Do you want to start a greenhouse farm? If YES, here is a complete guide to starting a greenhouse farming business with NO money and no experience plus a sample greenhouse farming business plan template.
In the united states and in most countries of the world, you can successfully start your own greenhouse farm and grow the business into an international venture by exporting your farm produce throughout the United States of America and to other parts of the world.
A greenhouse (also known as a glasshouse, or a hothouse as the case may be) is a structure with walls and roof made essentially of a transparent material such as glass, in which plants requiring regulated climatic conditions are grown. These structures vary in size from small sheds to industrial-sized buildings used for commercial farming.
Generally, greenhouses are often used for cultivating crops such as flowers, vegetables, fruits, and for transplants. Special greenhouse varieties of certain crops such as tomatoes, are generally used in tomato paste companies and for commercial production.
It is a fact that vegetables and flowers are grown in greenhouses in late winter and early spring, and then transplanted outside as the weather warms. Starting a greenhouse farm 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 greenhouse farm on a small scale or on a large scale depending on their financial status. If you are interested in starting a greenhouse farm business, then you should pay attention to this article.
Steps to Starting a Greenhouse Farming Business
1. Understand the Industry
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, 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 food production in marginal environments.
This is so because Greenhouses enable certain crops to be grown all though the year irrespective of the climatic condition. Greenhouses are increasingly becoming an important factor in the food supply chain of high-latitude countries.
Many commercial glass greenhouses or hothouses are high tech commercial production facilities for vegetables or flowers. Usually, the glass greenhouses are filled with equipment such as screening installations, heating, cooling, lighting, and also may be controlled by a computer to enhance conditions for plants to grow effectively.
The Greenhouse Commercial Farming industry is indeed a fast – growing industry and pretty much active in countries such as United States of America, Netherlands, Japan, China, Germany, Singapore et al. As a matter of fact, The Netherlands has some of the largest greenhouses in the world.
That is the scale of food production in the country so much so that in 2000 alone, greenhouses occupied about 10,526 hectares, or 0.25 percent of the total land area.
The Netherlands has an estimate of 4,000 greenhouse establishments that operate well over 9,000 hectares of greenhouses and employ about 150,000 workers, producing €7.2 billion worth of vegetables, fruit, plants and flowers, some 80% of which is exported.
Statistics has it that in the United States of America alone, there are about 2,307 registered and licensed greenhouse commercial farms responsible for employing about 7,939 and the industry rakes in a whooping sum of $848 million annually. The industry is projected to enjoy 5.3 percent annual growth.
Some of the factors that encourage entrepreneurs to start their own greenhouse farms are that the business is still pretty much green and they can easily get support from the government. You can actually start your own greenhouse farm in your compound if you live in a rural/farming community. All you need to do is to build the greenhouse, get the first set of seedlings and then build safe fence around the farm.
Just like any other business, if you are able to conduct your cost analysis, market research and feasibility studies before launching your greenhouse farm, you are more likely not going to struggle to sell your farm produce because there are always food processing companies and consumers out there who are ready to buy from you.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who consume farm produce from greenhouse farms is not restricted to a group of people. Children, adults, whites and blacks et al consume 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 as well as the choys that are used for stir fries; these are the crops an average greenhouse farmer cultivates, hence the market for greenhouse farm produce is all encompassing.
So, if you are looking towards defining the demographics of your greenhouse farm produce business, then you should make it all encompassing. It should include households, groceries stores, hotels, restaurants and food processing companies that rely on supply of fresh fruit and vegetables et al from greenhouse farms.
3. Decide Which Niche to Concentrate On
There is no niche area in the greenhouse farm industry since greenhouse farm is a niche in commercial farming, though a greenhouse farmer can decide to specialize in either cultivating only fruits, or vegetables or plant transplant services or they could generalize or add vegetable and fruit processing and packaging and Greenhouse construction, consultancy and advisory services.
So, if you are looking towards starting your own greenhouse farm, then you should clearly define your market so that you will be able to know how to get your greenhouse farm produce to them.
The Level of Competition in the Industry
No matter the line of business you decide to pitch your tent, you are still going to compete with others who are into same area of business and greenhouse farms business is not an exemption despite the fact that it is technical and still pretty much green.
The level of competition in the greenhouse farms industry to some extent depends largely on the location of the business and of course the capacity of your greenhouse farm. If you can successfully create a unique niche for your greenhouse farm, you are likely going to experience little or no competition. For instance, if you are the only greenhouse farm in your location that is into plant transplant services, you can successfully monopolize the market for a long time before you start having competitions.
It is important to also state that the competitions in the greenhouse farm industry depends on the scale of your greenhouse farms. There are greenhouse farms in the United States that are competing with global greenhouse farms and there are greenhouse farms in the United States that can only compete at local level.
