How to Start a Small Business in Hydroponics

As the traditional small family farm disappears from the national rural landscape, small hydroponic farms are growing in urban environments. With only 250 square feet, one such indoor hydroponic farming business can produce food for hundreds of local families. Hydroponics has made corporate farming more efficient, but it has also been a boon to small independent operators who embrace the new technology – creating opportunity for both small farmers and suppliers of hydroponic equipment.

Learn Hydroponic Farming Options

The Bureau of Labor Statistics reports that postsecondary education is becoming increasingly important in successful farming operations. Hydroponics is no exception because of the chemistry of plant nutrition that you must understand and control. Classes in hydroponic farming will also teach you what to expect if you intend to convert a small piece of land or an urban rooftop or basement into a farm.

You may wish to explore other types of hydroponic enterprise aside from farming, such as retailing hydroponic equipment and supplies, or offering a service setting up hydroponic gardens for clients. Other options include distributing the produce grown by local hydroponic farmers or launching a hydroponic franchise operation that does all these things.

Strategically analyze the potential for hydroponic enterprise in your local area. Before you decide whether to farm, retail or distribute, learn about the local consumer marketplace, demographics, buying habits and income levels. Gaebler suggests seeking the advice of a hydroponics farmer well outside the area where you plan to do business.

The Legal Formalities

Rural, suburban and urban locations each have restrictions. Consult your local planning commission for information on zoning laws, electrical requirements, water usage, restrictions on the use of chemicals, required insurance, permissible weight loads for certain types of flooring and hydroponic equipment placement restrictions in buildings. Even if you intend to use an open urban lot, and gardening is permissible, you may not be able to grow produce for sale.

Urban and hydroponic farming is a relatively new type of business in some regions. Prepare to educate people in city government and in the neighborhood on the benefits and problems associated with hydroponic farming. Your activities obtaining licenses and permits may inspire others. In fact, you may find you can finance your own business by acting as a sales rep for manufacturers of hydroponic equipment and supplies.

Research Suppliers

Your best source of information is likely to be hydroponic equipment and chemicals suppliers. They know which vine crops, lettuce and herbs are the most successful. Don't overlook flowers and decorative plants. Hydroponics also lends itself well to the production of algae for use in biodiesel.

Unless you already have established a business growing and selling a particular type of produce, consider everything that can be grown using the hydroponic process. Get advice and quotes from vendors and put together a spreadsheet listing all the costs of developing and launching your business.

Develop Your Business Plan

Once you know what you want to do, perform a SWOT analysis on your idea by examining its Strengths, Weaknesses, Opportunities and Threats, as described by Business News Daily. Create a mission statement that describes the what, why, when, where and how of your business idea in one or two sentences. Then, start writing your hydroponic farming business plan.

Describe your business model, revenue model, target customer, marketing model and contingency plan. The final section should be your financial projections of costs and projected hydroponics business profits. If you are new to agriculture or hydroponics, take your business plan to the local Small Business Administration office for an impartial opinion.