The Next Steps

What follows that ﬁrst big step?

As an astute entrepreneur with an eye for a great investment you did your research , visited numerous ranches, asked a hundred questions and bought your ﬁrst alpacas to start your herd. Whether you board (agist) your animal or are preparing to build your dream ranch there are certain steps in the set-up of your new business that must be attended to within the ﬁrst year.

Please note that the following items are applicable in the State of California, County of Ventura. Be sure to check with your state’s agencies to see what is necessary in your neck of the woods.

Record Keeping for the IRS

DBA - Business name

As a business, Alpaca ranching requires that your ranch (whether you have property or not) has a name. Filing for a DBA or "Doing Business As" Ficticious Business Name is required so that your business name is on record with the county where you will do business. If you are in the state of California you can get those forms from the website of your county oﬃces. You choose a name, ﬁll out the forms, pay a small fee and send them in to the address given. If no one challenges the name as already being in use then it is yours.

Resale Number

With your ﬁrst purchase of a breeding female you are now in the business of breeding alpacas. To the IRS, this means that taxes can be collected. If you are a reseller buying the animals for "resale" to other resellers then there is no need to charge California State Sales tax on the purchase price. You deﬁnitely want to be registered as a reseller with a seller’s permit number on ﬁle. If you do not hold a resale number then the seller of the alpaca must charge you sales tax. Forms for getting a sellers permit, aka - resale number are available on the internet at the State Board of Equalization website.

Business Checking Account

Start a checking account, either under your name or your ranch name, which is strictly for Alpaca business expenses. Pay all your board, feed, equipment, show fees etc… out of this account. If you get a credit card for business expenses be sure to pay it out of this account as well. These are all deductible expenses and you want to keep them separate from your personal ﬁnances for ease of accounting at the end of the year.

Accountant

A good accountant is a very valuable resource. They can tell you what is and is not deductible, what records to keep and how to keep them and when you have to have certain papers to the government to keep your taxes straight. Interview accountants and ask them if they have any experience with ranching and livestock accounting. Do they know what Title 179 of the farm code is? Spending a little extra time ﬁnding the right accountant will save you a lot of money later on down the line.

Payment Schedules

If you bought your animals on time and ﬁnanced them through the seller or through the bank you will want to make note of your payment schedule so that you don’t accidentally miss a payment and default on the contract. Some sellers will even print out schedules for you and include them in your sales contract.

Record Keeping for you and your animals

We live in a world of contracts, data and information. The business of alpacas is no diﬀerent from any other well run business in that respect. You want to keep track of all your contracts and agreements as your herd grows. I ﬁnd it easiest to relate everything to a speciﬁc animal so I keep a ﬁle for each animal by name both in the computer and in printed form.

The ﬁle includes

Copy of purchase/sale contracts
Copy of Board/Agist agreements if any
Copy of ARI Certiﬁcate and/or application for registration
Copy of animal medical records including paid veterinary receipts and records prior to my owning the animal.
Copy of Insurance papers and Insurance exam forms
Fiber Samples and Histograms
Photographs

In the computer I keep track of

Medical Records (any and all medical procedures including toe nail trimming, vaccinations, worming dates, castrations, pre-breed exams, pre-purchase exams, weight, weaning dates, etc…)
Breeding Records (Breeding Dates, Ultrasound Dates, Due Dates, Births)
ARI Registration Records (Owner of Dam, Owner of Sire, Ancestry etc.)
Transport and Quarantine dates
Fleece Data (When shorn, weight, histogram etc…)
Show Data (what shows entered, placings, judges, number of competitors.)
Purchase and Sales records
Owner records

At some point in each animals life you will need to have all this information available. It will save you hours of searching if you set up a system. There are several good Herd Management software programs on the market that you can use. We use Alpaca Ease for Filemaker and ﬁnd that it ﬁts our needs. If you have three animals you can set up a spreadsheet for yourself that will easily track smaller numbers of animals. Finding a method that works for you will be a long term blessing when you realize that you don’t know when your ﬁrst cria is due or when your prize herdsire needs to get his next West Nile Virus vaccination. Records are essential to easy management.

Other Important Items

Register or Transfer? Registering your animals

When you purchase an animal that is already registered with ARI you will receive a transfer certiﬁcate of registration to change the ownership to your name. If you paid in cash, the certiﬁcate should come to you immediately, signed by the seller so that transfer can be aﬀected by sending the completed certiﬁcate (on the back) into ARI.

If you purchase an animal on time then the seller remains the registered owner until such time as the ﬁnal payment is made. Any cria born to a dam that you are making payments on technically belongs to the seller as well. If you want to register a cria born while you are still making payments it must be registered with the seller as Owner and then transferred to your name upon ﬁnal payment.

When you register an animal that you own outright you will need the following signatures to complete the form:
Owner of Dam at time of conception
Owner of Sire at time of conception
Owner of Dam at time of birth
Owner of animal being registered

With the new online registration system at ARI this becomes easier as you simply ﬁll out the information necessary and then they contact the other signers via e-mail to have them, „Sign Oﬀ“ on the animal in question.

You can see that ARI wants to make very sure that animals are registered properly and it can get a bit complex trying to ﬁgure out who owned what animal at what time. Just one more reason that good records are extremely important.

You will also need a sample of blood on an ARI FTA card. These cards can be purchased through the ARI website and are only necessary the ﬁrst time an animal is registered.

All other information and forms for registration can be obtained on the ARI website.

Insurance

Alpacas are investment quality livestock and you have the option of insuring them against theft and mortality. There are very few investments that you can insure so I highly recommend that you take advantage of this safeguard. There are any number of insurance companies that will insure livestock, speciﬁcally alpacas. Wilkins Livestock Insurers and Prairie States are just two that immediately come to mind.

If you purchased an animal for $15,000 you can insure it for that full amount for about 3% of the value. It would cost you about $450 per year to insure a $15,000 animal. Animals valued at over $30,000 require a veterinary exam before they can be insured. Each company will have its own form asking what they want the vet to check. The vet will complete their exam and then you send in the vet report along with your information form and you will receive a "Binder" for your animal followed by an invoice for the insurance amount.

Having done all of the above you can continue watching the cria grow and enjoying your new adventure in alpacas knowing that you have taken care of the details that make this pleasure a business.

Current weather