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 worldwide.
Today, many people have turned to aquaponics farming to grow food because of its sustainability 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.
Because of the growing interest in commercial aquaponics, we developed this aquaponics business plan. To provide an outline and guidance for developing an operating strategy for those interested in starting their own commercial aquaponics farm.
What is Aquaponics?
Aquaponics is a recirculating method of farming that combines aquaculture and hydroponics. It is the raising of fish and the growing of plants together in a symbiotic environment with the help of beneficial bacteria. It converts fish waste into nitrates, which become plant food, and in return, the plant roots filter and clean the water for the fish to live.
Benefits of Aquaponics
- Organic Produce - Food grown in aquaponics is not exposed to chemicals, including fertilizers and weed killers, because they are grown naturally with the help of fish waste.
- Year-round farming - Aquaponic growers do not depend on weather conditions to farm because of their ability to regulate temperatures. So they can cultivate organic food all year round.
- Faster Plant Growth - Plants grown in aquaponics naturally grow faster because they have access to the nutrients 24 hours a day. A constantly regulated source of water also helps enhance plant growth.
- Two Sources of income - Commercial aquaponics operations can enjoy two sources of income: plants and fish.
- Reduces the Planet's Carbon Footprint - large acres of farmland are not needed to grow aquaponics crops. A sustainable aquaponics system is viable in places where the land is rocky, unstable, or prone to drought.
Things to Consider Before Starting Your Commercial Aquaponics Business
Before developing and starting your commercial aquaponics business, think of the main reasons why you want this kind of business. This will help you focus on the business plan and identify the issues, resources, and expertise needed to develop your business plan. Consider asking yourself these questions;
- Do you have a farm or crop growing experience that will help 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 cleanup issues that may be associated with the public property you intend to use?
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 its management and organization.
3. Marketing Strategy:This section identifies the products to be produced, how they will be marketed, and the potential competitors. This section will also describe the packaging, distributing, and promoting approaches for the product.
4. Operating Strategy: This section describes the approach to 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 its success.
Your business plan overview provides your vision and mission statement. It also summarizes your goals for your commercial aquaponics farm. The overview is 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 your commercial aquaponics farm's future and how you incorporate your values into your farm. It provides clear decision-making criteria and answers what economic, environmental, or community values are essential to the farm. What products or services do you intend to offer, and how the community will benefit from these products or services.
- Mission Statement:This is a set of guiding principles that describe your commercial aquaponics farm's overall goals. 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 farm's startup 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 commercial aquaponics farm's ownership status 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 will these managers, board members be compensated?
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. Developing your marketing strategy requires understanding the market, demands of your product, potential customers, and potential competitors. In this section, you need to convince your reader that there is a viable market for your commercial aquaponics farm. The marketing strategy is divided into these sections:
1. Introduction: The introduction section of the marketing strategy shows the following:
- The market or potential customers of your commercial aquaponics farm.
- The products that the farm will produce and sell.
- The distribution process or how and where the products will be made available to the customers.
This section describes the demographic, social, and cultural factors that describe your potential customer that will influence or affect 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 consumers?
3. Product: Using the information you gathered from the market analysis about customer values, needs, and preferences, describe the product 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 sell, including options for storing the product before selling. Discuss these questions:
- How will you sell your product?
- Will they distribute directly your product from the harvest to the customer?
- How will you maintain your product quality during storage and distribution?
- What will you do with 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?
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. It divides the operating strategy 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 your marketing strategy's objectives. This involved understanding the approach used to raise the fish and plant the crops and the planting and harvesting schedule. 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 is interdependent, will the volume of your plant crops meet the market demand drive of the fish's volume 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 seedlings 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?
Yield, you also need to discuss the estimated amount of plants and fish that can be repeatedly reproduced given from the crop management approach, operating size area, and resources available. Estimates output should be for the first five years of operation and should be consistent with the plans and growth of the business.
3. Physical Resources (the material resources needed to operate the farm)
The physical resources include land, buildings (greenhouses), and the necessary equipment to produce and market your farm products to meet your marketing strategy's objective. Discuss the physical resources and the environmental factors (water, electricity, etc.) needed to run the farm and acquire them. Discuss also how these environmental factors may affect the farm and the environment. In discussing physical resources, you need to consider these questions:
- 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 you lease or acquire the land area?
