How to Start a Trout Farming Business

Do you want to start a trout farming business? If YES, here is a complete guide to starting a trout farming business with NO money and no experience plus a sample trout farming business plan template. 

Trout is the name given to a number of species of freshwater fish or oily fish in 3 out of the 7 species in the subfamily Salmoninae. Trouts are an important source of food for both humans and wildlife and they are in high demand in fish markets because they contain a high level of fish proteins.

No business is easy to start and maintain, which is why you need to understand that starting a trout farm is demanding and it needs moderate capital to set up a standard commercial fish pond. All the same, one good thing about this type of business is that you can start it small from your backyard in a pond or a tank and if you are hardworking, you can grow the business into a money spinner.

Facts have emerged that home based fish farms are profitable and sustainable considering the fact that you can raise your own fish without using any antibiotics, chemicals, or synthetic products.

If you are raising fish in an indoor container or swimming pool, your fishes are safe from germs or natural predators, and can be monitored for parasites, infection and disease. Here are what you need to know about the trout farming business.

Steps to Starting a Trout Farming Business

1. Understand the Industry

Aquaculture, or the production of fish, shellfish, and aquatic plants in a controlled environment, is the fastest growing segment of agriculture in America. We believe that as consumer demand has grown, so has the aquaculture industry.

Farm-raised fish and shellfish now account for over 40% of all the fish and shellfish eaten around the world. A large majority of U.S. trout grown commercially for food are grown in Idaho, which accounts for over 75% of the production. Facts have it that Idaho’s success is linked to a vast system of aquifers and springs. Other leading states include Pennsylvania, North Carolina, Washington, and California.

According to our research, in 2008, over 53 million pounds of trout, mostly rainbow trout, were grown in the U.S., primarily for the food fish market.

Substantial numbers are also grown for recreational use. Note that trout meant for the food fish market are sold fresh or frozen to restaurants, supermarkets and institutions. Also have it in mind that the process/packaging phase of the industry is highly sophisticated and hard.

These fishes are marketed as dressed or boned and boneless fillets. They may be breaded or stuffed. Trout also available canned, like tuna or salmon, as pate or smoked product. It is not unusual for trout to be harvested, processed, chilled and packaged for shipment in less than 90 minutes.

You should also know that food quality especially that of seafood has become a major consumer issue from the 90’s. This is why to make sure of the continuing safety and quality of American farmed trout; the US Trout Farmers Association has developed a producer’s quality assurance program for the entire trout industry.

We were able to find out that the trout producers quality assurance program focuses on the scientific monitoring of farming and processing to insure that consumers receive the most safe and wholesome products possible.

We also believe that this program will emphasize good management practices and a systematic analysis of current production techniques. This quality assurance program is among the first of those developed by the U.S. aquaculture industry.

Even though trouts are wonderful to consume, they also provide family fun. A lot of farm-raised trout are supplied to recreational areas or clubs for the purpose that helped make trout famous – sport fishing. Throughout the country there are “fish out” or “free-fishing” lakes where catches are “guaranteed.”

Generally, a license to fish at these facilities isn’t necessary. Complete resorts, offering a motel or campground, restaurant, swimming pool, tennis courts or other amenities are also often available. Most important, the fish are the same farm-raised trout available in restaurants and supermarkets.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

It is advised that if you are to start a thriving trout farming business, then you should conduct your feasibility studies. It should be able to fill you in on everything about trout, the cost of setting up a trout farm and how to create a market channel for your produce and other key factors that are part of running a trout farm for profit.

We strongly believe that a thorough feasibility study in this regard will provide all the answers you would need to effectively launch and operate your trout farm and build it into a lucrative business.

3. Decide Which Niche to Concentrate On

The unique importance of a well detailed business plan cannot be shifted to the background as far as starting a new business is concerned. When preparing to start your own trout farming business, you are needed to draft your own business plan; a blueprint that will guide you in starting and running the business.

