Are you about starting a vertical farming company? If YES, here is a detailed sample vertical farming business plan template & FREE feasibility report.
Starting a vertical farming business is one sure way of earning good money. In the united states of America owing to the fact that you will definitely get all the support you need in terms of technology and finance to grow the business. If you are considering starting a vertical farm, the good news is that you can’t get it wrong because various types of crops can be cultivated via vertical farming and interestingly, agriculture produce are consumed all over the globe.
Starting a vertical 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 the farm on a small scale or large scale depending on their financial status. Here is a sample vertical farming business plan template that can guide you to come up with yours within record time.
A Sample Vertical Farming Business Plan Template
1. Industry Overview
Vertical farming is the method of cultivating crops in vertically stacked layers. It often incorporates controlled-environment agriculture which aims to optimize plant growth, and soil-less farming techniques such as hydroponics, aquaponics, and aeroponics.
Some common choices of structures to house vertical farming systems include buildings, shipping containers, underground tunnels, and abandoned mine shafts.
Vertical farms come in different shapes and sizes, it could be simple two-level or wall-mounted systems or large warehouses several stories tall. But all vertical farms use one of three soil-free systems for providing nutrients to plants; hydroponic, aeroponic, or aquaponic.
It helps to grow small size crops like Greens (Lettuce, Broccoli, Amaranthus, Tuber crops et al) and medium sized crops (Cabbage, cauliflower, Tomato, brinjal et al) than big sized crops (Maize, Sorghum et al). Vertical farming is rapidly gaining entrance in our world today. Vertical farming gives room for greater control over the growing environment of crops.
Dependent upon the technicality and specification of a vertical farming 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.
This is so because vertical farming enables certain crops to be grown all though the year irrespective of the climatic conditions. Vertical farming is increasingly becoming an important factor in the food supply chain of high-latitude countries.
The vertical line of business is indeed a large industry and a recent reports released by Beyer shows that the AeroFarms building cost an estimated $39 million for what amounted to less than two acres of farm land, noting in contrast that an acre of farmland in Iowa has an average cost less than $8,000.
In the united states of America, Chicago is home to several vertical farms, while New Jersey is home to AeroFarms, the world’s largest vertical farm. Other countries such as Japan, Singapore, Italy and Brazil have also seen more vertical farms.
2. Executive Summary
Kelly Norman® Vertical Farms, LLC is a registered and licensed farming business that will be based in the outskirts of East Rutherford, New Jersey – United States. We have done our detailed market research and feasibility studies and we were able to secure an ideal facility to start our vertical farm.
We will construct different shapes and sizes, both simple two-level and wall-mounted systems and large warehouses several stories tall. Our vertical farms will make use of three soil-free systems for providing nutrients to plants; hydroponic, aeroponic, or aquaponic.
At Kelly Norman® Vertical Farms, LLC we will be involved in the cultivation of common crops grown indoors such as greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat) et al.
In the nearest future, hopefully within the first five years of officially running Kelly Norman® Vertical Farms, LLC, we will start our food processing and packaging plant and also start exporting our agriculture produce to other parts of the world.
Which is why aside from the fact that we’ve secured the farming are and most of the farming equipment and machines, we have also hired some key employees who are currently undergoing training so as to be able to fit into the ideal picture of the 21st century vertical farming business workforce that we want to build.
We are in the vertical 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, raw materials production for industries, to export agriculture produce from the United States to other countries and over and above to make profit.
Kelly Norman® Vertical Farms, LLC is well positioned to become one of the leading vertical farming businesses 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 process and strategies in place that will help us employ best practices when it comes to vertical farming processes.
Kelly Norman® Vertical Farms, LLC is a private registered company that is owned by Kelly Norman and his immediate family members. Kelly Norman has a Degree in Agriculture from the University of New Jersey and he has over 23 years’ experience in the industry.
3. Our Products and Services
Kelly Norman® Vertical Farms, LLC will be involved in cultivating various crops via the vertical farming model. We are in business to produce both vegetable, and fruits in commercial quantities. We will also ensure that we operate a standard food processing and packaging plant as part of our complimentary business.
These are the areas we will concentrate on in our vertical farming business. If need arises, we will definitely add more agriculture produce to our list;
- Greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat).
- Plant transplant services
- Vegetable and fruit processing and packaging
- Vertical farming construction, consultancy and advisory services
4. Our Mission and Vision Statement
- Our Vision is to become one of the top 10 vertical farm brands not just in the United States of America but also on the global stage.
- Our mission is to go into full – time cultivation of vegetables, and fruits that will not only be consumed in the United States of America, but also exported to other parts of the world.
- We want our farm produce to flood the nooks and crannies of the United States and other countries of the world.
