It’s time to bring this series to a close as I share one last entry about the current business climate for prospective CEA growers.
In my first post I shared some justified hype about “7 Reasons why 2024 is an ideal time to get into CEA.” Last week I added a bit of balance by listing “7 things for prospective CEA businesses to be cautious of in 2024.” Now, I hope to share a resource to help you put this advice into action.
This is a list of seven questions that everyone who is interested in getting into CEA or expanding their operation should not only be asking, but should have strong answers for. Be honest with yourself. Unrealistic overconfidence is a recipe for failure.
If you don’t have a great answer, do not be discouraged! The point of an exercise like this is to help aspiring growers pinpoint exactly the ways they need to improve.
The 2024 CEA Grower’s Checklist
Are you willing to build a deep knowledge and passion for horticulture, or do you just see this as a cool business idea?
CEA certainly can be a great business, but as close as our systems are to “plug and play,” we unfortunately have not invented money-printing machines yet. Most of the failures we see in the industry comes from entrepreneurs who are unable to let horticulture be the main thing.
Do you have an understanding of how much capital you’ll need?
Depending on where you’re starting from, you will need funds for a site, a foundation, a greenhouse, HVAC, sensors, systems, tanks, and supplies. This can all generate a return, but you’ll need an accurate understanding of how much it will cost you. If you don’t know this yet, you’ve got to start here.
Do you have access to the capital you’ll need?
Of course, once you know what your capital expenses will be, you need to know if you can actually raise that. Maybe you have it all saved up. If so, great! If not, are you in touch with lenders yet? Do you have friends, family, or business partners who will invest with you?
Have you identified a viable market?
Do you have sales leads or data to suggest that your products will sell? What products will you grow? How will you price your products? As always, just because you build it, it doesn’t mean the buyers will come. This must be an essential part of your business plan. I’m an optimistic guy, but just being hopeful is not enough.
Do you have a plan to get help with labor?
Plants are living things and require near-constant attention. You will need a plan to check on your greenhouse or grow room every single day. A single grower can do a lot themselves, but what if you ever want to go on vacation? Again, friends, family, or partners can be crucial here, otherwise you’ll need a plan for hiring quality labor.
Do you know experts you can turn to for advice?
Of course it’s possible to self-educate and learn through research followed by trial and error. But having the number for an expert on speed dial can save enormous amounts of stress and heartbreak. Maybe that’s a member of AmHydro’s team, another consultant, or just an experienced grower who you’ve connected with. No matter who it is, you should absolutely seek out support from people who have been-there-done-that.
Are you thinking about your mental health?
The USDA has been looking a lot more at the stress that farmers deal with and the ways it can affect mental health. There is the element of financial risk, but there is also the stress that can come from getting into business with partners that you might end up clashing with. Is that worth it? Are you confident in your ability to work through inevitable conflict? Do you have a strong support system? This may all seem secondary to questions of business planning and horticulture, but it is absolutely crucial to consider.
I would be so bold as to say that if you cannot answer all these questions conclusively, you are not yet ready to build a farm. It’s not that it couldn’t work, it’s just that it would increase your risk of failure and stress so dramatically that I cannot in good conscience recommend it.
But as I said above, pinpointing your weak spots is the first step in improving them. Going back to my first post in this series, 2024 is a great time to launch a CEA business. If you haven’t begun planning, it’s an even better time to start there.
AmHydro’s team of experts is here to help. We can point you toward other resources you need while working with you to design a starter system that will put you on the path to your goals. We also offer all-in-one Get Growing greenhouse packages.
I hope this series has been useful and encouraging. If you have any thoughts, feel free to connect with me on LinkedIn, or chat with our team by contacting info@amhydro.com