4. Know Your Major Competitors in the Industry
These are some of the leading greenhouse farms in the United States of America;
- Color Spot Nursery – California
- Costa Farms – Florida
- Altman Plants – California
- Kurt Weiss Greenhouses – NY
- Rocket Farms – CA
- Bell Nursery USA – MD
- Metrolina Greenhouses – North Carolina
- Color Point – KY
- Seville Farms – Texas
- Green Circle Growers – OH
- The Sun Valley Group – CA
- Ivy Acres – New York
- Delray Plant CO – FL
- Milgro Nursery – UT
- Flora Plant Grower – WI
- Olson’s Greenhouse Gardens -UT
- Bela Flor Nurseries – MO
- Northwest Horticulture – WA
- Headstart Nursery – CA
- Battlefield Farms – VA
When starting a greenhouse farm business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start exporting fruits and vegetables within your country and other countries of the world.
When conducting costing and economic analysis for your greenhouse farm business, you just have to critically examine these key factors; place, product, pricing and promotion. As a matter of fact, you would have to continue to review these key factors at regular interval while running your greenhouse farm business. As a greenhouse farm owner, you just have to have a proper grasp of your competitive landscape if indeed you want to 5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise. Besides, from available research conducted, there are no known fully operational greenhouse farm in the United States of America, that is into franchising; most players in this line of business are adopting strategies that will help them sell their farm produce beyond the city, state or country where their greenhouse farm in domiciled to other parts of the world as against selling franchise.
Besides, it is easier to start and run a greenhouse farm from scratch to profitability without leveraging on a known brand name. People will patronize your fruits and vegetables based on accessibility and pricing as against relying on a brand name.
Please note that most of the big and successful commercial greenhouse farms around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own greenhouse farm to become a successful greenhouse farm in your area of specialization and even go ahead to start exporting vegetables and fruit products to other countries of the world.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own greenhouse farm business today, one of the major challenge you are likely going to face is the presence of well – established commercial greenhouse farms in your target market location. The only way to avoid this challenge is to create your own market; concentrate on households, individuals and also start–ups food processing/production companies who need regular supply of fresh fruit and vegetables from greenhouse farms.
Some other threats and challenges that you are likely going to face when you start your own greenhouse farms are global economic downturn that can impact negatively on household spending, bad weather cum natural disasters (draughts, epidemics), unfavorable government policies and the arrival of a competitor (a greenhouse farm or even commercial farm that are also into cultivation of fruits and vegetables) within the same location. There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When it comes to choosing a legal entity for your business, what you want and the type of business model that you intend building should be some of the factors that should guide your decision. Generally, you have the options of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as greenhouse farm business.
Ordinarily, sole proprietorship should have been the ideal business structure for a greenhouse farm business especially if you are just starting out with a moderate start – up capital. But people prefer limited liability company for obvious reasons.
As a matter of fact, if your intention is to grow the business and start exporting fruits and vegetables to other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need board of directors, shareholders meeting and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your greenhouse farm business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes. If you take your time to critically study the various legal entities to use for your greenhouse farm business, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially if you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your greenhouse farm business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.
8. Choose a Catchy Business Name
Generally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own greenhouse farm business, here are some catchy names that you can choose from;
- Eddie Maslow Greenhouse – Farms, LLC
- Scientific Approach Farms, Inc.
- Fairhope Town Community Greenhouse Farms, Inc.
- John Dre Greenhouse Commercial Farms Ltd.
- Pius L.P & Family Greenhouse Farms, LLC.
- Crest Laurel Commercial Greenhouse Farms Ltd.
- Fresh Fruits Greenhouse Farms, Inc.
- Dave & Friends Commercial Greenhouse Farms, Inc.
- Fresh Vegetables Greenhouse Farms, Inc.
- Ted Sean Nursery Group, LLC.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the united states and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your greenhouse farming business.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own greenhouse farm business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Farm Equipment and Auto Insurance
- Commercial Agribusiness Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own greenhouse farm business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even crop cultivation concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Asides from the quality and quantity of fresh vegetables and fruits that you produce from your greenhouse farm, professional certification is one of the main reasons why most greenhouse farmers win contracts as it relates to plant transplant services and greenhouse construction, consultancy and advisory services; you should work towards acquiring all the needed certifications in your area of specialization.
You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. These are some of the certifications you can work towards achieving if you want to run your own commercial greenhouse farm business;
- Certified Greenhouse Farmers (CGF)
- Green Building Certification
Please note that the average local greenhouse farmer in suburbs in the United States do not have certifications and that does not in any way stop them from growing their greenhouse farms.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentation.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own commercial greenhouse farm business in the United States of America;
- Business Incorporation Certificate
- Business and liability insurance
- Commercial Vehicle Operator’s Registration for distribution truck
- Appropriate driver’s licenses for drivers
- Assistant’s licenses for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Depot, commissary or service support facility meets vending unit operation needs
- Copy of license for the service support facility and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Farm Partnership Agreement
- Insurance Policy
- Apostille (for those who intend exporting crops beyond the United States of America)
13. Raise the Needed Startup Capital
Starting a standard and well – equipped commercial greenhouse farm business can be capital intensive especially if you choose to launch a large greenhouse farm with the capacity to supply fresh fruits and vegetables beyond your immediate community.
