Are you about starting a lavender farm? If YES, here is a detailed sample lavender farming business plan template & FREE feasibility report.
Lavender farming is known to be a profitable business and over the years, it has evolved from small scale backyard-garden to a global industry in all countries where it’s carried out. Countries in Northern Africa and the mountainous regions of the Mediterranean and recently in North America are known to be in the forefront of cultivating lavender.
If you are considering starting a lavender farm business, the good news is that you can’t get it wrong. This is because lavender is most commonly used in aromatherapy.
The fragrance from the oils of the lavender plant is believed to help promote calmness and wellness. It’s also said to help reduce stress, anxiety, and possibly even mild pain. It is important to state that starting a lavender 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 a lavender farm on a small scale or on a large scale depending on their financial status.
So, if you have decided to go into lavender farming, then you should ensure that you carry out thorough feasibility studies and market survey. Here is a sample lavender farm business plan template that can guide you to come up with yours within record time.
A Sample Lavender Farm Business Plan Template
1. Industry Overview
Lavender which is classified as a herb is native to northern Africa and the mountainous regions of the Mediterranean. Although there are over 30 species of the lavender plans, with hundreds of varieties, but there are just 3 species that are widely grown by most commercial growers.
The first is Lavendula augustifolia, also commonly called ‘English’ lavender. The second is Lavendula x intermedia, called lavandins, as they are hybrids, also known as ‘Spike’ lavender. The third common commercial species is Lavendula stoechas, known also as topped lavender or Spanish lavender.
Lavender farm business is categorized under the Plant & Flower Growing industry and players in this industry grow nursery plants, such as trees and shrubs; flowering plants, such as foliage plants, cut flowers, flower seeds and ornamentals; and short rotation woody trees, such as Christmas trees and cottonwoods et al. These flowery and nursery plants can either be grown under cover or in an open field.
Report published by IBISWORLD shows that the Plant and Flower Growing industry has fared poorly in the five-year period. The report also stated that the influx of low-cost cut flower imports from Colombia and Ecuador has had a staggering negative effect on domestic farmers, decreasing industry revenue.
The report also projected that in the coming years; the revenue generated in this industry will decline, hampered by weak demand from florists and nurseries and by import competition. While the overall US economy is no longer in recession, weak discretionary spending will continue to strain flower sales throughout the year.
Statistics has it that in the united states of America alone, there are about 45,619 registered plant and flower growing/lavender farming companies responsible for employing about 163,403 people and the industry rakes in a whooping sum of $14 billion annually.
The industry is projected to enjoy -0.7 percent annual growth between 2013 and 2018. It is important to state that there is no company with a lion share of the market in the United States of America.
A recent report published by IBISWorld reveals that on the average, the Plant and Flower Growing industry spends about $0.07 on capital for each dollar spent on labor. This is representative of the industry’s low, but rising, level of capital intensity.
Over time, the industry has become more reliant on machines and technology as opposed to field workers. Although technology is increasingly taking over operations within nursery plant and flower production, the industry is still highly reliant on labor inputs.
According to the 2012 Census of Agriculture (latest data available), the average nursery and floriculture establishment spends about $75,155 on machinery and equipment annually, which is lower than the crop farming sector average of $154,425. This is due to the delicate nature of flowers and foliage plants.
One thing is certain about lavender farming business, if you are able to conduct your market research and feasibility studies, you are likely not going to struggle to sell your lavender because there is always a ready market for products from this line of business.
If you are a small lavender farmer, the Saturday market is the best place to sell your harvest. In business, selling direct at the market allows you to cut out the middleman and receive full retail prices for your products.
2. Executive Summary
Lilian Marcos® Lavender Farms, LLC is a registered and licensed plant and flower growing company that will based in Overland Park, Kansas – United States of America and we will have active presence in other cities in and around Kansas because we know that our products will be in high demand due to the demographic composition of Kansas.