Our Business Structure
Kelly Norman® Vertical Farms, LLC is family owned and managed vertical farm that is into the cultivation of vegetables and fruits. At Kelly Norman® Vertical Farms, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.
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 board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Operating Officer
- Vertical Farm Manager
- Administrator/Accountant
- Crop (Vegetable and Fruits) Cultivation Manager/Supervisor
- Vegetable and Fruits Processing and Packaging Plant Manager/Supervisor
- 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
Vertical Farm Manager
- Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the organization
- Supervise other section managers
- Ensure compliance during project executions (especially in the construction of vertical farming structures 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 the growth 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. Responsible for preparing financial reports, budgets, and financial statements for the organization
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Handles all financial transactions for the company
- 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
- 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 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
Crop (Vegetable and fruits) Cultivation Manager/Supervisor
- Responsible for the cultivation of crops such as; cucumbers, shallots, tomatoes, lettuce, chilies, capsicum, red salad onions and snow peas, Chinese cabbage, lettuce, basil, roses, tomatoes, okra, cantaloupe and bell peppers, watercress, basil, coriander, parsley, lemongrass, sage, beans, peas, kohlrabi, taro, radishes, strawberries, melons, onions, turnips, parsnips, sweet potato, cauliflower, cabbage, broccoli, and eggplant.
- Handles plant transplant services
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Vegetable and Fruits Processing and Packaging Plant Manager/Supervisor
- Responsible for managing the fruits and vegetable processing and packaging plant section of the business
- Supervises other workers within the department
- Work closely with the General Manager to achieve the organizations’ goals and objectives
Sales and Marketing Officer
- Identify, prioritize, and reach out to new markets for our agriculture produce, processed food, new partners, and business opportunities within the industry
- Document all customer contact and information.
- Represent the company in strategic meetings
- Help increase sales and growth for the company
Front Desk/Customer’s Service Officer
- Welcomes clients and visitors by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s farm produce
- Manages administrative duties assigned by the HR manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to potential clients when they make enquiries
6. SWOT Analysis
Kelly Norman® Vertical 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 vertical farm that will favorably compete with leading vertical farms in the United States of America.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of Kelly Norman® Vertical Farms, LLC;
Strength:
- Year-round crop production.
- Eliminates agricultural runoff.
- Significantly reduces use of fossil fuels (farm machines and transport of crops)
- Makes use of abandoned or unused properties.
- No weather-related crop failures.
- Offers the possibility of sustainability for urban centers.
Weakness:
Part of the weakness that will affect us is the fact that vertical farming technologies face economic challenges with large start-up costs compared to traditional farms.
Other weaknesses could be that we are a new commercial vertical farm in the United States, it might take some time for our organization to break into the market and gain acceptance especially from international markets in the already saturated and highly competitive commercial farming industry; that is perhaps our major weakness.
- Opportunities:
The opportunities available to us are unlimited. The fact that vertical farms attempt to produce food in challenging environments, like where arable land is rare or unavailable. Having greater output from a small cultivation area is not the only advantage of vertical farming, vertical farming produces more crops from the same square footage of growing area.
- Threat:
Part of the threats we will face is the fact that vertical farms face large energy demands due to the use of supplementary light like LEDs. Moreover, if non-renewable energy is used to meet these energy demands, vertical farms could produce more pollution than traditional farms or greenhouses.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with rising technology and scientific development in the agriculture industry, you will quite agree that vertical farming is at the front burner. Vertical farming is rapidly gaining entrance in our world today.
While vertical farming can help improve a community’s economic and social base, most of the debate surrounding its sustainability is centered around its environmental base. Sustainability also depends on the efficient use of local resources such as water and land. Vertical farms also achieve a higher crop yield.
Vertical 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, vertical farming methods 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 food production in marginal environments.
Interestingly, vertical farming methods enable certain crops to be grown all though the year irrespective of the climatic conditions. Greenhouses are increasingly becoming an important factor in the food supply chain of high-latitude countries.
Lastly, it is important to point out that the dependence on technology is a big disadvantage to vertical farming. If a vertical farm loses power for one day then it will be a big loss in production. While vertical farm companies promise more-sustainable produce by growing it closer to consumers and using renewable energy to power their operations.
8. Our Target Market
The end consumer of vertical farm produce and also those who benefits from the business value chain are all encompassing. Every household consumes produce from vertical farms be it vegetables, or fruits et al. In essence a commercial vertical 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 of agriculture produce not 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 farm produce either in raw form or processed form to other countries of the world.
Our competitive advantage
Kelly Norman® Vertical Farms, LLC is fully aware that there are competitions when it comes to selling vertical farm produce, which is why we decided to carry out thorough research to know how to take advantage of the available market in the United States and in other parts of the world.
We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable vertical farming processes that can help us cultivate and sell our produce at competitive prices, good network and excellent relationship management.
