How to Start Freshwater Shrimp Farming Business

Pay attention to these important factors as you establish your shrimp farming business:

1. Choose a location — Select a suitable location with access to clean water, good soil conditions, and a favorable climate for shrimp farming. Consider factors like proximity to markets, infrastructure, and transportation.
2. Aquaculture permits — Secure the necessary permits for aquaculture from local, state, and federal agencies. This may include environmental permits, water use permits, and health department permits.
3. Pond construction — Design and construct ponds or tanks that are suitable for shrimp farming. This includes considerations for size, depth, water flow, and aeration systems.
4. Farming equipment — Invest in high-quality equipment necessary for shrimp farming, such as aerators, water pumps, feeders, and nets.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Seed stock — Purchase healthy and disease-free post-larvae (PL) shrimp from reputable hatcheries. Ensure they are acclimated properly before stocking.
8. Water quality management — Monitor and manage water quality parameters such as temperature, salinity, pH, and dissolved oxygen levels to provide optimal conditions for shrimp growth.
9. Feeding practices — Develop and implement effective feeding practices to ensure proper nutrition and minimize waste. Regularly adjust feeding rates based on shrimp growth and pond conditions.

1. Is Shrimp Farming the Right Catch for You?

Pros and cons

Shrimp farming industry trends

Industry size and growth

• Industry size and past growth – The U.S. fish and seafood aquaculture industry is worth $2.3 billion in 2023 after growing 1.5% annually for the last five years.((https://www.ibisworld.com/united-states/market-research-reports/fish-seafood-aquaculture-industry/))
• Growth forecast – The U.S. fish and seafood aquaculture industry is projected to grow .2% in 2023.
• Number of businesses – In 2023, 3,881 fish and seafood aquaculture businesses are operating in the U.S. 
• Number of people employed – In 2023, the U.S. fish and seafood aquaculture industry employs 10,229 people.

Trends and challenges

Trends

• Advances in indoor shrimp farming methods have increased the number of shrimp farms.
• The demand for shrimp is growing, which is good news for shrimp farms.

Challenges

• Viral, bacterial, and fungal diseases often threaten shrimp farm production.
• Shortages of aquafeed for shrimp pose a challenge for shrimp farms.

How much does it cost to start a shrimp farming business?

Assuming you have the land, startup costs for a shrimp farming business range from $35,000 to $75,000. Costs include pond construction, equipment, feed, and shrimp stock.

If you’re going to construct an indoor farming facility and tanks, costs will be significantly higher.

You’ll need a handful of items to successfully launch your shrimp farming business, including: 

• Electric aerators
• Water pump
• Feed storage facility
• Water quality kit and oxygen meter
• Harvesting equipment
• Truck to transport shrimp

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$100 - $300	$200
Insurance	$100-$500	$300
Website	$500 - $1,000	$750
Pond construction	$5,000 - $10,000	$7,500
Equipment	$20,000 - $40,000	$30,000
Feed and supplies	$5,000 - $10,000	$7,500
Shrimp stock	$5,000 - $10,000	$7,500
Total	$35,800 - $72,300	$54,050

How much can you earn from a shrimp farming business?

An acre pond can produce up to 1,500 pounds of shrimp per year, and you should be able to charge about $5 per pound wholesale. Your profit margin should be about 40%. 

In your first year or two, you might farm ten two-acre ponds, bringing in $150,000 in revenue. This would mean $60,000 in profit, assuming a 40% margin. 

As you gain traction, you might build ten more ponds, doubling your production numbers. At this stage, you’d need more staff, reducing your margin to around 30%. With annual revenue of $300,000, you’d make a tidy profit of $90,000.

What barriers to entry are there?

There are a few barriers to entry for a shrimp farming business. Your biggest challenges will be:

• Funding the startup costs
• Learning shrimp farming techniques

2. Hone Your Vision

Now that you know what’s involved in starting a shrimp farming business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research shrimp farms in your area to examine their products, price points, and customer reviews.

• Make a list of shrimp farms that offer similar products. 
• Review your competitors’ products – their features, pricing, and quality – and marketing strategies
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a jumbo prawn farm, or a bamboo shrimp farm.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine the types of shrimp you’ll farm

You’ll need to do some research and determine what type or types of shrimp you’ll farm, as well as how you want to sell it – wholesale to grocery stores and restaurants or retail to the public from a store of your own. 

