commercial aquaponics

[Manny Hattangadi]

own a small (5 acre) farm in pa

want to start a micro leafy-green vegies/fresh water prawn

aquaponics unit by this spring - have contacts with a pa

university with an aquaculture program and also a 12k sq.ft.

commercial aquaponics unit attached to it. I am looking for 

a good business plan 

[Connie Christians]

No, not lacking in innovation- the word I used was 'inspiration'... it speaks to the soul, not the mind.

[Damon Polta]

im not here to put people down, it's more like to keep them grounded...

most people being sold the idea of commercial AP are getting bloated figures, and that's saying those figures have any truth to them at all... it does take a bit of inspiration to start a business, but intentions don't always equate to dividends... i've seen that word play at work in its most ugly of forms... when looking to go commercial the bottom line is, the bottom line.... and that's putting it lightly... it might be inspirational to feed the world... but you shouldn't put your financials in jeopardy trying to do so...

some phrases to look out for that'll come form people selling "off the shelf" BP's...

produce yield rates being expressed as points of sale... just because it can be grown, that doesn't mean it can be sold... some of what you will grow will be un-sellable to do product defects.

basically anything that talks about rearing fish.... all species of fish are different, and not all places are allowed to raise all types of fish... so if the place you're getting your plans from only speak of tilapia, first make sure you're allowed to raise them in your region, if so, find out which species, and then see if that species growth rates match up to the ones specified in the BP if you're not allowed to have tilapia, then you have to find a fish that is suitable for your region. this not only requires a close look at its temperature thresholds, but the kind of water quality that you'll have to provide for your fish as well... higher water clarity = extra filters = extra costs... you could use a dirst water fish, or a fish that doesn't require super clean water, but you'll have a hard time finding a market for selling those fish... that's why tilapia are used... they can handle less than perfect water and still have a high market demand price...

watch out for the phrase "year round growth." most of the commercial business plans are built on the basis of out door growth... so if you're planning on building a system in the northern latitudes... you can automatically tack on the cost of a green house.... along with the cost to heat you're green house in the winter months. some people see this point as common sense... but it goes over looked more often than not...

never trust the quoted sales price of product in a manual... things are regionally priced... a head of lettuce in hawaii will be sold at a higher price than lettuce in cali.and that price will be different than the price of lettuce being sold in ohio, and in africa, and in india, and in asia... 

also look and see if there is a shipping cost in the budget... if there isn't you'll have to put one there.how else are you going to get your product to market?

things like refrigerating units, sanitizing materials, shipping materials, water plumbing, construction permits, back up electrical systems, and labor will normally be left out of the "off the shelf" budget plan... they tend to make the start up cost look less pretty...

learn from my mistakes... never trust what you see on a piece of paper... make sure that what is being presented on one piece of paper is congruent on other pieces of paper written on by different people... just because it's put down in the black and white that doesn't make it true, it just means some one wants you to think it's true.

[TCLynx]

Connie, we are not really trying to be pessimists though I know it might sort of seem like it, but I have to agree with Damon.

Too many people hear of the idea of aquaponics and come across some of the extreme e book advertizing that say you can grow 10 times the amount of vegetables in 1/2 the space in 1/2 the time with no work once the system is set up and people suddenly think they could run a commercial operation from their couch in their spare time or something.  And this is not reality.  Farming of any sort is a lot of work and turning it into a business will take some careful market research for the local conditions.  Aquaponics operations should find themselves a niche market since trying to sell against the commodity crops in the big chains is rarely going to be easy.

And as most people probably already recommend.  Before you ever try to go large scale commercial.  Build a small system and get your feet wet so to speak with a backyard scale system and become experienced with aquaponics before you decide if you really want to do it for a living.  Remember, farming means no vacations or holidays unless you have some one you can trust to tend the operations while you are away.

[steve]

I'd rather live the dream being told it cannot be done. Rather than being told how easy it is, only to become discouraged from the impossibility.

[TCLynx]

On the nose there steve.  I hate when people exaggerate the claims about aquaponics and then people get all discouraged that there are not tomatoes popping off the vines three weeks after they have set up a brand new system.  Patience is in short supply these days and the exaggerations make it so much worse especially since the first six months of an aquaponics system it is still immature and not really coming into it's prime till it's a year old (and then they get better.)

