How to Start a Beef Cattle Business

May 25, 2022 Post a Comment

Start a cattle ranch business by following these 10 steps:

Plan your Cattle Ranch Business
Form your Cattle Ranch Business into a Legal Entity
Register your Cattle Ranch Business for Taxes
Open a Business Bank Account & Credit Card
Set up Accounting for your Cattle Ranch Business
Get the Necessary Permits & Licenses for your Cattle Ranch Business
Get Cattle Ranch Business Insurance
Define your Cattle Ranch Business Brand
Create your Cattle Ranch Business Website
Set up your Business Phone System

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your cattle ranch business. 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 are the startup and ongoing costs?
Who is your target market?
How much can you charge customers?
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 cattle ranch business?

While many cattle ranchers have realized success on a farm with only a few acres, this business venture does require significant starting capital. Careful research and a well-thought-out business plan are essential to your success. To start a basic cattle ranch, be sure to include the following in your budget:

Land - Consider your needs regarding grazing, pasturing, necessary vegetation, proper climate, and topography.
Land preparation
Homestead fencing - While DIY fencing projects can save a significant amount of money, it is critical it's done right. Follow these tips to keep your cattle safe and secure.
Watering facilities
Tools and equipment - Purchase used equipment and perform all maintenance and repairs yourself to save on upfront and ongoing expenses.
Shelter - This is particularly important if you plan to raise dairy cattle.
First set of cattle
Website
Payroll - You will need to hire a set of workers several months before the farm is officially open.
Insurance
Marketing and advertising

Cattle ranchers managing a medium-sized farm estimate a starting budget of $650,000. Entrepreneurs with limited capital are urged to apply for government seed funding and grants through the United States Department of Agriculture and the Organic Farming Research Foundation. The Farm Service Agency is also a great resource for those just starting out in the industry.

What are the ongoing expenses for a cattle ranch business?

Feed costs represent over 25% of the cattle rancher's annual budget. Standard ongoing expenses such as payroll, loan payments, and utilities should be documented and budgeted for as the farm evolves. Annual budgets should also include medical care, maintenance and repair of equipment and structures, and feed. To reduce overall operating expenses, new cattle farm owners are encouraged to review and identify patterns in climate conditions and access to low-cost labor.

Who is the target market?

The target market for this industry is basically everyone who eats beef or dairy products or those who deal in any products, such as leather, that can come from cattle. Businesses that require a supply of beef, processing and packaging companies, and individual households are all part of the demographic.

How does a cattle ranch business make money?

Traditionally, a cattle ranch generates income from the sale of each cow. To maximize profits and make the most of their resources, most ranch owners offer additional services. The specifics of the goods and services offered is directly tied to the amount of land owned, geographical location, amount of starting capital, and type of cattle raised.

How much can you charge customers?

What you charge clients depends on a number of factors. When determining your fees, consider your cost, necessary profit margin, the individual clients' needs, and what the market will bear.

How much profit can a cattle ranch business make?

Overall profit margins of a cattle ranch range from 24-33% per head of cattle. Profits vary depending upon product sold, size of ranch, demand, and pricing.

How can you make your business more profitable?

Production is directly tied to your business' annual profit. While new cattle farmers are encouraged to limit production to what they can do best, there are a number of business opportunities in this industry. When preparing your business plan, consider these options:

Process milk products (e.g., milk, condensed milk, evaporated milk, dry milk, cheese, butter, yogurt)
Beef processing and packaging
Breeding services
Hosting farm tours
Hosting classes (e.g., butchering, cooking, cheese making)
Sale of cow hide
Show cows at local events/fairs
Grow/sell additional food items/raise other livestock

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 Cattle Ranch Business 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.

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 cattle ranch business is sued.

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

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.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

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!

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?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

LLC Taxes
Sole Proprietorship vs LLC
LLC vs Corporation
LLC vs S Corp
How to Start an S Corp
S Corp vs C Corp

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.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

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.

Open net 30 accounts

Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

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.

Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.

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.

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.

Learn more about General Liability Insurance.

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.

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.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a cattle ranch business

Because this is a dynamic industry, branding plays a pivotal role in your success. Raise brand awareness by advertising on digital and printed platforms, sponsoring/hosting community events, attending trade/road shows in targeted communities, and cold calling businesses that could utilize your product (e.g., restaurants, farmers markets, MBC's, and grocery stores.) Your business should be listed in all local online and printed directories and have a strong social media presence. Display your logo on all company vehicles, and have staff members wear branded shirts whenever representing the company.

How to keep customers coming back

As mentioned, your brand's positive reputation is what will carry you to success. Ensure your cattle ranch consistently delivers quality products by properly matching your product and land. Work within the parameters of what your land has to offer and master your craft.

Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it's out of their reach because they don't have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn't delay building your website:

All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don't need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn't take you any longer than 2-3 hours to complete.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That's not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We've reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

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