Hydroponics is a method of growing plants in which, instead of soil, an aqueous solution that is rich in nutrients is used. Hydroponics farming is gaining popularity because it enables us to grow plants anywhere, regardless of climatic conditions and disasters like drought, floods etc. The yield is also higher when compared to traditionally grown crops. This method of horticulture allows you to exercise a high degree of control and consumes a lesser amount of water while completely eliminating the need for insecticides and pesticides.
Although starting a hydroponic farm might be slightly expensive due to the cost of quality hydroponics supplies and systems, the investment pays off in the long run. Now that you know the advantages of hydroponic farming, let’s take a look at how to set up a hydroponics farming business and the costs involved.
First, any entrepreneur must come up with a viable business plan to ensure that the venture is sustainable and will deliver good returns. This involves a couple of steps.
1. Target Audience Research
Start out by researching who your potential customers are and if they are already sourcing what you plan to sell, who their suppliers are. For a hydroponic farm, restaurants and supermarkets are viable customers.
2.Competitor Analysis
Next, see if you have any competitors who are already into hydroponic farming. Come up with a pitch – a list of reasons why potential customers must choose your products over existing suppliers. If you can, pitch your hydroponic farming business idea to someone who could be a potential customer and see if they’re convinced.
3. Cost Planning
List down what your one-time expenses and running expenses will be. Initial set-up expenses can include the cost of leasing/buying land, erecting greenhouses, lighting, climate control systems, seeds, filtration systems for the water, racks/towers to grow the plants in, office furniture and buying a vehicle for transportation. Running costs will include electricity, fuel, labour, insurance, maintenance for utilities and equipment replacement as necessary.
4. Income and Pricing
A hydroponic business generates income by selling plants, flowers etc. to customers. Based on your competitor analysis, you must price your products carefully so that they’re not too expensive and, at the same time, allow you to meet operating costs, pay off the initial set-up cost and generate profits.
5. Location and Sourcing
Identifying a suitable location for your hydroponic farm depends on proximity to customers, availability of skilled labour at low cost, ease of procuring raw materials, and land price. Visit Kushy to source your hydroponics equipments at great prices. Since plants can be grown in towers, hydroponic farming does not require much space, so your greenhouses can be located close to urban centres. This allows your hydroponic farm business to be near customers and employees, reducing transportation costs.
After this is done, there are a couple of necessary steps that you must take to make sure your business is a legal entity in compliance with the required norms.
6. Registration
Decide on your business name that you feel best embodies what your business does and aims to achieve. Then, your hydroponic farm must register itself as a legal entity. There are a couple of different options based on your farm’s size and the number of proprietors.
7. Permits
A number of different permits must be obtained to start a hydroponics farm, or you end up paying hefty fines. Permits to build greenhouses, set up a hydroponics farm and license to sell your products as well as a certification from the relevant food authority are all necessary before your farm can start functioning as a business.
8. Accounting
A business account with a trusted bank is essential for the smooth functioning of your hydroponic business. This is the account through which your company will pay taxes, pay the wages of your employees, pay for any costs incurred and receive payment from your customers. Once your business has been legally recognised, you must also make sure that you keep paying the requisite taxes to both state and federal government in a timely manner, to avoid any issues.
9. Insurance
Life is fraught with uncertainties and you must be prepared for any situation. Business insurance is essential to make sure that a calamity or unforeseen event does not cripple your livelihood. Insurance coverage for your hydroponics farm will ensure its financial well-being.
10. Marketing and relationships
Once your business is up and running, you need to attract new customers and guarantee the loyalty of existing ones. Marketing lets you define your brand, and what you stand for and a great marketing campaign with the right messaging will strike a chord with potential customers and reassure current ones. Build great relationships with your customers by providing them with high-quality products and great service. Creating your own website for people to view what you have to offer and reach out to you is almost a necessity in today’s digital age.
Starting your own business can seem difficult, but it need not be, provided you have a solid business plan in place and are willing to work hard to make your venture a success. Hydroponic farming start-up is a great way to contribute to sustainable agriculture and help make the world a better place. Reach out to our hydroponics experts for further information or to source equipment for your hydroponic business.