One of the first things you have to understand when you are considering building a new business is how much do you know about this business. Many people think that they can begin a business with no knowledge about it just because it is a relatively easy business and many other people are having success. Unfortunately not understanding the business before you start it is an almost guaranteed way to fail.
Money is always a consideration when starting your business but knowledge about the business is much more important. If you understand the business then you won’t make mistakes. You won’t waste money and time which is also money by doing the wrong things.
Regulations are one of the most important things to consider. When you are dealing with selling your product to consumers then there are always regulations. For very small hobby farms this might mean that for you to sell your product the consumer must come to you. Once your product leaves the farm like selling to restaurants and grocery stores then another level of complexity kicks in. The reason for this is that if there is problem and maybe people get sick they want to be able to track back where that product was produced.
Record keeping goes hand in hand with regulations. The more records that you keep will actually be helpful for your business and for compliance with regulation. You need to keep records of pretty much everything but regulations are a start. Contact your state’s department of agriculture and they will give you a list. Things like where did you buy the chicks, the food, monthly water testing for harmful things like bacteria and viruses. Records of required veterinary visits and treatment of your animals. After this you want to keep records of things like how many days of growth are your chickens taking to produce their first egg or reach a specific weight for meat birds. How much feed are you feeding them daily, how much water are they consuming. What are the weather conditions.
You don’t want to have to go back and recreate or guess what was or wasn’t and keeping records will be helpful in the management of your farm and compliance with regulation.
You will need to know other things like how to write a purchase agreement, How to predict profit and breakeven points. How much tax should you pay based on your predicted income. Where to apply for your business license and how to buy business insurance. If you are hiring people there are additional considerations and regulations.
This is just the beginning of starting your business and we haven’t even really talked much about the birds or how you will even sell your product.
You can now see that money is a big consideration but if you don’t understand the business then you are likely to just waste any money you have trying to pay someone to teach or do the things for you that you can do for yourself. If you start by hiring an accountant, lawyer and getting caught up in costs that aren’t necessary for a small business then it will get very expensive and you will never turn a profit.
How Much Money Do You Need To Start A Chicken Farm?
The amount of money you will need will depend on your available resources. If you or your family live on a sizeable piece of land that is zoned for agricultural business then you have accomplished one of the biggest hurdles. You must have land and it must be zoned to allow you to raise chicken commercially. Some areas will allow residential home owners to raise a few chicken in their backyard as a food source and as pets but when you step it up to a commercial business you will need land. If you don’t have land and you can’t borrow access to land then you will need to rent or purchase the land. This can be very expensive. For this reason the land is going to be your biggest expense and unfortunately no one can predict that cost especially with quickly changing real estate costs.
Supporting yourself while you start your business is the second largest and most important expense. If you can’t support yourself while you are starting your business then you are likely to quit trying. If expenses get beyond your ability then you will have no other choice. For this reason when you are first starting off you don’t just need saved money but you also need an income source that will bring in money before your farm starts being profitable. The second thing is your profits normally can’t be taken from the farm because when you start small you need to expand quickly. You might start off with 50 birds in September and by November you are buying 500 and by February you have 5000. You have to be ready for this and often it is the only way to stay in business. However even with thousands of birds you may not be turning a profit that is large enough to pay for all of your business and personal expenses.
The best way you can understand how much money you will need is by educating yourself about the business and then by writing up cost sheets that describe what you are spending and how much profit is available. You are likely to be very surprised when you see how much it costs to be in business and how much of your money gets eaten up. If you hit about 20% profit above your total costs of running the farm and paying for labor including yourself then you are not doing bad.It does not mean you are rich it means that you need to save for the future and for expansion.
Final Note
This is the basics of starting a chicken farm but it is pretty much the same for any business. You need to know how to make your product and comply with regulations before you turn a profit.
If you do turn a profit that you can live off of then you should be proud of your success. It won’t come without major effort and it won’t come without dramatic changes to your life. You can forget about fancy things and vacations they are a memory that won’t likely return. Running your own business normally means working 24hrs a day 7 days a week and not getting paid for most of it.
I strongly suggest that if you have the ability to work for someone who runs their own farm that you take it and do so at whatever they’re willing to pay you. Show up on time and stay late and learn everything you can because what you learn even if its only a small amount is going to be worth more than any paycheck they give you.