How to Start a Insect Farm

Start a insect farm by following these 10 steps:

1. Plan your Insect Farm
2. Form your Insect Farm into a Legal Entity
3. Register your Insect Farm for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Insect Farm
6. Get the Necessary Permits & Licenses for your Insect Farm
7. Get Insect Farm Insurance
8. Define your Insect Farm Brand
9. Create your Insect Farm Website
10. Set up your Business Phone System

We have put together this simple guide to starting your insect farm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Insect Farm Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a insect farm?

Another benefit of choosing this as a business venture is that it requires very little start-up capital. You will need to purchase your first batch of “breeders” from a reputable insect farm. The habitat specifics vary depending upon what insect you decide to breed, but most new insect farmers start small, operating out of vertically stacked bins in their garage or shed. New farmers are encouraged to join the North American Coalition for Insect Agriculture (NACIA) with membership fees ranging from $100 to $500 annually.

What are some insider tips for jump-starting an insect farm business?

While insect farming is not complicated, industry leaders recommend that new farmers conduct thorough research, paying close attention to the challenges their colleagues have faced on their journey. In your research, pay close attention to market needs in your area. If the ladybug market is oversaturated, but there is a need for mealworms, focus your energies on perfecting that niche before adding other insect breeds to your farm.

What are the ongoing expenses for a insect farm?

Like the start-up costs, ongoing expenses for an insect farm are minimal. Insects need two to six times less feed than other farm animals and require very little space to grow. And, since just one female insect has the potential to lay hundreds or even thousands of eggs, you will rarely have to purchase additional breeder sets once you have developed an effective process.

Who is the target market?

Historically, the target market for insect farmers was limited to zoos, reptile owners, and pet stores. Recent knowledge regarding the myriad of ways insects can be used, however, has expanded the market. Farmers now sell to:

• Wildlife parks and rescues
• The food industry - restaurants and for manufacturers of high protein food products, such as protein bars and flour
• Fish and vegetable farms for aquaponics
• Animal farms - as a protein supplement to offset the cost of their feed

The key is to identify local market needs and provide the products consumers are lacking.

How does a insect farm make money?

Insect farmers generate revenue through the sale of each insect. The specifics will be determined by the kind of insect you raise and the market need in your region.

How much can you charge customers?

Prices vary, depending upon the type of insect and number being sold. Overhead and time costs, market demand, and competitor pricing are all factors to be considered when setting your prices. For example, cricket prices are approximately $15 for one thousand crickets, while mealworms go for slightly less, averaging $13 for one thousand. High shipping costs to deliver live insects should also play a factor when determining your pricing.

How much profit can a insect farm make?

While many insect farmers choose to remain small, limiting their service to the local community, the sky’s the limit when it comes to potential profit. The five leading insect farming companies report profits upwards of $2 million annually.

How can you make your business more profitable?

Like a majority of environmentally friendly businesses, long-term growth comes from maintaining a pulse on industry innovations and trends. Your involvement in educating others on the green movement will ensure you make mutually beneficial connections and increase your organization’s visibility.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your insect farm is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate an art consulting business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

As awareness increases regarding the environmental crisis and the impact humans have had on the planet, consumers and business owners alike are continually seeking new opportunities to do their part. Launching an insect farm business is the perfect solution for the entrepreneur who wants to be a part of the movement, but has limited start-up capital and/or workspace.

What happens during a typical day at a insect farm?

When first starting your farm, you will need to set aside time each day to clean, feed, and breed your insects. Depending upon the insect you decide to breed, this could include spraying eggs, separating the bugs, and topping off food and water containers. Most successful insect farmers have found, however, that they can develop a low-maintenance system over time that only requires a few hours a week for this process.

Once you have a healthy environment set up and a low-maintenance plan in place, the rest of your time will be spent implementing a marketing strategy, identifying buyers, filling orders, and conducting ongoing research on how to expand your business and/or continue your mission to go green.

What are some skills and experiences that will help you build a successful insect farm?

To maximize output and profit, business owners are encouraged to learn as much as they can about the insects they breed. For those just starting, the Vertical Farming Academy and the North American Coalition for Insect Agriculture (NACIA) are excellent resources.

 

Like every business, production is only part of the recipe for success. Entrepreneurs should also possess strong leadership skills, business acumen, and have a firm understanding of their market. You can build on these skills through free local workshops and by fully immersing yourself in the movement towards ensuring a greener future

What is the growth potential for a insect farm?

While the human consumption of insects has only recently gained traction in the United States, sources indicate that more than two billion people consume insects as part of their regular diet. As we face growing concerns of overpopulation, climate change, and food and land scarcity, an increasing number of consumers are beginning to recognize the multitude of advantages to insects as a sustainable livestock option. They are a healthy alternative protein to standard farm feed, emit fewer greenhouse gases than most farm animals, and require a fraction of the land. 

As we learn more about how our presence has affected our planet and what we must do to ensure our future here, the greater the need will arise for this unique green practice, making it a future-proof business investment.