Alpaca Business Plan, Part 9 Executive Summary and other parts

The executive summary is quite easy now that you have finished the document. Keep the summary to a page. It is okay to go over and it is okay to just have one paragraph. What is important is to include the important bits. Let the person who is reading it know that you have done your homework, but don't give them minutiae. This is where the elevator speech comes into play. If you can tell the person what you are doing, why you are doing it, and how you will succeed in the time you have on an elevator, then you have done a great job.

Now add a table of contents. Most word processors will do this for you.

If you have a very long document, add an index in the back. Most word processors will help you with this.

The final piece is the cover page. This can be as elaborate or as simple as you wish. I put a picture of a cria, my logo, my name, address, phone number and the date of completion.

If there is a item that you think is important and I have not covered it, please add it to your business plan. I have tried to give you the framework on which to start. Good luck and I hope this helped.

Alpaca Business Plan Part 8 - Financials

Here is the hard part. What do you want to count for and against your alpaca business? That is completely up to you and your accountant. However, I would like to suggest some areas to discuss.

Animal expenses:

Vet visits
CDT
worming
pellets
minerals
hay
fiber testing
ARI registration
Stud fees
Microchips
Tools ( shovels, rakes, etc)
Supplies (1st aid, feed and water buckets etc)
halters and leads
sharpening service
membership in associations
books, videos, and seminars
alpaca purchases
alpaca insurance

If you look at the IRS publication 225 ( Farmer's Tax Guide) you get a feel for the sections.

Income from a purely alpaca standpoint would be from breeding, and selling of animals. If you branch out, then there are many income ideas: fiber, seminars, books, herd sitting, agistment are just a few.

Alpaca Business Plan Part 7, Farm Information

The farm information section is where you detail the accomodations you have made for the alpacas.

Where do you buy your hay?
Who is your vet?
What kind of pastures do you have? What kind of grass is in the pastures?
What kind of fencing do the pastures have?
What kind of shelter is available?
What is their water source?
How will you manage the manure?
Who will do the daily labor?
Do you need insurance?
What kind of pellet/mineral mix are you using?

These are the same kind of questions that people ask new buyers to ensure a good home. I am sure there are more I could ask, but that covers the basics. If you think I left one out, please let me know.

HomeSpun Alpacas has ~3 acres in pasture. It is currently divided into 4 pastures, but we rearrange as needed. The pastures are fenced in with 2x4 horse fence, woven. The pasture provides the majority of feed, but we buy about 2 ton Orchard grass hay for 16 alpaca from the local feed store.

We provide 3 sided shelters in each pasture for the alpacas. There are trough feeders in the shelters to feed pellets in. The pellets are provided by Puget Sound Nutrition Group. Dr Waltner provides the makeup for our area. The water is provided in buckets in the pasture from a well on the propery.

We have 2 vets, husband and wife. Puget Sound Vet Clinic. They have a nice hospital facility and do make farm calls.

I do all the daily labor. My husband and son help on the weekends and nights as needed.

The manure is composted and used in our garden. We have not outgrown the compost output yet.

Alpaca Business Plan Part 6 - Herd Growth

Herd growth has many facets:
How many alpacas do you want?
How many are you planning on breeding every year?
How many will you keep?
How many will you sell?
What is your expected production rate?

What is the ideal number of alpacas for your farm? This could be the maximun number the land will support or the number of females necessary to produce the amount of alpacas you want to sell or the number of fiber boys you need to make product.

I first figured out how many alpacas I could reasonably support on the land. From that number, I worked on the number of females and males that would be ideal for my sales goals. Remember goals are just that, goals, so have a fall back plan if you don't make the sales you were expecting.

Northwest alpacas has a great herd growth calculator. You type in the number of alpacas you have now and it estimates the number you will have in future years.

You can see that the cria add up faster than you think. So have a plan in place to sell as you are growing. This does two things, it puts you in the marketplace and makes you practice marketing and selling. You learn what works and what doesn't before you find yourself in a position of having to make a sale. It also brings in new bloodlines if you buy to replace what you sell. If you don't plan on that, then it puts money in the farm budget.

Now is the time to think about what to do with the boys you will be getting. Will you show them, sell them as fiber boys, or keep a fiber herd? Just something to think about.

I would like a herd of 10 breeding females. If I get 50% boys, then I will need to sell 5 boys a year. I also need to sell 5 females to keep the herd at the ideal size. The females sold could be yearlings, pregnant maidens, and/or the production females. I also have some older females, so am planning on when they will retire to have a replacement in place.

As I am growing to that size, I am selling the females that don't fit my business plan and most of the boys. The number can't be written in stone because while statistics say there will be a 50/50 spilt, I have had years with all girls and ones with all boys. It works out in the long run, but to plan year to year for it is tricky.

Alpaca Business Plan Part 5 - Business Products & Services

The business products and services section is where you talk about what you are going to sell. First identify what your products and services are going to be. This may be repeated in the section on marketing, but it is a different slant than what we are focusing on here. Are you in the business to sell and promote fiber boys, fiber products, raw fiber, breeding females, herdsire services, or future herdsires? Huacayas or Suris?

Tell about your criteria for each one. What do you consider a herdsire? What would you consider to be prime blanket? Not all blankets are created equal, the 17 micron fleece will bring more per pound than the 35 micron fleece. What are your standards for an acceptable X?

Address anything unique about your services or products. Think of the people who raise organic vegetables, they detail what is unique about their product and show how it fits into a healthy lifestle.

The following is what I put down as my business products and services:

HomeSpun Alpacas will sell huacaya alpacas for the breeding market. We will also sell fiber and products made from their fiber such as yarn and blankets. We will focus on black.

Our fiber goals for fineness are detailed in the long term goal section.

