Alpaca Farm Business Plan, With a Projection

An alpaca farm business plan has a cost that never stops: the herd eats every day, whether anything sells or not. So the plan starts with the animals, what they cost to feed, shear and keep well, and then asks what they can earn: fleece sheared once a year and milled into yarn, raw fleece for hand spinners, farm visits, and goods bought in to sell beside them. In the example below, a farm in Wyoming with 22 fiber alpacas sells its own yarn, alpaca socks from a co-op, farm visits and raw fleece, and ends a year about $15,500 ahead on $54,000 of sales, before any breeding stock is sold. Below is a description example, each part of the plan, the year month by month, the startup budget, and a free template.

The short version

• Describe the farm in a paragraph: the herd, what it sells, who comes, the goals.
• Start from the herd's costs: hay and feed, vet care, shearing, fencing, insurance.
• Count the fleece: pounds a year from each animal, what's left after skirting, what the mill returns.
• Farm visits earn the most for the least stock; price them like an outing, not a petting zoo.
• Keep each shearing's fleece as its own lot, by animal, so the yarn leads back to it.
• Breeding stock sales are lumpy; plan without them.
• TaroStack keeps each fleece as a lot with its animal and shearing date, and the yarn from the mill as stock of its own. More below.

Part 1: the business description

Big Horn Alpacas, a made-up alpaca farm near Sheridan, Wyoming, I use in these examples, writes:

Big Horn Alpacas keeps 22 fiber alpacas on a family farm near Sheridan, has their fleece milled into yarn at a mini mill, and sells the yarn, raw fleece for spinners and alpaca socks from a fiber co-op at its farm store, online and at markets, with farm visits and alpaca walks from spring to autumn. Its aim is a herd that pays for itself and the farm store.

Part 2: from the herd to what sells

In this example each alpaca gives about 7 pounds of fleece a year at the spring shearing, about 158 pounds from the herd: about 120 pounds go to the mini mill and come back as about 380 skeins of yarn, and about 38 pounds are sold raw to spinners. The mill charges about $20 for each pound of finished yarn.

The fleece itself has no cost in the table, because the herd's costs are paid every month whatever it gives; they're the fixed costs below.

Part 3: customers and prices

In a summer month the farm visits bring $2,370 of the $3,941 of contribution, the yarn $793, the socks $694 and the raw fleece $85. The visits pay for the herd; the yarn and socks are what visitors take home. Selling at markets as well has its own costs, set out in cost to sell at a farmers market.

Part 4: the year, month by month

Fixed costs are $1,825 every month: hay and feed for 22 alpacas ($900), vet care and shearing averaged ($350), fencing and barn upkeep ($150), insurance that covers farm visits ($150), the website ($40), market fees ($100), ads ($100), and software and card fees ($35). Month 1 is January:

The year's sales are $53,960 and the profit $15,541, before any breeding stock is sold. The winter months barely cover the herd, so the farm's cash comes from summer and autumn. Winter visits and holiday yarn sales are where a better year comes from. How to plan stock around a season is in seasonal inventory.

Part 5: the startup budget

The land and barn are the family's, so they aren't in the budget. At about $15,500 a year, the $27,600 spent before working cash is earned back late in the second year.

Get the template

Download the alpaca farm business plan workbook. Four sheets: your yarn, socks, visits and fleece with price, variable cost and a summer month's volume; the year, month by month, with sales, profit and cash, and month 1 set to January; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twenty-two fleeces sheared in one day, each graded and bagged by animal, some sent to the mill and some sold raw, yarn back from the mill months later in a dozen colors, and socks from the co-op on the same shelves. A notebook can't say which animal's fleece a skein came from, how much of last year's yarn is left, or what to send to the mill next.

How TaroStack does it

TaroStack keeps each fleece as a lot with its animal and shearing date, and the yarn from the mill as stock of its own.

Each fleece a lot. Each animal's fleece is received as a lot with its shearing date and weight, and fields of your own on the lot, such as the animal's name and the grade, so a fleece's story stays with it. How lot numbers work is in how to create lot numbers.

Yarn back from the mill. The yarn from each milling run is received as a lot of its own, counted by the skein, with the fleece it came from written on it, and sold earliest first.

Socks and yarn on one shelf. The co-op's socks are stocked like anything bought in, with the supplier's price, and both come up on a reorder list in days of cover, worked out from how fast they sell.

Lots, custom fields and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is alpaca farming profitable?

It can be, slowly. In the example, 22 alpacas end a year about $15,500 ahead on $54,000 of sales, with farm visits bringing most of it, and the startup takes about two years to earn back.

How much does it cost to start an alpaca farm?

In the example, $32,600 on land the family already has, with the herd and the shelters and fencing most of it.

How much fleece does an alpaca produce?

It depends on the animal; the example uses about 7 pounds a year from each, sheared in spring, before skirting and milling.

What sells best on an alpaca farm?

In the example, farm visits earn the most, followed by yarn milled from the herd's own fleece. Breeding stock can sell for much more, but too unevenly to plan on.