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Do you want to start aquaponics business?
Do you wish to start a aquaponics business? Aquaponics business has tremendously grown in the last few years. With agriculture becoming a main source of livelihood, you definitely make a lot of money in this business. One of the strongholds about this business is using creativity to produce food for different group of people from nonprofit, urban people and communities among others. Everyone needs to eat to function properly, and as long as you are growing healthy foods in your aquaponics farm, you will make cash. There are so many niche categories to choose from and with a well-laid out commercial cultivation business plan, you’re guaranteed to make good profits.
Executive Summary
2.1 The Business
The aquaponics business will be registered as Mary’s Shed and will be located in Baltimore, Maryland. The business will be owned by Ann Marie who’s an experienced agriculturist by profession.
2.2 Management Team
Ann Marie who’s the owner and manager of Mary’s Shed is an experienced agriculturist with a wide experience in the aquaponics industry that spans over 15 years. During her career, Ann has worked with various aquaponics farms and industry such as Ouroboros Farms gathering essential experience associated with aquaponics industry.
2.3 Customer Focus
In this aquaponics business model, focus will be on targeting customers who love eating healthy grown vegetables and animals. All food grown in Mary’s Shed will use a chemical-free method of growing.
2.4 Business Target
Mary’s Shed plans to offer healthy, chemical free and high quality products to a wide range of customers. After watching the local trends, Mary’s Shed is planning to target both local and regional customers.
Aquaponics Company Summary
3.1 Company Owner
Ann Marie is an experienced agriculturist who has had the opportunity to work in various reputable aquaponics farms across the United States. Given her past experience, she knows how to start aquaponic farming business plan. Ann understands the various aspects involved in the niche selection, business marketing and the right strategy to use.
3.2 Aim of Starting the Aquaponics Business
Aquaponic businesses have become popular in recent times thus making the need to have farmers who can creatively cater for customer needs without affecting the environment negatively. People love eating healthy chemical free vegetables and animals because they don’t expose one to diseases but instead boost their health. Mary has the perfect approach to make sure customers get what they are looking for.
3.3 How the Business will be Started
Having worked in the aquaponic industry for over fifteen years, Ann Marie is a pro in aquaponics businesses as she has helped other businesses succeed. Given her agriculture experience, Ann clearly understands what needs to be done to come up with an all-inclusive financial plan for Mary’s Shed. She also plans to make use of free aquaponics business plans available on the internet.
| Start-up Expenses | |
| Legal | $3,000 |
| Consultants | $5,000 |
| Insurance | $16,000 |
| Rent | $12,000 |
| Research and Development | $15,000 |
| Expensed Equipment | $6,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $61,000 |
| Start-up Assets | $0 |
| Cash Required | $80,000 |
| Start-up Inventory | $35,000 |
| Other Current Assets | $22,000 |
| Long-term Assets | $10,000 |
| TOTAL ASSETS | $25,000 |
| Total Requirements | $20,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $100,000 |
| Start-up Expenses to Fund | $30,000 |
| Start-up Assets to Fund | $20,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $18,000 |
| Non-cash Assets from Start-up | $12,000 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $20,000 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $30,000 |
| Investor 2 | $40,000 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $12,000 |
| Loss at Start-up (Start-up Expenses) | $40,000 |
| TOTAL CAPITAL | $45,000 |
| TOTAL CAPITAL AND LIABILITIES | $30,000 |
| Total Funding | $120,000 |
Services for Customers
Having a well-thought-out aquaponic farm business plan will come in handy for the business development and service delivery. Mary’s Shed plans to offer its customers a wide range of awesome products. One of the best parts about starting an aquaponics business is it contributes positively to people health and wellbeing. Mary’s Shed hopes to conduct a comprehensive research to understand better what kind of vegetables, fruits and animals people prefer to eat. In order to successfully create an aquaponic business, it is essential to identify the products you wish to see and try to diversify where necessary. In this case, Mary’s Shed is planning to offer customers the following products:
- Grow fresh water fish including tilapia, silver perch, eel-tailed catfish, jade perch and Murray cod.