Also, if you have someone you look up or rather a mentor who is running a trout farm, you can request to see his or her business plan so that you will be well guided when drafting yours. You can access some templates online that will guide you in producing your own business plan. The most important thing is to come out with something that is substantial.

You also need to understand that apart from conducting feasibility studies which would have exposed you to learning about trout farming, it is still very important to learn the business.

For you to succeed in this business, you are expected to learn how to hatch trout, the ideal habitat for them, what they feed on and their feeding pattern, their life cycle, how to harvest them and pricing system, how to attract clients and loads of other stuffs that will help you in the business.

In order to learn the business, you can attach yourself as an apprentice with someone who is already in this line of business or you can enroll in a community college to learn aquaculture. Trout farming is a distinctive sector with no specific niche, but you create a proper niche for yourself by choosing your target audience and work to woo them.

The Level of Competition in the Industry

It is very important to state that the production of rainbow trout has grown greatly since the 1950s, especially in Europe and more recently in Chile. Experts believe that this due to increased inland production in countries such as France, Italy, Denmark, Germany and Spain to supply the domestic markets.

Chile is currently the largest producer of trout. Other major producing countries include Norway, France, Italy, Spain, Denmark, USA, Germany, Iran and the uk.

Indeed there are a lot of outputs from rainbow trout, these may include food products sold in supermarkets and other retail outlets, live fish for the restocking of rivers and lakes for recreational put-and-take game fisheries (especially in the USA, Europe and Japan), and products from hatcheries whose eggs and juveniles are sold to other farms.

Also note that the product for human consumption comes as fresh, smoked, whole, filleted, canned, and frozen trout that are eaten steamed, fried, broiled, boiled, or micro-waved and baked. Trout processing wastes can be used for fish meal production or as fertilizer. The fresh fish market is large because the flesh of the fish is soft and delicate, white to pink in colour with a mild flavour.

Food market fish size can be reached in 9 months but ‘pan-sized’ fish, generally 280-400 g, are harvested after 12-18 months. However, optimal harvest size varies globally: in the USA trout are harvested at 450-600 g; in Europe at 1-2 kg; in Canada, Chile, Norway, Sweden and Finland at 3-5 kg (from marine cages).

Preferences in meat colour also vary globally with USA preferring white meat, but Europe and other parts of the world preferring pink meat generated from pigment supplements in aqua feed.

But the industry has strict guidelines that are in place for the regulation of rainbow trout for consumption with respect to food safety. Hygiene and safe transportation of fresh fish are of paramount importance to ensure that fish are uncontaminated by bacteria, in accordance with food agency directives.

4. Know Your Major Competitors in the Industry

• Buxton farms
• Sunbrost trout farms
• Tillingbourne Trout Farm
• Cold springs trout farms
• Manningford Trout Fishery and Farm
• Bibury trout farms
• Andy’s trout farms
• Elandskloof Trout Farm
• Marysville trout farm
• Pennine Trout Farm and Fishery

Economic Analysis

You should know that the rainbow trout farming industry has been developing for several hundred years, and many aspects are highly efficient, using well-established systems.

Indeed solid and current research and development is continually attempting to increase production efficiency and sales by increasing rearing densities, improving recirculation technology, developing genetically superior strains of fish for improved growth, controlling maturation and gender, improving diets, reducing phosphorous concentrations of effluents, and developing better marketing.

We are meant to believe that one method that has been developed is a genetically modified hormone that is effective in reducing production costs. However, problems may lie ahead as public opinion towards genetically-modified products continues to be negative. As production continues to rise, research is needed to keep costs to a minimum so the industry can move forward.

You should also know that trout farms without control impact upon the environment as river water is diverted from its natural course, potentially altering species composition and diversity. Escapee trout from farms can have negative impacts, potentially displacing endemic species (especially brown trout), and exhibiting aggressive behaviour that can result in the altering of fish community structure.

