Table of Content

    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

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    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 Business Plan - 3 Years Profit Forecast

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    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.

    Aquaponics Business Plan - Startup cost

    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

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    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

    Strategic/Operational Business Plan

    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.

    Aquaponics Business Plan - Market Segmentation

    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.

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    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.

    Aquaponics Business Plan - Unit Sales

    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

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    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.

    Aquaponics Business Plan - Brake-even Analysis

     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

    Aquaponics Business Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Aquaponics Business Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Aquaponics Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Aquaponics Business Plan - GROSS MARGIN YEARLY

    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.

    Aquaponics Business Plan - Projected Cash Flow

     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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