- Green leafy vegetables such as Chinese cabbage, lettuce, spinach, watercress, among others
- Fruits such as bananas, oranges, pineapple, strawberries and melons etc
- Healthy herbs to help people boost their immune systems which include basil, coriander, parsley, lemongrass, sage and mint among others.
Note
In order to successfully create an aquaponic business, it is essential to identify the products you wish to see and try to diversify where necessary.
Marketing Analysis of Aquaponics Business
Operational and Strategic Planning
Ever since the growing trend of healthy eating, the market of organically grown vegetables, fruits and animals has greatly increased. The market has changed and customers want to eat chemical free grown food. With the rate of lifestyle diseases people are suffering from everyday such as cancer and diabetes, there is a need for healthy and nutritious vegetables and herbs. Starting an aquaponics farm business is a dream come true for Ann Marie. The aquaponics farm business plan at hand will use the aquaponic cycle technology which is water efficient, chemical free and sustainable method of growing.
According to recent research, the aquaponics business field had a mind blowing potential market size of €180m in 2013 and this is expected to go past €1 billion in sales by year 2020. Mary’s Shed plans to tap into the increasing market and thanks to a comprehensive aquaponics business plan, the business will be successful.
5.1 Market Segment
For Mary’s Shed to properly meet the needs of its customers, the professional business planning to offer various healthy products whose demand is high. Thus way, the business can effectively reach out to customers. In the aquaponics business plan sample, Mary’s Shed has carried out an in-depth market analysis to target the right customers with the right product in order to make them long term customers.
5.1.1 Households
Baltimore has a high population of households that are in need of healthy vegetables and meat. Research has shown an increase over the years in healthy food consumption in many households in Baltimore. People have become healthier conscious and want their children and loved ones to consume health food options. Given the demand for local healthy foods, Mary Shed plans to target these households to constantly supply them with chemical free grown fish, vegetables and herbs. According to Mary’s Shed aquaponics business plan template, this will be amojor revenue source for the business.
5.1.2 Retail Shops & Supermarkets
Baltimore has a many supermarkets and retail shops that sell vegetables and herbs. Most working class people pass by the supermarket frequently. Mary’s Shed plans to approach various supermarkets and retail shop to supply them with healthy leafy vegetables and fish. Since vegetables and fish are commonly loved by people, the supermarkets will use Mary’s Shed as one of their main vegetable supplier.
5.1.3 Hotels
Baltimore is a home to many prestigious and beautiful hotels in the United State. Most of these hotels require herbs, vegetables and fish to cook various recipes for their customers. Mary’s Shed plans to supply most of these hotels with the products they require making the customers happy. The fact that Mary’s Shed plans to grow chemical free products, it will be one of the selling point to the hotel owners.
5.1.4 Organic Markets
Over the years, the growth of organic markets in Baltimore has grown immensely. People flock to these markets looking for organically grown vegetables and herbs. Since Mary’s Shed plans to grown organic and non-gmo vegetables and plants, the products will definitely be loved by many. The business plans to supply sellers in the market with leafy vegetables and herbs.
| Market Analysis | |||||||||
| Potential Customers | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR | ||
| Households | 32% | 23,000 | 25,000 | 27,000 | 29,000 | 31,000 | 10.00% | ||
| Retail Shops and Supermarkets | 27% | 20,000 | 22,000 | 24,000 | 26,000 | 28,000 | 13.00% | ||
| Hotels | 25% | 17,000 | 19,000 | 21,000 | 23,000 | 26,000 | 14.00% | ||
| Organic Markets | 16% | 14,000 | 16,000 | 18,000 | 29,000 | 31,000 | 10.00% | ||
| Total | 100% | 74,000 | 82000 105000 | 107,000 | 116,000 | 6.00% | |||
5.2 Business Target
With the demand for aquaponic products increasing, Mary’s Shed has come up with a unique aquaponics business plan after going through various aquaponics business plan templates. This plan will cater for both local and external customers. Baltimore is a large city and business expects to make awesome sales by putting in place systems that will leave the customers asking for more. This aquaponic business models hopes to achieve an annual growth of between 30 -40%.
