Are you considering either launching an indoor farming venture, or expanding your current greenhouse operation? If you haven’t already, you’ll want to map out a business plan or a feasibility plan.
The Center for Excellence for Indoor Agriculture explains the difference between the two:
- A business plan is a comprehensive document that outlines goals, strategies and financial projections for a new or existing business. It can also be used to secure financing or investment for the business and is usually written for external stakeholders such as investors, lenders or partners. A good business plan may be 50 to 100 pages long.
- A feasibility plan (or farm feasibility study) is a preliminary assessment of a business idea to determine if it is viable and worth pursuing. This document can be used by an entrepreneur to evaluate the feasibility of his or her business idea before investing significant time and resources in it. It is typically written for internal stakeholders such as the owner, potential employees, or the management team.
The main benefit of having a plan is that it helps you get in touch with your gut without having to actually build the farm. It also mitigates financial risk. Finally, your plan will become the basis for how you set up and operate the company. In that sense, your plan is the foundation for what will come.
A recent post from the Center for Excellence for Indoor Agriculture offers 10 elements necessary for your plan, including:
Market Opportunities: The market opportunity section of the business plan should discuss the problem or opportunity the company’s products or services address. It should also provide an overview of the size of the market, including sales, population and units consumed. Additionally, this section should identify important industry trends and any regulations that might impact the success of the venture.
Video of the Week: Identifying Broad Mites and Their Damage
Business Model and Financial Projections: The business model section of the plan is where the company’s revenue streams and cost structure are articulated, ie, it should describe how the company will make money in both the short and long term based on the equation: Profits=Revs-Costs. This section should also include a compelling story that explains why customers will choose to buy from the company.
Operations Plan: The production and operating requirements section of the business plan should describe the production requirements for the product or service. Key enabling technologies should be identified. Additionally, this section should identify key personnel and any unique or special skills required to run the operation.
Learn the seven other elements in the original post here.
Top Questions Answered by Effective Indoor Farm Business Planning