Breeding Females
Breeding females should be the ones with fine crimpy fiber and correct conformation. They have easy births and plenty of milk. Their crias are healthy and strong.

Breeding Males
The breeding male alpacas also have the fine crimpy fiber and correct conformation. They produce crias that are consistently better than the dam and themselves. They come from a line of alpacas that produce healthy crias. Their fiber stays fine even with the onset of breeding and age.

Fiber Products
The fiber that the alpacas produce is warmer than sheep wool and generally considered stronger. It has been marketed as rivaling cashmere, and the truly fine fleeces do with a micron under 20. There is a wide range of fiber produced by an alpaca. The blanket is the prime and the most marketable. The neck is second. The leg and belly are thirds. Each of these kinds of fibers has their use in the market place.

• Prime The prime fiber is used for blankets, sweaters, scarves and hats. It is soft and able to be worn next to the skin.
• Seconds This fiber is used for socks and things that are not worn next to the skin. It is also used as felt.
• Thirds Thirds are used for rugs, insulation, and as weed barrier.

Alpaca Business Plan Part 4 - Goals

Short term goals are goals you want to achieve in a short period of time. I usually choose a year for this, but choose a time period that makes sense to you and your business.

What are you going to do this year to bring your alpaca business forward? Outside breedings, buy a herdsire, sell females or fiber boys, make business agreements with others for trading are just a few ideas. What do you need or want to avoid?

What do you want to achieve with your alpacas? Lower micron, higher shear weight, easy births, milk production, crimp style, color are examples. Also include things you would like to get rid of.

What marketing are you planning? Will it help you achieve your goals? Is marketing one of your goals? What do you want marketing to do for you?

What profits would you like to see? How might you go about producing a profit?

Brainstorm and see what comes up. Don't worry about reality just yet. Dream.

Goals are your destination, worry about getting there after you figure out where you want to go!

Now take all of your great ideas and write them up in a couple of paragraphs. It can help to make concrete, active statements like "We are selling three alpacas in 2010" rather than "We plan to sell three alpacas next year."

Long term goals just take that information a bit farther. Think 5 or 10 years down the line.

What would you like to see then?

What steps do you need to take to get there? What do you need to focus on?

HomeSpun Alpacas Short Term Goals

The initial business focus will be on quality (fleece and conformation) tame, halter trained alpacas. During the first two to three years, we will strive to improve the herd’s fiber.

During this time, we will also be breeding for black. To complement this objective, we will search out the most appropriate black herdsires to breed to our black females. We will also use finely fleeced and crimpy alpacas to bring down the micron and compliment the crimp in our brown females. They will be bred to the most appropriate male, regardless of color.

We will use males that dramatically improve upon the female’s crimp and decrease any guardhair.

Long Term Goals

It is the intent of the owners of HomeSpun Alpacas to build a fiber business selling yarn and products made from our own alpacas as well as building the herd of females to around 10 head.

Our breeding goals are:

• Soundness of body and limb
• Uniformity of fineness and extension of blanket fiber throughout the brisket, shoulder,
• hip, head, neck, and leg.
• Lack of medulation (low percentage over 30 microns)
• Luster or brightness
• Staple length (minimum of 3 inches a year, preferably 4 to 6 inches)
• Volume (the more finer fiber the better)
• Crimp
• Easy births and plentiful milk supply
  
• Good mothers (females)
• Settles females quickly (males)
• Mellow temperament

The fiber goals for micron counts are as follows:

Age Micron
Up to 12 months 16
1 - 2 years 18
2 - 3 years 20
3 - 4 years 21
4 - 6 years 22
6 - 8 years 23
8 - 14 years 26

To achieve our goals we need to:

• Make smart breeding decisions to produce the high quality fiber that is most marketable.
• The males chosen for breeding will have cria on the ground that are an improvement over either parent. The conformation will be correct and the crias will have the same correct conformation and be healthy.
• For the strong fiber, we will find a salable product to produce. Rugs, felt pads, and teddy bears are one of the options on the table as are quilt batts.
• Raise the herd numbers to be able to produce a quantity of fiber that can be made into enough product to not only support the alpacas, but make a profit.
• Refine a product line that will sell on the high end market. Currently focus is on yarn kits, blankets, shawls, and vests.

This focus will allow us to make a profit out of our poorest quality fiber as well as the high quality fiber ensuring there is no waste.

Alpaca Business Plan Part 3 - Mission Statement

A mission statement is a concise statement about your business' reason for being. Why did you start raising alpacas? What made you think that raising alpacas would be a good business to get into? What are you doing differently from the other farms? What makes your alpacas the "ones"? What are the values or beliefs that guide you raising alpacas? What kind of relationship do you want with your customers and alpacas?

Answer any, all or none of these questions as it suits you.

It should be short and memorable. If you can spell it out in that infamous elevator speech, then you have done well. If you can print it on the back of your business cards, you get the gold star.

Think of it as a tag line with some explanation. Leave out buzz words and fluff. State your goal and what makes you unique. Tell the world why they should do business with you.

I have listed some websites that have good ideas on how to write mission statements if you are stuck.

http://nonprofit.about.com/od/nonprofitbasics/a/mission.htm

http://www.tgci.com/magazine/How%20to%20Write%20a%20Mission%20Statement.pdf

http://www.entrepreneur.com/management/leadership/businessstrategies/article65230.html

Here is the first draft of my mission statement. I think it lacks some pizazz, so will be working on it as we go through the other steps

HomeSpun Alpacas' Mission Statement

HomeSpun Alpacas provides well-rounded support to its customers, from herd health to shearing to business plans, we are there for the customer. Our goal is to breed healthy, quality alpacas and develop a practical program of alpaca education.

For Thursday, think about your short term goals and next Tuesday we will work on long term goals.