Lilian Marcos® Lavender Farms, LLC we will be involved in the growing of different types of commercial species of lavender such Lavendula augustifolia (English Lavender), Lavendula x intermedia (Spike Lavedner) and Lavendula stoechas, known also as topped lavender or Spanish lavender.
We will retail them as fresh cut lavender bouquets to dried buds, lavender oil and the many value-added lavender products.
Lilian Marcos® Lavender Farms, LLC is in the plant and flower growing industry because we want to leverage on the vast opportunities available in the industry. We are well positioned to become one of the leading lavender farmers in the United States of America, which is why we have been able to source for the best hands and resources to run the business with.
We have put process and strategies in place that will help us employ best practices when it comes to bringing out the best in this line of business. Lilian Marcos® Lavender Farms, LLC is a private registered company that is owned by Lilian Marcos and her husband Lionel Marcos. The company will be fully managed and financed by the owners.
3. Our Products and Services
Lilian Marcos® Lavender Farms, LLC will be involved in farming of commercial lavender for the United States’ market.
We will ensure that we do all that is permitted by the law in the United States of America to maximize profits. These are the areas we will concentrate on in our lavender farming business. If need arises, we will definitely add more plants to the list;
- Fresh cut lavender bouquets to dried buds
- Lavender bags
- Aromatherapy oil
- Lavender soap
4. Our Mission and Vision Statement
- Our vision is to become one of the top 5 lavender farmers not just in the United States of America but also on the global stage.
- Our mission is to go into full – time commercial cultivation of lavender that will not only be patronized in the United States of America, but also exported to other parts of the world. We want our lavender plants and products to flood the nooks and crannies of the United States.
Our Business Structure
Lilian Marcos® Lavender Farms, intends starting small in Overland Park – Kansas, but hopes to grow big in order to compete favorably with leading plant and flower growing companies in the industry. We are aware of the importance of building a solid business structure that can support the the kind of world class business we want to own.
At Lilian Marcos® Lavender 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 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 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
- General Farm Manager
- Farm Workers/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
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Accountable 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
- Supervises other section managers
- Ensures compliance during project executions
- Provides advice on the management of farming activities across all sections
- Responsible for carrying out risk assessment
- Uses IT systems and software to keep track of people and progress of the growth of crops
- Represents 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.
- Oversees the smooth running of the daily farming activities across the various farming sections.
- Defines job positions for recruitment and managing interviewing process
- Carries 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.
- Accountable for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Farm Workers/Field Workers
- Responsible for carrying out core activities such as; nursery stock crops, annual bedding and garden plants
- Responsible for pruning, shearing/maintenance of lavender plants and other nursery plants and flowers
- Handles Sod installation / hydro – seeding
- Handles weeding or fertilizer and / or pest control application
- Handles tree care / maintenance services
- Assists in transporting work tools and equipment from the office (store) to site and back to the office
- Works closely with the General Farm Manager to achieve the organizations’ goals and objectives
Sales and Marketing Officer
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to 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 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
Lilian Marcos® Lavender Farms, LLC does 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 lavender farming business that will favorably compete with leading plants and flower growers in the United States of America and in the rest part of the world.
Here is a summary from the result of the SWOT analysis that was conducted on behalf of Lilian Marcos® Lavender Farms, LLC;
Our strength as a lavender farming company is the fact that we have healthy relationships with major players in the industry; both suppliers and buyers of lavender plants within and outside of the United States. We have some of the latest lavender farming tools and equipment that will help us grow these plants in commercial quantities with less stress.
Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in the business in the whole of Overland Park – Kansas under our payroll.
Our weakness could be that we are a new lavender farming business in the United States; it might take some time for our organization to break into the market and gain acceptance especially from well – established clients in the already saturated industry; that is perhaps our major weakness.
Another weakness is that we may not have the required cash to set up a processing plant and also to promote our business the way we would want to.
The opportunities that are available to us cannot be quantified, because lavender oil has been used for hundreds of years as an antiseptic, a natural antibiotic, an insect repellant and a calming sedative.