Impacts from flow-through systems are largely from disease treatment chemicals, uneaten feed and fish excreta, which can alter water and sediment chemistry of the farm. Elevated nutrients reduce water quality (increasing biological oxygen demand, reducing dissolved oxygen and increasing turbidity) and increase the growth of algae and aquatic plants.

Output restrictions require farms to have settling areas to remove solid wastes, though soluble phosphorous in the effluent cannot be removed economically – hence reductions in feed are needed to address the problem. There are also problems with the transmission of diseases from farmed stock to vulnerable wild populations.

5. Decide Whether to Buy a Franchise or Start from Scratch

When planning on how to start this business, you need to understand that starting a Trout Farm comes with a host of financial risks and concerns. If you do not have or lack an operational history, you will find it hard to understand and organize how your business processes will actually perform in the industry. By and large, starting afresh to build your business would pay you more.

6. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Deciding on a business structure for your trout farm is a task that can feel overwhelming. But for the sake of this article, the LLC is the best legal entity for a Trout Farming business. The costs and efforts to set up an LLC are relatively minor and it provides a level of protection to your personal assets that a sole proprietorship does not.

New businesses should think forward and anticipate growth and its complications. The LLC provides the liability protection for your Trout farm with the tax structure of a partnership, while providing operational flexibility.

7. Choose a Catchy Business Name

You need to consider deeply as you choose your Business Name. Remember that it is possible to change a corporate name, but it is much better to get it right the first time when your still starting the business. You should also know that name changes are expensive, time-consuming and confusing to customers.

You should ask yourself how will the name sound and what will it mean to an individual learning about your farm for the first time. The term farm indicates that you only raise trout through legal agricultural procedures. Try to use names that show your vision and purpose. Names like Heaven gate trout farm, Bendel Trout Farm etc.

8. Discuss with an Agent to Know the Best Insurance Policies for You

When planning to start this business, you should understand that insurance is part of doing business, and you should have a variety of insurance policies in place to take care of injuries and mishaps. Some of the insurances may include;

• General Liability
• Property Insurance- Including Buildings/Equipment/Stock/Inventory
• Homeowners insurance
• Farm Owners insurance
• Automobile insurance
• Worker’s Compensation insurance
• Life Insurance
• Public liability insurance
• Income protection/personal accident cover

9. Protect your Intellectual Property With Trademark, Copyrights, Patents

There isn’t need for an intellectual property in the trout farming business.

10. Get the Necessary Professional Certification

Professional certification or qualification is a distinction you can gain that credits you with a high level of skill or expertise in some areas.

We all know that certifications can be an indicator of professionalism and aptitude. Certifications are often regulated by a professional organization. There are certifications in the industry that you can acquire and also keep yourself abreast of information and trends in the industry. They may include;

• AGFO Certification
• Global Trust Certification
• Professional Animal Care Certification
• Animal Behaviour Institute Wildlife Rehabilitation Certificate
• Certified Animal Welfare Administrator

11. Get the Necessary Legal Documents You Need to Operate

If you make the mistake of not completing the legal side of operating your trout farm, you will be jeopardizing your whole operation. It is advisable that you check the licenses required by your city and state. You will likely need a business license and the following documents;

• Tax
• Insurance
• Business license
• Drivers insurance
• Employment agreement
• Business plan

12. Raise the Needed Startup Capital

The money needed to start a Trout farm can be said to be enormous, but a Trout farm needs finance to flourish and expand, finance to provide feed for the Trout and extend their homes and all other things. Ways of financing a trout farm may include:

• Family loans
• Community schemes
• Peer-to-peer loans
• Micro loans and grants
• Crowdfunding
• angel investors
• Factoring
• Cash advances
• Bank overdrafts

13. Choose a Suitable Location for your Business

The decision you make here will in the long run affect your business. Apart from making sure you are somewhere your prospective clients can easily reach you, you also need to make sure that your farm is arranged properly. When deciding on the pond site and design, there are some factors to be considered. Some of these are:

• Source of water

Source of water to fill the pond and how the same water will be brought to the pond. The general rule is that the pond water inflow and outflow should equal the pond volume over the period of a month.

