How To Start A Hydroponics Business – American Hydroponics Webinar
Hi, welcome to our webinar. I’m Jenny from American Hydroponics and we are out in one of our greenhouses right now so some of the noises that you are hearing are our roof vents closing, but hopefully you can hear everything going on. So just want to give you a quick look at our greenhouse here. We’ve got vine crops, we’ve got some NFT things growing, we’ve got some other little baby plants on this side all growing in our greenhouse. So what we’re going to be talking about today is how to start a hydroponic business. Let me give you a little bit of house cleaning stuff, just some basic instructions and if you are looking at this and you see a comment section on the right side of your screen, minimize that, close that and there are some arrows up at the top, you’ll want to close that and get as full screen as possible because we will be showing some slides with information on them and they will be easier to see if it is full screen. Right after this webinar is over, you will be receiving a link that goes to the webinar so you can rewatch it if you need. You will also be receiving a PDF file of all of the slides that we show so if the font is too small or it goes by too fast, don’t worry, you will be sent all of the information after. So welcome to everybody. We have about 100 people signed on to this webinar right now, that’s the max that we take. We assume that we will be getting some questions here. Feel free to ask any questions you want down beneath the screen, there’s a question section, so feel free to send those questions in and we will try and answer all that we can at the end.
If we don’t get to your question, we will send out a Q&A email so that all of the questions can be answered. As I mentioned there are about a hundred people who are involved in this webinar right now and they’re from all over the world. We have people from Pakistan, Jamaica, and India. We have 13 countries represented right now. We ourselves, American Hydroponics, are located in Northern California, in Humboldt County. So this whole presentation, the whole idea of how to start a hydroponic business is based on a North American view on entrepreneurialism. So if you are somewhere else in the world certainly all of these concepts are valid and are great to take with you. They may be a little bit unfamiliar to you, but they are definitely things that you can use to start your hydroponic business anywhere in the world. If anyone did not get a chance to attend this webinar and you want them too, just go ahead and forward this link to them. It will also be available on our website after December 25th because at the end of this broadcast for everyone who’s watching, there’ll be some special offers just for those that are actually attending this webinar. There are some pretty special offers for you there. So let’s continue on. I’m going to go ahead and share my screen right here so that way you are going to see me in split screen. Okay, so, how to start your hydroponic business. Let me tell you a little bit about who we are, as I said my name is Jenny, and here at American Hydroponics, or AmHydro, as we’re known, we’ve actually been around for over 30 years. We were found in 1984 right here in Humboldt County in Northern California and we’ve been helping hydroponic growers for the last 30 plus years.
So we’ve been at this a long, long time. Not only have we been in business manufacturing hydroponic systems for that long, but everybody who works for us has experience growing. As you can see this greenhouse here and we have two small R & D greenhouses right at our warehouse too. Our employees are encouraged to go in and grow things for their friends and families to better understand how we do it. Between our staff here whether you’re calling me or Rudy or Joe or Hailey or Lorelei or anyone who answers the phone, we have over 100 years of growing experience, of actual hydroponic growing experience between us. So you’re going to get to talk to people who don’t just have the knowledge but have the practical experience as well. We ship to over 60 countries since 2012 so we don’t just operate here in the U.S. we operate all over the world. We have hundreds of growers here in the U.S. Everything from small mom and pop, weekend warriors we call them who might have an NFT 1200 that puts out 250 plants per week. Maybe they go to their Farmer’s Market every week and they sell their plants at the farmer’s market. We have large, multi-acre facilities that have dozens and dozens of employees working there and they put out 35 to 40 thousands plants per week. Those businesses that have started just like you’re starting. They are starting with something small and working their way up and expanding. They distribute and they sell to Costco, they sell to large grocery store chains, and they sell to Whole Foods and we have everything in between that as well. So where ever you are looking to start whether it’s something to just make a little extra money because you love gardening and being involved in your community or you have several investors and you want to keep going and growing and distribute, we can help you either way.
