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  • 04-03-2014, 07:18 AM
    zee-man
    Implications of Starting a Small Breeding Business
    I've been pondering the following topic for some time and as excited as the thought gets me it bears to question just how plausible it is. As this section is specifically built to cover just this topic - and is a bit slow as of late - I thought I'd throw it out there for perhaps some good discussion and an opportunity to learn from those already there. I warn ahead of time this is a long post, but I hope its broken down well enough to be easily read and replied too, and will foster good discussion.

    I want to first state that I didn't want to put the word "business" in the title as to me that sounds like work. I already do work, I want this to be fun/play time. I know it won't always be, but relegating it to a "hobby" sounds more fun than "business." Though you still need all necessary permits, etc., it seems less painful and more positive this way. Kind of like if we rephrased "taxes" to "our contribution to society."


    So when I land back on American soil I considered taking my modest collection and pursuing breeding. Nothing large scale, only a couple/few clutches a year, but this got me thinking. How do you market yourself to interested parties? Sure I can make a Facebook page, a website, advertise on ks, etc., but I've visited these areas, and the one thing that you need to do, is stand out amongst the crowd. I've already promised myself if I get involved in this undertaking, my desire is to provide the best I can - health, support, response time, etc. - but it won't matter for much if people never find/see what I have to offer. I suppose I could buy "likes" or play macro-writing games so that my website pops up as a top response when "ball python" is searched, but I don't want to play games. I'd rather be known as a solid, trustworthy guy who offers quality animals. This is something that I really wish to take pride in and truly share the experience with others. But I see many folks here who are just the same (which is great!) and I've visited some of your websites - how do you make those relationships and get people to see what you've got to offer - this forum, trade shows, people in your area, etc.? One example of a guy I remember "just starting out" was 8 Ball Pythons. He was a bit into it when I first came to this forum, but had built quite a reputation (positive) here and seemed to be doing well. From what I understand Adam is an awesome dude and that helped build that reputation. But was it also partly because of when he started just as much as how he started?

    One of the topics that spins off of the above, is what you have to sell. If I offer only a few clutches a year, what encourages someone to check my website, when they can visit one of the "big boys" and see a massive list of available morphs? Are they really going to take the time to visit my website and compare? How about taking a chance on a no-name / no-rep breeder? I know people look at fauna boi's all the time, but what if there is nothing on this new prospective breeder? Would you personally take that risk, or go somewhere else? For me personally, I've leaned more toward the middle and smaller sized breeders, because I appreciate the attentiveness, eagerness, and effort they make in communication and making the sale. To me, that is just as important as the quality of the animal being sold.

    The market is full of single and double gene animals. It honestly blows my mind, because in the time I've been in this hobby (owning my first snake to now) I've seen prices cut in half - or more - for many animals. I remember when bumblebees were the talk at my local reptile show, and now you can see 3-4 gene animals. What happens to all of these animals that are single and double gene? Sure, beginners will happily take them, but that's assuming those beginners go online to look for their first snake. You can also offer them as package deals - which seems a rather clever idea - but the user has to be even slightly interested in breeding on their own - or wanting two snakes instead of one. Even assuming you breed a 2 gene to a 3 gene, you still have odds for singles and doubles, heck even normal. Is everyone truly managing to sell these animals before the next breeding season, or are many collections of the small timers growing without necessarily wanting them too? Is there even a true demand for ball pythons nowadays with the number of big, middle, and already existing small time breeders - or is the market merely bloated thanks to sheer numbers and a struggling economy?

    Auctions... perhaps one of the banes of the hobby for small timers. Its a great thing for those with the stock and the ability to deal with hit and miss sales, but it seemingly eliminates the chances of small timers. They either have to sell their stock to the auctions of a big timer / post their snakes on one of these sites, or hope that they have established a reputation strong enough to make a sale with their already existing clientele. I honestly wonder how much longer people will be operating their own websites with the masses looking more towards options on social media and the conglomeration of big names with their own hosted auctions. When prices on animals are so low thanks to auctions it creates a false expectation of those looking to purchase. There is not only the pull of potential buyers to these "hubs" looking for the best price, but there will be more and higher frequency of animals available.



    For me personally, when I make a purchase, I really put the breeder through the ringer. Not being harsh on them, but moreso researching their reputation, communicating with them to see how they respond, what kind of information they can provide, and their willingness to work with me - not on price mind you, but in communication. I've always been a believer that if you are a stand-up individual and do your best to work with your customers and offer a quality product - regardless of what that is - you'll be able to manage a positive result. Perhaps not become a full-time big name, but be able to make some sales of your animals and build a reliable customer base. I now have some breeders I visit their websites first before going anywhere else, and others I would not consider purchasing from again - or at all. I'd like to hope the majority of people do similar, but in reality the bottom line is cost for most - which is the reality of business. What are your opinions? Do you feel there is a chance for the small-timer out there to establish themselves enough to have people interested in what he/she has to offer at this stage in the morph game, or is it merely a pipe dream/wish that more than likely won't become a reality because the "game" has outpaced that level of play?


    If you made it this far, hopefully it wasn't too painful, and I look forward to hearing what you have to say. Thanks!
  • 04-03-2014, 04:17 PM
    AlexisFitzy
    Re: Implications of Starting a Small Breeding Business
    This is beautifully written and was thinking about making a post similar to this some day but I couldn't have written it as well as this. I really hope this thread takes off and you get tons of answers because I am very curious about this as well. I'm sure this will be an extremely helpful thread to people who want to start a small business. Subscribed.


    Sent from my iPhone using Tapatalk
  • 04-03-2014, 07:44 PM
    zee-man
    Hi Alexis, thanks for your reply. I was growing concerned perhaps my post was too long or poorly written.

