How to Start a Fish Farm

Benefits of Opening a Fish Farm

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.

How to Start a Fish Farm Checklist

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.

1. Create a business plan

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:

• 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 in between? What’s 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 various equipment, from pumps and tanks to aerators, water quality testing kits, refrigeration, and fish feed.
• Tax breaks and local grants: Depending on your location, your municipality, county, or state could offer tax incentives or government grants for fish farms.
• Startup costs: This field has potentially high startup costs because of the land, water supply, and equipment required.
• Location: Different types of fish are bred in different environments (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’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.

3. 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? 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.

4. Register your business and open financial accounts

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.

5. Determine your business costs

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.

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 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.

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
• Pumps
• Water testing equipment
• Nets
• 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 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.

Examples of Fish Farm Businesses to Start

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.