Our competitive advantage lies in the power of our team; our workforce. We have a team of hardworking and highly proficient vertical farmers, a team with excellent qualifications and experience in various niche areas in the industry. Aside from the synergy that exists in our carefully selected team members, we have some of the latest and efficient vertical farm machines and equipment and we will be guided by 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 an all-round vertical farm that will be involved in diverse areas such as crop cultivation, plant transplant services and food processing and packaging plant. 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 objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Kelly Norman® Vertical Farms, LLC is in the vertical farming business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry. Below are the sources we intend exploring to generate income for Kelly Norman® Vertical Farms, LLC;
- The more common crops that will be grown by us in our vertical farm are greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat).
- Plant transplant services
- Vegetable and fruit processing and packaging
- Vertical farming construction, consultancy and advisory services
10. Sales Forecast
From the survey conducted, we were are able to discover that the sales generated by a vertical commercial farm depends on the size of the farm, and the nature of the vertical commercial 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.
We have been able to examine the agriculture industry cum vertical commercial farm business, 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 Kelly Norman® Vertical Farms, LLC;
- First Fiscal Year (FY1): $280,000
- Second Fiscal Year (FY2): $500,000
- Third Fiscal Year (FY3): $800,000
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.
- Marketing Strategy and Sales Strategy
We are quite aware that the reason why some vertical farms hardly make good profits is their inability to sell off their farm produce especially perishable crops as at when due. In view of that, we decided to set up a standard food processing plant to help us maximize profits.
Our sales and marketing team will be recruited based on their vast experience in the commercial farms industry and they will be trained on a regular basis so as to be well equipped to meet their set targets and the overall business goal of Kelly Norman® Vertical Farms, LLC.
Our goal is to grow Kelly Norman® Vertical Farms, LLC to become one of the leading vertical farms in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market. In summary, Kelly Norman® Vertical Farms, LLC will adopt the following strategies in marketing our commercial farm produce;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the agriculture industry, companies that rely on the agriculture industry for their raw materials, hotels, restaurants and agriculture produce merchants et al.
- Advertise our business and agriculture produce in agro – allied and food related magazines and websites
- List our vertical farm 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 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 vertical farm 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
- Install our Billboards in strategic locations all around East Rutherford – New Jersey
- Engage in roadshow from time to time in targeted neighborhoods
- Distribute our fliers and handbills in target areas
- Contact corporate organizations and residence in our target areas by calling them up and informing them of Kelly Norman® Vertical Farms, LLC and the farm produce we sell
- List our vertical farming business in local directories/yellow pages
- Advertise our vertical farming business 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 are well branded with our company logo et al.
12. Our Pricing Strategy
We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers for our produce is to sell them at competitive prices hence we will ensure that the prices of our fruits and vegetables are going to be what other farmers would look towards beating.
- Payment Options
The payment policy adopted by Kelly Norman® Vertical 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 regulations of the United States of America. Here are the payment options that Kelly Norman® Vertical Farms, LLC will make available to her clients;
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via Point of Sale Machines (POS Machines)
- Payment via mobile money transfer
In view of the above, we have chosen banking platforms that will enable our clients make payment for our farm produce 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 vertical farm, there are some key factors that should serve as a guide. The most important expenses are the construction of the vertical farming structures. Below are some of the basic areas we will spend our startup capital in setting up our vertical farm;
- The Total Fee for incorporating the Business (aquaponics commercial farm) in United States of America – $750.
- The budget for key insurance policies, permits and business license – $2,500
- The amount needed to acquire / lease a farm land – $50,000
- The amount required for preparing the farm land (for construction of vertical farming structures) – $70,000
- The cost for acquiring the required working tools and equipment / machines / stacked layers et al – $25,000
- The amount required for purchase of seedlings – $20,000
- The Cost of Launching an official Website – $600
- The amount required for payment of workers for a period of 3 months – $100,000
- 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 vertical farm business in the United States of America.
Generating Funds/Startup Capital for Kelly Norman® Vertical Farms, LLC
No matter how fantastic your business idea might be, if you don’t have the money to finance the business, it might not become a reality. Finance is a very important factor when it comes to starting a business such as vertical farming. No doubt raising startup capital for a business might not come cheap, but it is a task that an entrepreneur must go through.
These are the areas where we intend sourcing for fund for Kelly Norman® Vertical Farms, LLC;
- 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
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Kelly Norman® Vertical Farms, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to sell our farm produce a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while. Kelly Norman® Vertical 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 of our business strategy. 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 East Rutherford – New Jersey: 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 Promotional Materials: Completed
- Recruitment of employees: In Progress
- Building/construction of vertical farming structures and 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, transporter/haulage and suppliers of seeds, fertilizers, pesticides and insecticides et al): Completed