    I think this could be a great topic. Every couple days someone mentions plans to start breeding or a desire to. It would be great to have a no pulled punches type of thread that gives a dose of reality to help someone better decide whether breeding is right for them and - most importantly - your animals.


    What we should consider is you have mainly three different types of customers - enthusiasts, collectors, and other breeders. Enthusiasts probably like reptiles and want a snake and don't want a fast mover like a corn snake so ball python it is. They might own a couple snakes but more than likely one or two. Collectors are the next level of customer. They dont really want to breed but really love the color of the mid and high level morphs. They may have started with a single but when they add to their collection they want something that really pops. Finally, other breeders. Big timers will spend big bucks to get in on new projects or imports that offer promise of something. I dont see them buying from a small timer unless they want fresh blood in their collection which most likely would come from another mid or high end breeder. Basically small timers will sell to other small timers, enthusiasts that look online, or a collector - if you have something complex to offer

    Essentially the market depends on other people wanting to get into breeding to sell these combos. That's where the money and interest is. But the double edged sword is that you must encourage others to breed to potentially make these sales knowing in a couple years they will now be "competition" adding more snakes of that type to the market. So its almost necessary to encourage others to breed to sell your offspring. Not to say this is some devious plan of a dark fraternity where you get smacked with a paddle and have to say "thank you sir may I have another," but its likely this is the reality of business.
  • 04-06-2014, 02:21 PM
    AlexisFitzy
    Re: Implications of Starting a Small Breeding Business
    I'm so disappointed that this thread hasn't taken off yet :( there's so many small breeders, and aspiring breeders on this site.


    Sent from my iPhone using Tapatalk
  • 04-06-2014, 02:25 PM
    Dave Green
    I started to respond a couple times but you could write a book. I was a few paragraphs deep and gave up, it felt like I was answering fifty questions.
  • 04-06-2014, 02:31 PM
    AlexisFitzy
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by Dave Green View Post
    I started to respond a couple times but you could write a book. I was a few paragraphs deep and gave up, it felt like I was answering fifty questions.

    That's true it is a lot to answer for one person and would be a super long book if you did answer everything yourself but you don't have tackle it all by yourself :) maybe just comment on what you feel most strongly about or just focus on one of the questions. That's the great thing about this site. If one person leaves out some info others will comment and fill in the gaps :)


    Sent from my iPhone using Tapatalk
  • 04-06-2014, 03:11 PM
    bcr229
    You've got two main topics in the OP: Business versus Hobby and Reputation

    I already run two small businesses, neither are herp related. Both are LLC's. So, I have some overhead with each that takes my time each week - accounting, quarterly taxes, etc. - in addition to the actual business of the business. I don't want to have to look at my animals as lines on an inventory sheet, with me praying that I make enough on sales to show at least a small profit, my accountant telling me it's a bad idea to have a $1000 vet bill on a $200 snake (a business would euthanize the snake, write off the loss, and replace it), the IRS gets testy if you show losses for more than 3 years in a row, a Schedule C is a big red flag for an audit, etc... So, I'm keeping my activity firmly as a hobby with my expenses greater than my income, and if I start to get burned out, or I decide that producing only a handful of clutches to produce what I want instead of pairing every female that's ready to go so the at least pay for their rats is what I want to do that year, or my favorite normal female with a value of $100 needs pricey vet care, I can do as I please and I have no one to answer to for my decisions so long as my animals are kept appropriately.

    Reputation is easier - I would rather be a hobbyist with a good rep than a business with a crappy rep. Building a good rep simply takes time and a willingness to fix your screw-ups when (not if, we're human and we make mistakes) they occur.
  • 04-06-2014, 03:24 PM
    Dave Green
    I'll start with getting started. Every big, medium or small breeder started somewhere. I don't know of anyone that bought someone else's business which means we all started from scratch. You need to promote yourself, name recognition is huge in this hobby/business. Most breeding programs need years to get going. What are you doing in the meantime?

    I moved from NJ to AZ in 2007. Before that, if I was known at all, I was locally known as a small hobbyist who kept and bred a few snakes. I started buying Ball Pythons in 2005 and built a pretty nice collection. When I moved to AZ and got settled I started doing local shows as well as the Anaheim, CA show for three years. I showed off my snakes and got my name out there. I also showed off stuff on forums and got involved in discussions, etc. I had some luck along the way and built a good reputation for myself.

    I think too many people sit back and figure the snakes will sell themselves which is rarely the case. People need to trust you and feel comfortable dealing with you. Get your name known...
  • 04-06-2014, 06:51 PM
    zee-man
    Take #2:

    I havent had the chance to read all the replies yet but wanted to say thank you to those whom have taken the time to do so.


    I did see comment that its a lot to reply to. I agree wholeheartedly. I was intentionally trying to spur a good discussion and share of knowledge. Lets take it one step at a time and progress. I really think this could be a great thread.

    So for everyone who has read and has/will offer comment, thank you.
  • 04-07-2014, 11:39 AM
    sorraia
    Re: Implications of Starting a Small Breeding Business
    I'm not even breeding yet (though I have put my first pair together this season), and definitely not going to go into it as a business, but thought I'd throw out my input as a novice and as someone who has been in the "animal business" with other species. (I used to breed pet/show rats and was quite successful, so although its a different species and a different market, I expect some of that experience would give me some perspective on these matters.)

    Quote:

    Originally Posted by zee-man View Post
    I want to first state that I didn't want to put the word "business" in the title as to me that sounds like work. I already do work, I want this to be fun/play time. I know it won't always be, but relegating it to a "hobby" sounds more fun than "business." Though you still need all necessary permits, etc., it seems less painful and more positive this way. Kind of like if we rephrased "taxes" to "our contribution to society."

