So You Want to Build a Farm
PART II
Jessica is back for the second half of what you need to know and do before your start building your farm. Read part one here.
7. Who is best suited for this industry?
Farming is hardwork and it doesn’t matter if it’s inside or outside. People who are willing to roll up their sleeves and put on their gowns and go work in the farm usually have the most success. Hard workers who have humility also tend to have the most success. I worked in retail for a long time and always respected the owners and managers who did whatever to run a successful business. So this industry is for entrepreneurs from any industry who can do those things. But vertical farms or CEA farms aren’t right for everyone— there can be other, more cost-effective ways of feeding people or feeding communities.
8. Hire the right team and train them really well.
I don’t everyone needs to be involved in everything, that’s why we are specialists. As people join the company, they have to spend a week in the grow so that they understand how to do it and what the day-today looks like—the participants are not trying to become experts just to understand— and be hand on long enough to recognize it’s not easy and how things work, and then they can take that knowledge and information and apply it to sales, finance, or marketing. It’s also a good idea to get your growers involved in the sales process or at least help them understand the sales process. They will understand the why’s: pricing, market, and buyers.
One of our clients is a great example of prioritizing these roles: growing, finances, sales and marketing and they make a really great team and have seen a lot of success.
9. Know your number.
You need to understand your financials. This one of my greatest learnings as a grower. It helps you understand what it takes and how much it takes to run the business. While there are a lot of contingencies when it comes to understanding the financials, but understanding your budget and knowing how to build something within your budget is key. If I had to give someone a number, Id say $250K to do 5,000 sq. ft. This is a very lean operation. This is a lean team, you are probably doing some minor retrofitting and you’re not optimizing, and you’re not paying for a huge renovation. This gets you healthy plants, a small team, and keeps you food safe and compliant.
If you raise more money, receive a grant, or find a way to expand. Your next cash infusion is best spent on what suits your business or niche— this might mean upgrading your facility to expand into a new crop that might be more profitable, or do a smaller expansion and diversify your sales outlets. This will be different for everyone but the second round of funding is a great way to prioritize your greatest needs. Expose everyone in the business to the financials, and do it as soon as possible.
10. What’s next?
You’ve made it. Your farm is up and running, you have a team and you’re growing. What’s next after your first couple of years? You might realize you’re too specific and need to expand your crop capabilities and offerings. Or maybe you have too many things and you need to narrow. We talk a lot about automation, especially as you scale— I don’t think it works for every piece of the business but I do think you can automate some of your processes. You should still have humans doing the work but maximize the effort— automate your cleaning processes and bring down some of the labor costs you had in your early years.
If you find yourself struggling with expenses, labor, or marketing I suggest you hire someone to come look at your operation. Sometimes we have tunnel vision and someone with an outside perspective and can give you a better idea of what’s happening or missing in your operation. They can help you choose a better crop mix, help you with pricing, or improve labor practices. They will help you course correct.