There are some things to consider before you actually start your business. The number one thing we always tell our customers or anyone who’s interested in starting a business is: it’s a great business, and it’s definitely up and coming right now. It’s a really great investment but you are still farming, and farming is a lot work. You have to consider that it is an every day job and unless you have trained someone to come in and check on it while you’re gone, you have to check on your greenhouse every single day. And what we like to say is you really need to have your eyes on every plant every day. In this greenhouse right here we have 5,000 plant sites and it’s a small greenhouse but it doesn’t mean that you’re going through checking every plant site, but it does mean that you walking through the greenhouse and you’re considering what’s the temperature like? What’s the humidity like? Do I see any kind of pest infiltration or disease on any of my plants? You want to catch those things right away. Some people have said that putting a webcam in might be a great idea and while a webcam might is super, a webcam is not going to replace you walking through your greenhouse everyday and it’s not going to replace keeping your eyes on the actual plants. When you consider this you have to consider that you are still farming and you want to consider your investment, and what your involvement is going to be. Are you going to be a passive owner? Are you going to hire a grower who comes in and actually manages the plants for you? That’s great! Get a good grower and that’s a great model. Are you going to be entirely active? Are you going to be the grower for your own greenhouse? What is your start-up capital? Are you going to self fund it or are you planning on getting an investor to help you? What are your expenses going to be? You’re going to need enough cash, like any good small business start up, to get through the first six months. Is this going to be a solo effort? The greenhouse that we are in now is a 30 by 96 and that is something that one person can pretty much run on their own. Or is this going to be a team effort? Are you going to bring other people in and have help? Another important thing to consider before you start your business is what kind of person are you? Are you a plant geek that loves the botany and biology and physiology of the plants themselves and that really excites you? Or are you a sales person that loves getting out there loves the idea of dealing right with your community? These two things are great things, but in a job like this and a business like this, you have to be both.
Just a quick little story; we had one customer who was a fantastic grower and he grew some of the most beautiful produce, but he couldn’t sell it because he didn’t like dealing with people. And so we went down there and said all you have to do is take some of this stuff to any of the fabulous restaurants that are in your community here and they will absolutely want to buy your produce. But he decided that being a people person wasn’t for him so he sold his business to someone else. That’s something that you need to consider. Are you in it for the growing aspect, or for the people aspect? It’s great if you are in it for the combined aspect and that is how you become the most successful. What’s your time frame? Is your time frame right now? Do you want to be starting now, immediately, and you want to hit the ground running right now? That’s great! There’s a little bit of ground work that you have to do first. Do you have a greenhouse already and do you have space for the greenhouse?
Are you looking at 1-2 months from now? That’s a pretty short time frame. Are you looking at six months from now? That’s ideal! That gives you a chance to give us a call we can work through with you what exactly are you looking for, what is your market like, what’s the best greenhouse for you, what kind of system, do you want an NFT system to grow leafy greens or do you want a vine crop system that grows tomatoes, cucumbers, and peppers or combination of those two? Six months is really an idea time frame. Or maybe a year from now or maybe you’ve just joined this webinar and you’re just checking out the whole idea. Well this is a great place to start because we have a lot of really great information to help you decide all of those things.
So now we’ve kind of talked about before you even jump into this and you’ve decided that you’re serious and you say OK I really do want to do a business, you need to do the research and to do the research you need first and foremost research what will make you successful. If there’s one thing that will make you more successful than doing any other thing it’s understanding your market. Every market is unique. As I said, we sell around the world and the market in Lagos, Nigeria is very different than the market in San Francisco, California or even in Trinidad and Tobago where we have have growers. So you need to understand what your market is. You also need to understand what can you sell in your market? Local produce commands a higher price than any other type of commodity pricing. For example, if you live on the East coast in the U.S. and you buy a head of iceberg lettuce at the grocery store, there’s a 90% chance that lettuce has been shipped to you from either California or Texas and it has taken three or four days to get there and so you get it the day it comes off the truck and it’s already four, maybe five days old, but they grow it in such huge quantities that the price is much lower and they have a lower margin. If you buy something from your local farmer, you’re getting something that’s super fresh, maybe maybe not even hours old from the time you deliver it to your customers. It’s beautiful, fresh, and tastes fantastic! That’s what commands the higher price. So you need to understand what your market charges. And what are some high value items that you put into your market? Do you have an ethnic market? Do you have something like Asian greens? Say you have a large market or Asian greens and there’s no consistent supplier out there. Do you have a large market for culinary herbs? Maybe have some fantastic restaurants nearby and they can’t get consistent culinary herbs. Those are the sort of things you want to discover when you’re doing your research and what prices are they charging? Walk around your farmer’s market, walk around your grocery store, ask to talk to the produce manager, go ask and talk to the chefs of local restaurants, people love to talk about what they are doing. If you can just talk to them and say hey I’m looking into growing hydroponically and I could supply year round, in a controlled environment, a consistent product to you and if I did what would your wish list be? Here in Humboldt County we have a number of high end restaurants and we had a chef ask us if we could grow cutting celery. Well we had not heard of cutting celery so we went to our seed supplier and ordered some and planted them and they turned out fantastic.