    For me I feel the same, in a way. To me, a business is what you make money off of, its where you earn your living. You have to approach from a profit/loss, income/expense perspective. It can be enjoyable, but ultimately if you want a successful business, your profits need to be higher than your expenses. As another reply indicated, this can be problematic when a $200 snake requires a $2000 vet bill. From the business perspective, that snake is better off viewed as a loss, and put down, than to spend that kind of money on treating it, then hoping you can recoup it later on down the line. I personally don't want to have to view my snakes in this way. They are my pets first and foremost, and I have them because I enjoy them. As living animals I have chosen to bring into my home, I feel it is my responsibility to take care of them and give them the best care possible, including paying those vet bills when an ailment is treatable. For these reasons, any snake breeding I do will be on a hobby basis. I could lose money, and that would be ok because I would still get enjoyment out of it, just like I would lose money going to an amusement park, but still get enjoyment out of it. If I break even or actually make some profit, that will be a bonus, and something I can put back into the care of my snakes. If it becomes too much stress and work, then I can "retire" my snakes to pet-only status and just enjoy them for what they are, instead of worrying about breeding and selling the offspring.


    Quote:

    How do you market yourself to interested parties? Sure I can make a Facebook page, a website, advertise on ks, etc., but I've visited these areas, and the one thing that you need to do, is stand out amongst the crowd.
    You hit the nail on the head. You need to stand out from the crowd. With my rats, I build quite the reputation for myself, throughout the hobby, across the country, and even into Canada (I'm in the US). I did that not only by having a thorough, informative website, and by having my site listed on other sites, but also through networking. I joined online communities, helped other people, socialized and made friends, I joined clubs (even if I wasn't actually showing my rats), etc. I made it a point to tell people why I picked the rats I did to produce my litters. I made a point to keep my rattery transparent, keep people updated, let them know what i thought about different issues, show how I truly felt about ethics and responsibility. It took me years to gain the reputation I did, but it did pay off. I actually held waiting lists for my litters (and I only had a few litters a year!), I was able to place all of my rats, even the "plain" colors like black. Although I haven't had my first snake clutch yet, I expect it is similar. A website and listings can be helpful, but the real work is networking and building that reputation as an excellent breeder who can and will stand behind their animals.

    Quote:

    If I offer only a few clutches a year, what encourages someone to check my website, when they can visit one of the "big boys" and see a massive list of available morphs? Are they really going to take the time to visit my website and compare? How about taking a chance on a no-name / no-rep breeder? I know people look at fauna boi's all the time, but what if there is nothing on this new prospective breeder? Would you personally take that risk, or go somewhere else?
    Networking, networking, and more networking. When I bred rats, I would have only 2 litters in some years, and as many as 6 litters in another year. I routinely kept 2-4 babies from each litter, I routinely sold my rats in same-sex or spayed/neutered pairs, and my litters were typically about 10 babies. That meant I didn't need a bunch of people to buy my rats, and there could be months in between litters. If I kept to myself and stayed quiet, that meant my rattery could become stagnant and not grow. But because I put myself out there and spent a lot of time socializing and networking, even between litters, I was able to keep people interested. I also wrote articles and made blog posts to help keep people engaged and interested.

    As far as taking a chance on a newbie, I personally am willing to, IF they have no negative feedback and/or have some positive feedback. The BOI's are very helpful. Its different with snakes than rats, because you can ship snakes across the country. It might cost a little more, but this opens up a whole different market than what you may have locally. With my rats, shipping was so prohibitively expensive, I would not do it. That meant most of my sales were local only. Occasionally my rats were sold out of state if I or the buyer were travelling, but that was uncommon. Staying local meant my market was quite limited. Being able to ship does open up a different set of risks, especially for the buyer, but that's why building that reputation and networking IS so important. If you have a good reputation, that makes people more willing to take the risk. Even as a buyer you can develop a reputation: good communication, prompt payment, working with the seller, etc. I've got a few positive feedbacks on Fauna because I've been a good buyer. Not quite the same as being a seller, but it is definitely better than no feedback at all.

    Quote:

    The market is full of single and double gene animals. It honestly blows my mind, because in the time I've been in this hobby (owning my first snake to now) I've seen prices cut in half - or more - for many animals. I remember when bumblebees were the talk at my local reptile show, and now you can see 3-4 gene animals. What happens to all of these animals that are single and double gene? Sure, beginners will happily take them, but that's assuming those beginners go online to look for their first snake. You can also offer them as package deals - which seems a rather clever idea - but the user has to be even slightly interested in breeding on their own - or wanting two snakes instead of one. Even assuming you breed a 2 gene to a 3 gene, you still have odds for singles and doubles, heck even normal. Is everyone truly managing to sell these animals before the next breeding season, or are many collections of the small timers growing without necessarily wanting them too? Is there even a true demand for ball pythons nowadays with the number of big, middle, and already existing small time breeders - or is the market merely bloated thanks to sheer numbers and a struggling economy?
    I have a different take on this than what I see many others share. The animals I have now are single and double gene animals. I personally don't like some of the 4, 5, and 6 gene animals. In my opinion they are too washed out, faded, just not as stunning as a high quality single or double gene animal. Since I'm not going to be a big breeder, I don't want to spend the money on a "power house" animal I won't enjoy, I want to spend my money on high quality animals I WILL enjoy. So that means my clutches will be producing more single and double gene animals. To me, that's ok. I will focus on quality instead of quantity, and my market won't necessarily be other breeders, but might instead be that person who is looking for one or two snakes to keep as pets. That pet owner isn't going to want to spend $20k on a snake (at least not typically!), instead they'll be perfectly happy buying one that's $50 to maybe a couple hundred. That's exactly what these single and double gene animals are going to cost. Might take me longer to sell them, but as long as I have the means to care for them, that's ok. Again, its about quality over quantity. Rome wasn't built in a day, I didn't gain my reputation in the rat hobby over night, and any snakes I produce won't be flying out of the rack at breakneck speeds. That's reality, and that's what I personally have to come to terms with if I'm going to breed snakes, especially as a hobby.

