Do you want to start hydroponics farm business?

Are you looking for a type of business which will have immensely increased demand in the near future? Well, you might like to start a hydroponics farm, if you are a person with a knowledge of plants and if you can invest what is required for this business.

Hydroponics farm business includes growing plants, greenery, flowers, herbs, etc. by providing them the optimal environment and essential nutrients without indulging yourself in the draining and actual lengthy procedure of growing plants in soil. If you want to know more about hydroponics farm and how to start it, you can take help from this sample hydroponics farm business plan of a startup named, ‘Alice Agritech’.

Executive Summary

2.1 The Business

Alice Agritech will be a registered and licensedhydroponics business owned by Alice Grainger. The business will be started in New Orleans and will include growing greenery and plants by using the latest techniques of growing more nutritious food by providing optimal medium required by plants.

2.2 Management

The first step before you start a hydroponics business, is to make a detailed hydroponics business plan. As hydroponics business will involve establishing an indoor area usually a greenhouse, providing plants the essential nutrients, establishing the whole system of power, and drainage alongside packaging and selling the grown foods. Therefore, in order to manage all these tasks, you have to devise a detailed management plan before you take a startup.

2.3 Customers

Our customers will mostly be the departmental stores, food companies, hotels, and restaurants and some individual buyers, residing in New Orleans.

2.4 Target of the Company

Our primary target is to grow and sell tastier and more nutritious food to our customers in whole New Orleans creating an example of standard and quality. Our financial business target is as follows:

Hydroponics Farm Business Plan 1

Hydroponics Farm Business Plan 3
Strategic/Operational Business Plan
This deliverable will contain a business development road map that will help the company achieve its goals and become a market leader.

Company Summary

3.1 Company Owner

Alice Grainger will be the owner of Alice Agritech. Alice has a Master’s degree in Horticulture from Cornell University. From gardening as a hobby to starting hydroponics business, she is solely driven by her passion about plants and agriculture and the urge to run her own company.

3.2 Why the Business is being started

It is not wrong to say that Alice is passionate about plant-related fields, but the reason why she is starting this business is to turn hydroponics business opportunities into money. Nowadays the concept of rural areas and agricultural farms is terminating due to the high labor and time required to grow plants in soil.

Hydroponic plants are easy to grow and maintain. In a hydroponic farm, not only their quantity and growth rate would increase but also their nutrition content and taste will be much more craving than the traditionally grown outs. Considering the importance of producing good food in bulk these days as well as in the coming days, Alice has decided to start a hydroponics farm.

3.3 How the Business will be started

All the details of how Alice Agritech will be started, are provided in this sample business plan. So, if you too are looking for how to start your own hydroponics business you can take help from here.

Hydroponics system will be installed in an indoor facility bought in New Orleans. The plants will be kept in trays and buckets and provided with growth promoting environment by supplementing them with the proper nutrient intake as told by specialists. Proper light, heat, drainage, and cutting of plants will be insured by Alice and her dedicated staff.

The detailed start-up information is given below:

Hydroponics Farm Business Plan 4

Start-up Expenses
Legal$55 300
Insurance$32 750
Rent$32 500
Research and Development$32 750
Expensed Equipment$32 750
Signs$1 250
Start-up Assets$220 875
Cash Required$332 500
Start-up Inventory$32 625
Other Current Assets$232 500
Long-term Assets$235 000
Total Requirements$245 000
Start-up Expenses to Fund$151 875
Start-up Assets to Fund$123 000
Assets$23 125
Non-cash Assets from Start-up$18 750
Cash Requirements from Start-up$0
Additional Cash Raised$18 750
Cash Balance on Starting Date$21 875
Liabilities and Capital$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Capital$620 125
Planned Investment$620 125
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$313 125
Total Funding$255 000

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It will be really helpful for you in future if you include your products and services in your hydroponics business plan template. Predetermining the services will help you in making the proper arrangements and hoarding the required nutrient supplements. The services Agritech will be providing are enlisted here:

  • We’ll be producing healthier and tastier leafy green and other vegetables and some fruits including potatoes, mint, cabbage, lettuce, tomatoes, onions, green beans, spinach, fenugreek plant, lemons, green chili, bell peppers, strawberries, blueberries, and cherries.
  • We’ll be growing all types of greenery and flowers used for decoration.
  • We’ll also be growing some herbs hydroponically including coriander, mint, basil, thyme, chives, and sage.
  • We’ll be having an Edible Bar for the people to visit us, watch our extraordinary system and try our foods.

