Aquaponics Business Plan
Aquaponics is a form of agriculture that has been around for many years but is resurfacing in today’s modern world and attracting many people because of its benefits and profitability. Recent studies have shown the increasing demand for the aquaponics market globally because of the rising population, lack of farming land, and high demand for organic food across the world.
Aquaponics is a recirculating method of farming that combines aquaculture and hydroponics leading, to the raising of fish and growing of plants together in a symbiotic environment with the help of beneficial bacteria. It converts wastes produced by the fish into nitrates, which become plants’ food, and in return, the plant roots filter and clean the water for the fish.
Today, aquaponics is becoming more popular and attracting many people as a way of growing food because of its sustainability and benefits such as eco-friendly, less use of water, low-cost maintenance, efficient, and organic way of producing food. Aquaponics has grown and developed not just for the hobbyist or backyard gardening but, most importantly, for commercial purposes to sustain the high demand for organic food by the growing population in urban areas.
Commercial Aquaponics can be profitable when done to a specific scale. Startup cost can be a challenge, but because it is a low maintenance cost, and efficient system that provides fresh organic yield much faster than any other farming method, makes it an ideal investment. As with any businesses, starting a commercial aquaponics system requires careful and extensive planning, commitment, capable team, and business plan to build and operate.
Essential Things to Consider Before Starting Your Commercial Aquaponics Business
Before developing and starting your commercial aquaponics business, think of the main reasons for starting an aquaponics business. These will help you focus on the business plan and identify the issues, resources, and expertise needed to develop your business plan. Consider these questions;
- Do you have a farm, or crop growing experience that will help in your farm operations, or do you need to seek that expertise elsewhere?
- Do you have a property or are you in the process of choosing a location?
- Are you developing an aquaponic farm for-profit and source of income?
- Who will be part of your planning team?
- Do you have the knowledge or expertise in developing marketing, operating, and financial strategies necessary for the business plan or to help start the business?
- Do you need expertise in addressing environmental and clean up issues that may be associated with the public property you intend to use?
Because of the growing interest in commercial aquaponics, we developed this Aquaponic Business Plan to provide an outline and guidance for developing an operating strategy for those who are interested in starting their commercial aquaponics farm.
Aquaponics Business Plan
This aquaponics business plan is divided into five sections:
1. Overview: This section provides the vision statement, mission, and goals of your commercial aquaponics farm.
2. Management and Organization: This section describes the business ownership structure, and how it will be managed and organized.
3. Marketing Strategy: This section identifies the products to be produced, how it will be marketed, and the potential competitors of the products. This section will also describe the packaging, distributing, and promoting approaches for the product.
4. Operating Strategy: This section describes the approach for product management, farm size, physical and human resources, and regulatory requirements.
5. Financial Strategy: This section provides income and expense estimates, expected profit and loss, sources of funds, and potential business risks to the success of the business.
Overview
Your business plan overview provides your vision and mission statement. It also summarizes your goals for your commercial aquaponics farm. The overview can be divided into Introduction, Vision, Mission Statement and Goals.
- Introduction: Describe the purpose and key issues to be addressed by the business plan. It provides an understanding of what information is contained in the business plan.
- Vision Statement: Your vision statement describes your vision of the future of your commercial aquaponics farm, and how you incorporate your values into your farm. It provides clear decision-making criteria, and answers the questions of what economic, environmental, or community values are important to the farm. What products or services do you intend to provide, and how the community will benefit from these products or services.
- Mission Statement: This is a set of guiding principles that describe the overall goals of your commercial aquaponics farm. A mission statement tells the fundamental purpose, and expectations for the farm to its customers. It also provides an understanding of the goals of the farm.
- Goals: The goals describe what is to be achieved by the farm. Goals can be short-term goals or long-term goals. Short-term goals may be focused on the startup of the farm and achieving a certain level of production income. Long-term goals can be the plans for farm growth. Goals are reflections of what you want to achieve and when you like to achieve them.
Management and Organization
Management and organization describe the ownership status of the commercial aquaponics farm and how it will be managed and organized. How you register your farm will depend on your business structure (corporation, sole proprietorship, non-profit). Check with your local or state requirements before registering your commercial aquaponics farm. In making the management and organization structure of your farm, consider answering these questions:
- What will be the legal structure of your business? Will it be a sole proprietorship, partnership, non-profit, or corporation?
- How will the farm be organized and managed?
- Who will be the key managers who will run the farm?
- What skills do these managers bring to the farm, and what will be their duties and responsibilities?
- Will there be a board of directors?
- How these managers, board members, will be compensated?