    As far as prices falling, that's pretty standard supply and demand. Something in high demand with low supply is going to sell for a lot more than something with high supply and medium or low demand. High supply with high demand can sell for more, but maybe not as much as the low supply item. Its also about marketing. If your snakes are viewed as higher quality and better than someone else's (for example, if you have axanthics who are perfect gray scale animals with no hints of brown, they can be viewed as more valuable than a browned out, muddy axanthic), they'll sell for more. Offering better customer service can make your animals more marketable. And over time you can break even, which as a hobby and not a business is ok. I might pay $200 for a snake, and the offspring it produces are only worth $50-100. If I produced 5 babies, kept 1 and sold the remaining 4 for even $50 each, I just paid off that $200 animal in one clutch (granted there will actually be 2 animals involved, since it takes a male and a female, but I'm sure you can see where I'm going with this!). As a hobby, that's ok with me, because I'm not in it to make a profit, I'm in it for the enjoyment of the animals. Breaking even, or making a small profit that can be invested back into my animals is a bonus. (And it also helps being able to cut down on costs by raising my own rats. That makes the price of food negligible. The climate I live in is also advantageous, because the heating costs become negligible since our weather is typically pretty mild, with winter night time temperatures rarely reaching even freezing.)

    Quote:

    Auctions... perhaps one of the banes of the hobby for small timers. Its a great thing for those with the stock and the ability to deal with hit and miss sales, but it seemingly eliminates the chances of small timers. They either have to sell their stock to the auctions of a big timer / post their snakes on one of these sites, or hope that they have established a reputation strong enough to make a sale with their already existing clientele. I honestly wonder how much longer people will be operating their own websites with the masses looking more towards options on social media and the conglomeration of big names with their own hosted auctions. When prices on animals are so low thanks to auctions it creates a false expectation of those looking to purchase. There is not only the pull of potential buyers to these "hubs" looking for the best price, but there will be more and higher frequency of animals available.
    I don't have a problem with auctions in and of themselves. Other animals are auctioned off, and auctions are a great way to see what the buyers are ACTUALLY willing to pay, without having to bother with the haggling and potential lost sales. This is where marketing to the pet portion of the hobby is advantageous, because those are the people who are looking for the deals, aren't as willing to pay thousands for a single animal, AND is the portion of the hobby more likely to see the most growth (let's face it, top breeders ARE limited in number, and WILL see the most limited growth, while the number of pet keepers are going to grow at a much higher rate). What I do NOT like with auctions are how they currently work. I personally can't and won't do Facebook auctions, because I simply won't have the exposure to be successful. The newest reptile auction site (Reptile Ring) looks like a great idea for those who want to do auctions, BUT it prices out the small timers like me. I don't necessarily want to keep a website, so I won't have the option of waiving their activation and yearly membership fees, and $200 + $100 annually is much too expensive for ME who will probably only have one or two clutches a year. It seems to me that auction site is going to be much more advantageous for the big time breeders who have that money coming in to be able to pay those fees, and/or who have the popular websites to be able to post the banner and waive those fees. (Note: I'm not talking about listing fees and commissions on sold auctions, which are pretty standard across all markets, including Amazon and eBay.)


    Quote:

    For me personally, when I make a purchase, I really put the breeder through the ringer. Not being harsh on them, but moreso researching their reputation, communicating with them to see how they respond, what kind of information they can provide, and their willingness to work with me - not on price mind you, but in communication. I've always been a believer that if you are a stand-up individual and do your best to work with your customers and offer a quality product - regardless of what that is - you'll be able to manage a positive result. Perhaps not become a full-time big name, but be able to make some sales of your animals and build a reliable customer base. I now have some breeders I visit their websites first before going anywhere else, and others I would not consider purchasing from again - or at all. I'd like to hope the majority of people do similar, but in reality the bottom line is cost for most - which is the reality of business. What are your opinions? Do you feel there is a chance for the small-timer out there to establish themselves enough to have people interested in what he/she has to offer at this stage in the morph game, or is it merely a pipe dream/wish that more than likely won't become a reality because the "game" has outpaced that level of play?
    I feel the same way. I honestly feel more compelled to go with the small time breeders than the big names, because they seem to have more time to put in that extra effort for customer service. (not saying the big names don't do it, just seems the small timers are more willing and able, which makes sense if they have smaller collections, fewer clutches, and fewer clients.) I think there absolutely is a place for other small timers who feel the same way, who want to focus on quality over quantity, and focus on customer service over quick sales. I do think the small timer will have to work harder, because they don't have that large clientele (and referrals that go with it) or exposure, but with that extra bit of work I think a small timer can work it out. Just don't quit your day job. ;)
  • 04-07-2014, 01:29 PM
    MrLang
    Nice comments and all valid concerns for small breeders. I'm feeling the burn on a number of these points, which is frustrating to say the least. When you've exhausted a lot of the advice here and still can't sell your animals, it's very hard not to simply lower the price until someone bites. I realize how detrimental that course of action is to my own brand as well as the hobby at large, but on the other side of that you are paying out electric, food, and time to care for and maintain the animals you have for sale.
  • 04-09-2014, 10:08 PM
    Amelydia
    Re: Implications of Starting a Small Breeding Business
    Haha this is the exact thread I've been looking for, I only wish there were more replies. I'm hoping to get back into the snake hobby but I've got to convince my husband that its a good idea. I am really curious how difficult it is for small and medium sized breeders to place animals. Assuming you have 2 clutches and plan on keeping 1 hold back from each, what do you do when you end up with 10 babies you can't sell? Do you just keep trying to sell them? Skip a season until you find homes for them?
  • 04-09-2014, 10:23 PM
    sorraia
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by Amelydia View Post
    Haha this is the exact thread I've been looking for, I only wish there were more replies. I'm hoping to get back into the snake hobby but I've got to convince my husband that its a good idea. I am really curious how difficult it is for small and medium sized breeders to place animals. Assuming you have 2 clutches and plan on keeping 1 hold back from each, what do you do when you end up with 10 babies you can't sell? Do you just keep trying to sell them? Skip a season until you find homes for them?

