Have you ever thought about where restaurants and supermarkets get their fish? It’s not all from operations like what you see on Deadliest Catch. Over the last several decades, fish farming — or aquaculture — has taken over a huge portion of the market.
Today, about half of the fish sold for consumption in the United States comes from fish farms — and Americans are eating more fish than ever. Per capita, we’re consuming more than twice as much as people did in the 1960s.
With a growing population, aquaculture is more important than ever. You can become a fish farmer as long as you have plenty of know-how and startup capital. This flexible business can begin on a small scale and expand into a larger commercial fish farming operation once you have a steady stream of buyers.
The benefits of opening a fish farm go far beyond owning a scalable business with increasing market demand. For many, it’s not about the money. Fish farming helps prevent the overfishing of natural fisheries and the accidental wildlife casualties associated with that, such as the estimated 300,000 whales and dolphins that die each year because they’re caught in nets. Aquaculture can even be used to re-establish the population of species in areas where overfishing has taken its toll.
Most of the criticism is related to fish farming centers on open-ocean aquaculture rather than the kind that happens in man-made ponds. This is because species of fish like salmon and tuna are bred in flow-through cages, where untreated waste, chemicals, and excess feed can be swept out to sea and cause environmental damage. There’s also an increased risk of diseases and parasites spreading to wild populations through farmed fish.
Overall, onshore farms, which generally hold catfish and tilapia, among other species, are considered one of the most sustainable types of aquaculture. They’re also among the easiest types of fish farms to start.
Starting a fish farm has some similar steps to other types of businesses, but you do need some specialized knowledge about aquaculture. You are caring for living things that can’t just survive in order for your business to succeed — they need to thrive.
Begin your journey by researching how to breed and care for fish, which specialized equipment is required, and the types of permits you need. This is based on the method of farming and varies from state to state. It’s best to consult an aquaculture professional, but this checklist will give you the basics of starting your new business.
Most successful businesses start with a well-thought-out business plan. This can help hopeful fish farmers identify potential issues, get a grasp on their path to profitability, and raise startup capital. You may find it helpful to create a business plan that examines:
All businesses need to choose a business structure for both tax and operational purposes. You’ll do this before you obtain a business license, and many first-time fish farmers choose between either an LLC (limited liability company) or a sole proprietorship. The choice is typically up to the size of your operation and how comfortable you are with personal liability.
Those raising fish by themselves in a small backyard pond may opt for a sole proprietorship since it’s an easier, quicker, and cheaper process with less paperwork (i.e. you won’t have to draw up an operating agreement). Unfortunately, this does not provide any personal liability protection, and a fish farming business can have a lot of liabilities. Just ask anyone who’s ever been in trouble with the Environmental Protection Agency.
For this reason, an LLC may be optimal because it offers limited liability protection on an owner’s personal finances (provided you operate the LLC in compliance with state law). Like a sole proprietorship, this business structure also allows you to avoid the corporate tax rate, which often results in the same money being taxed twice (first at the corporate level, then on the personal level). You can apply for an LLC online using a business formation service, but each state has a slightly different process.
Creating the perfect business name takes a little work. You need to find something that can be easily recognized on social media or through word of mouth. Do your buyers love organic fish? Fish shipped directly to their doors? Consider your company’s expertise when developing name ideas.
The name also needs to be original enough to register your domain. Once you have an idea, avoid the legal hooks of accidentally using another company’s name by searching through your Secretary of State’s business registration service database.
Name your fish farm
Enter your desired LLC name to get started
Registering your business is where things can get a little complicated. To open a fish farm, you must follow specific zoning laws and obtain specialized licenses and permits. But the process varies based on the state. For example, New York state has a special fish pond license.
In addition, you may have to obtain a National Pollutant Discharge Elimination System (NPDES) permit from the EPA or an off-shore fishing permit from the National Oceanic and Atmospheric Administration (NOAA), depending on the scale and specifics of your operation. You may want to consult a lawyer who’s familiar with aquaculture.
To launch your business, you’ll also need to obtain the proper insurance, open a business bank account, and get an employer identification number (EIN) from the IRS.
Fish farming can be an expensive business to start because you’ll need to make a lot of specialized purchases. That includes the land and the product (the fish). Different fish production methods have varying costs. You may focus on growing fish that you purchase wholesale or you might want to build your business around hatching your own fish from eggs (also known as a hatchery). Either way, high quality usually has a high cost. You can get started from anywhere between $100,000 to $1 million, depending on the scale and your water supply.
Calculate your business expenses by adding up fixed and ongoing costs (land, business taxes, and utilities) with one-time costs, like equipment and installations. Remember: fish food, which is typically a mix of fish and soybean meal, accounts for about 50% of the overall cost of fish farming.
Most people can’t pull $100,000 out of their bank accounts to start a fish farm, so they’ll need funding. This is where business loans and government assistance come in. The Small Business Administration (SBA) can help new business owners secure a loan or find a grant. The government — particularly the United States Department of Agriculture (USDA) — has a number of programs and services focused on aquaculture.
Additional forms of funding include business credit cards and family and friends. The former can have a prohibitive cost with interest, so you’ll probably want to find a low- or no-APR card. The latter may have an emotional toll since a bad business deal can sour relationships.
Fish farming requires a lot of equipment. For a small-scale operation, you’ll just need fingerlings (juvenile fish) and a pond. For a large-scale operation, you’ll need things like:
You may want to consult a supplier to find out what types of equipment are required for your business model. You can learn more from the Food and Agriculture Organization of the United Nations.
The key to marketing a fish farm business is to start before your fish have matured. Consider implementing a social media strategy by posting on Twitter, Facebook, and Instagram, as well as creating an SEO strategy for your website. You can also register your business with Google Business Profiles, Yelp, and local directories and advertise across niche LinkedIn and Facebook communities. Consider enacting a print campaign in trade magazines or reaching out to local grocery stores and restaurants on your own.
There are many different types of fish farm businesses. For example, salmon farming is a big business in areas with cooler waters. In the U.S., half of all farmed fish production is catfish. Other businesses opt for tilapia or mollusks. Some fish farms aren’t even raising fish for human consumption. Instead, they breed stock like goldfish and betta fish to become pets.
Fish farming is a large market that has yet to reach its full potential in the U.S., where the majority of fish is still imported. If you’ve got knowledge of how to take care of fish, you can dive right in and start your new business.
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Fish farming can absolutely be profitable, but it requires a lot of labor. Remember: you’re taking care of living things that need a lot of maintenance. Right now, the industry is still growing while the prevalence of open-sea fishing is falling.
You don’t necessarily need much formal education, but you do need knowledge about how to care for fish, the laws involving fish farming, and the equipment required. Some universities do have aquaculture programs, which can help teach you everything you need to know about running a large-scale fish farm.
It can cost anywhere from $100,000 to over $1 million to open a fish farm, depending on the scale and location.
Because fish farming has a number of environmental regulations, you may want to consult a lawyer who’s familiar with the particular requirements.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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