How much should you charge for shrimp?

Wholesale market prices for shrimp change periodically, so you’ll need to keep an eye on the market when setting your prices. You’ll also, however, need to consider your ongoing costs of doing business.

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market is likely to be grocery store and restaurant managers. You can connect with them on LinkedIn or call on them directly. 

Where? Choose the right site for a shrimp pond

When choosing a shrimp farm location, several factors should be considered.

1. Soil Quality: Ensure clay or silty-clay soil to retain water effectively. Avoid sandy or rocky soils as they can cause leaks.
2. Water Supply: Proximity to a clean, saline or brackish water source. Test water for contaminants or pathogens.
3. Topography: Flat or gently sloping terrain to facilitate pond construction and drainage.
4. Tidal Influence: If near the coast, consider tidal influence for natural water exchange.
5. Flood Risk: Avoid flood-prone areas. Ensure adequate protection if risks exist.
6. Accessibility: Good access to roads for supply transportation and product distribution.
7. Buffer Zones: Adequate distance from urban areas, industrial sites, or agricultural runoff to avoid contamination.
8. Legal Considerations: Check land rights, local regulations, and permits related to aquaculture.
9. Environmental Impact: Ensure minimal damage to local ecosystems; avoid areas with mangroves or other critical habitats.
10. History of the Land: Avoid areas previously used for activities that might have left pollutants or contaminants in the soil or water.

Always consult local experts or professionals when selecting a site.

3. Name Your Business and Make It Memorable

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “shrimp” or “prawns”, boosts SEO
• Name should allow for expansion, for ex: “BlueHorizon Aquaculture” and “ExpandSea Farms” over “PurePrawn Paradise” and “AquaShrimp Haven”
• A location-based name can help establish a strong connection with your local community and help with the SEO, but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

4. Outline Your Farm’s Business Plan

Here are the key components of a business plan:

• Executive Summary: Summarize your shrimp farming business plan, highlighting its objectives and potential for success in the shrimp farming industry.
• Business Overview: Introduce your shrimp farming venture, detailing the scale and location of your farm, as well as the type of shrimp species you intend to cultivate.
• Product and Services: Describe the products and services your shrimp farming business will offer, including the sale of fresh or frozen shrimp and any additional services like pond maintenance.
• Market Analysis: Analyze the market for shrimp products, considering factors like demand, pricing trends, and potential customers, both domestically and internationally.
• Competitive Analysis: Identify and assess competitors in the shrimp farming industry, including other shrimp farms and seafood suppliers, highlighting your farm’s unique selling points.
• Sales and Marketing: Outline your strategies for selling shrimp, whether through direct sales to consumers, distribution to restaurants and retailers, or online sales.
• Management Team: Highlight your experience and expertise in shrimp farming or aquaculture, as well as any key team members who will contribute to the success of the business.
• Operations Plan: Explain the day-to-day operations of your shrimp farm, covering areas such as shrimp cultivation, water quality management, and sustainability practices.
• Financial Plan: Provide financial projections for your shrimp farming business, including startup costs, revenue forecasts, operating expenses, and potential profitability.
• Appendix: Include any supporting documents such as certifications, permits, environmental impact assessments, and market research data to strengthen your business plan’s credibility.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

5. Formally Register Your Company

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to shrimp farms. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your shrimp farming business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. 
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. 
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

6. Secure Your Tax ID

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship, you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

7. Secure Funding for Tanks, Feed, and Equipment

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a shrimp farming business. You should also check with the USDA to see if farming grants are available. 

8. Apply for Agricultural Licenses and Permits

Starting a shrimp farming business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

Most states require that you get an aquaculture permit from the state’s Department of Agriculture. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

9. Secure a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your shrimp farming business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

10. Protect Your Farm with Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

11. Prepare to Open

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as AgCode, farmbrite, or FarmLogic, to manage your shrimp stock, feeding records, harvests, and sales.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now” or “Order”. This can sharply increase purchases. 