Marketing Strategy
Before starting your commercial aquaponics farm, defining the strategy for marketing and sales is very important. These are also the most important part of your business plan. The development of your marketing strategy requires an understanding of the market, demands of your product, potential customers, and potential competitors. In this section, you need to convince yourself, and your reader that there is a viable market for your commercial aquaponics farm. The marketing strategy is divided into these sections:
1. Introduction: Introduction section to the marketing strategy shows to the reader the following:
- Market or potential customers of your commercial aquaponics farm.
- Products that the farm will produce and sell.
- Distribution process or how and where the products will be made available to the customers.
2. Market: This section provides an analysis of the market to identify your potential customers or target markets. You need to have a general understanding of the environment where your farm will operate to identify your potential customers. It is important to describe the economic factors, such as inflation, employment rate, and income, that affect your potential customer’s purchasing power and spending rate.
This section describes the demographic, social, and cultural factors that describe your potential customer that will influence or impact your farm. Social, and cultural factors refer to the basic values, perceptions and behaviors of your potential customers. These include their preference for the type of crops to be grown. In discussing the market section, know the answer to these questions:
- Who are your potential customers, and where are they located?
- How likely are they to buy your product?
- Are you growing a crop that is not easily accessible to the consumers.
3. Product: Using the information you gathered from the market analysis about customer values, needs, and preferences, describe the product that you’re planning to offer and how they will compete in the market. Describe why your product is unique and how they differ from its competitors.
4. Distribution: Getting your product to the market will be critical to your marketing strategy as the quality of crops and customer perception will depend on the freshness and quality of your product. This section discusses the handling of products from harvest to sale, including options for storage of the product before sale. Discuss these questions:
- How will you sell your product?
- Will your product be distributed directly from the harvest to the customer?
- How will you maintain your product quality during storage and distribution?
- What will you do the product that is not sold or delivered?
- What is your method of distribution?
- How will you price your product?
- Who are your competitors?
- How does your product differ from your competitor’s product?
- Are your competitors’ established in the market?
- Do they offer a greater variety of products?
- Will your pricing be competitive?
Operating Strategy
Before developing your operating strategy, it is important that you have completed your market analysis and identified the type and volume of plants to grow and fish to raise.The operating strategy is divided into these sections:
1. Crop Management (Your approach in cultivating and harvesting plants and fish)
Crop management involves managing the volume of fish and plant crops needed to meet the objectives of your marketing strategy. These involved an understanding of the approach that will be used to raise the fish and plant the crops and the schedule of planting and harvesting. Discuss the specific method to be used, such as a raft system, media-based system, nutrient film technique (nft), or a combination of the three main systems of aquaponics. This section discusses the following questions:
- Since the relationship between the fish and the plants are interdependent, will the volume of your plant crops meet the market demand drive of the volume of the fish needed to provide the necessary nutrients for the plant?
- Will the volume of the fish from the water be able to support the demand of the plants?
- Will the fish be marketed as a product of the farm or managed only to support crop production?
- Will plant crops start from seeds on the farm or seedling purchased from suppliers?
- How will you manage water pH, ammonia, temperature, nitrates, nitrites dissolved oxygen?
- How will you cycle the system?
- How will planting be made to meet the required crop harvest of the marketing strategy?
- Are you going to plant and harvest year-round?
- What type of buildings and structures are required within five years?
- Will your commercial aquaponics farm be located within the building?
- How much building area and land area are required? Within five years?
- Will lease or acquire the land area?
- Has an environmental assessment been conducted on the property, and are there any known or potential environmental issues on the property that will require cleanup or specific action?
- What resources will be needed for the farm (water, electricity, and waste disposal)?
- What equipment will be needed (vehicles, monitoring equipment, lighting, tanks, etc.) within five years?
- What tools will be needed initially and within five years?
- What supplies will be needed?
- How will these resources be acquired?
- In determining needs for the development of an aquaponics farm operation, consider that commercial aquaponics typically exists in a controlled environment like using greenhouses or buildings.
- In determining the square footage needs, it should include sufficient space to access and work around the fish, and tanks, space for offices, packaging, shipping, cold storage, material, and equipment storage and growing area for the seedlings.
- Consideration should also be given for the need for monitoring the system, such as water quality and temperature, pH, Ammonia, humidity, water pump, light and other parameters that are important to the healthy growth of the fish, and plants.
- Internet, telephone, and other communication requirements for remote monitoring.
- What is the workforce needed for the first five years?
- What types of positions will be created for the farm, and how many workers will be needed for each position?
- Will you provide training for each position?
