How to Start a Insect Farm

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An insect farm, which can be managed on both a small and large scale, is a farm that breeds and raises insects. The commodities these insects produce can be used to make everything from candles to silk. Additionally, insect farmers sell their “product” as farm feed, for human consumption, as pollinators, and as natural pesticides.

Learn how to start your own Insect Farm and whether it is the right fit for you.

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Start a insect farm by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your insect farm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

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 are the startup and ongoing costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

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

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.

What will you name your business?

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity


Establishing a legal business entity such as an LLC prevents you from being personally liable if your insect farm is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

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For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?

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!

A cube with LLC printed on its sides

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

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

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment 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.

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.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For information about local licenses and permits:

STEP 7: Get Business Insurance


Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8: Define your brand


Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How to promote & market a insect farm

While an insect farming business can be quite lucrative, most entrepreneurs get their start in this industry because they are passionate about helping save our environment’s resources. Therefore, new business owners are encouraged to get involved in a city, state, and national level. This increases visibility and ensures you remain abreast of the latest innovations and trends. 

The relationships garnered through this involvement will help your business grow organically over time. In today’s business landscape, an informative website and a social media presence are also recommended. Lastly, consider the traditional methods of cold-calling and pounding the pavement. Make a lasting impression by going beyond simply telling prospective customers how they could benefit from your products and instead show them the benefits.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

It’s important to remember that consumers who are environmentally conscious love to share information. Your involvement, strong customer service, and knowledge will go a long way towards building a positive reputation. Additionally, because today’s farmers face increasing feed costs, with no sign of slowing down, the promise to deliver level pricing over a five to ten-year period will help earn and retain a loyal customer base.

STEP 9: Establish your Web Presence


A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Insect Farm In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

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.

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Take the Next Step

Find a business mentor


One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Resources to Help Women in Business


There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a insect farm?


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 and when to build a team


Unless you plan on building the business on a very large scale, this venture does not require a team of employees. Most business owners are able to manage most aspects of the business themselves. However, it is important to recognize your weaknesses and hire accordingly. If bookkeeping isn’t your strong suit, hire an accountant to manage the books. If you find you do not have the time or knowledge to steadily market your products, consider hiring a marketing firm or adding a team member to handle those responsibilities.

Next Steps

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