Are you interested in raising alpacas as a business or as a hobby?  Please consider the risks and rewards.

We have been breeding alpacas for more than 30 years. We operated a very active and successful business as an alpaca ranch for many years.  We closed our corporation in 2012 to devote more time to our family and now enjoy alpacas as a family ranch and Ken is an AOA certified alpaca judge.

As you investigate the wonderful world of alpacas, you may be surprised to discover many investment and business perspectives on the financial potential of the alpaca industry. In reality, these new business opportunities are potentially limitless. All types of exciting and rewarding enterprises may be available in the alpaca industry for the savvy business operator.  Yes, it is an industry.  There are many business profiles ranging from family breeders selling alpacas to large alpaca operations that are no different from other large-scale livestock corporations. Make no mistake about it, there are very successful fulltime breeders earning an income in the alpaca business. There are also breeders making little more than smiles.

It is important to note, that this is a true livestock business that incorporates some potential and inherent risk. The returns can be meager or significant with hard work and dedication. However, it is prudent to realistically consider the risks. These risks are sometimes unavoidable and unexpected. Like any business there are winners and losers!

The Alpaca Opportunity:

However, if you are reading this site at all, you probably have decided that alpacas are of great interest to you and your family. Perhaps owning alpacas can offer a future potential business opportunity.  Perhaps you are looking for a unique way to earn additional income on your property.  There are many reasons why this might be a reasonable business opportunity. It is also important to note that some alpaca ranches earn very little income at all. There are also others in the alpaca business that earn quite a bit of money indeed.  Just like any other business, there is a wide range of financial results.

While consistent residual income may be icing on the cake, most likely you have simply fallen in love with these beautiful creatures. If you are reading this without having the pleasure of meeting an alpaca face to face, you may have your doubts. Once you meet you first alpaca, there may be very little you can do to keep from being hooked at first sight. As we say in California – “Alpacas Rule Dude”!

The investor looking to make a quick return might be successful in alpacas, but may be more successful on Wall Street. Alpaca ranching is a long-term nurturing business providing multiple benefits. It can – under the right set of circumstances – become a good business. It can provide potential financial rewards. However, truth be told, it has also been a bust for some. As such, it can be a hobby or a business venture but certainly it is an endeavor that requires significant dedication and most of all: Passion!

 

The Successful Business Alpaca Enterprise

  • Self-Sustaining
  • Goal for Positive ROI
  • Cash Positive
  • Does Not Create Financial Liability
  • Potential to Generate Wealth & Income
  • Makes Me & My Alpacas Happy!!!
  • Elite Alpaca Progeny
  • Companion Alpaca
  • Ecotourism Options!
  • Show Ring Fun & Challenge!

The Successful Alpaca Enterprise

  • No One Size Fits All Alpaca Ranching
  • The Alpaca Business Is Scalable
  • Wide Open Canvas of Opportunity –Hobby Farms, Fiber Programs to Elite Breeding Programs
  • Provides Unique Opportunity:
    • Home Based
    • Family Oriented
    • Leverage Real Estate & Herd Growth

Alpacas can be a valuable Business Opportunity, allowing you to develop a wonderful new enterprise or simply a great hobby to have fun with your family and friends!

Alpaca Ranching is for most people a great hobby.  Business ventures require capital investment, hard work and dedication and are required to be a For Profit enterprise.  You cannot have it both ways.

 

Alpaca Lifestyle Opportunities:

Another key element to the success of the alpaca industry has been its versatility. With so many different participants, the range of potential profiles is virtually unlimited. In fact, there are hundreds of different ranch profiles and business approaches that are being employed by breeders and businesses large and small. Thus, the alpaca business is wide open.  There are some great entrepreneurs out there with all kinds of great businesses that are related to and supported by the industry.  In particular, the service side of the industry may offer a savvy owner some potential business opportunity. The key here is to know if you are going to be hobby farm or a business in advance. There are very different running rules for each. As a business, there are specific rules by which to conduct business. There is no real flex here and in accordance with these rules, there is a more stringent set of criteria and business regulations to follow. There are significant tax considerations that each participant must follow to be compliant and legal.

Hobby farming is simply that – a great hobby!   Some ranches do not rely on business plans at all, but rather life style plans that take far more into consideration than simply return on investment. In fact, these ranch profiles are just as valid as the business plan for a for profit ranch. However, these hobby ranches ensure long-term returns of personal satisfaction. While this may sound a bit idealistic, working from this perspective can help to realistically determine if the alpaca business is right for you and your family. Perhaps you will have a very successful hobby ranch.  Even if you have a hobby farm you can still sell something.  Income reporting regulations apply accordingly. Sound financial analysis along with some good ole fashion honesty can help frame the lifestyle benefits that will be the key to future success.