    For me personally, until I buy a bigger house, I'll have to limit myself to one clutch a year, and skip seasons until all my available stock sells. That forces me to be extremely selective in what I buy, keep, and breed.
  • 04-10-2014, 11:15 AM
    bcr229
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by Amelydia View Post
    Assuming you have 2 clutches and plan on keeping 1 hold back from each, what do you do when you end up with 10 babies you can't sell? Do you just keep trying to sell them? Skip a season until you find homes for them?

    A hobbyist can do that. A business has to flip inventory and make some money, and make more inventory. If you're not selling then there's no point in having the hassle and associated overhead that comes with running a business.
  • 04-10-2014, 01:06 PM
    Marrissa
    See I was planning on making it a "business" so I don't get in trouble with taxes. I was planning on waiting until I've got more established snakes and maybe had a season or two of clutches under my belt. My first season, I should have around five females ready, and even more the next season... unless my boyfriend gets his house this year (which is the plan), in that case I get my reptile room and will be purchasing a few breeder size females. I plan on staying around 10 clutches max for a while unless I find I'm capable of caring for more babies and adults than that.
  • 04-10-2014, 01:56 PM
    bcr229
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by Marrissa View Post
    See I was planning on making it a "business" so I don't get in trouble with taxes.

    IANA CPA or attorney, and this is not legal or tax advice.

    That said... the only real difference between a business and a hobby with respect to taxes is that your small business can report losses and you can use those losses to offset other income, while there is no deduction for hobby losses. Both business and hobby income have to be declared for taxes.

    So, if you breed, buy and sell, trade, etc. and can prove that your costs for feeders, equipment and supplies, vet bills, etc. are greater than your income from sales, so you never make money each year, and keep it a hobby, and thus never deduct your losses, the IRS won't care. If you find yourself coming up to the end of the year and you've made money, 1) CONGRATULATIONS, and 2) go shopping.

    If you breed and sell and never make money, operate as a business, and deduct your losses every year to offset other earned or investment income... eventually the IRS will care and may go back several years, prohibit the deductions you took for business losses, and hit you with a bill for back taxes, penalties, interest, etc.

    As both a business and a hobbyist you should keep records of income and expenditures in case of a personal tax audit, especially if you accept PayPal or other forms of e-payment from buyers as those transactions are trackable.
  • 04-10-2014, 02:32 PM
    Nick_bp
    Re: Implications of Starting a Small Breeding Business
    I am not a lawyer or business owner but my mom started a small business and is doing alright, she does make a profit. To declare taxes on the the profit you make from your small business or any type of selling for goods or services you have to hit a certain amount of profit. The IRS will only allow you to declare loss on your small business for only a certain amount of years after you hit those certain amount of years you have to either accept your losses or cut ties with your business. I do not know the exact details and this is not legal advice, just some information I have learned over the years from my mom running her own small business.
  • 04-11-2014, 02:56 AM
    zee-man
    I am happy to see people posting and having some back and forth in conversation.


    For reference, any income over $500 / year you need to claim to remain within the law for taxes. Consider this is a "hobby" where one snake can sell for a few times that, you will most likely need to make a claim.

    I am currently personally investigating what is required to have a "hobby" business as far as approvals, paperwork, etc. I do know that it varies by state and even city / borough, but once I find more information, I will relay it here.
  • 04-19-2014, 03:01 AM
    Snizz
    So glad to have found other like-minded individuals also at the beginning of this journey. Perhaps it goes without saying, but, I would remind people to check with their local town hall on legality, permits, limits, etc.. Some municipalities have strict restrictions such as; no constricting snakes, no snakes longer than X# of feet, no more than X# of snakes in a household, and so on. A pet owner may be able to fly under the radar in areas like this, but participating in commerce and the community as a breeder is another story. Before investing significant money, and making a name for yourself, make sure officer friendly isn't going to show up and shut you down.
  • 05-03-2014, 02:13 AM
    coldbloodedsouth
    Re: Implications of Starting a Small Breeding Business
    This is a very helpful thread! I've kept reptiles since I was a kid and have decided to breed a couple of clutches in a year or two, and a lot of my questions about the business side of the hobby have been answered.
  • 05-03-2014, 06:14 AM
    zee-man
    I'm glad this is helping folks and people are continuing to find and post in this thread. I've gone quiet on the topic only because I've been doing some research myself. My hope is to speak with some experienced folks when I get home here in a couple weeks (so excited for multiple reasons :D:D:D). I will update my thread with my findings.



    Thus far you need to look into Federal, State, and county/city ordinances and requirements. For county/city most of these pertain to signage permits, business traffic, etc. Some areas will require permits or will prohibit this activity - it is an eye-sore and bothersome to the neighbors. With respect to a hobby breeder, I'd expect neither of these to really be a concern, but its just an example of the type of "local" laws for a small business.