• If the inflow is too low, water quality may suffer from oxygen depletion and/or accumulation of toxicants.
• If the water outflow is too high, large amounts of beneficial algae may be flushed out from the pond.
• The water should keep the pond full throughout the culture period. The pond should fill up in less than a week.
• Place screens on pond inlets and outlets to keep out predators, insects and unwanted fish and also to retain the cultured fish.

Size, shape and depth of the pond

Relatively shallow ponds are productive. However, the shallow end should be at least 0.5m deep to avoid invasion by weeds and predators of the fish.

• The size and shape of the pond can vary depending on the fish species, fish population and the farmer’s preferences.
• It is worth noting that if you want to produce fingerlings, you will require more small ponds whereas a food fish producer requires relatively large ponds.

Slope of the pond bottom

The bottom must have a sufficient slope for good drainage. A slope with a drop of 2cm for every 10m along the pond bottom is appropriate. If the slope is too gentle, the pond will not be easily drained. If the pond is too steep, it may be too shallow at one end or too deep at the other end. Pond should be drainable.

Height, width and slope of the dyke

The perimeter and feeder roads are required for movement of machines during construction and harvest.

• If you plan to drive on the dykes, build them at least 3m wide on top and at the base.

Soil types

Top soil is high in organic material and should not be used to construct pond dykes. Land should be composed of good quality soil, with little or no gravel or rocks either on the surface or mixed in. Areas with rocky, gravelly, or sandy soil are not suitable for pond construction.

Soil that will be used to build the dykes must contain at least 20 percent clay so the finished pond will hold water throughout the growing period.

14. Hire Employees for your Technical and Manpower Needs

Using a home based trout farm as a point of contact, one thing you will need to start a home based fish farming business is some basic knowledge about raising fish. You will also need to learn about the business side of farming. We believe that to raise fish you will need some space in your backyard for digging a fish pond or space in your basement or anywhere else if you want to raise fish in containers.

Fish can be raised in any kind of fish tank, containers, and tubs. You could even raise fish in barrels.  Also note that you will need some basic knowledge about fish, which is why we will suggest that you get as much knowledge as you possibly can about fish farming.

Even if you decide to start a backyard trout farm or indoor container based aquaculture, the more knowledge you have the better chances you will have to succeed in your home based fish farming business. For you to build a simple home based trout farm, you will need to dig a fishpond or gather some fish tanks or containers for indoor fish farming.

Make sure to choose water from a reliable source. Your municipal supply water would be fine. For large scale pond based fish farms, you would need some additional equipment. A list of equipment is given below. You will need the following for a commercial fish farm:

• Aquarium or fish tank
• Pumps
• Aeration Devices
• Net or Seine Reels
• Handling and Grading Equipment
• Water testing equipment

The Service Delivery Process of the Business

Trout will not spawn naturally in aquaculture systems, hence eggs are artificially spawned from high quality brood fish when fully mature (ripe); although two-year-old trouts can start spawning, females are seldom used for propagation before they are three or four years old. We believe that the number of brood stock needed rests on the number of fry or fingerlings required to meet the production schedule of the farm.

The number can be back-calculated based on survival rates at the different life stages and the fecundity of the brood stock females. Generally, one male to three females is deemed a satisfactory sex ratio for brood stock. Have it in mind that males and females are generally kept separate.

Their maintenance can be expensive and labour intensive, causing some farms to buy eyed eggs from other sources; these should be ‘certified disease free’, although they should be treated with iodine (100 mg/litre for 10 min) upon arrival and gradually raised to the hatchery temperature.

It is very important to state that the brood stocks are selected for fast growth and early maturation (usually after 2 years).

We believe that one frequently used management tool is the use of sex-reversed, all-female brood stock to produce all- female progeny that grow faster. Functional males are produced by oral administration of the male hormone 17-methyl testosterone through starter feeds at the fry stage.

