Hydroponics has grown from a small niche practice that researchers were interested in to a full-blown sub-industry worth more than $35 billion globally. And despite this booming world of eco-friendly plant growing, there’s still room for smaller, local businesses who can supply local markets and companies with fresh-grown produce.
The Hydroponic Business Model
Vertical hydroponic farm systems can generate, on average, revenues of $41.16 per square foot. For perspective, the average energy cost per square foot in small, vertical hydroponic farms is just $3.45. This makes it one of the most highly profitable farming systems around.
But not all hydroponic farms – vertical or otherwise – are profitable. Thus, it ultimately comes down to how you structure the business, the equipment and systems you use, and how diligent you are with your processes.
Tips for Starting Your Hydroponics Business
If you’re interested in starting a small, local hydroponics business to supply markets, stores, and restaurants with fresh produce, your head is in the right place.
The big question is, where do you start?
Here are some tips:
- Learn the Basics of Hydroponics
Before diving into the business, make sure you understand the basics of hydroponics. Hydroponic systems come in various types, such as nutrient film technique (NFT), deep water culture (DWC), and aeroponics. Each system has its own advantages and is suitable for different types of plants. Spend time researching and learning about these systems to decide which one is best for your business.
You should also learn about the types of plants that grow well in hydroponic systems. Leafy greens like lettuce and spinach, herbs like basil and mint, and certain fruits like strawberries and tomatoes are popular choices. (Flowers as well.) When you understand the needs of these plants, such as light, temperature, and nutrient requirements, you can manage your hydroponic farm much more effectively.
- Create a Business Plan
A solid business plan is obviously key for any successful business. So, it makes sense to begin by outlining your business goals and objectives. Consider:
- What do you want to achieve with your hydroponics business?
- Are you aiming to supply local restaurants, sell at farmers’ markets, or provide produce for grocery stores?
- Will you be running all of the operations, or will you hire someone to run the business for you?
Next, consider your target market. Who will buy your produce? When you understand your customers, you can tailor your products and marketing strategies to meet their specific needs.
Your business plan should also include a financial plan.
- Calculate the startup costs, such as equipment, seeds, nutrients, and utilities.
- Estimate your ongoing expenses and project your revenue.
- Determine what your break-even point is, so that you can set goals for output.
Running calculations like these will help you determine how much capital you need and when you can expect to start making a profit.
- Choose a Location
The location of your hydroponic farm is extremely important. If you’re growing indoors, you’ll need a space that can accommodate your equipment and provide the right environment for your plants. This could be a basement, a greenhouse, or a dedicated grow room. Wherever it is, make sure the space has access to electricity, water, and proper ventilation.
If you’re planning an outdoor hydroponic farm, consider factors like sunlight, weather conditions, and space for expansion. An outdoor setup might require additional structures like shade nets or greenhouses to protect your plants from harsh weather.
- Purchase Equipment and Supplies
Once you’ve chosen a location, it’s time to purchase the necessary equipment and supplies. The basic equipment for a hydroponic system includes grow lights, pumps, reservoirs, nutrient solutions, and grow media (such as clay pellets or rock wool). You’ll also need seeds or seedlings to start your crops.
Look for reliable suppliers and compare prices to ensure you get the best value for your money. It might be tempting to cut costs, but high-quality equipment will save you time and money in the long run by reducing maintenance and improving plant yields.
As you scale up and begin building out larger systems, you’ll also need things like hydroponic chillers to maintain the ideal temperature and give your plants the best possible environmental factors. But for now, focus on the basics.
- Set Up Your Hydroponic System
Setting up your hydroponic system can be the most exciting part of starting your business. Follow the instructions for your chosen system carefully and make sure everything is installed correctly. Pay attention to the placement of grow lights, pumps, and reservoirs to create optimal growth conditions for your plants. This can take time – be patient!
Once your system is set up, mix the nutrient solution according to the manufacturer’s instructions and fill the reservoirs. Plant your seeds or seedlings in the grow media and place them in the system. At this point, monitoring the pH and nutrient levels becomes an obsession. Make sure you stay on top of this.
- Market Your Produce
With your hydroponic farm up and running, it’s time to start marketing your produce. While social media and a good website are certainly important, it ultimately comes down to effective networking for most people.
Consider joining local farmers’ markets or partnering with restaurants and grocery stores to sell your produce. Offering free samples or hosting farm tours can also help attract customers and build relationships within your community.
Putting it All Together
Running a hydroponics business requires continuous monitoring and adjustment. So make sure you keep track of your plant growth, nutrient levels, and environmental conditions. If you notice any issues, such as slow growth or nutrient deficiencies, make adjustments to your system or nutrient solution as needed. The more you iterate, the healthier your business will become!