It is used as the aromatic base for thousands of cosmetic products, such as lotions, massage oils, perfumes and soaps and there are loads of cosmetics and related production companies that require steady supply of freshly cut and dried lavender plants. We are ready to take advantage of any opportunity that is available in the industry.
Climatic condition is a big threat for us. The fact that you must have the right climate to grow lavender could possibly become a threat to us. Lavender is a Mediterranean plant, and requires a similar climate to thrive. Lavender needs full sun to do well, but not too much summer heat.
A cold winter is also necessary to produce the best flower heads. Lavender grown in regions with high humidity often have problems with fungal diseases, which can sometimes be corrected by wider spacing between plants to improve air circulation.
So also, economic downturn is a threat for our business. It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new lavender farming company in same location where our target market exists and who may want to adopt same Business model like us.
7. MARKET ANALYSIS
- Market Trends
In some parts of the world, such as the Provence region of France, lavender has been grown commercially for centuries, but the trend is that in North America, commercial cultivation of lavender is just beginning to take off. Lavender’s growing popularity has led many new and veteran herb growers to specialize in this unique fragrant herb.
The latest trends show that lavender is experiencing a renewal of popularity as a culinary and medicinal herb, and as a fragrant addition to cosmetics from perfumes to body lotions.
Lavender farmers are beginning to adopt techniques that will help them ensure that their lavender plants are consistent in quality, color, and oil production and almost all commercial growers propagate lavender from cuttings rather than from seed.
Producing lavender from cuttings guarantees the new plants will be exact clones of the parent plants. New growers can purchase their plants from wholesale growers, then take cuttings from these “mother” plants.
It is on records that revenue generated by lavender farmers not just in the United States but in other countries has maintained positive growth. Another common trend in the business is that most players in the industry are no longer concentrating only on lavender farming.
They now find it easier to add other related aromatherapy plants, scent plants and also go into the production of the end products.
8. Our Target Market
The end users of lavender plants and also those who benefits from the business value chain is all encompassing. In view of that, we have created strategies that will enable us reach out to various households and production companies that would need our fresh cut lavender bouquets to dried buds, lavender oil and the many value-added lavender products.
Below is a list of the people and organizations that we have specifically market our products to;
- Cosmetics production companies
- Flower shops
- Pharmaceutical production companies
- Lavender bag manufacturers
- Aromatherapy oil production companies
- Lavender soap production companies
Our Competitive Advantage
Lilian Marcos® Lavender Farms, LLC is fully aware that there are competitions when it comes to selling cut lavender plants, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in Overland Park – Kansas.
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 farming processes, good market network and excellent relationship management.
Economies of scale, production of premium goods and ability to alter goods and services produced in favor of market conditions are part of what we will be bringing to the table. Also, our competitive advantage lies in the power of our team; we have healthy relationships with loads of major players in the industry.
We also have some of the latest lavender farming tools and equipment that will help us grow these plants in commercial quantities with less stress. Aside from our network and equipment, we can confidently boast that we have some the most experienced hands in the lavender farming industry in the whole of Overland Park – Kansas under our payroll.
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 lavender farming business that will also grow different types of commercial lavender both in organic and non-organic forms. 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 objectives.
9. SALES AND MARKETING STRATEGY
We are quite aware that the reason why some lavender farming companies hardly make good profits is their inability to sell off their farm produce as at when due.
Our sales and marketing team will be recruited based on their vast experience in the lavender farming 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 Lilian Marcos® Lavender Farms, LLC.
Our goal is to grow Lilian Marcos® Lavender Farms, LLC to become one of the leading lavender 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 and grow to become a major force to reckon with not only in Overland Park – Kansas but also in other cities in the United States of America and the world at large.
In summary, Lilian Marcos® Lavender Farms, LLC will adopt the following strategies in marketing our lavender plants and products;
- Introduce our lavender farming company by sending introductory letters alongside our brochure to households, companies that make use of lavender as raw material in their products production and other key stake holders in the industry in and around Overland Park – Kansas.
