Alpaca Business Plan Part 2- Farm Overview

Having taught Freshman English, I know starting is the hard part for most. So today we will start in the middle with the easy part: Your farm overview. This is a snapshot in time of what you own and where you are in the business. We will later put this information in the main body of the document and in the assets portion. It feeds into the financials too, but don't worry about any of that yet, that will be a later topic.

The first step is to list the resources you dedicate to alpacas, assuming you are raising alpacas on your own land. If you aren't, but would like to, skip to the next paragraph. If you plan to continue agisting, there are still some manner of alpaca accessories you own--these are important too. If you would like to go down the jungle trail, please turn to page 394. To the point: How many acres do you have total? How many are fenced for the alpacas? Do you have room to expand? What buildings are you using for the alpacas? If you are storing alpaca stuff in your garage, list that too.

Next, let's do a little prognostication. Are the land and pasture adequate for the present and next year? If not, what do you need to accomplish to make it so? If they are fine now, how about in 5 years? What would you like to see on your property in 5 years? More alpacas, a bigger barn, somewhere to put the hay - make a list. This is not a list of to-do items, but things you would like in an ideal world.

What alpaca accessories do you own? Halters, buckets, chute, scale - make a list of this too, with how much you paid for it. These are assets.

How many alpacas do you own? Do not include the upcoming cria in this section. Alpacas are also assets, so put a price on each one.

This information can be in list form or in a nice narrative. Remember, this is your business plan, make it work for you. Only include that information that helps you make decisions. Everything else is noise.

Next time, we'll talk about mission statements.

Note: As I work on the whole, I will be editing all sections. When this is finished, I will put the whole thing together in a PDF for anyone interested.

In the meantime, here is what I have come up with for my Farm Overview section:

Farm Overview

Property

Our current property is just over 5 acres. The alpacas have 3 pastures consisting of about 1.5 acres. We are in the process of fencing another acre to bring the total to 2.5 acres available for the alpacas. Each pasture has a shelter, water and a hay bin. There are interconnecting gates between the pastures which enables us to increase pasture size as needed.

One third of the garage is used to store alpaca items and hay.

Current Operations

I have been raising alpacas for 9 years. Over that span I have sold 12 alpacas, plus 5 consignment alpacas. We have 9 females and 5 males with 2 cria expected this year.

halters
leads
buckets
shelters
hay bins
chute
shearing table
shearing equipment
tooth-a-matic
emergency kit
horse trailer
trailer hitch (mine is special - worthy of its own blog post)
herdease software
camera
photo printer
Green panel pen w/creep gate
heated buckets

Cappuccino Chip
Millennium Jubilee
Cinnamon Kiss
Mary Pitcher (Mollie)
Raven
Rheia
Andante
Andantina
Sweetart
Bond James Bond
Ink Jet
Apollo
Heart's Afire
Baby - unnamed cria by Mollie

Improvements Needed

The current capacity is ~20. Our fields are very productive and we supplement with hay/pellets. The existing facilities (including the new pastures) will keep up with herd growth as long as the projected sales happen.

How to Write an Alpaca Business Plan - Part 1

Given that every business needs a business plan, how do you write one for alpacas? We don't want to manufacture millions of widgets or raise thousands of cattle no matter how well these business models are documented. There are some books and web sites that give you the outline of an alpaca business plan, but I found them lacking. I am a technical writer by trade, so I dived into those dry books on how to write business plans and applied it to my alpaca business.

I took home the message that you need goals. What gets managed, gets tracked. What gets tracked, gets done.

I acknowledged the need for a financial plan, if not actual financials. Not only answering the question of am I making money, but how will I make money.

Detailing where my alpaca business is today and where I want it to be in the future opened my mind to more possibilities. How many acres do I want, how many alpacas, do I want machinery or material goods to help . In an ideal world, what do I see as my end goal? Now how do I get there?! What are the risks?

Business Plans are the roadmap to success. Once you have the goals set for your one year and 5 year plans, it is easy to make day to day decisions. Should I put in the new pasture, or buy a new alpaca is transformed into the question "Does buying this new alpaca fit into my business plan, does putting in a new pasture fit into my business plan?" I have passed up many alpacas because they do not fit into my business plan. I raise black alpacas, with some brown and fawn sprinkled in. Fawn does not always cover black... But I digress. Even though the alpacas were quality and were well priced, I saved my money for the new pasture because my 5 year goal is to have 10 production black females. To do that, I need more room. Fencing is the priority.

Deciding on which breedings to do is easier with a business plan. Which male will drive my business forward towards my goals? If you have the 20/20 goal of 20 pounds of fiber at 20 microns, then you would want to look at the males that will add density and fineness to your females instead of say color.

The business plan is the way to tell the IRS you are serious and not a hobby. It is one of the criteria for a business, along with stationary, and a bank account. :)

A business plan helps you budget your expenses and income.

Given the scarcity of business plans amongst alpaca breeders, I think there must be a reluctance about writing them. They can be a long or short as you want. They can include financials or just a general goal. The can be involved or simple. It really is up to you. I thought it might help for me to walk you through the steps of a business plan with an alpaca slant on the information. Many of the books that are out there are thinking along different lines of manufacturing or production of one item. Farming and ranching have their own unique issues.

Follow along with me for the next couple of weeks as I rewrite my business plan and talk about the steps involved.