Creating a business in the form of a greenhouse is not a new idea. However, with a competent organization, a “green” business can bring a very good income. Where to start a greenhouse business and how to overcome the obstacles that arise in the path of a novice entrepreneur? We will talk about this and much more in this article.
Weigh the pros and cons
In greenhouses, greens, vegetables grow rapidly, in some regions they harvest 3-4 crops per year. Therefore, such a business, in fact, cannot be unprofitable. Nevertheless, in addition to the advantages, it has several disadvantages. Consider both in the table.
Benefits of Greenhouse Management | Business disadvantages |
Greenhouse business is simple. Greenhouses are quickly erected. Starting a business can be done in a couple of months | To sell the grown products is very problematic, therefore, a constant search for consumers, markets |
The opportunity to receive subsidies from the state. For example, the administration of the Krasnodar Territory provides subsidies for starting up its business in the field of agriculture in the amount of up to 50% | Seasonality of prices and high competition require careful study of the local market |
Business can be established in a small area, necessary for greenhouses. Sometimes 2-3 acres is enough. Savings on rent with own land or its rent far from the city | Decent monthly costs for electricity, water, as well as their conduct and connection |
Quick payback (from 1 to 2 years) distinguishes any greenhouse business |
Where to begin?
It is extremely important for a novice entrepreneur to have a rough picture or plan of action conducive to the success of the greenhouse business. It is important to think over many points related to the organization of the greenhouse economy, but first of all, it is worth paying attention to solving three primary issues:
- What to grow? Given the weather conditions favorable in a small number of regions, price forecasts, it is advisable to grow vegetables and herbs. These plants are very unpretentious, do not require much care, any greenhouse business will benefit from them. Flowers are the choice of many professionals. Exotic plants and flowers - this is the most profitable direction in the greenhouse business. But the flower business is always associated with risk and high costs. For a beginner starting a greenhouse business from scratch, it is recommended to practice it on greens (onions, lettuce, parsley).
- To whom to sell? This is a question that needs to be addressed before building or buying a greenhouse. Before starting all work, it is important to establish contacts with buyers. The more guaranteed points of sale of products you have, the better, because if one wholesale buyer refuses to purchase grown, then there will be another.
- What type of greenhouse to put: summer or winter? What materials and how much to buy? Many people choose quick-mounted greenhouses. Industrial greenhouses are more suited specifically for business , but they are not cheap. Some start-up entrepreneurs build from improvised materials, and then update and equip the economy as they earn. No matter how much you intend to invest, it is advisable to plan the budget in advance.
Business specifics
In the greenhouse business, three sectors are distinguished: the cultivation of vegetables, flowers and herbs; Each direction has its own greenhouses. According to experts, the maximum income from them can be obtained in a fairly hot climate, it is desirable that the winter temperature was not lower than –5 degrees. Frosty winter is a serious risk, in order to avoid it, you will have to invest extra in the purchase of materials for insulation. Losses from the cold winter will be many times greater than the cost of transporting products to the northern regions.
A novice entrepreneur will have to choose a direction: seasonal or permanent greenhouse business. Where to start planning? If you intend to engage in seasonal growing plants, then an ordinary farm greenhouse is suitable . The permanent business is based on special industrial premises with protected ground, with year-round heating and lighting.
It’s almost impossible to calculate all expenses and estimated income in your mind, to think over financial risks, other significant issues without a business plan. It helps to identify and solve many problems at the preparation stage. How to develop a business plan for a greenhouse complex?
Business Plan Sections
A greenhouse business plan may include several sections. It takes into account natural and climatic conditions, all aspects of a particular business:
- Review of activity or resume.
- Description of the business.
- Description of products and services.
- Market and industry analysis.
- Production plan and organizational plan.
- Sales plan.
- Financial and investment plan.
What to write about in a business plan?
We give a detailed justification of the project in the table.
Section | Summary |
Business Overview or Resume | The business plan provides for the opening of a greenhouse farm, which will carry out the cultivation, harvesting and subsequent marketing of agricultural products (greens, vegetables or flowers, etc.). As the legal form, IP was chosen. The advantage of this form is simplified bookkeeping, ease of settlement with contractors and tax reduction. The project is assessed as successful, since the region has a fairly high demand for agricultural products |
Business description | In this section, it is recommended to describe in detail all the objects that will go into the greenhouse. The business plan should contain a description and diagrams of future building structures and planned engineering and technological communications. It is necessary to calculate the needs for heating, gas, water. For example, it is planned to open a greenhouse of five greenhouses, the total area of which is 600 m 2 , the size of the greenhouse is 20 x 6 m |
Description of products and services | The greenhouse business is being created for growing agricultural products and selling them to customers wholesale and retail. At the preparatory stage, it is worth deciding on the future assortment, which will be presented in the greenhouse. Most often it is greens and vegetables. At this stage, you have to choose a cultivation method, traditional or innovative, for example hydroponics. When selecting an assortment, it is important to take into account the demand and the general specifics of this industry in your region, for this we are working on the next section |
Market and industry analysis | The greenhouse business plan, as a rule, contains a detailed description and features of the regional (regional, district) greenhouse market. In addition, it is extremely important for the success of the whole business to find potential wholesale buyers, evaluate sales opportunities, and report on working with wholesalers. The business plan indicates not only future buyers, but also the volumes of purchases planned by them |
Production Plan and Organizational Plan | - Acquisition or lease of land.
- The construction of greenhouses.
- Carrying out all necessary communications.
