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 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, to sustain the high demand for organic food by the growing population in urban areas. 

We developed this aquaponics business plan because of the growing interest in commercial aquaponics. 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 becomes 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 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 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.

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

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 reflect on 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 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?

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, and potential competitors. In this section, you need to 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. 

2. Market: This section analyzes the market to identify potential customers or target markets. It would help if you had a general understanding of your farm's environment to identify your potential customers. It is essential 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 affect your farm. Social and cultural factors refer to your potential customers' basic values, perceptions, and behaviors. 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 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?

5. Competition:This section describes the competition of your market and how you will position your farm to compete in each market segment. Discuss your farm's advantages and disadvantages over your competitors and how you differ from them. 

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?

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 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. 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 other sources that are 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 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?

5. Risk Management (potential risks to the successful operation of the farm)

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 associated with competitors' actions, like lower pricing, and what can be done to minimize these potential risks if they happen.