They grew really well in our NFT system and we took them to our chef and he loved them! If you don’t know what cutting celery is, it’s a small plant that looks similar to a cilantro plant. This cilantro plant has a couple more weeks to grow but the cutting celery looks very similar. The cutting celery tastes just like celery so you can use a lot less and not have to use the large stocks of celery. So it has the flavor of celery and chefs love it. So as we show more people the greenhouse and walk more people through it, chefs also come through and we let them taste the cutting celery and they love it and suddenly we start having more orders for cutting celery. So understanding what some of those high value items are is really important when doing research. The other piece of it is how much can you sell? What is your market out there? Do you want something like this which is a 30 by 96 greenhouse and there’s over 5,000 plant sites in here and it produces about 2,500 plants per week. So do you have a market for that much? Or maybe you have a market for a lot more than that, so that can help you understand how you can really sell. Another important part of research is figuring out how much land and space you will need. Will you need permits? Here is California you need a permit for everything you do, however, in other states you don’t need any. So you need to understand what is your locality and what kind of permits will you need for your greenhouse and how much space you need. Then, do you want room to expand? This greenhouse that we are in is called a gutter connect greenhouse house and what it means is when you want to expand, you take another greenhouse just like this, take the wall off, and the two greenhouses are going to be connected by a gutter up there. So you can expand using the same greenhouse and you can just keep adding on. That’s how commercial produce growers that grow in greenhouses do it. They start with a couple greenhouses and then keep adding on.
Or will you only need one greenhouse because you know that when you’re going to expand you’re going to expand in different locations. In that case you might want of Quonset style greenhouse. They are less expensive but are still an absolutely official and viable way to grow but you can’t just add on side by side, you have to get a whole other greenhouse. Another thing you want to consider is walking the land. Walk the land where your greenhouse is going to go at different times of the day. Is a bunch of shade covering up the space where you want to put your greenhouse? IF so, that’s not good because your plants need sunlight to grow, around 12 to 14 hours a day sunlight to grow. So if your greenhouse is going to be in between two large trees, there is going to be a lot of shade and that’s not going to be ideal. Can you utilities to your site? Can you get water, electricity, and natural gas? These are the things that your greenhouse is going to need. So walk the space where you’re looking at putting your greenhouse and see what’s it like if you were to have a greenhouse there. Will you have adequate shade? Will you be able to get utilities there? Another thing is if you have people come and pick up at your greenhouse, whether it’s delivery trucks or consumers, is it easily accessible for those type of pick-ups? So you’ve done your research and you have a really good idea of what your market is, what prices can be charged, how much you can sell, and you found the ideal location for your greenhouse, now you have to start getting prepared.
To be prepared, you have to go through all that icky stuff right. You need to talk to your legal team, whatever that. You need to find a good business attorney and find out if you’re going to open your business with a partner. Do you have a partnership agreement in place? Do you need to file business permits? Do you have to apply for any greenhouse permits? You need to find that all out as you’re starting to get ready to start your business. You also really need to understand your costs and expenses. The number one reason businesses fail because they’ve overestimated their income potential and they’ve underestimated their expenses. So take a look at your costs, expenses, and potential revenue and plan for low revenue months. Plan for months where, for whatever reason you don’t sell as much as you had expected. Are you going to apply for a business loan? If so, start doing that now. We can actually help you, we have a couple of customers who use different financing vehicles and we’re happy to keep that information out if you’re looking for a way to finance your business, just give us a call and we can help you with that. You also want to be prepared physically. Your greenhouse site might need to be leveled, you might need to cut down a few trees, you might need to get some infrastructure into that site, or maybe you need to finalize the purchase agreement. Whatever it is, you need to be physically prepared to start your business. The construction part really depends on what kind of greenhouse you’re going to get. Who’s going to do the construction of the greenhouse? Are you and some friends going to do it? Are you going to hire a specialized team to come in and do it? Just give us a call! We can help you design your system and we will order up your system and it usually takes between 4 to 8 weeks to design, manufacture, and deliver your system.
