Greenhouse business: where to start? Greenhouse business plan

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

Starting a greenhouse business is not a new idea. However, with a competent organization, a “green” business can bring a very good income. How to start a greenhouse business and how to overcome the obstacles that arise in the path of a novice entrepreneur? We will talk about this and much more in this article.

Weigh the pros and cons

In greenhouses, greens, vegetables grow rapidly, in some regions they harvest 3-4 crops a year. Therefore, such a business, in fact, cannot be unprofitable. However, in addition to the advantages, it also has a number of disadvantages. Consider both in the table.

Benefits of greenhouse farming	Business Disadvantages
Greenhouse business is simple. Greenhouses are being built quickly. Starting a business can be done in a couple of months	It is very problematic to sell grown products, therefore, a constant search for consumers and markets is required
The opportunity to receive subsidies from the state. For example, the administration of the Krasnodar Territory provides subsidies to start a business inagriculture in the amount of up to 50%	Seasonality of prices and high competition require careful study of the local market
Business can be established on a small area required for greenhouses. Sometimes 2-3 acres is enough. Saving on rent if you have your own land or rent it far from the city	Decent monthly costs for electricity, water, and their installation and connection
Quick payback (from 1 to 2 years) distinguishes any greenhouse business

Where to start?

For a novice entrepreneur, an approximate picture or action plan that contributes to the success of the greenhouse business is extremely important. It is important to think over many points related to the organization of greenhouse management, but first of all, it is worth paying attention to solving three primary issues:

1. What to grow? Given the favorable weather conditions in a small number of regions, price forecasts, it is advisable to grow vegetables and herbs. These plants are very unpretentious, do not require much care, any greenhouse business will benefit from them. Flowers are the choice of many professionals. Exotic plants and flowers are the most profitable direction in the greenhouse business. But the flower business is always associated with risk and high costs. A beginner starting a greenhouse business from scratch is recommended to practice on greens (onion, lettuce, parsley).
2. To whom to sell? This is a question that must be resolved before building or buying a greenhouse. BeforeAt the beginning of all work, it is important to establish contacts with buyers. The more guaranteed points of sale for products you have, the better, because if one wholesale buyer refuses to buy what is grown, then there will be another one.
3. What type of greenhouse to put: summer or winter? What materials and how much to buy? Many choose quick-gathering greenhouses. Industrial greenhouses are more suitable for business, but they are not cheap. Some start-up entrepreneurs build from improvised materials, and then update and equip the farm as they earn. Regardless of how much you're going to invest, it's a good idea to budget ahead of time.

Business specifics

There are three sectors in the greenhouse business: growing vegetables, flowers and herbs; for each direction there are greenhouses. According to experts, the maximum income from them can be obtained in a fairly hot climate, it is desirable that the winter temperature is not lower than -5 degrees. A frosty winter is a serious risk, in order to avoid it, you will have to invest additionally in the purchase of materials for insulation. The losses from the cold winter will be many times greater than the cost of transporting products to the northern regions.

A novice entrepreneur will have to choose a direction: seasonal or permanent greenhouse business. Where to start planning? If you are going to be engaged in seasonal cultivation of plants, then a regular farm greenhouse will do. Permanent business is based on special industrialprotected ground, with year-round heating and lighting.

It is almost impossible to calculate in your mind all the expenses and expected income, think over financial risks, and other significant issues without a business plan. It helps to identify and solve many problems at the stage of preparation. How to develop a business plan for a greenhouse complex?

Business plan sections

Greenhouse business plan may include several sections. It takes into account natural and climatic conditions, all aspects of a particular business:

• Operation overview or resume.
• Description of the business.
• Description of products and services.
• Market and industry analysis.
• Production plan and organizational plan.
• Marketing plan.
• Financial and investment plan.

What to write in a business plan?

Let's give a detailed justification of the project in the table.

Section	Summary
Operational overview or resume	The business plan provides for the opening of a greenhouse that will grow, harvest and then sell agricultural products (greens, vegetables or flowers, etc.). IP was chosen as the organizational and legal form. The advantage of this form is simplified accounting, ease of settlements with counterparties and tax reduction. The project is rated as a success, asthere is a fairly high demand for agricultural products
Business Description	In this section, it is recommended to describe in detail all the objects that will be included in the greenhouse industry. The business plan must contain a description and diagrams of future building structures and planned engineering and technological communications. It is necessary to calculate the needs for heating, gas, water. For example, it is planned to open a greenhouse facility of five greenhouses, the total area of which is 600 m2, the size of the greenhouse is 20 x 6 m
Description of products and services	Greenhouse business is created to grow agricultural products and sell them to customers wholesale and retail. At the preparatory stage, it is worth deciding on the future assortment that will be presented in the greenhouse. Most often it is greens and vegetables. At this stage, you have to choose a method of cultivation, traditional or innovative, such as hydroponics. When choosing an assortment, it is important to take into account the demand and the general specifics of this industry in your region, for this we are working on the following section
Market and industry analysis	Greenhouse business plan, as a rule, contains a detailed description and features of the regional (regional, district) greenhouse market. In addition, it is extremely important for the success of the whole business to find potential wholesale buyers, evaluate sales opportunities, and report on work with wholesalers. The business plan indicates not only future buyers, but also their plannedpurchase volumes
Production plan and organizational plan	Purchase or lease of land. Construction of greenhouses. Conducting all necessary communications. Recruitment as required
Marketing plan	Before starting all the activities for organizing a greenhouse business, it is necessary to draw up a marketing plan. We need to think about what the circle of buyers will be, and, if possible, establish relations with agricultural bases, shops, supermarkets, food markets and other counterparties
Financial and investment plan	Is the greenhouse business profitable? A financial plan will help answer this question. To calculate the amount of profit and the break-even point, you need to keep track of upcoming income and expenses, understand the features of tax accounting and other indicators

