and how much that profit will be. Don’t kid yourself and don’t sugarcoat your numbers. You want to go into this business with your eyes wide open.

Related articles:
Investing in Alpacas
Tax Advantages

Updated October 18, 2019