Indoor Farming is Booming
Bright Agrotech is providing transparency and powerful resources for aspiring hydroponic farmers. As we have covered in previous sessions, a number of trends are colliding to allow small urban and suburban growers to enter the produce market.
Indoor farming techniques are ideal for high water weight, low stature crops with a strong market value. Growers are able to grow a number of crops profitably, and are finding new sources for financing these projects.
Empowering Growers All Over the World
Dr. Nate Storey works with experienced growers as well as first time growers. He has put together one of the world's most comprehensive library of tutorials for indoor crop production.
I sat down recently with Dr. Storey, and took a closer look at the crops that are powering healthy profits. In this session, Dr. Storey demonstrates how an 1,800 square foot is able to reach a 29% IRR over a period of five years.
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In this session:
3:06 Intro to local food markets
4:28 Defining the size and scale of your market
6:01 An 1,800 square foot indoor farm, built to supply wholesale restaurant and retail locations
6:48 Safe Harbour Statement
7:21 Production estimates
8:26 Exammple of an internal rate of return
9:41 Ready, set, let's do some business planning!
10:11 Start with net income (profit and loss statement)
10:43 Capital budgeting for an 1,800 square foot indoor facility (example)
11:10 Operating expenses (example)
13:22 Profitability study: 10% Basil, 28% Lettuce, 22% Mini-head of Lettuce, 40% Kale
19:50 Net income and IRR for year 1
24:52 A closer look at the assumptions for this scenario - pricing and production numbers
26:07 Identifying the most productive and profitable crops to grow
26:52 How increasing herb production can increase profitability
30:02 Additional costs associated with a new line of business
31:18 (Example) How to optimize your crop selection for profitability
33:03 A 5 year IRR of 29%
36:53 Audience questions
Don't miss the next event!