Marketing Analysis of Hydroponics Farm Business

If you are going to start hydroponics business, you are fortunate enough in the case of the target market and marketing trends. Nowadays the concept of growing plants in soil is terminating and people are searching for an approach by which they will be able to grow plants speedily and efficiently in large quantity without compromising on their quality.


The only thing you have to worry about is to find a perfect location for your business with a less or no number of existing hydroponic farms. Do research on how to open a hydroponics business and devise a plan to go ahead.

Franchise Business Plan

5.1 Market Trends

The market trends of hydroponics business are extremely satisfying. There are currently 3 thousand hydroponic farms running in the United States generating a revenue of $891 million annually, and their number is expected to increase over the next years. IBISWorld has reported a 1.2 percent growth rate for hydroponics business.

As it is a business which remains active round the year, you will be able to supply your products to your buyers throughout the year making a considerable profit. This is the right time to enter this venture, but before looking for how to start a hydroponics supply business, make sure that you have studied the market thoroughly in which you will be serving.

5.2 Marketing Segmentation

The target group of customers as identified by Alice Agritech are given here in detail.

hydroponic farming business plan

5.2.1 Restaurants and Hotels

The biggest target group availing our services will comprise of the hotels and restaurants running in New Orleans. By our hydroponics system, we’ll be able to supply them our packed, high-quality vegetables and herbs in bulk quantities on a daily basis.

5.2.2 Departmental Stores & Food Companies

We’ll contact various departmental stores and food companies located near to us to supply our products to them. As they are also expected to buy our products in bulk, so we’ll be offering several discounts in order to get introduced to them.

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5.2.3 Individual Buyers

The last group of our target customers will be the residents of New Orleans who are expected to purchase our packed products, decorative plants, and to visit our edible bar. They will surely like our edible bar where they can experience the taste of our products and watch our procedures.

The detailed market analysis of our potential customers is given in the following table:

Market Analysis
Potential CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
Individual Buyers32%11 43313 34416 55318 74520 54513,43%
Restaurants and Hotels48%22 33432 34443 66552 54466 43210,00%
Stores and Food Companies20%12 86714 43315 99917 56519 13115,32%
Total100%46 63460 12176 21788 854106 1089,54%

5.3 Business Target

Our aim is to become the most recognized and most visited hydroponic farm in the whole city. Our financial goals to be achieved are:

  • To balance the startup costs with earned profits by six months of the launch
  • To earn a profit revenue of $10k per month by the end of the first year

5.4 Product Pricing

After considering the market demands and to run our business without compromising quality, we have priced all our products in similar ranges as of our competitors.

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After analyzing the target groups and market trends, it is time for you to make a strategy to gain your target customers after which you will be able to meet your business targets. In this hydroponics farm business plan pdf format you can know about the competitive edges Alice Agritech will have over her competitors. This hydroponics business plan sample also enlist some of the advertisement techniques followed by Alice Agritech.

6.1 Competitive Analysis

Our biggest competitive advantage is the variety and quality of the products we’ll be offering. We’ll be producing fresh, healthier and tastier food for our customers. We’ll be using pure organic nutrients to supplement our plants in the supervision of certified nutrition specialist. Secondly, only we in the whole New Orleans are having an Edible Bar where people can sit, enjoy and eat vegetables and fruit by plucking them with their own hands. Lastly, our advertisement plan to get introduced to major restaurants, departmental stores and companies will also be our competitive advantage.

6.2 Sales Strategy

Alice Agritech will be advertising her services by adopting these means.

  • We will advertise our services by posting effective billboards and banners.
  • We will print business card template hydroponics and send them to the food companies, departmental stores, and restaurants near to us.
  • We’ll offer free transport of our packed products to the food companies and restaurants for the first three months of our launch.
  • We will get our website developed by expert developers and run a campaign through our website and social sites.