Online Marketing

Here are some powerful marketing strategies for your future business:

• Local Partnerships and Collaborations: Collaborate with local restaurants, supermarkets, and seafood markets to create exclusive partnerships, ensuring a steady demand for your fresh shrimp within the community.
• Local SEO — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Educational Events and Workshops: Host educational events or workshops about sustainable shrimp farming practices to engage and educate your local community, fostering trust and loyalty for your brand.
• Social Media Storytelling: Leverage social media platforms to share compelling stories about your shrimp farming journey, emphasizing sustainable and eco-friendly practices to attract environmentally conscious consumers.
• Community Sponsorship and Events: Sponsor local events or sports teams to increase brand visibility and connect with the community, positioning your shrimp farm as an integral part of local life.
• Subscription Boxes for Direct Sales: Introduce subscription box services that deliver fresh shrimp directly to customers’ doors, offering convenience and a direct channel to engage with your customer base.
• Environmental Certification: Obtain certifications for environmentally friendly and sustainable shrimp farming practices, prominently displaying these certifications in your marketing materials to attract conscious consumers.
• Customer Loyalty Programs: Implement loyalty programs to reward repeat customers, encouraging them to choose your shrimp over competitors and creating a sense of brand loyalty.
• Collaborate with Chefs and Influencers: Partner with local chefs or influencers who can create unique recipes using your shrimp, showcasing their creations on social media platforms to reach a wider audience.
• Seasonal Promotions: Launch seasonal promotions and discounts during peak demand periods, such as holidays or special occasions, to drive sales and capitalize on increased consumer interest.
• Interactive Online Content: Create engaging online content such as cooking tutorials, live Q&A sessions, or virtual farm tours to connect with your audience and build a community around your shrimp farming business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your shrimp farm meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your shrimp farming business could be:

• Experience the epitome of flavor with our meticulously bred, premium quality shrimp.
• Indulge in guilt-free seafood bliss with our environmentally conscious and responsibly sourced shrimp.
• Discover a taste sensation with our farm-to-fork shrimp, raised using innovative aquaculture practices.

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a shrimp farming business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in shrimp farming for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in shrimp farms. You’ll probably generate new customers or find companies with which you could establish a partnership. 

12. Build Your Team (or Manage Solo)

As your business grows, you will likely need workers to fill various roles. Potential positions for a shrimp farming business include:

• Laborers – help maintain ponds, feed and harvest shrimp
• Salesperson – call on grocery store and restaurant managers to make sales
• General Manager – inventory management, accounting

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

13. Harvest, Sell, and Start Profiting!

Starting a shrimp farming business takes some knowledge and an investment, but you’ll be providing tasty and healthy food to your community and making a nice profit. If you’re successful, you can expand your facilities over time and perhaps add new varieties of shrimp or fish to your offerings.

Now that you understand the business, you’re ready to start building your ponds and getting your lucrative shrimp farming business going!

Q&A

Is a shrimp farming business profitable?

A shrimp farming business can be profitable depending on various factors such as market demand, production costs, operational efficiency, and pricing strategies. Effective management considering factors like feed costs, disease management, market trends, and sustainable farming practices can contribute to profitability in shrimp farming.

What happens during a typical day at a shrimp farming business?

A typical day at a shrimp farming business involves several activities. This includes monitoring water quality to maintain optimal conditions, feeding the shrimp with appropriate nutrition, managing disease prevention and treatment, harvesting mature shrimp, maintaining ponds and equipment, record keeping for analysis and decision-making, and engaging in marketing and sales efforts to establish and maintain market relationships.

What is the growth potential of a shrimp farming business?

The growth potential of a shrimp farming business can be significant due to increasing global demand for seafood, expanding market opportunities for sustainable and traceable products, technological advancements in shrimp farming techniques, genetics, and disease management, as well as the potential for international trade and export opportunities.

What type of business is a shrimp farm?

A shrimp farm is considered an agricultural and aquaculture business. It falls under the primary production sector, involving the cultivation and harvesting of shrimp for commercial purposes. Depending on scale and operations, a shrimp farm can function as an independent farm or be part of an integrated aquaculture operation. The business may include breeding, rearing, and selling shrimp, with potential diversification into value-added shrimp products or supplying shrimp to processors or distributors.