Starting a greenhouse cultivation business can be a daunting task, especially when it comes to creating a business plan. Several challenges need to be considered when putting together a plan for this type of business, including the cost of setting up the greenhouse, the type of crop that will be grown, and the market for the finished product. With the rising popularity of greenhouse cultivation, more and more people are looking to get into the business. However, in order to be successful, a precise feasibility study needs to be conducted before starting a greenhouse business. An accurate profitability study of your greenhouse operations will help you survive market uncertainties, especially during these times of rising inflation and energy prices.
Making a business plan for greenhouses
That is why Vahan Hovsepyan, with his team of experts, has worked hard during the last two years to develop Greenhouse Formula, an online software that automatically produces a business plan report for your greenhouse operation based on user inputs. The company launched the service during this year's edition of Fruit Logistica in Berlin. "Greenhouse Formula is an online Software as a Service ("SaaS") application accessible on any desktop and laptop to help growers estimate the profitability of greenhouse projects," he explains. "The software produces a professional, precise financial report that is used for investment decision making by greenhouse investors, growers, financial institutions, agronomists, etc."
Vahan was previously making business plans for greenhouse companies and saw that the whole process could have been much more streamlined. "I had growers and investors approach me to understand the profitability of their projects. Historically commercial greenhouses were mostly family-owned. Nowadays, more and more non-profiled investors are jumping into horticulture with higher requirements to make accurate financial planning before building their new greenhouses."
How to predict profitability
The software asks the user to fill out a questionnaire indicating all the different aspects of their greenhouse, including dimensions, crop types, investment amounts, market prices, utilities, and other expenses. Everything will then be automatically calculated, and growers and investors can appreciate a full-fledged financial report. "The visualized and well-structured questionnaire, developed by Horti-financial experts, guides users to fill in the required data while at the same time introducing inexperienced investors to all-round aspects of greenhouse operations," Vahan explains.
According to Vahan, the software makes financial projections and produces the final report based on complex financial formulas and algorithms compatible with International Financial Reporting Standards. The software, which works for any country and crop, completes this huge task within seconds. It provides a PDF report which includes a forecast and analysis of all the expenses, revenues, capital investments, and financial statements for a ten-year period. Another important service feature is the scenario analysis, where users can play with key parameters such as yield and sales prices to measure their impact on profitability.
"With Greenhouse Formula, growers and investors can see how financially attractive the business is and if it's' necessary to make changes and find areas for optimization. Compared to traditional consulting solutions available in the market, Greenhouse Formula is much easier, cheaper, and faster."
"As the first achievement, we appreciated the big interest from horticulture participants during GreenTech Amsterdam 2022 and Fruit Logistica 2022, where we have been selected as one of the 20 startups. Therefore, we are now continuously improving the service based on user feedback and meanwhile looking forward to attracting investments for the development of new services."