Do you want to start a tomato farm and need to write a plan? If YES, here is a sample tomato farming business plan template & FREE feasibility report.
Interestingly, tomato is a universal vegetable or fruit because it is grown and eaten around the world. It is used in diverse ways, including raw in salads or incorporated into a variety of dishes, or processed into ketchup or tomato soup. Unripe green tomatoes can also be breaded and fried, used to make salsa, or pickled.
Tomato juice is sold as a drink, and is used in cocktails such as the Bloody Mary. It is important to state that starting a tomato farming business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture. An aspiring entrepreneur can either choose to start on a small or large scale depending on their financial status.
A Sample Tomato Farming Business Plan Template
1. Industry Overview
Tomato farming is a niche idea in the Hydroponics and Vegetable farming industry and operators in this industry grow a wide variety of vegetables in open fields and in greenhouses. But in actual sense, when it comes to commercial cultivation of tomatoes, hydroponic technique is often used in hostile growing environments, as well as high-density plantings.
A tomato is 95 percent water, contains 4 percent carbohydrates and less than 1 percent each of fat and protein. In a 100 gram amount, raw tomatoes supply 18 calories and are a moderate source of vitamin C (17 percent of the Daily Value), but otherwise are absent of significant nutrient content.
According to statistics published by Wikipedia, in 2016, world production of tomatoes was 177 million tonnes, with China accounting for 32 percent of the total, followed by the European Union, India, the united states, and Turkey as the major producers. Global tomato exports were valued at 85 billion US dollars in 2016.
Tomatoes are easy to preserve whole, in pieces, as tomato sauce or paste by home canning. They are acidic enough to process in a water bath rather than a pressure cooker as most vegetables require. The fruit is also preserved by drying, often in the sun, and sold either in bags or in jars with oil.
If you are a close observer of the vegetable farming industry, you will agree that the industry is anticipated to increase due to increasing consumer health consciousness, which has led to increasing demand for fresh produce. While per capita fruit and vegetable consumption has remained stable over in recent time, the price of vegetables have increased as consumers demand premium, fresh vegetables.
So also, the number of both small and large farms have been increasing. Small, local farms are benefiting from the organic, local movement, while large, commercial farms are improving labor efficiency. Going forward, players in the vegetable farming industry will continue to increase revenue generation for their business.
The companies that have the lion share of the market in this industry are NatureSweet Ltd., Houweling’s Tomatoes and Village Farms International Inc. but smaller tomato farms can successfully make profits in the industry.
Statistics has it that in the united states of America alone, there are about 44,900 registered and licensed vegetable farms (tomato farms inclusive) responsible for employing about 132,048 people and the industry rakes in a whooping sum of $20 billion annually. The industry was projected to enjoy -0.7 percent annual growth between 2014 and 2019.
A recent report published by IBISWorld shows that over the five years to 2019, revenue for the Hydroponic Crop Farming industry has mostly decreased. During the five-year period, while overall vegetable prices have increased, industry revenue has been limited by years with significant drops in vegetable prices.
However, extreme weather conditions damaged many crops for fresh field farmers, so grocery stores and farmers’ markets quickly turned to hydroponic farmers to meet their demand.
In particular, drought throughout many parts of the United States over the past five years harmed agricultural industries across the board, presenting an opportunity for hydroponic crop farmers. Over the five years to 2019, industry revenue is expected to decrease at an annualized rate of 0.9 percent to $830.8 million.
As a matter of fact, with the recent advancement in technology, farmers can now comfortably grow varieties of vegetables in a country where such crops can hardly survive and in places where there are few farming land, people can make use of the rooftop (basement) of their houses to cultivate vegetables even for commercial purposes.
One thing is certain when it comes to tomato or vegetable farming in general, if you are able to conduct your market research and feasibility studies before choosing a location for cultivating your tomato, you are more likely not going to struggle to grow the business and also to sell your tomatoes because there are always food processing companies and consumers out there who are ready to buy from you.
2. Executive Summary
Philip Clinton® Tomato Farms, LLC is a registered and licensed commercial vegetable farm with bias in tomato cultivation that will be based in the outskirt of San Antonio, Texas – United States. We have done our detailed market research and feasibility studies and we were able to secure 25 hectares of land to start our tomato farm.
We will always leverage on both field and greenhouse farming to cultivate tomatoes in commercial quantities hence we will construct a structure with walls and roof made essentially of transparent material in which plants requiring regulated climatic conditions are grown.
At Philip Clinton® Tomato Farms, LLC we will be involved in the cultivation of different species of tomatoes such Beefsteak tomatoes, Plum tomatoes, Cherry tomatoes, Grape tomatoes, Campari tomatoes, Pear tomatoes and Oxheart tomatoes et al both in organic and non – organic forms.