[Damon Polta]

im not saying it's impossible, really on the other forums you'll see im arguing for the viability of commercialization.

the problems are that some people are selling this idea that AP is an easy thing to do... and really... it's about as hard as actual farming.

also, the "one size fits all business plans," either over look and misinterpret data points that can kill a potential business... because the people writing the manuals are in the business of making money using aquaponics, they're in the business of making money selling the idea of aquaponics, so to make their presentations look real pretty and eye catching, key factors in cost, climate control, and production are either left out or embellished...

how many business plans have you seen that run a mosaic virus recovery plan? or any type of failure rate for that matter?

hoe many business plans have you seen show the production of sellable product? and not just system growth?

im not here to say it's impossible, because nothing is impossible, im just giving people more of what they need to know to make the best and most informed decision as possible.

[Connie Christians]

All very good discussion points. I appreciate it. Questioning everything is part of being a good consumer and businessperson. I agree that the clearer a person is, going into a business venture, the better they are at staying focused and navigating the pitfalls. I simply think it's important not to lose sight of the 'people part' of the equation: Turning a passion into a business changes the individual- been there, done that. It's not JUST the balance of fish and plants. As I stated before, business is business, but I would suggest that IF there is no sustainable reason or belief to be doing what you're doing...what's the point? Money isn't everything- especially in horticulture- IMHO.

As a new participant and having read many posts in the entire forum, I'm a little concerned about the tone sometimes and the focus on scammers... Maybe I stumbled into the middle of some other conversation? No doubt, the cut-throat nature of online posers make it ever more important to perform due diligence.

Damon, even though I agree with the presence of 'bloated figures', I find some dispute with the idea that there can't be a basic BP to follow. Helping someone find a comfortable entry point to launch into something new begins with a conversation: I prefer to start with the original motivation and a simple outline. The gaps are almost always filled through lots of research -sometimes using great forums . Then reasonably, development is formed in phases. To be clear, the first questions to be answered are 'Why are you doing this and what are your expectations?' And it goes without question, that testing and review is always part of that answer.

Maybe I'm lucky to have an experienced team to work with that not only shares a healthy business POV, but also a humanist focus to promoting solutions that would help others succeed. I'm optimistic that the future holds a reliable, replicatable BP that can be adjusted to fit most situations.

And to address the idea that perfectly-formed, 'beautiful' food is not sellable or wasted: there are lots of organizations that would disagree. To begin with, best cultural practices should always be used to reduce loss to diseases, like rotting and leaf spots. (I thought 30% loss was a very high estimate.) Secondly, there are other methods and markets available to accommodate less-than-perfect lettuce, herbs, etc. You mentioned in an earlier post, the grading process- 'seconds' should definitely be counted as part of the revenue stream, but not necessarily the dominant part.

The mention that a greenhouse is a 'must-have' in northern climates is another notion that I question. Having had greenhouses for many years, I have realized the extreme vulnerability of two pieces of poly stretched over a frame and the terrific expense of other clear, rigid building materials. Not to mention, the amount of constant inspection and maintenance ie: overheating, venting, shading- even in winter. I like greenhouses, they are cool to have; but I'd wager they require more work than the aquaponics they would house. It's my notion, for instance, that technology has allowed food production to move forward through innovations in the efficient use of LED and passive energy capture regardless (maybe not the best word) of the structure. It's increasingly more important to have food sources closer to markets and population centers. Sadly, a greenhouse may not be the best, most usable or most secure option. Reclamation of abandoned buildings may solve the 'year-round' challenge and provide a solution to urban food deserts.

I love the possibilities: Out of the box thinking goes right along with aquaponics.

[RupertofOZ]

Damon Polta said:

 

the problems are that some people are selling this idea that AP is an easy thing to do... and really... it's about as hard as actual farming.

 

And that's the whole point.... it is farming... if you intend to operate as a "commercial" business...

Your business is selling fish and plants.... aquaponics is just the method you're using to produce what you are selling....

If you can cover your costs from the sale of the fish... then the plants are your profit...