5.3 Product Pricing
In order for Mary’s Shed to achieve its targets, a detailed pricing survey was done in order to come up with affordable yet competitive pricing structure after observing the market patterns. Mary’s Shed also hopes to offer the best prices without hurting the business for the first month.
Aquaponics Farming Strategy
The aquaponics farm business has witnessed immense growth and it is expected more people will be joining. The need for healthy and well grown food products has grown and trends indicate an increase of chemical free products. When planning how on starting an aquaponics farm business, focus should be how to attract long term customers to keep a steady flow income.
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6.1 Competitive Analysis
When you start an aquaponics business, it is important to analyze the market and come up with the best strategies to grow the business. Despite the growing number of aquaponics businesses in Baltimore, Mary’s Shed has come up with the best strategies to stay on top of the game.
6.2 Sales Strategy
For Mary’s Shed to advertise its aquaponics products, the following sales strategies will be adopted for marketing the business.
- Find a creative and customer-friendly approach of handling any complains to keep a positive image of the business
- Advertise the aquaponics business on local media channels such as television, radio and newspapers
- Offer new clients low prices for the first month in order to entice and allow them to see the quality of products
- Always aim to provide high quality chemically free vegetables.
- Advertise the business using digital marketing strategies such as Social media platforms (Facebook, Twitter and Instagram).
6.3 Sales Forecast
To achieve its sales targets, Mary’s Shed has formulated a detailed sales forecast to show how the subscription box business will perform when it begins operations.
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Fresh Water Fish | 400,000 | 410,000 | 420,000 |
| Green Leafy Vegetables | 350,000 | 360,000 | 370,000 |
| Herbs | 300,000 | 310,000 | 320,000 |
| Fruits | 250,000 | 260,000 | 270,000 |
| TOTAL UNIT SALES | 1,300,000 | 1,340,000 | 1,380,000 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Fresh Water Fish | $250.00 | $260.00 | $270.00 |
| Green Leafy Vegetables | $100.00 | $110.00 | $120.00 |
| Herbs | $200.00 | $210.00 | $220.00 |
| Fruits | $300.00 | $310.00 | $320.00 |
| Sales | |||
| Fresh Water Fish | $250,000 | $260,000 | $270,000 |
| Green Leafy Vegetables | $200,000 | $210,000 | $220,000 |
| Herbs | $150,000 | $160,000 | $170,000 |
| Fruits | $100,000 | $110,000 | $120,000 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Fresh Water Fish | $2.00 | $3.00 | $4.00 |
| Green Leafy Vegetables | $1.50 | $2.50 | $3.50 |
| Herbs | $1.20 | $2.00 | $2.70 |
| Fruits | $3.00 | $3.50 | $4.00 |
| Direct Cost of Sales | |||
| Fresh Water Fish | $100,000 | $110,000 | $120,000 |
| Green Leafy Vegetables | $60,000 | $70,000 | $80,000 |
| Herbs | $20,000 | $25,000 | $30,000 |
| Fruits | $35,000 | $40,000 | $450,000 |
| Subtotal Direct Cost of Sales | $315,000 | $330,000 | $345,000 |
Personnel Plan for Commercial Aquaponics
Mary’s Shed plans to employ an experienced small team of staff to run the business. How to start an aquaponic business expects you to identify your personnel team and what each role the member will play. It’s essential to come up with a staff budget to help the business know how much it will spend on staff salaries to keep them motivated.
7.1 Personnel Plan for Commercial Aquaponics
Mary’s Shed is owned by Ann Marie who will also become the manager of the aquaponic business. As preparations take shape to open the business, the following staff members will be hired to help on making the dream of the commercial aquaponics business plan come true. The team is expected to work closely together to facilitate a smooth flow of business activities.
Manager/Owner
1 Marketing Executive
1 Operations Manager
1 Accountant
2 Agriculturists
2 Aquaponic Experts
The staff will be trained in order to familiarize themselves with how an aquaponic business is managed on a day to day basis.