We are in the tomato farming business because we want to leverage on the vast opportunities available in the agriculture industry, to contribute our quota in growing the U.S. economy, in national food production, to export agriculture produce from the United States to other countries and over and above to make profit.
Philip Clinton® Tomato Farms, LLC is well positioned to become one of the leading tomato farms in the United States of America, which is why we have been able to source for the best hands and machines to run the business with. We have put processes and strategies in place that will help us employ best practices when it comes to tomato farming and packaging as required by the regulating bodies in the United States of America.
Philip Clinton® Tomato Farms, LLC is a private registered commercial vegetable farm that is owned by Philip Clinton and his immediate family members. The company will be fully and single handedly managed by the owner – Philip Clinton and his immediate family members at least for a period of time.
3. Our Products and Services
Philip Clinton® Tomato Farms, LLC is a commercial vegetable farm that will be involved in cultivating different species of tomatoes via greenhouse and land farming for both the United States’ market and the global market. We are in business to produce tomatoes in commercial quantities.
We will also ensure that we operate a standard tomatoes processing and packaging plant as part of our complimentary business. We will be involved in the;
- Cultivation of different species of tomatoes such as; Beefsteak tomatoes, Plum tomatoes, Cherry tomatoes, Grape tomatoes, Campari tomatoes, Pear tomatoes and Oxheart tomatoes et al both in organic and non – organic forms
- Processing and packaging tomatoes
4. Our Mission and Vision Statement
- Our Vision is to become one of the number one tomato cultivator and exporter not just in Texas, but also in the United States of America.
- Our mission statement as a commercial tomato farming business is to go into full – time cultivation of tomatoes that will not only be consumed in the United States of America, but also exported to other parts of the world.
- We want our well – processed and packaged tomatoes to flood the nooks and crannies of the United States.
Our Business Structure
Philip Clinton® Tomato Farms, LLC is a commercial tomato farm that intends starting small in San Antonio – Texas, but hopes to grow big in order to compete favorably with leading commercial tomato farms in the in the United States. We are aware of the importance of building a solid business structure that can support the kind of world class business we want to own.
At Philip Clinton® Tomato Farms, LLC, we will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the management of the farm. In view of the above, Philip Clinton® Tomato Farms, LLC have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
- General Farm Manager
- Administrator/Accountant
- Field Workers
- Sales and Marketing Executive
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
General Farm Manager
- Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the organization
- Supervise field workers
- Ensure compliance during project executions (especially in the construction of greenhouse and hothouse et al)
- Providing advice on the management of farming activities across all sections
- Responsible for carrying out risk assessment
- Using IT systems and software to keep track of people and progress of crops
- Responsible for overseeing the accounting, costing and sale of farm produce after harvest
- Represent the organization’s interest at various stakeholders’ meetings
- Ensures that farming goals desired result are achieved, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied.
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Oversee the smooth running of the daily farming activities across the various farming sections.
Administrator/Accountant
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment and managing interviewing process
- Carrying out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Responsible for financial forecasting and risks analysis.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Farm Workers
- Responsible for planting and harvesting tomatoes as required by the manager or supervisor
- Responsible for weeding in and around the tomato farm
- Responsible for watering and applying manure (organic fertilizer) or inorganic fertilizer as instructed
- Assist in loading tomatoes meant for deliveries
- Work closely with the General Manager to achieve the organizations’ goals and objectives
6. SWOT Analysis
Philip Clinton® Tomato Farms, LLC do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis. We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard commercial tomato farm that will favorably compete in the United States of America.
We are quite aware that there are several tomato farms all over San Antonio – Texas and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Philip Clinton® Tomato Farms, LLC employed the services of an expert HR and Business Analyst with bias in the commercial farming industry to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of Hankins Philip Clinton® Tomato Farms, LLC;
- Strength:
Our strength as a tomato farming company is the fact that we have healthy relationships with loads of major players in the agriculture industry both within and outside of the United States.
We have some of the latest farm tools and equipment that will help us cultivate tomatoes in commercial quantities with less stress. Aside from our relationship and equipment, we can confidently boast that we have some the most experienced hands in the business under our payroll.
- Weakness:
Our weakness could be that for now we lack economies of scale and we don’t have our own tomato processing plant (we hope to build one within the first 12 months of operation). We have been able to put up structures that will help us overcome this initial setback within the shortest time frame.
- Opportunities:
An increase in the price of vegetables positively affects returns at the farm gate; as the price of vegetables increases, farmers collect higher revenue because changes in price do not drastically affect demand. Price fluctuations reflect supply levels, downstream processing activity, global demand activity and several other factors.