6.3 Sales Yearly

Hydroponics Farm Business Plan 6

6.4 Sales Monthly

Hydroponics Farm Business Plan 8

6.5 Sales Forecast

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Sales Forecast
Unit SalesYear 1Year 2Year 3
Vegetables & Fruits1 887 0302 680 3202 588 240
Flowers802 370815 430823 540
Herbs539 3207702301 002 310
Edible Bar265 450322 390393 320
TOTAL UNIT SALES3 494 1704 588 3704 807 410
Unit PricesYear 1Year 2Year 3
Vegetables & Fruits$140,00$150,00$160,00
Flowers$600,00$800,00$1 000,00
Edible Bar$650,00$750,00$850,00
Vegetables & Fruits$2 149 800$2 784 000$3 383 200
Flowers$120 050$194 500$268 500
Herbs$50 110$71 600$93 000
Edible Bar$139 350$194 600$249 850
Direct Unit CostsYear 1Year 2Year 3
Vegetables & Fruits$0,70$0,80$0,90
Edible Bar$3,00$3,50$4,00
Direct Cost of Sales
Vegetables & Fruits$989 300$1 839 000$2 679 700
Flowers$66 600$119 900$173 200
Herbs$17 900$35 000$52 100
Edible Bar$19 400$67 600$115 800
Subtotal Direct Cost of Sales$1 294 100$1 699 400$2 104 700

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Personnel plan

If you are going to start up hydroponics business, you must hire your staff after rigorous testing and train them well, as hydroponics farm need proper understanding, to be maintained.

7.1 Company Staff

Alice will supervise all the tasks by herself, the staff she will hire is listed here with a little job description.

  • 1 General Manager to manage the overall operations of the farm
  • 2 Accountants to maintain financial records
  • 2 Engineers for operating and maintaining the hydroponics system
  • 1 Technician to deal with technical issues at any time
  • 10 Field Employees for operating farm
  • 1 Store Manager to manage and maintain the retail store and edible bar
  • 1 Nutrition Specialist to ensure the quality of products
  • 2 Sales Executives responsible for marketing the business
  • 2 Drivers to transport products to various retail locations, hotels, and restaurants

7.2 Average Salary of Employees

 Personnel Plan
Year 1Year 2Year 3
General Manager$85 000$95 000$105 000
Accountants$145 000$152 000$159 000
Engineers$152 000$159 000$166 000
Technician$50 000$55 000$60 000
Field Employees$550 000$650 000$750 000
Store Manager$145 000$152 000$159 000
Nutrition Specialist$50 000$55 000$60 000
Sales Executives$187 000$194 000$201 000
Drivers$85 000$95 000$105 000
Total Salaries$600 000$705 000$810 000

Financial Plan

If you want to start a hydroponics farm, make a rough estimation demonstrating whether you can invest the required amount for this business or not. You will have to buy land and install greenhouse as well as hydroponics systems to initialize your business. Not only this you will need a lot of staff to maintain your hydroponics farm. So, if you are looking for how to start hydroponics business keep in mind the expenses and investments you will have to do.

Considering the importance of an accurate financial plan for this business, Alice had decided to get this task done by a financial expert. Her sample financial plan showing that how she will balance the startup costs by the profits earned is given here for your help. But still, it is strongly recommended to get this important task done by a professional according to your services, market, expenses, and investment.

8.1 Important Assumptions

 General Assumptions
Year 1Year 2Year 3
Plan Month123
Current Interest Rate10,00%11,00%12,00%
Long-term Interest Rate10,00%10,00%10,00%
Tax Rate26,42%27,76%28,12%

8.2 Brake-even Analysis

Hydroponics Farm Business Plan 12

 Brake-Even Analysis
Monthly Units Break-even5530
Monthly Revenue Break-even$159 740
Average Per-Unit Revenue$260,87
Average Per-Unit Variable Cost$0,89
Estimated Monthly Fixed Cost$196 410

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss
Year 1Year 2Year 3
Sales$309 069$385 934$462 799
Direct Cost of Sales$15 100$19 153$23 206
TOTAL COST OF SALES$15 100$19 153$23 206
Gross Margin$293 969$366 781$439 593
Gross Margin %94,98%94,72%94,46%
Payroll$138 036$162 898$187 760
Sales and Marketing and Other Expenses$1 850$2 000$2 150
Depreciation$2 070$2 070$2 070
Leased Equipment$0$0$0
Utilities$4 000$4 250$4 500
Insurance$1 800$1 800$1 800
Rent$6 500$7 000$7 500
Payroll Taxes$34 510$40 726$46 942
Total Operating Expenses$188 766$220 744$252 722
Profit Before Interest and Taxes$105 205$146 040$186 875
EBITDA$107 275$148 110$188 945
Interest Expense$0$0$0
Taxes Incurred$26 838$37 315$47 792
Net Profit$78 367$108 725$139 083
Net Profit/Sales30,00%39,32%48,64%