    What has me most perplexed is the fun "game" of naming your hobby. What all do you need to do to trademark that name and have it be "official" while still remaining a hobby? I know as a small business you need to get a Federal ID number for your business, but as a hobby, that isn't required. As I said... more digging. And it will vary by state. My state does not require special permits to breed exotic animals, only those which are native to my locale (which I'm not breeding). Other states have different requirements.
  • 05-03-2014, 10:35 AM
    sorraia
    Re: Implications of Starting a Small Breeding Business
    Federal ID isn't always required for small business. It depends on your operation, if you have employees, and how you file your taxes. I have a personal small business, no employees, just myself. The taxes for that business are filed under my own personal income taxes (so instead of having a federal ID I use my personal social security number). I need a state seller's permit, city business license, and a home occupation permit. I use my name as my business name, or else I would also have to file with the county for a fictitious business name. City ordinances do not allow me to have customers come to my home, in the interest of keeping residential zoning. Instead I need to ship out my products, or go to my customers. I can get a special permit for certain events in my home, but otherwise I'm limited to not allowing customers to come and go. I'm also not allowed to have any kind of signage for my business at my home.

    When it comes to breeding animals, there's a different set of regulations to worry about in addition to those pertaining to running a regular business. You now have to worry about ordinances regarding the number of animals you can keep, permits to breed those animals or keep more than what's designated in the ordinances, kennel license, etc. Hobby breeders can often skip all of that (in some cases) if they keep with the ordinances, or can fly under the radar.
  • 06-15-2014, 11:17 PM
    alan12013
    I plan on creating an LLC this year and I don't even own a snake yet. I have several other reptiles though. I got metaphorically slapped by some one on a previous thread basically calling me a fraud but that's not the issue...

    I love pets and I have always been drawn to pythons and taking care of various reptiles. I had a rescue chameleon recently that drew me back into reptiles big time and I went from 0 to over 10 almost overnight and I plan on acquiring at least enough pythons to produce 3 clutches over the next year or so. If my business fails then I will try again but that is the model I have chose to follow. I currently own and run a full service cafe and a food cart and as that expands I work less hours on the floor which really gives me a chance to do what I love. I've also helped 2 people get started with their businesses, one of which is making over 50k a year and he never has to leave his house except to go to the post office.

    I've read all the posts so far and I too am concerned with what opportunities a small scale breeder has to succeed. Call me crazy but what I am thinking of doing is something like this(besides breeding other reptiles as well): Building a nice collection of the basics such as normals, spiders, mojave, lesser, etc and whatever I can get my hands on for 250 or less. Because there are people who search for pets online I would do package deals like a normal with a cage and accessories for 100-150. I am going to either custom make the cages or sometimes I get lucky and find some on the classifieds for a good price and I stock pile them. People can go to the pet store now and if they want a ball python they can get it on sale for 44(low)-90(high), the cage for 160, the lights and accessories for maybe 70. So they are spending 275 dollars roughly to walk out with an animal. As a small time breeder I could sell that same package after I've done my thrift shopping for lights and stuff at goodwill for a decent amount less. The problem with this is that I think it will take a lot of time to shop around, I already drive all over the state to pick stuff up I find online and to various thrift stores. I'm not for sure how interested the larger and more easy to tap into market is in designer morphs. Now if I built a website and was making a good reputation for myself on the line (The Internship joke) then I could direct potential customers to vast amounts of information and work with them after their first purchase to help with health issues and possibly spark their interest in more exotic morphs. I'm watching lemon blasts, black pastels, and BELs staying on the classifieds without selling because they are asking 250-400 dollars but a 150 dollar normal with a crappy undersized cage and pos heat lamp selling within the week. The way I see it is these people could be buying from me instead of some ones unwanted pet that they cant take care of any more and I will give them a healthy animal and good equipment. Assuming no one purchased the higher end morphs I would be lucky to pull in 6000 a year therefore I would be tempted to turn my entire house into a reptile room just in order to produce enough offspring. I've heard people say time and time again that the big timers that survive off of breeding have tons of animals and most that are doing it now started large. When Ron Tremper first found a morph of leopard gecko his only goal before that was to breed as many geckos as possible, it was by chance that a morph poped out, I wonder why he wanted to breed as many as they could. I would love to hear some small time breeders talk about their starts and the road to where they are now, it's always nice to find a "role model" of sorts to learn from. I'm sure there will be critics to whatever I just said, I think I'm missing a gene or something...
  • 06-16-2014, 02:21 AM
    Snizz
    Re: Implications of Starting a Small Breeding Business
    Alan,

    I have spoken with the owner of my local reptile shop at some length. He says most non-breeder people that are just shopping for a Pet snake, at least in my area, are looking primarily for 1 thing, CHEAP. Were talking $39 corn snakes, and $49 normals. I see $100 morphs advertised locally for months without selling. A lady near me was trying to sell 2 healthy adult normals at $100 for both, and couldn't move them. My first (corn) snake was free with all housing and gear, because the owner couldnt find a buyer. If you want to target the consumer pet market specifically, inexpensive normals (and colibrids) may find you more of this type of customer.

    You are so right about the under-sized tank and cheapo light package. But sadly we live in a walmart world, most people want cheap instead of good. Even the fantastic reptile shop by me, is mostly only known to people already into reptiles. This is why, I suspect, most BP breeders are selling primarily to each other.
  • 06-16-2014, 02:57 AM
    Snizz
    colibrids = colubrids
  • 06-16-2014, 10:23 AM
    Stewart_Reptiles
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by alan12013 View Post
    I plan on creating an LLC this year and I don't even own a snake yet. I have several other reptiles though. I got metaphorically slapped by some one on a previous thread basically calling me a fraud but that's not the issue...