• Stripping and fertilization

The reproduction of rainbow trout is well understood and the techniques are well-developed. The dry method of fertilization without admixture of water is the most common approach. Eggs are removed manually from females (under anaesthetics) by applying pressure from the pelvic fins to the vent area or by air spawning, causing the fish less stress and producing cleaner, healthier eggs.

Insertion of a hypodermic needle about 10 mm into the body cavity near the pelvic fins and air pressure (2 psi) expels the eggs. The air is removed from the body cavity by massaging the sides of the fish. Up to 2 000 eggs/kg body weight are collected in a dry pan and kept dry, improving fertilisation. The males are stripped in the same way as females, collecting milt in a bowl, avoiding water and urine contamination.

Milt from more than one male (ensures good fertilisation) is mixed with the eggs. Note that milt from three or four males is mixed prior to fertilization to reduce inbreeding. But then water is added to activate the sperm and cause the eggs to increase in size by about 20 percent by filling the vitelline space between the shell and yoke; a process known as ‘water-hardening’.

Fertilised eggs can be transported after 20 minutes, and up to 48 hours after fertilization, but then not until the eyed stage (eyes are visible through the shell). Direct exposure to light should be avoided during all development stages, as it will kill embryos.

From our research, we believe that good technique that has been developed to improve production output is the use of monosex culture of females, or triploids.

• Hatchery Production           

At this point, the eggs are incubated undisturbed until the eyed stage is reached in hatching troughs, vertical flow incubators or hatching jars. Hatching and rearing troughs are 40-50 cm wide, 20 cm deep, and up to about 4 m in length.

We believe that they usually have 2 layers of eggs placed in wire baskets or screened trays (California trays) supported 5 cm above the bottom, and water passes through the tray (3-4 L/min). But as the eggs hatch (4-14 weeks) the fry drops through the mesh to a bottom trough.

By that time, the alternative is vertical flow incubators (Heath incubators) that stack up to 16 trays on top of each other. A single water source flows (3-4 L/min) up through the eggs, spills over into the tray below, thus becoming aerated, allowing large numbers of eggs to hatch in a minimal amount of space and water.

Know that sac fry can remain in trays until they swim-up at about 10 to 14 days after hatching. But note that the time taken for hatching varies depending on water temperature, taking 100 days at 3.9 °C and 21 days at 14.4 °C (about 370 degree days).

Hatching jars, available commercially or constructed from a 40 L drum and PVC pipe, introduce water from the bottom and flow from the top.

We believe that about 50 000 eggs can be incubated inexpensively suspended in a water flow that rolls the eggs, given that the incubator contains two-thirds of the incubator volume in eggs, and the flow rate lifts the eggs 50 percent of their static depth.

In all the above methods, dead eggs are removed regularly to limit fungal infection. Have it in mind that trout hatch (typically 95 percent) with a reserve of food in its yolk sac (which lasts for 2-4 weeks), hence are referred to as yolk-sac fry, or alevins.

The opening of the batch of eggs usually takes 2-3 days, during which time all eggshells are regularly removed, as well as dead and deformed fry.

We believe that eggs incubated separately from rearing troughs are transferred to rearing troughs after hatching. After hatching, the trays are removed and trough water depth is kept shallow (8-10 cm) with a reduced flow until fry reach ‘swim-up’ stage, the yolk sac is absorbed, and active food searching begins.

• Raceway and Pond Layout

When fry reach 8-10 cm in length (250 fish/kg) they are moved to outdoor grow-out facilities. These can comprise concrete raceways, flow-through Danish ponds, or cages. Individual raceways and ponds are typically 2-3 m wide, 12-30 m long and 1-1.2 m deep.

Raceways provide well-oxygenated water and water quality can be improved by increasing flow rates; however, the stock is vulnerable to external water quality, and ambient water temperatures significantly influence growth rates.

The number of raceways or ponds in a series varies with the pH [low pH (6.5-7.0) reduces unionised ammonia concentration] and the slope of the land (a 40 cm drop between each raceway is necessary for aeration). For hygiene, water quality, and controlling disease problems, the parallel design is better as any contamination flows through only a small part of the system.

