An herb farm business plan sells a crop that keeps for days, not months. Cut basil lasts about a week in a cooler, so an herb farm harvests to order, sells to people who buy every week, and turns whatever doesn't sell fresh into something that keeps: potted plants that are still growing, and dried blends in a tin. In the example below, an herb farm near Salt Lake City sells fresh-cut bunches to restaurants, clamshells at markets and grocers, potted herbs and dried blends, and ends its first year about $36,700 ahead on $77,500 of sales, with the harvesting and the field help paid. Below is a description example, each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the farm in a paragraph: the herbs, the hoop houses, who buys, the goals.
- Cost each sale from the harvest up: cutting and bunching, the bag or clamshell, the cold chain, the fees.
- Restaurants buy every week and take the most; plan the beds to their standing orders.
- Fresh herbs keep about a week; harvest to order, and dry what's left.
- Potted herbs and dried blends sell from the same beds and keep longer.
- TaroStack keeps every harvest as a lot with its date, restaurant orders on one list, and blends as recipes. More below.
Part 1: the business description
Jordan River Herb Farm, a made-up herb farm near Salt Lake City, Utah, I use in these examples, writes:
Jordan River Herb Farm grows culinary herbs on two acres and in two hoop houses, harvested to order for about 20 restaurants, sold in clamshells at farmers markets and two grocers, and as potted herbs and dried blends.
Part 2: what each sale costs
The planting, weeding, seed and water are fixed costs, paid whatever sells. What a sale costs is the harvest and what it goes in:
| Per unit | Bunch, to restaurants | Clamshell, 0.75 oz | Potted herb, 4 in | Dried blend, 1 oz tin |
|---|---|---|---|---|
| Plug, pot and soil, or dried herbs | $0.65 | $0.60 | ||
| Harvesting, bunching or packing at $16 an hour | $0.53 (2 min) | $0.40 (1.5 min) | $0.27 | $0.80 (3 min) |
| Losses before sale | $0.10 | |||
| Rubber band and bag, clamshell and label, or tin and label | $0.05 | $0.25 | $0.85 | |
| Cooler, ice and delivery, its share | $0.30 | |||
| Card or invoice fees, 3% | $0.12 | $0.11 | $0.15 | $0.27 |
| Variable cost | $1.00 | $0.76 | $1.17 | $2.52 |
A restaurant bunch is a quarter pound, cut that morning and delivered in a cooler. How a farm turns a crop that won't keep into products that do is in value added products for farms.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Fresh-cut herb bunch, to restaurants | $4.00 | $1.00 | $3.00 | 75.0% | 1,200 |
| Fresh herbs, 0.75 oz clamshell, markets and grocers | $3.50 | $0.76 | $2.74 | 78.3% | 800 |
| Potted herb, 4 inch | $5.00 | $1.17 | $3.83 | 76.6% | 400 |
| Dried herb blend, 1 oz tin | $9.00 | $2.52 | $6.48 | 72.0% | 200 |
At full speed the restaurants bring about $3,600 of the month's $8,600 of contribution, from about 15 bunches a week each, the clamshells about $2,200, the potted herbs about $1,500 and the dried blends about $1,300. Restaurants are the anchor because they order every week, so the beds can be planted to their standing orders; a market brings whoever comes. The dried blends pay the most a sale, from herbs that would otherwise be compost. What a market stall really costs is in cost to sell at a farmers market.
Part 4: the first year, month by month
Fixed costs are $1,825 a month: the land lease for two acres ($200), hoop house heat and power ($150), irrigation water ($80), seed, plugs and fertilizer averaged ($150), field help for planting and weeding averaged ($800), van fuel ($200), market fees ($100), insurance ($80), the website ($30), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:
| Month | Restaurant bunches | Clamshells | Potted herbs | Dried tins | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 180 | 120 | 60 | 30 | $1,710 | −$532 | −$532 |
| 2 | 240 | 160 | 80 | 40 | $2,280 | −$101 | −$633 |
| 3 | 300 | 200 | 100 | 50 | $2,850 | $330 | −$303 |
| 4 | 360 | 240 | 120 | 60 | $3,420 | $761 | $458 |
| 5 | 480 | 320 | 160 | 80 | $4,560 | $1,623 | $2,081 |
| 6 | 600 | 400 | 200 | 100 | $5,700 | $2,485 | $4,566 |
| 7 | 720 | 480 | 240 | 120 | $6,840 | $3,347 | $7,913 |
| 8 | 840 | 560 | 280 | 140 | $7,980 | $4,209 | $12,122 |
| 9 | 960 | 640 | 320 | 160 | $9,120 | $5,071 | $17,193 |
| 10 | 1,080 | 720 | 360 | 180 | $10,260 | $5,933 | $23,126 |
| 11 | 1,200 | 800 | 400 | 200 | $11,400 | $6,795 | $29,921 |
| 12 | 1,200 | 800 | 400 | 200 | $11,400 | $6,795 | $36,716 |
The year's sales are $77,520 and the profit $36,716, with the harvesting paid at $16 an hour and the field help in the fixed costs. Cash dips to −$633 in month 2, so the plan keeps $3,000 of working cash. Utah's winters slow the field, so the hoop houses carry the restaurants through them; potted herbs sell most in spring. How to plan stock around a season is in seasonal inventory.
Part 5: the startup budget
| Item | Example |
|---|---|
| Two hoop houses | $12,000 |
| Drip irrigation | $2,500 |
| Walk-in cooler | $3,500 |
| Drying racks and dehydrator | $800 |
| Harvest bins and scales | $400 |
| Potting bench | $300 |
| Used delivery van | $9,000 |
| Market setup | $600 |
| Website | $400 |
| Working cash | $3,000 |
| Total to start | $32,500 |
The hoop houses and the van are $21,000 of it. At $36,700 a year, the $29,500 spent before working cash is earned back by month 11. Keeping cut herbs at their best in a walk-in is in walk-in cooler organization.
Get the template
Download the herb farm business plan workbook. Four sheets: your bunches, clamshells, pots and tins with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Twenty herbs, cut every morning to twenty restaurants' standing orders, clamshells for two markets and two grocers, potted herbs in the hoop house at three stages, and drying racks full of whatever didn't sell. A notebook can't say how many bunches of Thai basil are due tomorrow, which harvest a clamshell came from, or how many tins of the Italian blend the drying racks will make.
How TaroStack does it
TaroStack keeps every harvest as a lot with its date, restaurant orders on one list, and blends as recipes.
Harvests as lots. Each morning's cut is recorded as a lot with its date and a short shelf life, counted in the cooler on a phone, and orders are picked from the earliest dates first, so nothing goes past its week.
Restaurant orders. Each restaurant's weekly order is a sales order for its delivery day, and the day's orders come together as one picking list for the morning's harvest.
Blends as recipes. A tin of the Italian blend is a recipe of its dried herbs, tin and label; each blending is a batch that takes them off stock and gives the tins a lot, so what the drying racks hold becomes a number of tins.
| The job | Notebook | In TaroStack |
|---|---|---|
| Tomorrow's Thai basil | Add up the order texts | Sales orders by delivery day |
| Which harvest a clamshell came from | Not written down | A lot with its date |
| Herbs past their week | Found in the cooler | Picking by earliest date |
| Tins from the drying racks | A guess | A batch, at what it used |
Counting, lots, recipes and sales orders are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.