For ‘enterprise’ in the title above you could also read ‘business’. How often have you read or heard the word ‘investment’ when alpaca breeders are trying to promote their animals to new potential purchasers. If you want to ensure a financial return on your decision to buy into alpacas (and there are many owners who perfectly understandably do not wish to go down this road) then you should consider that what you are doing is not an ‘investment’ (a word more commonly used to describe putting money into a building society or into stocks and shares) but the start of a small business into which you are investing, as part of the equity, some capital to purchase the stock. Note the expression ‘part of the equity’.

Much of the rest of the equity that you must invest into the business is time, enthusiasm and knowledge. Without these you will not have a successful enterprise. Time and enthusiasm are essential if you want to ensure that your herd gains in value – time and enthusiasm to research into the alpaca industry in order to discover who has got the stud males that can benefit your ongoing breeding programme – time and enthusiasm to attend conferences and workshops to learn more about the essentials of the business – time and enthusiasm to take part in discussions about the industry – time and enthusiasm to devote to benefiting the industry as a whole through participation in shows, breed societies’ activities or fibre production – time and enthusiasm to track and follow the improvement of your herd – time and enthusiasm to join in with what is going on and yet still compete with the other breeders who will be trying to sell their animals into a relatively small market.

Knowledge can only be gained through the expenditure of time and enthusiasm. Knowledge to know how to improve your herd qualities - what to look for when assessing a female – knowledge to know what to look for in assessing a male to cover your individual animals – knowledge to ensure that you can grade a fleece – knowledge to know that you can speak with confidence about your animals and the industry as a whole – knowledge to ensure that your animals only get the very best husbandry.

In addition you must have a sound business plan based probably on a time scale of over five years. A business plan which is clearly researched, preferably through a consultant who understands the alpaca enterprise, rather than through the breeder you are intending to purchase the animals from. Business plans cannot be provided just as a blueprint for success from a simple computer database but must be constructed using the best independent evidence available from those who understand the industry. So often potential owners have sought that advice from those who have no knowledge of the alpaca industry – achieving nothing in the sum of their overall knowledge. If you are going to involve your financial advisor at least allow someone with knowledge of the industry to speak to them. 

Then you must decide on the animals you are going to purchase and where from. Probably the very best piece of advice a new purchaser can follow is not to look at the animals but to look at the person who is trying to sell them. Newcomers mostly have skills and a level of past experience and expertise in assessing individual humans, not necessarily assessing the qualities of individual alpacas. The essential question boils down to: ‘would I buy a used car from this person?’ If the answer is ‘no’ then move on. What you are looking for is a level of integrity that will ensure that you are not paying over the odds for your animal, a level of experience and resources that will provide a support system on which you can fall back and an element of knowledge to pass on that will provide you with the facts and information that you need to make a success of your new enterprise.

For many people starting in alpacas it will be the first time they have been involved with animals larger than a domestic pet. There are considerations, apart from the understanding of the physiology and husbandry of the animals. Fencing, water, shelter, grass management, handling areas, transport, veterinary procedures are but a few subjects which have to be understood if the enterprise is to work. In addition before you start you should investigate the possibility of any financial grants that might be available to help in setting up a diversification enterprise: grants can come from a variety of sources - regional, national or even European. Advice can be gained from the CLA, the NFU or from specialist consultants.

There must be some consideration of your goals and how you are going to achieve them. It is simple if in the first five years your goal is solely based on achieving an element of herd growth or in improving the quality of fibre. However that will not satisfy your business advisor, your accountant or the tax man, all of whom will want to see an element of turnover and income rather than just growth of your asset value.

To achieve income you must consider how you are to market. You do not make a successful business just by your skills in purchasing and breeding animals you only make income by successful sales. How are you going to achieve that? To whom are you are going to market and what other services can you offer to make yourself more competitively attractive? Perhaps these are not factors you need to consider before you buy into alpacas but if you are setting out your business plan it certainly should be part of your thought process.

Finally although the initial purchase of your stock is an expensive business do not forget that you will need some extra money available for your breeding programme. To have an animal purchased say for £5,000 you must ensure that when she has calved down you can cover her with a male with the best qualities available. This is the one major ongoing cost that must be factored into your sums. To spend that much money on a female and then to cover her with an animal of inferior quality is wasting your money. The British population of alpacas is constantly growing; the laws of supply and demand dictate that therefore unless there is a huge surge in demand the price of the average animal must gently slide down – that is not alarmist talk just realism. However if you have bred up the quality of your offspring year on year you will have animals that will be in demand, animals that will therefore hold a value far above those of average quality. 

Breeding alpacas can be a successful business or enterprise but as with all livestock enterprises or any small business it requires hard work, knowledge, enthusiasm and sometimes a little bit of luck. For those who do not wish to treat alpacas as a business venture there is much enjoyment to be had from these laid back animals but if it is a paying hobby or a small business that you seek then there is no alternative but to get more fully involved.

This article first appeared in Camelids Magazine, the magazine of British Camelids.