Aquaponics is a form of agriculture that has been around for many years but resurfaces in today's modern world and attracts 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 hobbyists or backyard gardening but, most importantly, for commercial purposes.
We developed this aquaponics business plan because of the growing interest in commercial aquaponics. We also aim to provide an outline and guidance for developing an operating strategy for those interested in starting their own commercial aquaponics system.
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. The bacteria convert fish waste into nitrates, which become food for the plant, and in return, the plant roots filter and clean the water for the fish to live.
Benefits of Aquaponics
- Organic Produce - Food grown in an aquaponics system 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 can access 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 farmland is not needed to grow aquaponics crops. A sustainable aquaponics system is viable in places where the land is rocky, or prone to drought.
Things to Consider In Starting A Commercial Aquaponics System
Before developing and starting your commercial aquaponics business, consider the main reasons 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 to help your farm operations, or do you need to seek that expertise elsewhere?
- Do you have a property, or are you still 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 to develop marketing, operating, and financial strategies necessary for the business plan or 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 product's packaging, distributing, and promoting approaches.
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.
1. Overview
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 the following:
- 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
The mission statement 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 reflect what you want to achieve and when you like to achieve them.
2. 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). In making the management and organization structure of your farm.
Consider answering these questions:
- What will the legal structure of your business be? 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 or board members be compensated?
3. Marketing Strategy
Before starting your commercial aquaponics farm, defining the strategy for marketing and sales is very important. These are also the essential part of your business plan. Developing your marketing strategy requires understanding the market, demands of your product, potential customers, as well as potential competitors. In this section, you must convince your reader that your commercial aquaponics farm is a viable market.
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.
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: Use the information you gathered from the market analysis about customer values, needs, and preferences, and 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 your product directly 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?
Discuss these questions:
- 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?
4. Operating Strategy
Before developing your operating strategy, it is essential 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 to 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 araft 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 support the demand of the plants?
- Will the fish be marketed as a farm product or managed only to support crop production?
- Will plant crops start from seeds 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?
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.
- 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 a growing area for the seedlings.
- Consideration should also be given to 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.
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.
Financial Strategy
This section should describe your approach to developing a financial strategy. The financial strategy is divided into these sections.
1. Expenses (the expenses estimated for the startup and operation of the commercial aquaponics farm)
Develop a five-year projection on the annual expenses for the commercial aquaponics farm. The costs should include marketing, operating, and human resource expenses discussed in the marketing, managing, and human resources strategy section. Expenses should also cover administrative costs 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. Payment should include receipts from sales of products and less any loss associated with spoilage or products that cannot be sold. Income should also include other sources anticipated to cover the farm's operating expenses.
3. Fixed Assets (anticipated fixed assets)
Develop your five-year projection of 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.
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 get these funds, and what are the sources or potential funding sources?
- 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?
How to Start A Commercial Aquaponics Business
Commercial aquaponics is a business. 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.
- The first step is to gather enough information on how aquaponics works and how to manage an aquaponics business. You can reach out to your local aquaponics farmers to get ideas for the day-to-day tasks of running an aquaponics farm.
- You can consult professionals with experience designing, building, and operating aquaponics facilities. The money you invest in professional consulting will be an essential factor in the success of your farm.
- Choose the location where you will establish your aquaponics farm. Choose an area where the temperature is not too high or low and has sufficient light for the plant to get enough light.
- Gather all the necessary materials required for setting up an aquaponics system. This will depend on your aquaponics design. These include a fish tank, grow bed, water pump, grow media, and pipes for plumbing.
- Register your business to get the necessary licenses and permits from your local authority.
- Set up your aquaponics business according to your plan and design. Continue consulting with aquaponics experts to get their guidance on effectively managing your aquaponics business.
Conclusion
Thank you for reading our article. Starting can be challenging, but it is an ideal investment because aquaponics is a low-maintenance and cost-efficient system that provides fresh organic yield much faster than any other farming method. Commercial Aquaponics can be profitable when done on a specific scale. If you are a beginner in aquaponics and want to start your own system, read our article, "Ultimate Aquaponics Beginner's Guide."
Custom Designed Aquaponics Systems
Interested in getting a system designed that fits your exact needs? Whether it be a small back yard system, a mid-size system for your restaurant or school, or a large-scale commercial system, Go Green Aquaponics can design you a custom aquaponics system to fit your needs!
Just reach out to us on the comment section below or let us know about the system you’d like via the contact form to get started!
Mauricio Briceño
August 05, 2020