MGFarm,
Just reading this thread and wanted to thank you for your post. My 10 year old son has wanted an egg business for two years and we finally agreed! But we have been told time and time again that he will not make any money from the business. We were starting to worry. I appreciate your daughter's story. It is hard work, but we are willing to support him and help him market creatively. I don't want to discourage the boy's entrepreneurial spirit. We are starting him with 15 Golden Comets and 5 Araucanas. Maybe it will grow bigger if all goes well. Right now we have 5 households in the family and 4 outside customers that are excited to help him get started by buying. Any helpful suggestions for a new business?
I know you meant this for MGM farm, but I thought I'd chime in since we sell most of our eggs to a local grocery store and do make a small profit. My #1 piece of advice is: Do It Right. Don't think, well, we're tiny so we don't have to follow rules, Do It Right. Now, all my advice is applicable only to Ohio, because that's where I know the laws. You'll need to look up your own laws in PA.
I would recommend that you keep your egg business separate from your home accounts. It cost very little to incorporate a business name in most states, and you run the farm taxes in with your personal taxes--just declaring agricultural profit/loss on the additional worksheet. You will be allowed to deduct losses on your federal taxes for three years, but then the IRS wants to see a profit or you don't qualify as a business. Having an actual business allows you to be exempt from sales tax on things that are directly used in producing and selling eggs, including birds, cartons, feed, and equipment.
In Ohio, there are specific requirements on what must be on the egg carton to sell eggs, and what can't be there. This makes it very difficult to re-use egg cartons from the store, so we buy blanks and use our home printer to print labels that are strips of paper we glue to the cartons with a glue stick. A bit time intensive, but it looks really nice and the grocery store tells us that our eggs are packaged the most attractively, and sell better because of that.
We have to keep eggs below 40 degrees F, and have a thermometer in our fridge to prove that. In the summer, we have to deliver eggs in a cooler with a thermometer inside.
We also have to keep records of how many eggs we pack. We just run an excel spreadsheet that tracks number of eggs laid, number of eggs packed, number of eggs sold. These dont' always directly correlate, because more eggs are laid than packed (some are too large, some have a weird shape, some are too bumpy and ugly, some are cracks) and before the we got the store contract, more were packed than sold (and the extra went to a local food bank, and since we're a business we could write the donation off on our taxes).
Keep all your chicken money in a separate bank account. Most banks have free business banking. Then it's really easy to see if you're making more than you spend! Also, keep each and every receipt, no matter how small. You'll need them to do your taxes. Expect that your first year, you won't make any money. It's almost impossible to do so, since you've just spent money on chicks that will need to eat for 19 weeks before the possibility of a single egg. In subsequent years, winter will hurt because you're spending 2-3X the money on feed that you did in the summer (if you're free range) and you'll need lots more bedding, too. We have to keep a carry-over in our farm checking account from summer to carry us into the winter, or else we'd be in the red.
When pricing eggs, look at EVERY SINGLE THING that goes into making them. Cost of chicks and shipping. Gas to pick up started birds. Feed. Water. Food dishes. Egg cartons. Electricity to brood chicks. Vaccinations. Dewormer. Egg soap. Bedding. Gasoline to go to the feed store and buy feed. Mortality from disease or predators. It costs us, all told, around $2.70/dozen to make a dozen eggs. That's amortized over the entire year and the chicken's entire life, since hens are very expensive when young (lots of feed, no eggs) and in the winter (lots of feed, reduced laying, electricity for lighting, extra bedding). Never sell eggs for less than they cost you to produce. We sell our eggs for $3.50/dozen or $3/dozen if you buy more than four dozen. The store sells them for a lot more, and we have one lady who buys 8 dozen at a time and then resells them for $4/dozen home delivery to a few people. We break even if we sell 10 dozen a week at $3/dozen, and anything on top of that is the cream. So there's not a huge profit, but there is enough of a profit to let us basically keep hens and eat all the eggs we want for free.
The best thing to do is figure out a way that you're selling a guaranteed number of eggs a week. For us, the grocery wants a minimum number, up to as many as we can bring them ( I know, nice, right?). We also have weekly and bi-weekly customers that we just bring them a dozen on a certain day of the week, or every other week. Those folks are gold. People that just order when they feel like it are nice, but don't base your hen numbers on them. Fulfill your standard orders first, then sell to more casual customers if you have the eggs.
Hope there's at least something useful in there. Good luck, it can be done!
Thanks for the encouragement to treat it like a "real" business.