If your fish aren't profitable... and Tilapia in many places.. from what I've read/heard... may well not be... then any potential profitability depends on your plant sales...

And if the plants aren't profitable... then neither will the business be.... even if you're not paying yourself...

So work out how much money you'd like to make each week... how much you might get for each plant.. then reduce it by 20%... and you'll know how many plants you'll need to produce/sell each week....

That will tell you roughly what the scale of your operation would need to be... and some rough capital costings... then increase them by 20%...

Then figure out if you can sell that many... and if you have the time, on your own... to seed/plant/harvest/market and distribute that many plants...

If you can't run an operation, on your own... at the scale needed.... then you'll have to pay labour... which means at least tripling/quadrupling the size of your operation....

And that volume means you'll need to sell wholesale... and your price/plant will probably halve...

Which effectively means that your scale will probably need to treble/quadruple again... and require more labour etc....

IMO... stay small... under 10,000sq ft.... operate it as a single owner/operator... and direct niche market...

[Averan]

Connie,

the 'people' part of the equation is a given here.  Most folks that have discovered aquaponics have already had some transformative inspirational moment and now are interested in making their dream a reality.  Those same folks very often have ZERO previous experience growing food much less making a sustainable profitable business out of it.  But I don't want to derail this thread with semantics.

With my tiny balcony system I have experienced all sorts of losses and mistakes, often easily more than 30%, and I used to manage production in commercial organic greenhouses!  For example, I just discovered yesterday that the freakin birds have eaten the baby heads off of all my broccoli!  That lesson has reminded me how useful a greenhouse can be in keeping out all the freeloading critters that can easily devastate a crop and bankrupt a business that had not accounted for such losses and was already operating with a narrow profit margin.

But enough of that.  Manny, let your inspiration move you forward and if you haven't built and run an aquaponic system yet I highly recommend that you start something small first.  There is a lot to learn and you can work out a lot of the kinks before you commit to a much larger commercial venture.  Aquaponics is still a growing industry, so any commercial outfit at this time will be one of the few brave pioneers leading the way for the rest of us!  Even following 'traditional' models there is quite a lot of local adaptation and innovation necessary to make aquaponics work.

I apologize to all for my babbling and almost pointless ramble!  I'd much prefer to give Manny the info he's asking for than to waste all of our time pontificating.  

[Damon Polta]

the closest thing we could possibly have in terms of a business plan would be more of a template, and less of a plan.

what a template would do is provide the prospective business person a complete list of variables that need to be considered.

in the cost/ benefit portion of the list it would give the person a good idea to expect. the template would be set up to where you just punch in the numbers you're looking to hit, or productivity numbers, and put them against your prospective sales price, and then automatically hit 3-5 different failure rates all while counting in the costs of production... i build spread sheets for fun to impress my employers... so setting one of these up isn't that difficult... it's just time consuming... a template built to where all you have to do is add in the numbers to the designated fields that will better illustrate the possibilities of production. 

then on the uncontrollable variables such as regional climate and pests, it would weigh the pros and cons of building a system... this would also factor in the necessity for a greenhouse or hoop house in the northern latitudes, or a net house in the tropics, or if you live in a desert where pests are hard to come by no protection at all other than from the sun...

it would basically only guide you as to what the potential of your farm could be, and not be a satiated fact of production...

as averan said, there's so many unseen variables that the average person is going to miss. but the construction of a list of variables will help people see or realize things that they had previously over looked...

and i do understand what a business does to ones passion... i love to cook and have done so for many years in restaurants. after my 10th year of cooking for other people i found myself eating out once i got home... i had lost the passion to cook for myself... so thats when i made the transition to front of the house activities... not only have i gotten my passion back to cook for myself and my family, i also get paid better and get to stay clean while at work, 2 other big bonuses of the switch.

and you're right money isn't everything, but know i'd rather be bummed out in the drivers seat of a ferrari than be bummed out on the seat of a bicycle... just saying...

[Connie Christians]

I have to laugh at your final analogy- I've been in both seats. This is all really good discussion for anyone who wants to go commercial. Manny, or any future forum reader, probably got more than he bargained for.

[Averan]

yup, guilty as charged!  :D