- Advertise our business in relevant business magazines, newspapers, TV and radio stations
- List our business on yellow pages’ ads (local directories)
- Attend relevant international and local expos, seminars, and business fairs et al
- Leverage on the internet to promote our business
- Engage direct marketing approach
- Join local chambers of commerce and industries with the aim of marketing our products
- Encourage word of mouth marketing from loyal and satisfied clients
Sources of Income
Lilian Marcos® Lavender Farms, LLC is in the lavender 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 Lilian Marcos® Lavender Farms, LLC;
- Sell of fresh cut lavender bouquets to dried buds
- Sell of lavender bags.
- Sell of Aromatherapy oil
- Sell of lavender soap
10. Sales Forecast
From the survey conducted, we were able to discover that the sales generated by an average lavender farm depends on the size of the farm, and other related production activities that they are involved in.
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 first year of operation and build the business from survival to sustainability.
We have been able to examine the lavender farming 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 Lilian Marcos® Lavender Farms, LLC;
- First Fiscal Year (FY1): $240,000
- Second Fiscal Year (FY2): $350,000
- Third Fiscal Year (FY3): $750,000
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.
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 and willing to utilize every available means to promote the business. Below are the platforms you can leverage on to boost our lavender 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 Overland Park – Kansas
- Distribute our fliers and handbills in target areas
- List our lavender farm in local directories/yellow pages
- Advertise our lavender farm 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
At the regular local Saturday markets in the United States, lavender bunches sell for $6 each. A 20′ x 20′ growing area can produce around 300 bunches each year, worth $1,800. Larger plots are even more profitable. A quarter-acre can produce about 3,000 bunches, worth $18,000.
We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers is to sell them at competitive prices hence we will do all we can to ensure that the prices of our farm produce are going to be what other lavender farmers would look towards beating.
One thing is certain, the nature of lavender farming business makes it possible for farmers to place prices for their farm produces based on their discretion without following the benchmark in the industry. The truth is that it is one of the means of avoiding running into loss. The easier you sell off your harvest the better for your business.
- Payment Options
The payment policy adopted by Lilian Marcos® Lavender 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 payments options that Lilian Marcos® Lavender Farms, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via mobile money
- Payment via Point of Sales Machines (POS Machines)
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for farm produces 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)
From all available statistics and facts available to us, we have been able to come up with an estimate of what we intend spending to establishing our lavender farm in Overland Park – Kansas. This is what it would cost us to setup Lilian Marcos® Lavender Farms, LLC in Overland Park – Kansas, U.S;
- The total fee for incorporating the Business (lavender farm) in United States of America – $750.
- The budget for key insurance policies, permits and business license – $2,500
- The amount needed to hire business consultants – $2,000
- The amount needed to acquire/lease a farm land – $50,000
- The amount required for preparing the farm land (for the cultivation of different commercial lavender species and fencing et al) – $30,000
- The cost for acquiring the required working tools and equipment / machines / flower pots et al – $200,000
- The amount required for purchase of seedlings and mineral nutrients solutions – $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 $300,000 to start a medium scale but standard lavender farm business in the United States of America.
A lavender farm does not require an office space, most people that run lavender farms operate directly from their farms. But we have decided to open a small liaison office; a place where administrative jobs will be carried out and in future we will also open a production plant (the budget for this is not included).
Generating Funds/Startup Capital for Lilian Marcos® Lavender Farms, LLC
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, it would never become a reality. Finance is a very important factor when it comes to starting a lavender farming business.
No doubt raising startup capital for a business might not come cheap, but it is a task that an entrepreneur must go through. Lilian Marcos® Lavender Farms, LLC will be owned by Lilian Marcos and her 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 $70,000 and soft loan from family members $30,000) and we are at the final stages of obtaining a loan facility of $200,000 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 business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business closes shop.
One of our major goals of starting Lilian Marcos® Lavender 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 cut lavender plants a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Lilian Marcos® Lavender 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.
- 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 Overland Park – Kansas: 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 fence for the farm and preparation of the farm land: Completed
- 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: Completed