A hydroponic farm business plan sets out what you'll grow and in what system, who buys it, what a head of lettuce costs and sells for, the greenhouse, power and heat, and the first year month by month. Hydroponic lettuce grows year round and on a schedule, a new crop every few weeks in the same channels, so the plan is a plan for capacity: how many heads the system holds, how often it turns, and whether there are buyers for all of them. Grocers take the most and pay the least; restaurants and markets pay more for less. In the example below, a greenhouse farm in Indiana sells living lettuce to grocers and restaurants and lettuce and basil at a market, makes a profit from month 2, and ends the year about $31,100 ahead on $81,400 of sales, after paying $20 an hour for seeding, harvest and packing. Below is a description example, each part of the plan, food safety, the projection, the startup budget, and a free template.
The short version
- Describe the business in a paragraph: the crops, the system, the buyers, the goals.
- Cost a head: seed, plug, nutrients, power and water, clamshell, label, seeding and harvest minutes.
- Grocers take volume at a thin margin; restaurants and markets pay more for less.
- The system's capacity is the ceiling: plan sales to fill it, not past it.
- Heat and power are the costs that move with the season and the electric rate.
- Living lettuce, sold with its roots, keeps longer on the shelf, which is what grocers pay for.
- TaroStack keeps every harvest as a lot and every grocer order straight. More below.
Part 1: the business description
Wabash Greens, a made-up hydroponic farm near Lafayette, Indiana, I use in these examples, writes:
Wabash Greens grows butterhead and leaf lettuce and basil year round in a 30-by-72-foot greenhouse with NFT channels, sold as living lettuce with roots to regional grocers and restaurants, and at a Saturday farmers market. Every case carries a harvest date and lot code.
Part 2: what a head costs
| Per unit | Lettuce to grocers | Lettuce to restaurants | Lettuce at the market | Basil bunch at the market |
|---|---|---|---|---|
| Seed, plug and nutrients | $0.15 | $0.15 | $0.15 | $0.11 |
| Power, water and pumps, a head's share | $0.15 | $0.15 | $0.15 | $0.12 |
| Seeding and transplanting, 30 seconds | $0.17 | $0.17 | $0.17 | |
| Harvest and pack, 1 minute at $20 an hour | $0.33 | $0.33 | $0.33 | $0.33 |
| Clamshell or bag, with label | $0.33 | $0.33 | $0.33 | $0.18 |
| Delivery share, or card fees | $0.05 | $0.05 | $0.12 | $0.11 |
| Variable cost | $1.18 | $1.18 | $1.25 | $0.85 |
The clamshell costs twice as much as the seed, plug and nutrients together. The power line is the pumps and the share of heat and fans that rises with production; the steady part of heating and ventilation sits in the fixed costs. How to keep each harvest's stock counted is in farm inventory template.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Living lettuce, to grocers, a head | $2.25 | $1.18 | $1.07 | 47.6% | 2,500 |
| Living lettuce, to restaurants, a head | $2.75 | $1.18 | $1.57 | 57.1% | 800 |
| Lettuce at the farmers market, a head | $4.00 | $1.25 | $2.75 | 68.8% | 600 |
| Basil, at the market, a bunch | $3.50 | $0.85 | $2.65 | 75.7% | 500 |
At full speed the greenhouse turns out about 4,400 units a month, its capacity in this example. Grocers take more than half and leave $1.07 a head; a market head leaves two and a half times as much, but one Saturday market can't sell 4,400. The mix is the plan: grocers fill the system, restaurants and the market lift the average. How a farmers market stall really costs out is in cost to sell at a farmers market.
Part 4: food safety and the buyers
Grocers and restaurants may ask a supplier about food safety: how water is tested, how harvest and packing are kept clean, and how a lot can be traced. FSMA's Produce Safety Rule applies to farms above certain sales levels, with exemptions for the smallest; which rules apply to a small food business is in FSMA requirements for small food businesses. Whatever applies, a harvest date and lot code on every case is what lets a farm answer a buyer's question, or a recall, in minutes. This is general information, not legal advice.
