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 30 years, fish farming — or aquaculture — has taken over a huge portion of the market. Today, 50% 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 60 years ago.
With a growing population, aquaculture is more important than ever, and almost anyone can become a fish farmer with a little know-how and startup capital. This flexible business can begin on a small scale in a backyard and expand into a large, commercial fish farming operation once you have a steady stream of buyers. If you’re ready to jump in, this guide will teach you the basics of how to start a fish farm.
Benefits of Opening a Fish Farm
The benefits of opening a fish farm stem far beyond owning a scalable business with increasing market demand. For many, it’s not about the money. Fish farming helps prevent 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 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.
How to Start a Fish Farm Checklist
Starting a fish farm is similar to starting most types of businesses, but you do need some specialized knowledge about aquaculture. You are caring for living things after all, and these living things 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.
Checklist for How to Start a Fish Farm:
- Create a Business Plan
- Choose a Business Structure
- Determine Your Business Costs
- Name Your Business
- Register Your Business and Open Financial Accounts
- Purchase Equipment and Supplies
- Market Your Fish Farm Business
1. Create a Business Plan
Most businesses start with a 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:
- Your business model: What type of marine life are you farming? Where? Are you going small scale with a pond, large scale with ocean farming, or somewhere inbetween? What is your source of water and how is your farm different from the competition?
- Your consumer base: Are you selling to restaurants, wholesalers, grocery stores, pet stores, or direct-to-consumer?
- The equipment: Different types of fish require different equipment from pumps and tanks to aerators, water quality testing kits, refrigeration, and fish feed.
- Tax breaks and local grants
- Startup costs: This field has high startup costs because of the land, water supply, and equipment required.
- Location: Different types of fish are bred in different environments (think: freshwater vs. saltwater), so not all locations are equal.
If you’d like more guidance at this phase, you can view our complete guide to writing a business plan.
2. Choose a Business Structure
All businesses need to choose a business structure for both tax and operational purposes. You must do this before you can obtain a business license, and most first-time fish farmers choose between either an LLC (limited-liability company) or sole proprietorship. The choice is typically up to the size of your operation.
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. no operating agreement is required). Unfortunately, this does not provide much 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 business and personal expenses are kept separate). Like a sole proprietorship, this business structure also allows you to avoid the corporate tax rate. You can apply for an LLC online, but each state has a slightly different process.
3. Determine Your Business Costs
Fish farming is one of the more expensive businesses 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 different costs. You may focus on growing fish that you purchase wholesale or you may want to build your business around hatching your own fish from eggs (also known as a hatchery). Either way, high quality has a high cost. You can get started from anywhere between $100,000 to $1 million, depending on scale and water supply.
Calculate your business costs by adding up fixed and on-going costs (like 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.
How do you fund your startup costs?
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 comes 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.
4. Name Your Business
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? The name also needs to be original enough to register your domain. One you have an idea, avoid the legal hooks of accidentally using another business’s name by searching through local business registration services.
5. Register Your Business and Open Financial Accounts
Registering your business accounts is where things 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). You may want to consult a lawyer who’s familiar with aquaculture.
6. Purchase Equipment and Supplies
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:
- Fish tanks
- Water testing equipment
- Aeration equipment
- Drainage equipment
- Feeding equipment
- Juvenile fish or eggs
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.
7. Market Your Fish Farm
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 My Business, 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.
Examples of Fish Farm Businesses to Start
Believe it or not, but there are a lot of different fish farm businesses out there. 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 important. If you’ve got knowledge of how to take care of fish, this isn’t that difficult of a profession to dive right into and there are relatively few risks.
Fish Farm FAQs
- Is a fish farm profitable?
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 fishing is falling.
- Do I need any education to become a fish farmer?
No, but you do need knowledge about how to care for fish, the laws involving fish farming, and the equipment required. Some universities do have 4-year aquaculture programs, which can help teach you everything you need to know about running a fish farm.
- How much does it cost to open a fish farm?
It can cost anywhere from $100,000 to over $1 million to open a fish farm, depending on the scale and location.
- Do I need a lawyer to start my business?
Because fish farming has a number of environmental regulations, you may want to consult a lawyer who’s familiar with the particular requirements.