Farm Model Concept and $$$ Projections (BIP#4)
Today I want to discuss a little more about the thought process I had about the business model for this farm. I gave the broad strokes of my concept in my BIP#1 article (HERE), but I want to explain my thoughts in a bit more detail.
What Are The Weekly Harvest Boxes Going To Cost?
After spending several years selling both lettuce and mushrooms at various farmers’ markets I think I have a fair estimate of current fresh produce prices in the DFW, TX area, and I believe that I can value the Salad Greens Harvest Box at $20. When I sold fresh Aquaponic Lettuce at markets six years ago, I was able to sell out at a $4 per head price, so I believe that this is a fair price. If anything, I might be undervaluing these crops as prices for everything have increased in the three years post-COVID.
The Fruiting Harvest Box, which I plan to launch in the early summer of 2024, will have at least 4 varieties of produce. My plan is to grow Tomatoes, Cucumbers, Eggplants, and Peppers. I hope to grow slicing AND cherry tomatoes, along with sweet AND hot peppers. This plan will give me a minimum of four crops, and possibly 6 or 7. Market research this summer has shown that large slicing Cucumbers often sell for $1-2 each, and Tomatoes, Eggplants, and Peppers sell for $3-5 per pound depending on the part of the DFW metroplex that you are in. As a result, I believe that a harvest box with 4-5 varieties of Fruiting crops should easily command a price of $20 as well.
No matter what, my goal is to provide Harvest Boxes that provide MORE VALUE than they cost. While I want to ensure that my valuations are in line with other farmers around the metroplex, I want to ensure that I provide additional value in the form of convenience and quality, but also recipes for salad dressing or meals, tips on storage or alternative uses, and more.
Production Goals And Revenue Projections
My ultimate plan for this farm is to produce 150 Harvest boxes per week. This would be half Greens and half Fruiting, so 75 of each. While I expect that some people would prefer to get one box or the other, the reality is that in my worst-case customer acquisition scenario, I would only need to find 150 customers per week to buy a single harvest box. I currently have approximately 50,000 people living within a 20-mile radius of my farm, and the result from a single post on Social Media resulted in over 50 people interested in purchasing a box.
My current revenue projections are built on the idea of 75 people buying both boxes for a combined $40 per week. This would result in a weekly revenue of $3,000, and a projected annual revenue (50 weeks) of $150,000.
Now projected Gross Revenue is only a hope and a dream, and as well, I don’t expect that I will have the farm 100% built out for over a year at best. Additionally, I am going to be bootstrapping this venture with a very minimal budget of $750 per month for six months. My plan is that after this point, there will be enough revenue coming into the farm that it will be able to self-fund its own expansion.
But, What Is It Going To Cost To Build?
Expenses are where I am now going to focus my efforts. My past experiences have shown me that hydroponic farms are often less expensive to operate, but more (sometimes significantly more) expensive to build than soil-based farms of the same productive capability. Thankfully, I do have some “unfair advantages” when it comes to this.
I have been able to locate a 30’x96’ greenhouse frame, with equipment (fans and such), for a cost of $2000.
My neighbor has a small skid steer that I can borrow to complete all of my site prep (leveling) and to dig some trenches for utility access and plumbing lines / buried sump tanks.
I have a 6’x100’ roll of liner sitting in storage along with piles of plumbing fittings.
I own nearly every tool that I could imagine needing to build this greenhouse and the systems inside.
Today I am going to spend the day working to figure out what my initial expenses will be for assembling the Greenhouse on my property and building the initial DWC trough. I also need to pull together costs related to buying my initial seed stocks, hydroponic nutrients, and other production expenses.
As always, I welcome your comments and questions. Please let me know if you see something I haven’t thought of or haven’t explained fully.