Seed Company Business Plan, With a Projection

A seed company business plan is a plan for a year that happens in winter. Gardeners buy seed from January to April, garden centers order in December, and the summer is for growing next year's seed and testing it, so the money arrives in a few months and has to last the rest. A packet of seed costs well under a dollar to fill and sells for about four, but every seed lot has to be grown or bought, tested for germination, and labeled the way the law asks. In the example below, an heirloom seed company in Nebraska sells packets, collections and bulk ounces directly and packets to garden centers, and ends a year about $34,600 ahead on $72,800 of sales, with the packing paid. Below is a description example, each part of the plan, the seed rules, the year month by month, the startup budget, and a free template.

The short version

• Describe the company in a paragraph: the seeds, where they're grown, who buys, the goals.
• Cost a packet from the seed up: the seed, the printed packet, the filling, the fees.
• Garden centers buy packets at half the retail price, with a rack on their counter.
• Collections and bulk ounces lift what each customer spends.
• Test every seed lot for germination, and label packets the way the Federal Seed Act asks.
• January to April is the year; plan the cash for the summer.
• TaroStack keeps every seed lot with its date, packets counted by variety, and garden center orders on one list. More below.

Part 1: the business description

Sandhills Heirloom Seed Co., a made-up seed company near Grand Island, Nebraska, I use in these examples, writes:

Sandhills Heirloom Seed Co. grows and buys open-pollinated vegetable, herb and flower seed suited to the Great Plains, tests every lot for germination, and sells packets, collections and bulk ounces online and at markets, and packets to about 30 garden centers.

Part 2: the seed rules

Vegetable seed in packets of a pound or less that crosses state lines carries a label: the kind and variety, with hybrids marked as hybrid, and the name and address of the shipper; seed that germinates below the federal standard also carries its germination percentage, the month and year of the test, and the words "Below Standard" (7 U.S.C. 1571). The Federal Seed Act is a truth-in-labeling law, and its labeling covers purity, germination, noxious weed seeds, any seed treatment, the kind and variety, and the shipper (USDA AMS). States have seed laws of their own, often asking for more, such as a germination test date or the season the seed was packed for, and some license seed sellers; check yours and the states you ship to. This is general information, not legal advice.

Part 3: what a packet costs

The seed itself is grown on the company's plots or bought in bulk from growers; the grow-out plots are a fixed cost, and the seed in a packet averages about 20 cents.

A packet's cost is mostly the packet and the minute of filling; the seed in it is the smallest part. How to cost anything packed by weight is the same arithmetic as in how to calculate cost per ounce.

Part 4: customers and prices

In a January the direct packets bring about $4,680 of the month's $10,040 of contribution, the garden centers about $2,500 from 2,000 packets, the collections about $1,730 and the bulk ounces about $1,130. A garden center buys at half the retail price and needs a rack on its counter; minimums are covered in minimum order quantity.

Part 5: the year, month by month

Fixed costs are $1,425 a month: seed grow-out plots averaged over the year ($600), germination testing averaged ($150), the website ($80), the catalog and ads averaged ($400), insurance ($60), cool, dry storage ($100), and software and card fees ($35). Month 1 is January; this is a year once the catalog has customers:

The year's sales are $72,762 and the profit $34,615, with the packing paid at $16 an hour. January to April bring 68% of the sales, and July and October lose a little, so the plan keeps $5,000 of working cash. Next year's seed is grown and tested in the summer, when the money's been in the bank since spring. How to plan stock around a season is in seasonal inventory.

Part 6: the startup budget

A new company's first selling season comes after its first seed is bought, tested and packed, so the first year's January is smaller than this one. At $34,600 a year, the $11,400 spent before working cash is earned back in the first selling season.

Get the template

Download the seed company business plan workbook. Four sheets: your packets, collections, bulk seed and garden center packets with price, variable cost and January's volume; the year, month by month, with sales, profit and cash, and month 1 set to January; 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

Two hundred varieties, each with one or more seed lots, each lot with its own germination test and date, packets printed by the thousand, thirty garden centers reordering in February, and collections made from eight varieties at a time. A notebook can't say which lot of a tomato a packet came from, which lots need testing again before January, or how many packets of the bean that sells out are left.

How TaroStack does it

TaroStack keeps every seed lot with its date, packets counted by variety, and garden center orders on one list.

Seed lots with their dates. Each lot is received or harvested with its date, and its germination result can sit on the batch record as a custom field with its limit, so a packet's lot leads back to its test.

Packets as batches. Filling a run of packets is a batch that takes the seed and the packets off stock, gets a lot of its own and records the seed lot it used, and lots with the earliest dates are picked first.

Garden center orders. Each garden center's order is a sales order, with one picking list for the day's orders, and the lots each garden center got are recorded as it ships.

Lots, batches, batch records 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.

Questions people also ask

Is a seed business profitable?

It can be, in its season. In the example, a seed company ends a year about $34,600 ahead on $72,800 of sales, with 68% of the sales from January to April.

How do you start a seed company?

Start with varieties you can grow or buy and test, a way to fill and label packets, a catalog or website, and a few garden centers. In the example, the startup is $16,400, with the first seed lots and packets the biggest parts.

What does a seed packet label need to say?

Under the Federal Seed Act, for packets shipped across state lines, the kind and variety, hybrids marked as hybrid, and the shipper's name and address; seed below the germination standard also shows its germination and test date. States may ask for more.

Do seeds need to be germination tested?

Every lot should be, so you know what you're selling; seed below the federal standard has to say so on the label, with its germination percentage and test date. State laws may ask for a test date on every packet.