Part 5: the first year, month by month
Fixed costs are $1,325 a month: the greenhouse site lease ($400), the steady part of heat, fans and pumps ($350), insurance ($80), water tests and supplies ($50), the delivery van ($250), market fees ($120), the website ($40), and software and card fees ($35). Month 1 is the first harvest; building the system and growing the first crop are in the startup budget. Sales start at 15% of full speed and reach it by month 11 as buyers come on:
| Month | Lettuce to grocers | To restaurants | At the market | Basil | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 375 | 120 | 90 | 75 | $1,796 | −$289 | −$289 |
| 2 | 500 | 160 | 120 | 100 | $2,395 | $56 | −$233 |
| 3 | 625 | 200 | 150 | 125 | $2,994 | $402 | $169 |
| 4 | 750 | 240 | 180 | 150 | $3,592 | $747 | $915 |
| 5 | 1,000 | 320 | 240 | 200 | $4,790 | $1,437 | $2,353 |
| 6 | 1,250 | 400 | 300 | 250 | $5,988 | $2,128 | $4,481 |
| 7 | 1,500 | 480 | 360 | 300 | $7,185 | $2,819 | $7,299 |
| 8 | 1,750 | 560 | 420 | 350 | $8,382 | $3,509 | $10,809 |
| 9 | 2,000 | 640 | 480 | 400 | $9,580 | $4,200 | $15,008 |
| 10 | 2,250 | 720 | 540 | 450 | $10,778 | $4,890 | $19,899 |
| 11 | 2,500 | 800 | 600 | 500 | $11,975 | $5,581 | $25,480 |
| 12 | 2,500 | 800 | 600 | 500 | $11,975 | $5,581 | $31,061 |
The year's sales are $81,430 and the profit $31,061, on top of $20 an hour for seeding, harvest and packing. A colder winter or a higher electric rate moves the fixed line; add a few hundred dollars to the heat in the template for December to February and see what changes.
Part 6: the startup budget
| Item | Example |
|---|---|
| Used 30 × 72 ft greenhouse | $12,000 |
| NFT channels, pumps and reservoirs | $9,000 |
| Germination station and lights | $1,500 |
| Heater and fans | $3,000 |
| Walk-in cooler | $2,500 |
| pH and EC meters, test kits | $400 |
| Harvest and pack table | $600 |
| Seeds, nutrients and clamshells, first order | $1,200 |
| Permits and food safety training | $500 |
| Working cash | $5,000 |
| Total to start | $35,700 |
Get the template
Download the hydroponic farm business plan workbook. Four sheets: your crops and buyers with price, variable cost and monthly volume at full speed; the 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
Four varieties seeded every week, harvests every few days, clamshells and nutrients by the case, five grocers with standing orders, and a market. A sheet can't say what's in the cooler by harvest date, which grocer got which lot, or whether restaurants or grocers pay better once delivery is counted.
How TaroStack does it
TaroStack keeps every harvest as a lot and every grocer order straight.
Harvests as lots. Each harvest goes in as a lot with its date, counted on a phone in the greenhouse or the cooler, and units convert: clamshells bought by the case, used one at a time. The oldest heads go out first, and anything close to its date shows in your alerts.
Standing orders. Grocer and restaurant orders are sales orders for their delivery day that show whether the heads are in the cooler while you're still typing, and one report walks a lot to every buyer who got it.
And what each buyer earns. The reorder list works in days of cover so clamshells and nutrients don't run out, and margins are reported by product and by customer.
| The job | Notebook | In TaroStack |
|---|---|---|
| What's in the cooler, by harvest date | Open the door | Stock by lot and date |
| Which grocer got Tuesday's lot? | The delivery slips | One report, lot to customer |
| Clamshells before they run out | Found short | The reorder list, in days |
| Grocers or restaurants, which pays? | A feeling | Margins by customer |
Lots, sales orders, counting and margins by product and customer 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.