So I have people that are handing me questions so that we keep going through them and we will address these questions. One that just came in was about FDA rules and regulations and I’m assuming that this is about the safety modernization act and we can absolutely help you with this. We have someone that is pretty well versed on the whole idea of food safety. The beautiful thing about it is that if you’re growing hydroponically and if you’re growing in controlled environment agriculture, CEA, about two-thirds of the food safety modernization act doesn’t apply to you. A lot of what that applies to is no birds flying over your open fields, no dogs walking through your fields, making sure there’s no dirt being tracked in and out of your packing area; we don’t have any of that hydroponically. So hydroponically speaking, the safety modernization act becomes very easy to comply to.
The last piece of this before we move on is the emotional part. No kidding or joking, it is stressful to own your own business. It’s also really exciting and satisfying and wonderful! Everything about owning your own business has emotions attached to it. So if you’re ready to jump in there and work and really see the satisfaction of building something with your own hands and with family and friends being involved, then owning a business like this is really exciting.
All right, so what does it actually take to get started? This is where we are going to talk a little bit more about the greenhouse. Growing in a greenhouse is referred to as controlled environment agriculture, and I’m not sure if you can hear the fans that are going or not, but everything here is controlled for optimizing the growth of your plants. So that’s what makes it possible to grow consistently, year round, beautiful produce such as lettuce and basil. Growing in a greenhouse allows you to grow even in the middle of winter so that you can continue to deliver fresh produce when otherwise you could only grow a few months out of the year. So as I mentioned, this is a gutter connected greenhouse. It’s more expensive but it can be specifically engineered for your location. For example, we had a customer that was down in the Caribbean that wanted this exact greenhouse for his set up and they didn’t just take the same greenhouse we have here and send it down there, they had to make some changes. Here in Northern California we have a pretty temperate climate but in the Caribbean, they have hurricanes and tropical storms so the greenhouse had to be built to withstand those conditions. So when you’re deciding on what type of a greenhouse to get, some of the biggest factors to consider are cost and locality. How much do you have to spend on your greenhouse and what is the weather like where you are looking to put your greenhouse? Another factor is who is going to construct it and do you want to expand? If you do, you will need a greenhouse that can expand with you. How long will it take to construct? Again, it depends on the greenhouse. It could take you and maybe five or six friends a few weeks to construct a Quonset style greenhouse. If you’re going to do something like this, a gutter connect greenhouse, you probably want to get a professional crew and it will probably take two to two and a half months to construct something like this. In this greenhouse we had a cement pad put in, you don’t have to have this but we put hydronic heating in it and those sort of things are going to add to which type of people you get to construct your greenhouse. And again, do you have utilities at your greenhouse and are they ready to go? That is something you will have to have for your business.
Next is the system. As you can see, this is an NFT system, and over there where the tomatoes and cucumbers are growing is a vine crop system. What kind of system are you going to choose and who is going to set it up? The system in this greenhouse is two 80 foot long tables and would take two guys about 5 days to set up. You can always hire us and we can send some of our employees out to set up the system for you, but you are perfectly capable of setting something like this up. Then you will want to start your seeds. You can actually start your seeds before your tables are complete because the seeds live in propagation trays for the first two weeks. Then what you’ll want to do it start delivering some samples. If you don’t have some solid orders already, you’ll want to take some samples to chefs for a few weeks so they can taste what you’re growing. By doing this, they can see the consistency, the quality and the taste of what you’re growing.
Next, we’re going to talk a little about market. Who is your market? Is it chefs? Produce managers? Grocery stores? Farmer’s markets? Are you selling direct to customers in some kind of CSA? CSA is a consumer supported agriculture which means you get a lot of people together, about 20 to 30, and everyone pays a flat rate up front and every week they get to take whatever is harvestable that week. So they get a variety of things each week, it’s great for them and it’s great for you. So that’s model where you can get produce direct to customers.