Financial plan

The basis of the financial plan is to forecast future income and expenses, without which the greenhouse business cannot become successful. In addition, the entrepreneur will have to independently maintain these articles, calculate the planned and actual profit, net profit, break-even point and other indicators. To create a plan and keep records, it will be convenient to divide all expenses into one-time, fixed and variable:

• One-time costs are expenses that will have to be incurred once, usually at the initialstage (purchase of greenhouses, cars, plumbing, electricity, etc.).
• Fixed costs are usually monthly expenses paid by the businessman in an equal amount (land rent, salaries of workers, water supply, electricity).
• Variable costs - expenses that arise periodically in different amounts (repair of greenhouses, purchase of fertilizers, fuel and lubricants (fuel) for product delivery).

Based on detailed information about the costs, we can calculate the total amount of expenses for each month and for the whole year. A table will help simplify the work, in which we select columns for each month and columns for types of expenses.

It is significant that in a number of regions they get 2-3 crops per year, and in some regions 4 crops per greenhouse. The business plan allows you to easily calculate the planned income. To do this, it is important to know market prices and crop volumes per square meter. Income will appear only after the sale of the ripe crop and depend on the type of product, its price on the market.

As an example, let's choose a greenhouse business on greenery. Let's make an approximate calculation for green onions. In the supermarket, a bunch of onions costs up to 30 rubles in the spring, about the same cost is 1 kg of onions at the base. From 100 to 120 bulbs are planned to be planted in a greenhouse per 1 m2². You can get from 100 to 120 bunches of onions with 1 m². So, 1 m² greenhouse will bring up to 3000 rubles. Subtract expenses from income and get profit. Suppose we have already incurred one-time costs. There are expenses for heating and watering the greenhouse and others, which amounted to 1 m2^{2 500 rubles:}

3000 – 500=RUB 2500

Profit from 1 m² multiply by the total area of 150 m^2:

2500 × 150=375 thousand rubles

After deducting the amount of taxes, we get a net profit, which will show how successful the greenhouse business is, whether it is profitable to invest your money, time and effort into it. Thus, the payback of a greenhouse business for growing greens, with the right calculation, can be several months. The constant search for clients will allow the entrepreneur to make a profit in the first year of operation, so the profitability of the greenhouse business is quite acceptable.

Investment plan

The investment plan contains a scheme of investments or investments for all stages of business development, the amount of initial capital. The first investment will be a greenhouse. The businessman receives project documentation for it and all external networks. It is important to know how much each piece of equipment cost. It is necessary to plan funds for the construction of greenhouses, connection to networks (electricity, water supply), purchase of equipment and planting material. These investments are included in the ongoing costs incurred by the businessman until the first profit from the greenhouses.

Which greenhouse to choose?

Before purchasing a greenhouse, you have to decide on its type. The type of greenhouse depends on climatic conditions, assortment and farm specifics:

• Greenhouses of summer-lightweight type are simple and are placed behindcouple of hours. This type of building is built in a few hours. The summer version of greenhouses is used for the most part as protection against prolonged rains or pests.
• Winter-type greenhouses, which transmit sunlight well, will help create and maintain the necessary microclimate. Therefore, they are more suitable for growing any plants, including flowers.

Greenhouse materials

Creating a suitable temperature regime for plants is costly. A cheap greenhouse will not be able to maintain the desired temperature for a long time. It is important to consider the choice of material that will be used in its construction. The following types of materials are popular today:

• Glass. For a very long time, the greenhouse business at home was built on one of the main materials in this business - glass. It was used to create insulated greenhouses that could be successfully operated until late autumn. Glass transmits up to 90% of light. But for the cold winter months, it is not suitable, regardless of whether additional insulation is used. Glass has such a disadvantage as fragility, low temperatures can destroy it. And the cost of glazing will be rather big. Therefore, this material is suitable for temporary use.
• Polyethylene is a material used for a long time in many types of greenhouses. Its plus is its low price compared to other materials. But a significant drawback is the small throughput. Many plants will need additional light sources. The greenhouse will have to be opened in acceptable weather so that sunlight can reach the plants. The material is characterized by low strength and low heat capacity, therefore it is suitable only for summer greenhouses.
• Home greenhouse business is unimaginable without polycarbonate. It is a product of modern technology, 250 times stronger and 8 times lighter than glass. Its heat capacity is several times higher than that of glass and polyethylene. Only polycarbonate is the ideal material for winter greenhouses. To ensure the greatest penetration of light allows the roof of the greenhouse made of polycarbonate with a thickness of not more than 9 mm. The walls can be thicker. When choosing a polycarbonate greenhouse, it is important to know that it comes in two types: monolithic and cellular. Cellular polycarbonate has more advantages, as it is much more transparent and warmer than monolithic. For greenhouse business, cellular polycarbonate is recommended.

Conclusion

Greenhouse farming is a business that must constantly develop and improve. High competition in industries reduces the rate of profit. New technologies are emerging, but at the same time, the cost of equipment is growing. Therefore, a businessman should be able not only to sell what he has grown, but to navigate the market, use innovations and expand the business.