    I love pets and I have always been drawn to pythons and taking care of various reptiles. I had a rescue chameleon recently that drew me back into reptiles big time and I went from 0 to over 10 almost overnight and I plan on acquiring at least enough pythons to produce 3 clutches over the next year or so. If my business fails then I will try again but that is the model I have chose to follow. I currently own and run a full service cafe and a food cart and as that expands I work less hours on the floor which really gives me a chance to do what I love. I've also helped 2 people get started with their businesses, one of which is making over 50k a year and he never has to leave his house except to go to the post office.

    I've read all the posts so far and I too am concerned with what opportunities a small scale breeder has to succeed. Call me crazy but what I am thinking of doing is something like this(besides breeding other reptiles as well): Building a nice collection of the basics such as normals, spiders, mojave, lesser, etc and whatever I can get my hands on for 250 or less. Because there are people who search for pets online I would do package deals like a normal with a cage and accessories for 100-150. I am going to either custom make the cages or sometimes I get lucky and find some on the classifieds for a good price and I stock pile them. People can go to the pet store now and if they want a ball python they can get it on sale for 44(low)-90(high), the cage for 160, the lights and accessories for maybe 70. So they are spending 275 dollars roughly to walk out with an animal. As a small time breeder I could sell that same package after I've done my thrift shopping for lights and stuff at goodwill for a decent amount less. The problem with this is that I think it will take a lot of time to shop around, I already drive all over the state to pick stuff up I find online and to various thrift stores. I'm not for sure how interested the larger and more easy to tap into market is in designer morphs. Now if I built a website and was making a good reputation for myself on the line (The Internship joke) then I could direct potential customers to vast amounts of information and work with them after their first purchase to help with health issues and possibly spark their interest in more exotic morphs. I'm watching lemon blasts, black pastels, and BELs staying on the classifieds without selling because they are asking 250-400 dollars but a 150 dollar normal with a crappy undersized cage and pos heat lamp selling within the week. The way I see it is these people could be buying from me instead of some ones unwanted pet that they cant take care of any more and I will give them a healthy animal and good equipment. Assuming no one purchased the higher end morphs I would be lucky to pull in 6000 a year therefore I would be tempted to turn my entire house into a reptile room just in order to produce enough offspring. I've heard people say time and time again that the big timers that survive off of breeding have tons of animals and most that are doing it now started large. When Ron Tremper first found a morph of leopard gecko his only goal before that was to breed as many geckos as possible, it was by chance that a morph poped out, I wonder why he wanted to breed as many as they could. I would love to hear some small time breeders talk about their starts and the road to where they are now, it's always nice to find a "role model" of sorts to learn from. I'm sure there will be critics to whatever I just said, I think I'm missing a gene or something...

    I hate to rain on the parade here but you are not gonna make a business out of producing a few clutches of single gene or even double genes low end animals that are less then $250.

    You would even be lucky to break even doing that after all your costs.

    The market is already flooded with those animals and they are VERY hard to move, as for normals the best you can hope for is wholesaling them to a pet store that has the proper exposure.

    That would be a hobby, a business is expected to make a profit within 3 to 5 years and this won't.

    Sent from my iPhone using Tapatalk
  • 06-16-2014, 01:21 PM
    richiquick
    Re: Implications of Starting a Small Breeding Business
    Dude do what you love,I have a large collection that will coat me more then I can ever make.If you enjoy it,enjoy it.Hope to make money and keep your dream alive everyday.As long as you love the animals and they make you happy that's all that matters.My animals are my babies, I know what they are worth money wise but to me each one is priceless!Goodluck,don't let anyone break your spirit,you could be the next bhb!
  • 06-16-2014, 10:37 PM
    alan12013
    Re: Implications of Starting a Small Breeding Business
    Richquick, that's the spirit lol I appreciate that! I do love reptiles and plan on breeding several species. My expectations aren't too high but I honestly think that I could show a little profit, especially by the 4-5 year mark.

    Deborah, I do appreciate brutal honesty since I have a hard time being brutally honest with people, even when they need to hear it in order to save them lots of time and money. I currently own my own business that makes a good amount of money. Enough to buy a house, car and work towards my passion. My current business was VERY hard for me when I started and in fact I was losing money for months just to stay operating. If my business doesn't work out then I still haven't wasted time as I at least tried to follow the dream. I understand that I might even consider myself lucky with breaking even with snakes since I cant afford to jump in too deep right now without testing the market first and seeing for myself, I am stubborn though. I am curious as to chain stores that you've mentioned. I didn't think small timers could do that?