And then you have the continuity of your business and the continuity of growing your business. Invest time and energy in talking to your customers. That’s the R and D that you want to constantly be going over. When you deliver your produce be sure to make an effort to ask how everything is going for the customer and ask if there is anything else they would like you to grow for them. Ask them if the quality is still up to standards. Listen to your customers. Ask them if they like the samples that you have been bringing or maybe they put in a special request for a certain product that you try out for a few weeks. Another thing for the continuity of your business that is really important is to develop new growers in your greenhouse. Take family and friends for example, in our company my 17 year old nephew comes in and he works for us and he has been working for us for about 7 months. He is now able to come in on the weekends so I don’t have to and he can look and see if there is any powdery mildew or pests in the greenhouse. So that’s how you develop new growers because he loves doing this and that’s what he wants to do so you have to start them out and train them right. Interns from any local campus such as a high school, a vocational school, a community college or university, interns are a great way to train growers and they work for free so it’s even better! We often get interns internationally that say hey I would love to come over and stay for two months if you could just put me up I would love to come and work for you to learn more about hydroponics. That’s a great way to learn how and to develop a new grower as well. Instructors from many of those same campuses that I have mentioned are great to bring into the greenhouse too. I really encourage you, for the continuity of your business, to listen to your customers and continue with the R and D and also develop new growers for your greenhouse.
The last thing that I wanted to share with you is we have Get Growing bundles that make it super easy to get started. These are all on our website and you can download all of the details but these come with the greenhouse, growing system, and all of the environmental controls. As a matter of fact, this greenhouse right here is one of our Get Growing bundles and it’s everything you need. We don’t manufacture the greenhouses ourselves, we partner with some of the leading greenhouse manufacturers here in North America to design and engineer the greenhouse specifically for your location. If you go on our website to the bundles, or even to the online store, you can download all of the different bundles and details of exactly what comes with them. We’ve done all the work or you get everything you need together to start your business. Some of the sizes that we offer are the NFT 15K that can produce 3,780 plants per week and it goes in a 30 ft by 144 ft greenhouse. This one as I mentioned is a 30 ft by 96 ft greenhouse and it produces up to 2,592 plants per week and you can see all the way down to the little systems that come with everything except the greenhouse. They come with technical support, growing supplies, the growing systems, everything you need to get started. And that’s actually all listed on our website or you can e-mail us we’re happy to send it, but we have two different versions of it just as a heads up, one is a commercial version that comes with the gutter connect greenhouse and the other is the small business bundle that comes with the Quanset style greenhouse and is a little less expensive.
That’s pretty much everything for this webinar so we will answer a few questions now. The first question is about financing and AmHydro doesn’t supply financing but we do have partners that have worked with our customers before, they know our system, and they know what we are capable of. I don’t think I mentioned it but our channel is guaranteed for 10 years. We have customers that have been using our channel for over 20 years and still use it. We have a couple of different companies who have financed this so if you are looking for financing, we could connect you directly to them. Another question is does building require dirt, gravel, or concrete for cleanliness purposes? No, you can actually do any one of these things. And as I mentioned we have a concrete floor here in this greenhouse, obviously that’s the ideal because it is really clean and you can just spray it all out if you need to but you don’t have to have concrete. You can use gravel and in the Get Growing bundle we have some ground cover that gives the floor a nice clean look. Here’s another question about pest control. When you buy a system from AmHydro, we provide you with a year’s worth of growing and technical support so if you do have a pest infestation, we can tell you what to do because we have dealt with them all and we can tell you how to best combat the pests. And as far as food safety, generally we recommend integrated pest management and that means using bugs to fight other bugs. The most common example is we release ladybugs in our greenhouse once a month and they eat the aphids. And then the ladybugs fly out through the vents once there’s no more food to eat. As for example powdery mildew and something like that we always use OMRI certified products that way we know that they are safe, we know that they are less harmful to the environment, and they’re certified organic. So OMRI is kind of the top tier of organic certification in the U.S. So we always use OMRI certified products and there are lots of them out there. So I think that’s pretty much it for this webinar. We have monthly webinars but if you want to give us a call, chat with us online, or email us, we can answer your questions. Our webinar will be about the Get Growing bundles and that will be January 19th at 1pm. We do our webinars on third Thursday of each month at 1pm. Give us a call! We love to talk hydroponics! Thanks very much and hopefully we will be chatting with a lot of you in the future.