Are you fond of gardening or a plant lover? If yes, think of starting a greenhouse business. Here in this article, we provide a complete plan guide to launching a small greenhouse business with costs, legalities, tools required, and much more.
What is a Greenhouse Business?
A greenhouse is a covered glass structure having facilities for temperature control, where different kinds of plants are grown. Greenhouse business is a profitable business. You need to know the techniques of utilizing the heating and cooling effects of the greenhouse and grow different varieties of plants, vegetables, fruits, and flowers.
You can also utilize your greenhouse venture for growing all kinds of saplings and selling them to nurseries, garden owners, and farmers. It is also a great idea to sell seeds of different plants through your greenhouse. Along with that, you can also sell landscaping materials from your greenhouse.
Is Greenhouse Business Profitable?
Greenhouse business is a profitable business as the products have high demand. The prices are also good to ensure you profit. After all the expenses, you can expect a profit ranging between 35-40%. If you expand your business with multiple greenhouses in different areas, your profits will go higher. For a single greenhouse, you can expect earnings of $135000 to $145000.
This type of farm business is a growing business area globally and the demand is rising. According to research and statistics, the commercial greenhouse market is expected to reach approximately USD 49.31 Billion by 2027, from 2020 to 2027. Hence, you can have a good profit and steady income from this business.
Here are the 13 Steps to Start a Small Greenhouse Business
1. Select Location
Starting your greenhouse business in your area may give you some advantages. You don’t need to travel and incur transport costs, you will have the advantage of acquaintance, selling locally will also save costs, etc. However, you have to make sure that the area has a good demand for items produced from your greenhouse. On the other hand, you can plan your product according to the local demands.
2. Research and Data Collection
This is an important step in starting and growing your greenhouse business. Exhaustive market research on the demographic profile, topographical features, greenery, and affordability of the people of the area is your prime responsibility. Get to know about the most demanded items in the area. Along with that take note of the number of competitors in the area to know your prospects as a new business.
3. Tools & Equipment
Greenhouse business involves a special type of plantation that requires several kinds of equipment, accessories, and structures. You have to know about them before starting your greenhouse business. The essential items of the greenhouse business are as follows:
- Land for the greenhouse
- Building materials for a greenhouse-like a frame, covering material, etc/buying a premade greenhouse
- Electricity connection
- Irrigation system
- Ventilation System
- Cooling and Heating arrangements
- Benches, and wire shelving
- Seeds, fertilizers, saplings, etc
- Farming equipment
All these are essential to start with. You may need more things with time.
4. Select Crops
It is most important to choose the crops according to the local demand. You have many choices in this field. Focusing on organic produce will fetch you a good income. In that case, you have to get certified that your products are fully devoid of any chemical fertilizer or pesticides. Selling flowers is another option where you can sell both seasonal flowers or grow off-season flowers using the temperature control system of your greenhouse.
Growing your greenhouse business as a supplier to the nurseries or landscaping agents is also a profitable idea. However, fruits and vegetables top the list of most demanded greenhouse produce. They are tomatoes, herbs, lettuce, strawberries, peppers, spinach, cucumber, etc. They are mostly easy to grow and have round-the-year demand.
Whatever you choose, you have to do the market survey as well as planning. Don’t go for too many crops together, select a few among them.
5. Create a Business Plan
Now that you have crossed the initial stages of planning, it is time to write down the business plan for your greenhouse business. Write everything in detail and mention your thoughts, strategies, market trends, and statistics. Try to be very specific and true. Your business plan must cover topics like
- Prospects of greenhouse business
- Vision and mission
- Area of business and its significance
- Types of crops
- Things and materials required
- Cost of starting the business
- Source of funds
- Projected Profit
- Marketing Plan
Write all the points lucidly and comprehensively. This business plan will help you in doing your greenhouse venture in an organized manner. Apart from that, you can apply for finance from banks or other institutions with the help of this business plan.
6. Name of the Greenhouse Business
Choose a suitable name for your greenhouse business. Keep in mind, that the name should be self-explanatory, i.e. it should have the feel of a greenhouse or something related to plants. Long or indirect names do not apply to this business. You must go for a simple and meaningful name.
Find the domain in the name of your business for the sake of the website of your company. In case the domain is not available, you have to change or alter the name.
7. Company Formation
Legalization of your greenhouse business is the next step. Different forms of business organizations are there like Sole Proprietorship, Partnership, LLC, S Corp or C Corp. Choose any form as per your convenience.
8. Licenses and Permits
Get the necessary licenses and permits needed for your greenhouse business both at the federal as well as state levels.
9. Tax Registration
Register your greenhouse business for the taxes applicable to it. Also, get the EIN or Employer Identification Number.
10. Buy Insurance
Get proper business insurance to protect the property, produce, equipment, etc. You will need General Liability Insurance, Risk Insurance, Workers’ compensation, Commercial Property Insurance, etc. Consult an expert in insurance before buying any policy. Furthermore, you need to calculate the premiums thoroughly.
11. Open a Business Bank Account
Opening a bank account in the name of your business is an essential step. Also, get a business credit card to avail of credit facilities.
12. Cost of Starting a Greenhouse Business
Starting your greenhouse business will cost you around $100000 because there are many areas of investment like land, equipment, etc. The heads of expenses are
- Cost or rent of land
- Greenhouse building expenses
- Cost of plants, flowers, produce, seeds, and other items
- Sourcing uninterrupted water supply
- Temperature control
- Salaries and wages
- Marketing cost
- Taxes, licenses, and permit costs
- Insurance premium
13. Marketing Plan
Your greenhouse business will need an aggressive and strategic marketing plan. Some of the low-cost marketing activities one can apply are the following:
a) Direct Contact
Direct contact with farmers, farmers’ markets, landscaping agents, nurseries, and individual garden owners is very important for your greenhouse business. Make a good brochure and distribute it to the contacts.
Give ads in newspapers, radio, TV, magazines, etc to get noticed.
c) Create Posters and Ad Materials
Use posters, flyers, and pamphlets about your greenhouse business and distribute them generously to people. Place the posters at good locations. Also use banners, hoardings, and glow signs at prominent places. Also, create a catchy logo that properly manifests your products.
Register your name on the websites containing information about greenhouses. Also, enter the name of your greenhouse business in different directories and yellow pages.
d) Create a Website
Design your website with good pictures as well as details of your greenhouse company. Mention your products and the respective price range. Also, enable online sales through the website.
f) Have Social Media Presence
Create pages in the name of your greenhouse company on the social media handles. Giving paid ads on social media is also very effective.
g) Participate in Fairs and Exhibitions
Participate in different agricultural exhibitions and fairs. This will spread the name of your business. Display your products in the exhibitions for greater publicity.
Greenhouses spread the green cover and produce fine products. You can start your greenhouse business and be a part of a healthy and lucrative business.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.