7.2 Average Salaries
Mary’s Shed plans to remunerate staff members the following salaries in the first three years of operation.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $40,000 | $45,000 | $50,000 |
| Operation Manager | $20,000 | $22,000 | $24,000 |
| 1 Sales and Marketing Executive | $25,000 | $27,000 | $29,000 |
| Accountant | $25,000 | $30,000 | $35,000 |
| 2 Agriculturists | $60,000 | $64,000 | $68,000 |
| 2 Aquaponic Experts | $62,000 | $64,000 | $66,000 |
| Total Salaries | $232,000 | $252,000 | $272,000 |
Financial Plan for Aquaponics Farm
Mary’s Shed has come up with an in-depth financial plan that will act as a guide on how the business will be run and managed. In this aquaponic farm business model, key financial parameters have been noted down. Ann Marie will raise capital from her personal savings and will collaborate with two investors. This requires make up business plan for investors. Prior planning how to start an aquaponic farm business, you need to know how about the expenses and costs involved to launch operations. A loan will also be secured to finance any budget shortage. Given the aquaponics profit margin, this is a business with high prospects if executed well.
8.1 Important Assumptions
The financial forecast for Mary’s Shed will be based on the assumptions below.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.00% | 12.00% | 16.00% |
| Long-term Interest Rate | 8.00% | 8.00% | 8.00% |
| Tax Rate | 12.00% | 16.00% | 20.00% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
The Brake-even Analysis for Mary’s Shed is shown in the graph below.
| Brake-Even Analysis | |
| Monthly Units Break-even | 5000 |
| Monthly Revenue Break-even | $390,000 |
| Assumptions: | |
| Average Per-Unit Revenue | $170.00 |
| Average Per-Unit Variable Cost | $5.00 |
| Estimated Monthly Fixed Cost | $400,000 |
8.3 Projected Profit and Loss
Below is the Profit and Loss information for the subscription box business calculated on a monthly and annual basis.
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $520,000 | $540,000 | $560,000 |
| Direct Cost of Sales | $50,000 | $60,000 | $70,000 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $50,000 | $60,000 | $70,000 |
| Gross Margin | $420,000 | $450,000 | $480,000 |
| Gross Margin % | 60.00% | 70.00% | 80.00% |
| Expenses | |||
| Payroll | $350,000 | $370,000 | $390,000 |
| Sales and Marketing and Other Expenses | $6,000 | $8,000 | $10,000 |
| Depreciation | $3,000 | $5,000 | $7,000 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3,000 | $6,000 | $9,000 |
| Insurance | $2,000 | $3,000 | $4,000 |
| Rent | $12,000 | $14,000 | $16,000 |
| Payroll Taxes | $25,000 | $28,000 | $31,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $320,000 | $350,000 | $380,000 |
| Profit Before Interest and Taxes | $40,000 | $50,000 | $60,000 |
| EBITDA | $30,000 | $35,000 | $40,000 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $25,000 | $27,000 | $29,000 |
| Net Profit | $80,000 | $90,000 | $100,000 |
| Net Profit/Sales | 35.00% | 40.00% | 45.00% |
8.3.1 Monthly Profit
8.3.2 Yearly Profit
8.3.3 Monthly Gross Margin
8.3.4 Yearly Gross Margin
8.4 Projected Cash Flow
Below is a summary of pro forma cash flow, subtotal cash received, subtotal cash spent, subtotal cash from operations and subtotal cash spent on operations.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $150,000 | $160,000 | $170,000 |
| Cash from Receivables | $10,000 | $12,000 | $14,000 |
| SUBTOTAL CASH FROM OPERATIONS | $160,000 | $172,000 | $184,000 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $60,000 | $65,000 | $70,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $22,000 | $24,000 | $26,000 |
| Bill Payments | $16,000 | $20,000 | $24,000 |
