Hydroponics Farm Business Plan

FynbosFarm

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Strategy and Implementation Summary

The FynbosFarm group strategy is to profitably and efficiently utilize present and future agricultural technology in the production of vegetables. The company, by developing a profitable vegetable farm with all the necessary custom-innovated equipment, will gain a significant industry advantage.

Additional application and utilization of horticultural technology in the production of vegetables will double utilization of the climate controlled portion of the overhead.

The company's goals in the first year are to:

  • Develop the complete project.
  • To have all 6ha planted and ready for production.
  • To have the instant turf planted and ready for production early in year 2.
  • To have grading and pack shed constructed.

The company's long term plan is to also produce more selective vegetables as well as looking to get into the fresh flower market. 

5.1 Competitive Edge

FynbosFarm's main competitive advantages are:

  • Efficient production utilizing greenhouses.
  • No existing projects of this magnitude in the KZN region.
  • Experience in the vegetable industry goes back to 1996.

5.2 Marketing Strategy

FynbosFarm will market and supply its products to the selected outlets aggressively, focusing at first on local markets, and then on export options. We will emphasize the reliable year-round output of our climate-controlled hydroponics facilities, as well as the ability to produce in-demand, non-native vegetables.

Marketing for turf will take place with direct contact between FynbosFarm and regional greenhouses and landscapers.

The company will also eventually develop a website and advertise on the Internet, although these future marketing avenues are not included in this plan.

5.3 Sales Strategy

At FynbosFarm, the sales process is primarily the same for vegetables as it is for instant turf, in that both products will be mainly sold through wholesale marketing. Shipments of vegetables will be transported in refrigerated trucks as per orders, and instant turf will be palletized on open back trucks as per orders. 

5.3.1 Sales Forecast

We expect to have exceptional sales in the first year. Our direct unit costs include the costs for the agricultural labor force who will tend and manage the vegetables and turf, including incentives and bonuses. These costs are roughly 35% of all direct costs each month.

Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Unit Sales
Tomatoes 2,100,000 1,500,000 2,100,000 1,500,000 2,100,000
Peppers 205,000 210,000 205,000 210,000 205,000
Cucumbers 250,000 250,000 250,000 250,000 250,000
Instant Turf 150,000 200,000 200,000 200,000 200,000
Total Unit Sales 2,705,000 2,160,000 2,755,000 2,160,000 2,755,000
Unit Prices Year 1 Year 2 Year 3 Year 4 Year 5
Tomatoes R4.00 R4.25 R4.50 R4.75 R5.00
Peppers R10.00 R10.50 R11.00 R11.50 R12.00
Cucumbers R1.80 R1.90 R2.10 R2.20 R2.30
Instant Turf R10.00 R11.00 R12.00 R13.00 R14.00
Sales
Tomatoes R8,400,000 R6,375,000 R9,450,000 R7,125,000 R10,500,000
Peppers R2,050,000 R2,205,000 R2,255,000 R2,415,000 R2,460,000
Cucumbers R450,000 R475,000 R525,000 R550,000 R575,000
Instant Turf R1,500,000 R2,200,000 R2,400,000 R2,600,000 R2,800,000
Total Sales R12,400,000 R11,255,000 R14,630,000 R12,690,000 R16,335,000
Direct Unit Costs Year 1 Year 2 Year 3 Year 4 Year 5
Tomatoes R2.00 R2.13 R2.25 R2.38 R2.50
Peppers R5.00 R5.25 R5.50 R5.75 R6.00
Cucumbers R0.90 R0.95 R1.05 R1.10 R1.15
Instant Turf R4.80 R5.28 R5.76 R6.24 R6.72
Direct Cost of Sales
Tomatoes R4,200,000 R3,187,500 R4,725,000 R3,562,500 R5,250,000
Peppers R1,025,000 R1,102,500 R1,127,500 R1,207,500 R1,230,000
Cucumbers R225,000 R237,500 R262,500 R275,000 R287,500
Instant Turf R720,000 R1,056,000 R1,152,000 R1,248,000 R1,344,000
Subtotal Direct Cost of Sales R6,170,000 R5,583,500 R7,267,000 R6,293,000 R8,111,500

5.4 Milestones

The following table and chart show the main milestones for the first year.

Milestones
Milestone Start Date End Date Budget Manager Department
Raise funding 11/1/2004 1/15/2005 R0 ABC Department
Begin Construction 2/1/2005 2/5/2005 R15,000,000 ABC Department
Begin First Crop Planting 5/10/2005 5/15/2005 R5,000,000 ABC Department
Begin Sales 7/1/2005 7/10/2005 R0 ABC Department
Begin Turf Sales 10/1/2005 10/10/2005 R0 ABC Department
Total Sales over R12 Million 7/1/2005 6/30/2006 R0 ABC Department
Totals R20,000,000
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Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Unit Sales
Tomatoes 2,100,000 1,500,000 2,100,000 1,500,000 2,100,000
Peppers 205,000 210,000 205,000 210,000 205,000
Cucumbers 250,000 250,000 250,000 250,000 250,000
Instant Turf 150,000 200,000 200,000 200,000 200,000
Total Unit Sales 2,705,000 2,160,000 2,755,000 2,160,000 2,755,000
Unit Prices Year 1 Year 2 Year 3 Year 4 Year 5
Tomatoes R4.00 R4.25 R4.50 R4.75 R5.00
Peppers R10.00 R10.50 R11.00 R11.50 R12.00
Cucumbers R1.80 R1.90 R2.10 R2.20 R2.30
Instant Turf R10.00 R11.00 R12.00 R13.00 R14.00
Sales
Tomatoes R8,400,000 R6,375,000 R9,450,000 R7,125,000 R10,500,000
Peppers R2,050,000 R2,205,000 R2,255,000 R2,415,000 R2,460,000
Cucumbers R450,000 R475,000 R525,000 R550,000 R575,000
Instant Turf R1,500,000 R2,200,000 R2,400,000 R2,600,000 R2,800,000
Total Sales R12,400,000 R11,255,000 R14,630,000 R12,690,000 R16,335,000
Direct Unit Costs Year 1 Year 2 Year 3 Year 4 Year 5
Tomatoes R2.00 R2.13 R2.25 R2.38 R2.50
Peppers R5.00 R5.25 R5.50 R5.75 R6.00
Cucumbers R0.90 R0.95 R1.05 R1.10 R1.15
Instant Turf R4.80 R5.28 R5.76 R6.24 R6.72
Direct Cost of Sales
Tomatoes R4,200,000 R3,187,500 R4,725,000 R3,562,500 R5,250,000
Peppers R1,025,000 R1,102,500 R1,127,500 R1,207,500 R1,230,000
Cucumbers R225,000 R237,500 R262,500 R275,000 R287,500
Instant Turf R720,000 R1,056,000 R1,152,000 R1,248,000 R1,344,000
Subtotal Direct Cost of Sales R6,170,000 R5,583,500 R7,267,000 R6,293,000 R8,111,500
Milestones
Milestone Start Date End Date Budget Manager Department
Raise funding 11/1/2004 1/15/2005 R0 ABC Department
Begin Construction 2/1/2005 2/5/2005 R15,000,000 ABC Department
Begin First Crop Planting 5/10/2005 5/15/2005 R5,000,000 ABC Department
Begin Sales 7/1/2005 7/10/2005 R0 ABC Department
Begin Turf Sales 10/1/2005 10/10/2005 R0 ABC Department
Total Sales over R12 Million 7/1/2005 6/30/2006 R0 ABC Department
Totals R20,000,000