Basic finance

Financing Alpacas

So you love alpacas, you want to get some, and the natural question is how do you finance them? Let's explore a few good options:

Breeder financing: When you purchase the alpacas from your favorite breeder, ask if they will be willing to finance the alpacas (most will at below bank rates).

Governmental programs: You may want to consider the United States Department of Agriculture (USDA).In Pennsylvania, there are programs that help start up farmers with some very attractive financing packages. Look for PA GROWS or similar state programs.

Personal savings: Retirement programs such as your 401 K or other retirement savings program is also an option. As a CPA, I can help answer questions about minimizing taxes with your purchase.

Stocks and other portfolio assets: These items may be converted to cash and pledged as security to acquire the alpacas.

Bank financing: This is certainly an available option if you have other assets and lots of collateral.

Compare the terms, interest rates, and payment options to design a finance package that will work for you.

They Cost What!

I remember the first time Kristie wanted an alpaca (actually four, but that's another story). My first question was, what is an alpaca? And my second question was: THEY COST WHAT!?!? Do some research and you will find the price of alpacas run the gamut for the potential alpaca investor. Here's why the price points are so varied.

Companion alpacas: These alpacas for the most part will have some conformational issues that would deter a reputable breeder from wanting to breed this alpaca. These alpacas are priced from $500 to $750.

Fleece alpacas: These alpacas are great for the fleece market. Many times these are male alpacas, sometimes gelded, and would not be used by a breeding farm. These alpacas are priced from $2,000 to $4,000.

Breeding alpacas: These alpacas have been chosen by the breeder to carry on and improve existing alpaca qualities. Your choices are to purchase less expensive yearlings (12 to 15 months old) or bred females (18 months old or more). For a bred female, the typical prices for a Breeding alpaca range from $7,000 to $25,000.

CAUTION: With all the price variations between breeders and online web services, we can gladly help you navigate the process.

How to Create a Business Plan

Remember Alice in Wonderland? Alice is lost and asks the Cheshire Cat which way to go. The cat asks Alice where does she want to go and she doesn't know, "Well then any way you go will get you there"!

Don't be like Alice. You have to know where you want to be and the only way to "get there" is by writing and using a business plan. A plan helps you identify where you want to go, but there are other reasons to write one. I have outlined a few items to consider:

You'll force an objective, critical, and unemotional look at the business. You'll produce an operating tool that can help manage the business. You'll provides a basis for the financing proposal.

In our opinion, the business plan should also have a mission statement, which should be concise enough to be repeatable to anyone who asks for it. Kristie and I have both a personal and a business mission statement.

You will also need to create a cash flow projection that helps to define your capacity to carry on the business until you can create your first alpaca or fiber sales.

We'd be delighted to help you create your own personalized business plan. Just drop us a line.