| SUBTOTAL SPENT ON OPERATIONS | $38,000 | $44,000 | $50,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $38,000 | $44,000 | $50,000 |
| Net Cash Flow | $15,000 | $18,000 | $21,000 |
| Cash Balance | $26,000 | $29,000 | $32,000 |
8.5 Projected Balance Sheet
Below is a Projected Balance Sheet for Mary’s Shed that shows assets, capital, liabilities, long term assets and current liabilities.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $250,000 | $270,000 | $290,000 |
| Accounts Receivable | $20,000 | $22,000 | $24,000 |
| Inventory | $6,000 | $7,000 | $8,000 |
| Other Current Assets | $5,000 | $5,000 | $5,000 |
| TOTAL CURRENT ASSETS | $281,000 | $304,000 | $327,000 |
| Long-term Assets | |||
| Long-term Assets | $13,000 | $12,000 | $14,000 |
| Accumulated Depreciation | $15,000 | $20,000 | $25,000 |
| TOTAL LONG-TERM ASSETS | $4,000 | $2,000 | $1,000 |
| TOTAL ASSETS | $302,000 | $320,000 | $340,000 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $14,000 | $16,000 | $18,000 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,000 | $20,000 | $25,000 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $20,000 | $25,000 |
| Paid-in Capital | $25,000 | $25,000 | $25,000 |
| Retained Earnings | $30,000 | $35,000 | $40,000 |
| Earnings | $120,000 | $130,000 | $140,000 |
| TOTAL CAPITAL | $230,000 | $250,000 | $270,000 |
| TOTAL LIABILITIES AND CAPITAL | $200,000 | $210,000 | $220,000 |
| Net Worth | $220,000 | $240,000 | $260,000 |
8.6 Business Ratios
The following is the Ratio Analysis, Business Net Worth and Business Ratios for Mary’s Shed.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 10.00% | 60.00% | 45.00% | 5.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 12.00% | 6.00% | 3.00% | 15.00% |
| Inventory | 5.00% | 3.00% | 2.00% | 13.00% |
| Other Current Assets | 6.00% | 4.00% | 2.30% | 59.00% |
| Total Current Assets | 120.00% | 140.00% | 160.00% | 50.00% |
| Long-term Assets | -10.00% | -20.00% | -30.00% | 48.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 7.00% | 5.00% | 2.00% | 30.00% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.00% |
| Total Liabilities | 7.00% | 4.00% | 1.20% | 50.00% |
| NET WORTH | 100.00% | 70.00% | 110.00% | 40.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 80.00% | 84.00% | 90.00% | 0.00% |
| Selling, General & Administrative Expenses | 70.00% | 85.00% | 65.00% | 70.00% |
| Advertising Expenses | 5.00% | 3.00% | 2.00% | 8.00% |
| Profit Before Interest and Taxes | 26.00% | 36.00% | 46.00% | 5.00% |
| Main Ratios | ||||
| Current | 20 | 30 | 40 | 2.5 |
| Quick | 30 | 35 | 30 | 3 |
| Total Debt to Total Assets | 8.00% | 4.00% | 2.00% | 65.00% |
| Pre-tax Return on Net Worth | 90.00% | 100.00% | 110.00% | 4.30% |
| Pre-tax Return on Assets | 70.00% | 60.00% | 74.00% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 20.00% | 24.00% | 28.00% | N.A. |
| Return on Equity | 65.00% | 70.00% | 75.00% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7 | 10 | 13 | N.A. |
| Collection Days | 120 | 130 | 240 | N.A. |
| Inventory Turnover | 20 | 24 | 28 | N.A. |
| Accounts Payable Turnover | 12 | 18 | 24 | N.A. |
| Payment Days | 29 | 29 | 29 | N.A. |
| Total Asset Turnover | 6.6 | 5.6 | 4.2 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.09 | -0.03 | N.A. |
| Current Liab. to Liab. | 0 | 0 | 0 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $320,000 | $350,000 | $380,000 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.92 | 0.65 | 0.33 | N.A. |
| Current Debt/Total Assets | 10% | 7% | 4% | N.A. |
| Acid Test | 30 | 34 | 38 | N.A. |
| Sales/Net Worth | 4.3 | 3.3 | 1.7 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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