Securing a large farm land, building well – secured greenhouse, purchase of the first set of seedlings, fertilizers and commercial farming equipment are part of what will consume a large chunk of your start – up capital, but if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your greenhouse farm business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Selling shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source of soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
Starting a business such as greenhouse farm comes with its own fair share of challenges; it is a business that cannot be started in any location of your choice. As a matter of fact, you will not be allowed to start a greenhouse farm in a residential estate in the United States of America, Canada, the United Kingdom and Australia. The only location you can be allowed to start a commercial greenhouse farm is a farm land designated for commercial farming.
It cannot be overemphasized that the location you chose to start your greenhouse farm is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power, and a location that has minimal predators and right climatic condition for the types of crops they intend cultivating.
If you make the mistake of renting or leasing a farm land for your commercial greenhouse farm business in a location that is prone to predator attack and hash climatic condition simply because it is cheap, then you must be prepared to spend more in protecting your crops and welcoming potential customers.
15. Hire Employees for your Technical and Manpower Needs
When it comes to starting a standard greenhouse farm business, you will need to construct a greenhouse or hothouse. Usually, the glass greenhouses are filled with equipment such as screening installations, heating, cooling, lighting, and also may be controlled by a computer to enhance conditions for plants to grow effectively.
When it comes to choosing between renting and leasing a farm land for your greenhouse farm; the size of the farm you want to own, and your entire budget for the business should influence your choice. If you have enough capital to run a pretty large and well – equipped greenhouse farm, then you should consider the option of long lease or out rightly purchasing a farm land; when you lease or purchase a farm land, you will be able to work with long – term planning, structuring and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard greenhouse farm business on a large scale, you would need the services of the following professionals; Chief Executive Officer (you can occupy this position), General Farm Manager, Human Resources and Admin Manager, Accountant/Cashier, Sales and Marketing Executive, Field Employees, Cleaners, and Security Guards.
Over and above, you would need a minimum of 15 to 20 key staff members to effectively run a medium scale but standard greenhouse farm. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some job function.
The Service Delivery Process of the Business
If you are conversant with rising technology and scientific development in the agriculture industry, you will quite agree that greenhouse commercial farming is at the front burner. Greenhouse commercial farming is rapidly gaining entrance into 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 food production in marginal environments.
This is so because greenhouses 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.
16. Write a Marketing Plan Packed with ideas & Strategies
As a greenhouse farmer, you would have to prove that you have the capacity not only to manage a greenhouse farm, but also to supply fresh fruits and vegetables in commercial quantities on a consistent basis. So, if you have plans to start your own commercial greenhouse farm, it will pay you to first build your capacity before sourcing to supply fresh fruits and vegetables to larger food processing and packaging companies who required fresh fruits and vegetables from commercial greenhouse farms.
The fact that the entry barrier for starting a small – scale greenhouse farm business is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with creativity and innovations if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans and strategies for your commercial greenhouse farm, make sure that you create a compelling personal and company profile. Asides from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in times past as it relates to crop cultivation cum commercial greenhouse farming when sourcing for plant transplanting contracts and construction of greenhouse. This will help boost your chances in the market place.
Please note that in most cases, when you bid for plant transplant and construction of greenhouse from organizations and individuals who want to venture into commercial greenhouse farming, you will be called upon to defend your proposal, and so you must be pretty good with presentations.
Here are some of the platforms you can utilize to market your greenhouse farm and its produce;
- Introduce your business by sending introductory letters alongside your brochure to households, food processing and manufacturing companies that make use of fresh fruits and vegetables, groceries stores, hotels, restaurants and other related businesses in the United States (if you are just starting out, you may want to concentrate on start – ups and smaller businesses)
- Promptness in bidding for fresh fruits and vegetables supply contracts et al
- Open your commercial greenhouse farm with a party so as to capture the attention of residence who are your first targets
- Engage in roadshows in targeted communities from time to time to sell your fruits and vegetables
- Advertise your products in community based newspapers, local TV and radio stations
- List your business and products on yellow page ads (local directories)
- Leverage on the internet to promote your greenhouse farm
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people would consider you an expert in the field)
- Join local chambers of commerce around you with the main aim of networking and marketing your fresh fruits and vegetables; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable and lasts long.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your commercial greenhouse farm;
- 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 your business
- Install your Bill Boards on strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods
- Distribute your fliers and handbills in target areas
- Contact food processing companies, hotels, restaurants, groceries stores and residence in your target areas by calling them up and informing them of your greenhouse farm and the farm produce you sell
- List your commercial greenhouse farms in local directories/yellow pages
- Advertise your greenhouse farms in your official website and employ strategies that will help you pull traffic to the site.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks are well branded with your company logo et al.