- How many workers will be compensated, and will there be full-time, part-time or volunteer workers?
- What are the ranges of salaries for each position?
- What are the employee benefits (vacation, medical coverage, etc.)?
The key issues needed to be considered in discussing human resources are:
- Using monitoring systems with remote notification capabilities can reduce labor and provide notification of system problems even when the aquaponics farm is unattended.
- There may be a need for additional manpower during harvest days.
Financial Strategy
This section should describe the approach you are taking in developing a financial strategy. The financial strategy is divided into these sections.
1. Expenses (the expenses estimated for start-up and operation of the commercial aquaponics farm)
Develop a five-year projection on the annual expenses for the commercial aquaponics farm. The expenses should include the marketing expenses, operating expenses and human resource expenses discussed in the marketing, operating and human resources strategy section. Expenses should also cover administrative expenses like the initial operating expenses, start-up expenses, site preparations, and other expenses.
2. Income (projected income of the commercial aquaponics farm)
Develop your five-year annual income projection for the farm. Income should include receipts from sales of products and less any loss associated with spoilage or products that cannot be sold. Income should also include donations, grants, and other sources that are anticipated to cover the operating expenses of the farm.
3. Fixed Assets (anticipated fixed assets)
Fixed assets include land, buildings, vehicles, furniture, office equipment, computers, fixtures and fittings, plant, and machinery. These items are depreciated over time for tax purposes. Develop your five-year projection of fixed assets.
4. Funding (a potential source of funds)
Describe the source and amount of funds needed to purchase, and install the fixed assets to start-up the farm, and achieve the goals of the business plan. Discuss the following questions:
- How will you obtain these funds and what are the sources or potential sources of funding?
- How much funding is needed?
- How will the funds impact the achievement of the business plan?
- Are there expenses needed in obtaining financing or funding, like insurance, filing fees and others?
Commercial aquaponics is a business, and to be successful, you need business experience, or you may need to involve someone who has the experience and knowledge about aquaponics. Getting excited and carried away by the coolness and possible profitability of aquaponics does not guarantee success; knowledge, experience, and right business decisions do. Here are our tips on starting a commercial aquaponics farm.
Expertise and training. It is important to invest in education and training in aquaponics before you invest in building your commercial aquaponics farm. Knowing how aquaponics operates, what to look for, and knowledge in the science of aquaponics is critical to the success of your farm. Reach out to your local aquaponics farmers to get ideas to the day to day tasks of running an aquaponics farm. The right people can help you get started on the right track, so consult professionals with experience in designing, building. and operating aquaponics facility with your design team. The money you invested in professional consulting will be an important factor in the success of your farm.
Research. You can research the local market to know which ones are in demand, priced highly, or low in competition. Research on the latest trends, updates, and activities on aquaponics to gather information and knowledge in setting up and managing the company.
Start Small Think Big. No matter how well you research, only when you start your business that you’ll get to know all the things involved and the profit margin. So, it is better to start small, as this will give you experience and knowledge and the flexibility to adapt. Running a smaller aquaponics is also more manageable, and if you’re new to aquaponics, you’ll need some learning to do to run it efficiently.When you’re just starting, things sometimes go wrong and fixing a smaller system is easier than a massive aquaponics farm. So, start small and once you gained the experiences and knowledge necessary, you can begin expanding your commercial aquaponics farm.
Love what you are doing. Lastly, love what you are doing. Aquaponics can be challenging and sometimes very labor-intensive, that is why if you are thinking of getting into commercial aquaponics farming, you have to love aquaponics and everything it involves. Aquaponics farming is not an easy work with the potentials to make good money. It requires hard work and effort to operate a successful aquaponics farm. So, if you don’t love the concept of aquaponics and sustainable organic farming, you must reconsider your choice. Commercial aquaponics farming is very achievable and gratifying if it is approached with the right business planning, knowledge, and most importantly, the right mindset.
Commercial Aquaponics Success Stories:
Sources:
- https://www.marketwatch.com/press-release/aquaponics-market-2020-size-statistics-growth-revenue-analysis-trends-industry-forecast-report--2025market-research-engine-2020-01-08
- https://www.leaffin.com/aquaponics-sustainable-profitable/
- https://urbanspaceaquaponics.com/2018/01/17/5-things-to-consider-when-starting-a-commercial-aquaponics-farm/
- https://www.epa.gov/sites/production/files/2016-09/documents/1_aquaponics_business_plan_guide_508_081116.pdf
- https://www.researchgate.net/publication/324489360_The_economic_and_social_benefits_of_an_aquaponic_system_for_the_integrated_production_of_fish_and_water_plants