8.3.1 Profit Monthly

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8.3.2 Profit Yearly

Hydroponics Farm Business Plan 16

8.3.3 Gross Margin Monthly

Hydroponics Farm Business Plan 18

8.3.4 Gross Margin Yearly

Hydroponics Farm Business Plan 20

8.4 Projected Cash Flow

Hydroponics Farm Business Plan 22

 Pro Forma Cash Flow
Cash ReceivedYear 1Year 2Year 3
Cash from Operations
Cash Sales$40 124$45 046$50 068
Cash from Receivables$7 023$8 610$9 297
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$47 143$53 651$55 359
ExpendituresYear 1Year 2Year 3
Expenditures from Operations
Cash Spending$21 647$24 204$26 951
Bill Payments$13 539$15 385$170 631
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
SUBTOTAL CASH SPENT$35 296$35 489$43 882
Net Cash Flow$11 551$13 167$15 683
Cash Balance$21 823$22 381$28 239

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet
AssetsYear 1Year 2Year 3
Current Assets
Cash$184 666$218 525$252 384
Accounts Receivable$12 613$14 493$16 373
Inventory$2 980$3 450$3 920
Other Current Assets$1 000$1 000$1 000
TOTAL CURRENT ASSETS$201 259$237 468$273 677
Long-term Assets
Long-term Assets$10 000$10 000$10 000
Accumulated Depreciation$12 420$14 490$16 560
TOTAL ASSETS$198 839$232 978$267 117
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities
Accounts Payable$9 482$10 792$12 102
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
Long-term Liabilities$0$0$0
TOTAL LIABILITIES$9 482$10 792$12 102
Paid-in Capital$30 000$30 000$30 000
Retained Earnings$48 651$72 636$96 621
Earnings$100 709$119 555$138 401
TOTAL CAPITAL$189 360$222 190$255 020
TOTAL LIABILITIES AND CAPITAL$198 839$232 978$267 117
Net Worth$182 060$226 240$270 420

8.6 Business Ratios

 Ratio Analysis
Sales Growth4,35%30,82%63,29%4,00%
Percent of Total Assets
Accounts Receivable5,61%4,71%3,81%9,70%
Other Current Assets1,75%2,02%2,29%27,40%
Total Current Assets138,53%150,99%163,45%54,60%
Long-term Assets-9,47%-21,01%-32,55%58,40%
TOTAL ASSETS100,00%100,00%100,00%100,00%
Current Liabilities4,68%3,04%2,76%27,30%
Long-term Liabilities0,00%0,00%0,00%25,80%
Total Liabilities4,68%3,04%2,76%54,10%
NET WORTH99,32%101,04%102,76%44,90%
Percent of Sales
Gross Margin94,18%93,85%93,52%0,00%
Selling, General & Administrative Expenses74,29%71,83%69,37%65,20%
Advertising Expenses2,06%1,11%0,28%1,40%
Profit Before Interest and Taxes26,47%29,30%32,13%2,86%
Main Ratios
Total Debt to Total Assets2,68%1,04%0,76%67,10%
Pre-tax Return on Net Worth66,83%71,26%75,69%4,40%
Pre-tax Return on Assets64,88%69,75%74,62%9,00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19,20%21,16%23,12%N.A.
Return on Equity47,79%50,53%53,27%N.A.
Activity Ratios
Accounts Receivable Turnover4,564,564,56N.A.
Collection Days9299106N.A.
Inventory Turnover19,722,5525,4N.A.
Accounts Payable Turnover14,1714,6715,17N.A.
Payment Days272727N.A.
Total Asset Turnover1,841,551,26N.A.
Debt Ratios
Debt to Net Worth0-0,02-0,04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120 943$140 664$160 385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0,450,480,51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23,6627,0130,36N.A.
Sales/Net Worth1,681,290,9N.A.
Dividend Payout000N.A.

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