The alpaca lifestyle represents the real strength of the industry because it provides stability and constitutes the true value of our market at many different levels of sophistication. In fact, lifestyle gains rather than cash returns are often just as important to the potential alpaca aficionado. For those looking for more out of today’s fast paced working environment through the alpaca lifestyle, the horizons are limitless. In fact, the alpaca industry is also completely scalable. It is possible to enjoy alpaca ranching at any level of participation that is ideal. There are many opportunities to enjoy the alpaca lifestyle at personalized levels of risk and investment.

The passion for alpacas and our market is our most stabilizing factor because the truth be told: People Love Alpacas! They will always be in demand and popular. In fact, Quality is not a gimmick in any business and always commands its price and value. To that end, alpaca breeders take great pride in their herd and attend alpaca shows to showcase their production.  Sometimes this leads to business profitability and sometimes just to pure enjoyment.

The Bottom Line:

So what’s the bottom line? For those looking for a balance sheet leading down the yellow brick road, some examples exist. Please examine each example with your personal finances, investment portfolio and lifestyle in mind.

Alpacas are great to own but even more fun to raise, show, train and enjoy! Once you raise an alpaca that was proudly hand bred and nurtured on your ranch, the hook will be set all that much deeper. What else can we say!

Potential Returns

Proceeds from an Alpaca Business Enterprise can be organized into several categories:

  • The Sale of Animals
  • Breeding & Stud Service
  • The Sale of Fiber
  • Ranch Support Businesses
  • Feed and Supply Businesses
  • Ranch Agistment & Related Services
  • Production of Alpaca Products & Services
  • Alpaca Market Related Product & Services
  • Alpaca Market Related Software & Services
  • Processing dung into fertilizer.
  • Proceeds from transportation of alpacas
  • Proceeds from shearing alpacas
  • Wholesale Products Business
  • On-site Ranch Store
  • Bed and Breakfast Operations
  • Ecotourism
  • Web Service for the Industry
  • Ranch and Alpaca Insurance Brokerage
  • Herd Services and Consultation

What Could go Wrong?

With the sources of income listed above as a frame of reference, what could go wrong? All business enterprises have risks. This industry is no different.  As with any new venture informed business research, best practice and sound planning prevail. There are some potential risks such as illness, injury or death of an alpaca that are not like other forms of investment like a CD for example. These risks are limited, but do realistically exist. Therefore, it is essential that owners obtain appropriate insurance policies to protect their investment and property. There are new liabilities that come with owning livestock.  It is important to be informed in this regard.  Also, many alpaca breeders will utilize the livestock insurance policies that are common in our industry. These policies can be customized to cover a variety of different potential risks. Education and research early in the evaluation process can help new buyers determine the appropriate insurance coverage to address these potential investment risks.

Unfortunately, new buyers sometimes fail to insure their most valuable asset. This approach is not to be universally encouraged and is completely avoidable. Please, don’t take this risk. If you own alpacas consider contacting a livestock insurance company for advice and consultation.

With this in mind, please realize that there are some inherent risks in the alpaca business. However, the benefits and enjoyment potential may be exciting and rewarding. Through careful planning one can safely avoid the potential losses and enjoy owning alpacas in spite of these inherent and risks. The Alpaca industry in a sense is wide open.

How Long Will It Last?

  • How long will the alpaca market last?
  • Is it too late for me to own alpacas?

The answer in all honesty is unknown. That is why it is important to be realistic and prudent when projecting potential returns. Also, please research the challenges to decide if alpaca ranching is the right move for your family. Please consider however that for the over 25 years that we have owned alpacas, our message of the many rewards is reaching more people than ever before. With these perspectives in mind we have been able to introduce many new breeders to the business. This has been personally rewarding. The opportunity to assist potential breeders from initial evaluation to alpaca ownership while offering assistance and guidance has been an excellent journey over the years.  If you want to learn more from our perspective please contact us directly.

Alpacas By The Sea specializes in alpaca judging services and we are an experienced resource for education on many aspects of the alpaca lifestyle. As one of California’s early alpaca ranches we have provided dozens of workshops and training programs to educate members of the alpaca community. We Love Alpacas and we enjoy all aspects of alpaca care and breeding. As experienced California alpaca breeders we help to educate members of the alpaca community. We Love Alpacas!

Our ranch is home to both Huacaya and Suri alpacas and features lovely alpacas of great quality and value. Alpacas By The Sea is a member of AOA and Calpaca. Ken is an AOA Certified Judge in Performance, Halter, & Fleece for both Huacaya and Suri. Victoria was an ARI Phenotypic screener and they have traveled together in Peru learning advanced husbandry directly from breeders on the altiplano.

 

BUSINESS/INVESTMENT DISCLAIMER:

The views expressed herein are our own viewpoints. Ken & Victoria Hibbits are not investment or business advisors.  We do not promote, endorse, recommend any form of business related to the alpaca industry in general. We do not earn income from any recommendations or statements outlined herein nor do we endorse any business or investment products or recommendations as discussed herein.  We do not in any way warrant or guarantee the success of any action made in reliance on our statements or recommendations as described herein. Past business performance is not necessarily indicative of future business or investment results. All individual business and investment actions carry risk and all investment decisions of an individual remain the responsibility of that individual.