With all other things equal, an increase in the price of vegetables will garner higher revenue for industry operators, so long as cost increases can be passed on to consumers to protect profit margins. The price of vegetables is expected to rise this year, representing a potential opportunity for the industry.
- Threat:
Vegetables (tomatoes) require a steady amount of soil moisture to grow and produce, but they cannot tolerate standing water from excessive rainfall. Periods of intense rain or harsh drought can destroy crops, drastically affecting industry production and revenue levels.
Average annual rainfall in the United States typically does not move far from its annual mean; still, unpredictable weather patterns can have drastic effects on the industry. Average annual precipitation is anticipated to decrease this year, posing a potential threat to the industry.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with rising technology and scientific development in the agriculture industry, you will quite agree that vegetable and fruits farming via greenhouse commercial farming model is at the front burner. Greenhouse commercial farming is rapidly gaining entrance in our world today.
Greenhouse farming gives room for greater control over the growing environment of various crops. Dependent upon the technicality and specification of a greenhouse design, some of the important factors which may be controlled include temperature, levels of light and shade, irrigation, fertilizer application, and atmospheric humidity et al.
Basically, Greenhouses are used to overcome shortcomings in the growing qualities of a piece of land, such as a short growing season or poor light levels. In essence, they are designed to improve tomatoes production in marginal environments.
Please note that while per-capita consumption of vegetables has trended down, especially among teenagers, population increases, better quality and higher prices have allowed the industry to hold its ground in revenue terms and achieve growth.
Retail giants like Safeway and Wal-Mart have placed an emphasis on expanding their selection of fresh produce, especially of organic varieties. However, these large chains have used their market power to impose higher quality standards and drive down returns to growers.
The damage has been somewhat mitigated by bringing produce to a wider consumer base, but there is limited scope for growing sales by expanding access. The strong performance of the industry over the years to 2008 drew many new participants in.
Over the last two years, however, IBISWorld estimates that the number of farms and greenhouses growing vegetables has shrunk.
So also, if you are a close observer of the trends in the hydroponics and vegetable farming industry, you will agree that the vegetable farming industry is anticipated to increase due to increasing consumer health consciousness, which has led to increasing demand for fresh produce.
While per capita fruit and vegetable consumption has remained stable over in recent time, the price of vegetables have increased as consumers demand premium, fresh vegetables.
So also, the number of both small and large farms have been increasing. Small, local tomato farms are benefiting from the organic, local movement, while large, commercial tomato farms are improving labor efficiency. Going forward, players in the hydroponics and vegetable farming industry will continue to increase revenue generation for their business.
8. Our Target Market
The end consumer of tomatoes or vegetable farm produce and also those who benefit from the business value chain are all encompassing. Every household consumes tomatoes in different forms. In essence a commercial tomato farmer should be able to sell his or her farm produce to as many people as possible.
We will ensure that we position our business to attract consumers just in the United States of America alone but also other parts of the world which is why we will be exporting some of our tomatoes either in raw or processed form to other countries. In essence, our target markets are;
- Tomato paste production companies
- Caterers
- Restaurant operators
- Hotels
- Households
- Pizza production companies
- Ketchup production companies
- Juice production companies
Our Competitive Advantage
Philip Clinton® Tomato Farms, LLC is fully aware that there are competitions when it comes to selling vegetables and tomato, which is why we decided to carry out thorough research so as to know how to take advantage of the available market.
We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace.
Other competitive advantage lies in the power of our team; our workforce. We have a team of hardworking and highly proficient tomato farmers. Aside from the synergy that exist in our carefully selected team members, we have some of the latest and efficient farm machines and equipment and we will be guided by international best practices in the industry.
Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we will operate a standard commercial farm that will be involved in diverse areas such as tomatoes cultivation, processing and packaging. With this, we will be able to take advantage of all the available opportunities within the industry.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Philip Clinton® Tomato Farms, LLC is in the tomato farming business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives. Below are the sources we intend exploring to generate income for Philip Clinton® Tomato Farms, LLC;
- Cultivation of different species of tomatoes such as; Beefsteak tomatoes, Plum tomatoes, Cherry tomatoes, Grape tomatoes, Campari tomatoes, Pear tomatoes and Oxheart tomatoes et al both in organic and non – organic forms
- Processing and packaging tomatoes (the production of tomato paste).
10. Sales Forecast
From the survey conducted, we were able to discover that the sales generated by a commercial tomato farm depends on the size and nature of the farm.
We have perfected our sales and marketing strategies and we are quite optimistic that we will meet or even surpass our set sales target of generating enough income/profits from the year of operation and build the business from survival to sustainability.