- Staff recruitment if necessary
|
Sales plan | Prior to the start of all activities to organize a greenhouse business, it is necessary to draw up a sales plan. We need to think about what the circle of customers will be, and if possible, establish contacts with agricultural bases, shops, supermarkets, food markets and other counterparties |
Financial and investment plan | Is the greenhouse business profitable? The financial plan will help to answer this question. In order to calculate the amount of profit and the breakeven point, it is necessary to keep track of upcoming income and expenses, to understand the features of tax accounting and other indicators |
Financial plan
The basis of the financial plan is the forecasting of upcoming income and expenses, without this the greenhouse business cannot become successful. In addition, the entrepreneur will have to independently keep these articles, calculate the planned and actual profit, net profit, break-even point and other indicators. To create a plan and keep records it will be convenient to divide all expenses into lump-sum, fixed and variables:
- One-time costs are costs that will have to be made once, usually at the initial stage (purchase of greenhouses, cars, running water, electricity, etc.).
- Fixed costs - usually these are monthly expenses paid by the businessman in equal amounts (land rent, employee wages, water supply, electricity).
- Variable costs - expenses that arise periodically in different sizes (repair of greenhouses, purchase of fertilizers, fuel and lubricants (fuel) for product delivery).
Based on detailed information about costs, we can calculate the total cost for each month and for the whole year. To simplify the work, a table will help in which we select columns for each month and columns for expense types.
It is significant that in some regions they receive 2-3 crops per year, and in some 4 crops per greenhouse. A business plan allows you to simply calculate the planned income. For this, it is important to know market prices and crop volumes per square meter. Revenues will appear only after the sale of the ripened crop and depend on the type of product, its price on the market.
As an example, we will choose a greenhouse business in greenery. Let's make an approximate calculation for the green onion. In a supermarket, a bunch of onions costs in the spring up to 30 rubles, about 1 kg of onions at the base has about the same cost. From 100 to 120 bulbs are planned to be planted in a greenhouse per 1 m 2 . You can get from 100 to 120 bunches of onions with 1 m 2 . So, 1 m 2 of the greenhouse will bring up to 3000 rubles. Subtract expenses from income and make a profit. Suppose we already incurred one-time costs. There were expenses for heating and watering the greenhouse and others, which amounted to 1 500 rubles:
3000 - 500 = 2500 rubles.
Profit from 1 m 2 is multiplied by the total area of 150 m 2 :
2500 × 150 = 375 thousand rubles.
After deducting the amount of taxes we get a net profit, which will show how successful the greenhouse business is, whether it is profitable to invest your money, time and effort into it. Thus, the return on the greenhouse growing business with the right calculation can be several months. A constant search for customers will allow the entrepreneur to make a profit in the first year of work, so the profitability of the greenhouse business is quite acceptable.
Investment plan
The investment plan contains a scheme of investments or investments for all stages of business development, the amount of initial capital. The first investment will be a greenhouse. A businessman receives design documentation for it and all external networks. It is important to know how much all parts of the equipment cost. It is necessary to plan funds for the construction of greenhouses, connection to networks (electricity, water supply), the purchase of equipment and planting material. These investments are included in the line costs incurred by the businessman until the first profit from greenhouses.
Which greenhouse to choose?
Before acquiring a greenhouse, you have to decide on its type. The type of greenhouse depends on climatic conditions, assortment and farm specifics:
- Greenhouses of summer-light type are simple and put in a couple of hours. This type of building is being built in a few hours. The summer version of greenhouses is mostly used as protection against prolonged rain or pests.
- Winter-type greenhouses that transmit sunlight well will help to create and maintain the necessary microclimate. Therefore, they are more suitable for growing any plants, including flowers.
Materials for greenhouses
Creating a temperature suitable for plants is expensive. A cheap greenhouse will not be able to maintain the desired temperature for a long time. It is important to consider the choice of material that will be used in its construction. The following types of materials are popular today:
- Glass. For a very long time, the greenhouse business at home was built on one of the main materials in this business - glass. It was used to create insulated greenhouses that could be successfully operated until late autumn. Glass transmits up to 90% of the light. But for the cold winter months, it is not suitable, regardless of whether additional heaters are used. Glass has such a disadvantage as fragility, low temperatures can destroy it. And the cost of glazing will be rather big. In this regard, this material is suitable for temporary use.
- Polyethylene is a material used for a long time in many varieties of greenhouses. Its advantage is its low price compared to other materials. But a significant drawback is the small bandwidth. Many plants will need additional light sources. The greenhouse will have to be opened in acceptable weather, so that sunlight enters the plants. The material is notable for its low strength and low heat capacity, therefore it is suitable exclusively for summer greenhouses.
- It is impossible to imagine a home greenhouse business without polycarbonate. It is a product of modern technology, 250 times more durable and 8 times lighter than glass. Its heat capacity is several times higher than that of glass and polyethylene. Only polycarbonate is the ideal material for winter greenhouses. The roof of the greenhouse made of polycarbonate with a thickness of not more than 9 mm allows the greatest penetration of light. The walls can be thicker. When choosing a polycarbonate greenhouse, it is important to know that it is available in two types: monolithic and cellular. Cellular polycarbonate has more advantages, as it is much more transparent and warmer than monolithic. For greenhouse work, cellular polycarbonate is recommended.
Conclusion
Greenhouse farming is a business that must constantly develop and improve. High competition in industries reduces the rate of return. New technologies are emerging, but at the same time, the cost of equipment is growing. Therefore, a businessman must be able not only to sell the grown, but to navigate the market, use innovations and expand the business.