    Rizz ( I think that was your screen name)... I know it's crazy so many people just want to spend as little as possible it seems when they decide to purchase a snake. But it would be nice to get them a cooler snake and set up that they will hopefully enjoy owning more than their generic packaged petco setup. Patience is another thing that I think will be important in this business. Holding out as long as possible to try getting the best price and cutting daily costs at every corner. Even the big timers use super cheap styrofoam sandwich to go boxes for their leopard gecko hides and make water dishes out of used bottles. I've seen them on you tube using disposable portion cups for water dishes to save them cleaning time. Another factor is having a full time job that can support you while you try to build a breeding business so you don't NEED your business to succeed. With breeding animals it seems that 3-5 years to start making a profit is a tough deadline to meet! Perhaps we should discuss estimated start up costs needed to expect any sort of profit? Or ways that small breeders can help each other advance into higher quality morphs. I'm more unsure of making a profit with pythons then some of the others that I'm working on due to the amount of clutches that I can reasonably afford to start with. Optimally I would only have 1 male and 3-4 females. I'm in contact with 2 individuals and 2 small time hobbiests regarding my first purchases. I think that I am getting some really good deals on some awesome snakes! I'm mostly excited about a lemon blast that I'll hopefully pick up this weekend. To save food costs I brought home some shelving from my cafe that I will use to house tubs for breeding meal worms, super worms and crickets (for other reptiles). I don't think that breeding mice would be too far out of the question. I know I'll probably have to feed rats eventually but I've had a pet rat in the past (Dr. Squiggles, Phd. not M.D.). I'm not saying that every SMALL breeding business will succeed and I don't want to come off like I think so. I've seen quite a few websites of people who started breeding but the websites have remained stagnant for several years indicating they probably failed or moved on. There has to be a reason so many don't succeed, IT'S HARD. If I was going to put all my eggs in one basket and only breed snakes I would go ahead and shoot for as many as I could get but I plan on testing the markets with several species just as Garrick DeMeyer did when he was starting. He even has a youtube video where he talks about how he had to breed some animals that were not his favorite just to keep his business going at first. As far as whole selling to pet stores... Does any one have experience with that? I've heard of a particular online store that will buy from small breeders but that's not snakes. I would love to have some mom and pop pet stores sell snakes that I've bred or even have bigger chains that are in my state buy from me. I wonder if they would... You could drop them off saving them on shipping. It seems like they would want some one stable to do business with, some one that's been doing it for a long time and could keep up with demand. Although I've noticed some petcos and petsmarts that will always be stocked up on normal pythons, leopard geckos and other reptiles then others that seem to never get restocked. I'd love to hear back from some one with experience in dealing with chains.
  • 06-22-2014, 02:09 AM
    PythonMan89
    Re: Implications of Starting a Small Breeding Business
    I was actually looking into this the other day, and I found a link to this guy's blog that has a large amount of information on this very topic. He goes into it analytically from a very focused and analytical mindset, looking mostly at how to make it profitable if you were going to invest your time and money (or potentially an investor's money) into purchasing and breeding ball pythons. I found both blog entries absolutely astounding and thought-provoking. I'm not sure what the policy is on posting links to other blogs, so for now I will refrain until I look into it, but he touched on a lot of the same topics/objectives you brought up yourself, as well as a brief how-to on making your hobby at least potentially profitable. I'm looking into breeding myself for the first time, ever. I had a ball last year and I absolutely loved her to death even though she was a "normal". I didn't care. I'd always wanted a snake, had always been told no, and when I'd finally saved up enough, I bought her, the enclosure I needed, lights, thermometers, timers, infrared thermometer, UTH, a hide, a water bowl, and some substrate. I had her for about six months, and then I got my orders to leave the unit I was in to come to where I am now...I had nowhere to keep her while I underwent training, so I was unfortunately forced to find her a new family to care for her, who was very grateful to take her under their care and give her a good home.
    I'm going into it purely from a hobbyist's perspective. I don't care if I lose money. I don't care about potentially shelling out 1,000 dollars for a snake that cost me a tenth of the vet bill. I'm getting into it to produce my own Blue-Eyed Leucies, because from the moment I saw them, I wanted my own, and the pairs that you can breed to get them yourself are ultimately a lot cheaper than buying the one snake outright.
    Now, when I do eventually breed the parents and hatch my first successful clutch (taking into account the human error factor and the off-chance that maybe an egg or two dies due to error or other incalculable issue) I plan on holding back at least one of each morphed egg that hatches, and selling the rest. I don't expect to break even. I know that my initial costs to set up both snakes to live comfortably, the monthly cost of substrate, mice, lights and heating, and everything else will negate any "profit" by a good amount most likely. But since I'm in it just to enjoy my animals for what they are and make sure they're all raised as comfortably as I'd raise children (if I had any) or pets (of which I've had quite a few), then it isn't a question of profit margins as it is about how enjoyable it is for me to raise them, breed them, and ensure the newborns are put into great and caring homes. If I can enjoy myself doing just that, then I'm happy.
    Now if I get burnt out for whatever reason? Then I can always stop breeding, continue raising my snakes as pets, and continue on my way.
  • 06-22-2014, 09:24 AM
    bcr229
    Re: Implications of Starting a Small Breeding Business
    Quote:

    Originally Posted by PythonMan89 View Post
    I was actually looking into this the other day, and I found a link to this guy's blog that has a large amount of information on this very topic. He goes into it analytically from a very focused and analytical mindset, looking mostly at how to make it profitable if you were going to invest your time and money (or potentially an investor's money) into purchasing and breeding ball pythons. I found both blog entries absolutely astounding and thought-provoking.

    Probably Colin Weaver's blog, which is excellent.

    Quote:

    I'm going into it purely from a hobbyist's perspective. I don't care if I lose money.
    I'm on a forum that discusses potential businesses to start, costs, etc. One of the tenets is: don't try to start up a new business out of something that others are already doing as a hobby. The hobbyist doesn't care if he incurs losses, and he doesn't have the same overhead costs - business licensing fees, tax prep, tax collection, etc. - that the businessman does, so the hobbyist can undercut your price.

    The difference in sales taxes alone - 6% in my state - means that the "out the door" price on a $300 snake on the businessman's table at an expo is $318 for the buyer... and $300 if purchased from the hobbyist. Guess where the buyer will go? And yes, BP buyers are cheap.

    So, run as a hobby for a while, see if you can turn a profit, and if you actually like doing the "business" side of things - marketing, selling, dealing with people, etc.
  • 06-23-2014, 11:52 PM
    alan12013
    bcr229, after a bit more planning and research I do agree that starting as a hobby is the best route however I do still think it's a viable option to run as a business down the road IF you enjoy it and see the potential. Without a HUGE amount to spend on start up it's unfeasible in my current opinion to expect to have the best business model. I've worked out several years into breeding on excel and have a better idea of what to expect and what routes to take. I'm optimistic but still sensible. I'll see how my own journey goes over the next couple years.
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