We have been able to examine the hydroponics and vegetable farming industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the projections that we were able to come up with for the first three years of running Philip Clinton® Tomato Farms, LLC;
- First Fiscal Year (FY1): $250,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $900,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending, bad weather cum natural disasters, and unfavorable government policies. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
We are quite aware that the reason why some vegetable cum tomato farms hardly make good profits is their inability to sell off their farm produce as at when due. In view of that, we decided to set up a standard tomato processing plant to help us maximize profits.
Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained to meet their set targets and the overall business goal of Philip Clinton® Tomato Farms, LLC.
We have perfected our sale and marketing strategies first by networking with agriculture merchants, hotels, restaurants, supermarkets, grocery stores and companies that rely on raw materials from the industry. In summary, Philip Clinton® Tomato Farms, LLC will adopt the following strategies in marketing our tomatoes;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the food processing and tomato paste production industry, supermarkets, grocery stores, hotels and restaurants and tomato merchants et al.
- Advertise our business and tomatoes in agro – allied and food related magazines and websites
- List our commercial tomato farms on yellow pages ads
- Attend related agriculture and food expos, seminars, and business fairs et al
- Leverage on the internet to promote our business
- Engage in direct marketing
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready to utilize every available means to advertise and promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.
Below are the platforms you can leverage on to boost our tomato farming brand and to promote and advertise our business;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our business
- Distribute our fliers and handbills in target areas
- List our tomato farms in local directories / yellow pages
- Advertise our commercial tomato farms in our official website and employ strategies that will help us pull traffic to the site.
- Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.
12. Our Pricing Strategy
Some of the factors that will help you sell your farm produce at the right price that will guarantee that you make profits is dependent on your strategy while some of the factors are beyond your control. For example, if the climatic condition is unfavorable and if there are natural disasters in the location, then it will directly affect the prices of your goods.
If you want to get the right pricing for your farm produce, then you should ensure that you choose a good location for vegetable farm, choose good breeds/seeds that will guarantee bountiful harvest, cut the cost of running your farm to the barest minimum and of course try as much as possible to attract buyers to your farm.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our tomatoes are sold a little bit below the average price in the United States of America. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our tomato farming business
- Payment Options
The payment policy adopted by Philip Clinton® Tomato Farms, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Philip Clinton® Tomato Farms, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via Point of Sale Machines (POS Machines)
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for tomatoes purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
When it comes to calculating the cost of starting a tomato farm, there are some key factors that should serve as a guide. The most important expenses is the construction of the farm. In view of that, here are some of the basic areas we will spend our startup capital in setting up our commercial tomato farm;
- The total fee for incorporating the business in United States of America – $750.
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
- The amount needed to acquire / lease a farmland – $50,000
- The amount required for preparing the farmland – $20,000
- The cost for acquiring the required working tools and equipment / machines / fencing et al – $10,000
- The amount required for purchase of the first set of tomato seedlings, manure (fertilizer) and pesticides et al – $15,000
- The amount required to set up a standard vegetable (tomato) processing plant within the farm facility – 80,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $10,000
- The cost of launching an official website – $600
- The amount required for payment of workers for a period of 3 months – $80,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,000
Going by the report from detailed research and feasibility studies conducted, we will need an average of three hundred and fifty thousand dollars ($350,000) to start a standard commercial tomato farm in the United States of America.
Generating Funds/Startup Capital for Philip Clinton® Tomato Farms, LLC
Philip Clinton® Tomato Farms, LLC will be owned and managed by Philip Clinton and his immediate family members. They decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings and sale of his stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank (loan facility).
N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $250,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
Part of the plans we have in place to sustain Philip Clinton® Tomato Farms, LLC is to ensure that we continue to make available different sizes and species of tomatoes, deliver quality services, improvise on how to do things faster and cheaper.
We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.
We are quite aware that our customers are key component to the growth and survival of our business hence we are going to continuously engage them to give us ideas on how to serve them better and the products they want to see in our store.
We will not waste time in adopting new technology, best practices and diversifying our services. Philip Clinton® Tomato Farms, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.
Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of farm land in San Antonio – Texas (preparing the farm land inclusive): Completed
- Conducting Feasibility Studies: Completed
- Startup Capital generation: Completed
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Design of The Company’s Logo: Completed
- Printing of Packaging and Promotional Materials: Completed
- Recruitment of employees: In Progress
- Building /construction of greenhouse and hothouse facility: In Progress
- Purchase of the needed working tools, machines and equipment: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Farm land Treatment, Health and Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry (agriculture farm produce merchants, tomato paste and ketchup production companies, suppliers of seeds, fertilizers, pesticides and insecticides): Completed