- Has an environmental assessment been conducted on the property, and are there any known or potential environmental issues 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?
The key issues needed to be considered in identifying physical resources are:
- To determine the development needs of an aquaponics farm, keep in mind that some commercial aquaponics systems exist in a controlled environment, like 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 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.
This section discusses the human resources required to operate your commercial aquaponics farm. Make an estimate of the number and types of workers needed by identifying the specific tasks required daily at the farm. These include the administrative and management responsibilities, farm labor, and the estimated number of hours per month for each job. Consider these questions in discussing human resources:
- What is the workforce needed for the first five years?
- What positions will be created for the farm, and how many workers will be required 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 an additional workforce during harvest days.
Every business needs to pass regulatory requirements to operate. Your commercial aquaponics farm also requires permits and license to operate. Depending on your state or country, make the necessary inquiries of the requirements you may need to use because these could significantly impact your production, operating plans, and startup costs. Identify the types of permits, licenses, regulations, and associated fees required to startup your business. Your farm must operate within the governmental and regulatory requirements, like zoning, planning, building requirements, waste management requirements, taxes, and other requirements.
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 startup 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 marketing, operating, and human resource expenses discussed in the marketing, managing, and human resources strategy section. Expenses should also cover administrative expenses like the initial operating expenses, startup 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 farm's operating expenses.
3. Fixed Assets (anticipated fixed assets)
Fixed assets include land, buildings, vehicles, furniture, office equipment, computers, fixtures and fittings, plants, 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, install the fixed assets to startup the farm, and achieve the business plan's goals.
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 required expenses in obtaining financing or funding, like insurance, filing fees, and others?
You also need to identify and evaluate the potential risks that can impact the business plan's success. These include the potential production risks related to crop failure or unexpected low yield, marketing risk related to competitors' actions, like lower pricing, and what can be done to minimize these potential risks if they happen.
Tips on Starting a Commercial Aquaponics Farm
Commercial aquaponics is a business. 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 aquaponics' coolness and possible profitability does not guarantee success; knowledge, experience, and proper business decisions do. Here are our tips on starting a commercial aquaponics farm.
- Expertise And Training
It is essential to invest in aquaponics education and training before building your own commercial aquaponics farm. Knowing how aquaponics operate, what to look for is critical to the success of your farm. Reach out to your local aquaponics farmers to get ideas for 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 designing, building, and operating aquaponics facilities with your design team. The money you invested in professional consulting will be an essential factor in the success of your farm.
You can research the local market to know which ones are in demand, priced highly, or low in competition. Research the latest trends, updates, and activities on aquaponics to gather information on setting up and managing an aquaponics system.
- Start Small, Think Big
No matter how well you research, you get to know all the things involved and the profit margin only when you start your business. It is better to start small, as this will give you the experience, knowledge, and flexibility to adapt. Things sometimes go wrong when you're just starting, and fixing a smaller system is easier than bigger aquaponics farms. So, start small, and once you gain 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 a challenge and sometimes very labor-intensive. If you are considering getting into commercial aquaponics farming, you have to love aquaponics and everything it involves. Aquaponics farming is not an easy job. 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 achievable and gratifying if approached with the proper business planning, knowledge, and, most importantly, the right mindset.
Commercial Aquaponics can be profitable when done on a specific scale. Startup cost can be a challenge, but because it is a low maintenance and cost-efficient system that provides fresh organic yield much faster than any other farming method, it is an ideal investment. As with any business, starting a commercial aquaponicssystem requires careful and extensive planning, commitment, a capable team, and a business plan to build and operate commercially.
Successful Aquaponics Farms
Aquaponics System #1
The commercial aquaponics farm is located in California. It’s a ⅓ acre aquaponics farm. In this video, the owner goes into great details on how the farm works.
Aquaponics System #2
In this video, the Sustainable Harvesters Commercial Aquaponics Farm takes you behind the scenes of a growing commercial aquaponics business that provides chefs with fresh farm to table aquaponic lettuce production for the Texas and Louisiana markets.