Fry are stocked in both systems at 25-50 fry/m² to produce up to 30 kg/m² with proper feeding and water supply, although higher production is possible. We believe that Fish are grown on to marketable size (30-40 cm), usually within 9 months, although some fish are grown on to larger sizes over 20 months.

The stock is graded, usually four times (at 2-5 g, 10-20 g, 50-60 g and >100 g) in a production cycle (first year), when the density needs to be reduced, thus ensuring fast growth, improving feeding management and creating product uniformity.

Fish quantity and size sampling (twice a month) allows estimations of growth rates, feed conversions, production costs, and closeness to carrying capacity to be calculated; essential considerations for proper farm management.

• Trout Feed Supply    

You should also know that foods for rainbow trout have been modified over the years and cooking-extrusion processing of foods now provide compact nutritious pelleted diets for all life stages. Pellets made in this way absorb high amounts of added fish oil and permit the production of high-energy feeds, with over 16 percent fat.

Dietary protein levels in feeds have increased from 35-45 percent and dietary fat levels now exceed 22 percent in high energy feeds.

Feed formulations for rainbow trout use fish meal, fish oil, grains and other ingredients, but the amount of fish meal has reduced to less than 50 percent in recent years by using alternative protein sources such as soybean meal. These high energy diets are efficiently converted by the rainbow trout, often at food conversion ratios of close to 1:1.

• Harvesting Techniques         

We believe that ways of harvesting vary but water levels in the holding facilities are generally lowered and the fish netted out.

Note that in pens and cages, the fish are crowded using sweep nets and are either pumped from the holding pen alive and transported to the slaughter plant, generally by well boat, or slaughtered on the side of the pens. The whole process is carried out with the aim of keeping stress to a minimum, thus maximizing flesh quality.

• Trout Handling and Processing       

Have it in mind that trout intended for restocking for angling purposes are handled carefully and checked for fin quality, size and any external signs of disease before being put into a special pond to await transport. Any of them destined for the table are killed humanely after similar, but less stringent checks.

But before the killing, all fish should be starved for 3 days and, once killed humanely, the head should be left on; beheaded fish spoil more quickly. Rainbow trout are supplied to markets either fresh or frozen, and their shelf life is 10-14 days if kept on ice.

Trout are marketed as gutted whole fish, fillets (often boneless), or as value-added products such as smoked trout. Just like any business, rainbow trout farms aim to increase revenue and reduce expenditure. This can be done by using the best value feed/seed and materials, and achieving an efficient FCR.

15. Write a Marketing Plan Packed with ideas & Strategies

Indeed we all know by now that the demand for trout is ever rising because of the fact that it is a very good source for fish protein et al. Yet there are few levels of competition out there so you need to build a good marketing strategy that will aid you gain a bigger share in the market. Fresh fish are more expensive than ice fish and you just need to be proactive in selling your fresh fish.

• Use Direct Mailings

Yes even businesses in the agricultural industry participate in direct marketing. For those who understand, a coordinated mailing campaign increases your company’s profile and draws new customers into the business. Also top tier mailing list providers consistently deliver high impact and affordable lists to your clients throughout the industry.

• Technological Expertise

Technology has been welcomed in all phases of our lives with open arms; even the business world, changing basic marketing concepts into sophisticated, tech-driven systems and solutions.

• Business referrals

We believe that anyone who knows about referrals will be glad to tell you that word of mouth advertising is a marketing principle that has never gone out of style. This is the reason why you can make use word of mouth marketing to speak to new customers and roll out new product offerings.

16. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

This industry is indeed huge with vast restrictions. It looks like an industry that has the opportunity for you. But you need to consider the future and growth of the agricultural industry, and the need to feed the fast growing population. Ways to boost your brand awareness and create a corporate identity in Trout Farming business may include;

• Leveraging the web
• Building a unique social presence
• Try traditional advertising methods