How to Create a Business Plan to Start a Vertical Farm
So you want to start a vertical farm. When it’s time to get funding to pay for the supplies and technology you need, you’ll have to pitch a vertical farm business plan.
The truth is unless you have an advanced degree in business, most business plan templates probably seem like they’re written in a foreign language. They’ll include language like “pro forma” or “SWOT analysis.” Some don’t even define these terms or explain various elements and how to collect the necessary data. We’ll examine the necessary parts of a vertical farm business plan and walk you through the process of creating one.
Before Writing Your Farm’s Business Plan
Before you jump in, there are a few steps you should take to build the groundwork for your new venture. Some of these you may need to research now and complete after funding is obtained. Others you can complete entirely before writing your farm business plan.
Conduct feasibility studies
Obtain the land that will be needed for your new business
Check the availability of your desired business name
Incorporate your business
Open bank accounts for your business
Obtain a tax ID
Apply for any business permits and licenses you will need
Find business insurance
Necessary Elements of a Business Plan
Once you’re ready to write your business plan, there are several elements that you’ll need to include. Depending on your knowledge of the vertical farming industry and your familiarity with vertical farming business practices, the process can take anywhere from a few months to years. These are the elements that you’ll need to include in your farm business plan.
Industry Overview
In many new businesses, an industry overview is unnecessary because the industry is commonly understood. Not so with a vertical farming business. You’ll want to provide a brief description of vertical farming, what it is, and how it works. This will help anyone reviewing your business plan to understand the type of business you’re aiming to start.
Executive Summary
Explain your company and what it will entail. Describe the type of vertical farming structure you will employ. Note whether you’re looking at hydroponics, aeroponics, or some other type of vertical farm growing method. Are you planning to grow vegetables, fruits, flowers, or a combination of these crops? Any information that sets your business apart from others in the industry can be included here.
Mission and Vision Statement
Like the executive summary, a mission statement tells readers what your business is all about. It defines the business, its goals, and how it will reach them. The vision statement goes further, explaining your plans for the business and where you hope to take it.
Products and Services Offered
In the prior section, you mentioned what types of crops you plan to grow. Now you can go into further detail, explaining which specific crops you will be planting and any services you will provide. This may include simply packaging your foods, or you may want to create salad mixes or provide consulting services.
Organization and Roles
If you’re starting a commercial farming venture, you’re probably not going to be able to manage it by yourself. Instead, you’ll need to hire some employees and managers to run the business. In this section, you should define the positions you will be hiring and what the roles and responsibilities will be for each of them. Ensure that all aspects of your business are covered, and if you plan to outsource any roles, you can note that here as well.
Market Analysis
Your market analysis doesn’t have to be incredibly in-depth and detailed but should show that you’ve done your research and understand the geography of your market. Who are the major players? Where are the opportunities? How can you compete in this space? Answering these types of questions will help you differentiate your business and demonstrate that you understand what you are about to undertake.
SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. In this section, you want to define these four points as they relate to your business. Rather than a sunny, optimistic assessment of your business, you want to show a realistic understanding of the market you’re entering and the challenges you will likely face.
Sales and Marketing Strategy
Are you planning to sell micro herbs in bulk to local restaurants? Will you be creating salads for direct to consumer retail sales? Are you hoping to sell your produce in local grocery stores? Explain what you will do with the crops your vertical farm will produce and how you will create income for your business.
Sales Forecast
Do the necessary research to determine what your sales are likely to look like for the first few years. These should be pro forma numbers or estimates since you won’t know the actual numbers until after the business has been established. That said, you want to provide support for the numbers you’re targeting, ensuring that your expectations are grounded in reality.
Pro Forma Budget
Of course, there’s no way to set an exact budget before your operations begin, but you can put together a pro forma budget showing what expenses you expect and what income you will likely achieve. Ensure that you have thoroughly budgeted for all business expenses as accurately as possible and that you’ve covered all of the expenses you’re likely to incur.
Expansion Strategy
Hearkening back to your vision statement, go into a bit more detail about the future of your business. Do you plan to add more greenhouses down the road? Will you expand into additional markets? How will you know when it’s time to grow? How will you fund this growth? Answer as many questions about your business and its future expansion as you can, with as much detail and candor as possible.
Eden Green’s Turnkey Vertical Farm Solution
There’s a lot of detail and plenty of information you’ll need to write your business plan. You could manage this all alone, but unless you’ve worked in the vertical farming industry, your estimates and projections will be difficult to predict and even harder to justify. Instead, partner with a company that understands the vertical farming industry and can help you create and run your business in a way that will allow you to survive and thrive.
Eden Green Technology offers a turnkey vertical greenhouse that is perfect for new vertical farmers. When you partner with us, we will help you assess your business needs, construct your hydroponic greenhouse, hire 30 full-time employees, and manage your daily operations. We have the award-winning technology and real-world vertical farming experience to ensure your business is given the best start possible.
Want to see how an Eden Green Technology greenhouse operates? contact our vertical farming experts to get started planning your greenhouse today.