Leandro Martín Olmos | Oct 25, 2023 | 0
Starting a New Greenhouse: Software for Data-Driven and Quick Investment Decisions
- Greenhouse Formula performs all necessary calculations and provides detailed financial results in a professional report
- Greenhouse Formula is a software designed for experienced professionals and new growers looking to make the best decisions in management and control of new greenhouses
29.03.2023 – ENGLISH
Greenhouses offer a sustainable and efficient way to grow plants and are quickly becoming a popular solution for food production around the world. With so many benefits to offer, it’s no wonder that more and more people are turning to horticulture as a solution for meeting the growing demand for fresh produce. Every single greenhouse should remain a profitable business to be a sustainable source of fresh produce continuously.
Factors to Consider Before Starting a Commercial Greenhouse
Although it’s a rewarding experience, it is a challenge to operate a commercial greenhouse. The growing environment and the health of the plants should be continuously monitored and controlled to get the maximum possible yield with the highest quality.
Starting a commercial greenhouse can be an even bigger challenge, especially for new growers. Correct planning is crucial before investing in greenhouses. Factors such as market demand, competition, operating costs (including energy), and initial investments in structures and equipment must all be carefully considered and incorporated into a comprehensive business plan. By doing so, investors can make informed decisions about whether to invest in a commercial greenhouse and ensure that it will be profitable in the long run.
The Importance of Proper Planning and Knowledge
Planning a commercial greenhouse requires horticultural and business knowledge. The project owner should have that knowledge to properly plan a successful business. It’s a rare combination of skills for new growers to have right at the beginning. Most often teams are created out of specialists with those skills to efficiently plan a commercial greenhouse project. It requires a lot of time and exchange of significant knowledge between each other in the team to come to a common ground and agreement about the project concept.
At the end of the process mentioned above, all the operational and investment choices should be transformed into a profitability calculation for the project to validate that the new greenhouse will be profitable. It usually requires financial and modeling skills to properly forecast future profits and arrive at project evaluation indicators for decision-making. And most of the time, profitability estimation is a back-and-forth process of searching for a profitable concept because of the many variables involved.
Estimating Profitability: Variables to Consider
The crop to be grown and the markets where it will be sold are very important variables having a significant impact on profitability. Some markets have high competition, while others rely on imported produce. Depending on the supply and the demand in that specific market, the prices may include a different level of profits for the producer. Generally, the higher the price is, the more attractive it will be for a new grower to produce for that specific market. Value added tax in the sales prices is another important variable that should not be neglected. It’s not a coincidence that this tax is often the biggest revenue source for governments around the world, therefore it should be paid special attention to while planning a commercial greenhouse project.
The cost of the greenhouse structure and equipment is another major factor having a significant impact on the profitability of the business. The useful life and quality of its components and requirement for maintenance should all be considered before making the final decision. Besides that, a greenhouse should operate and make expenses to grow crops until the first yield can be sold and the revenues can be collected. This is usually called initial working capital. It should also be properly estimated for the first growing season, and be considered part of the project investments.
Lastly, all of the mentioned above should be combined with the operational expenses to make a comprehensive profitability estimation. However, it is again a challenge because of several reasons. The estimation process involves writing formulas, modeling the greenhouse operations, all the expenses, crop production and sales, and finally producing financial statements. And all of these come with huge risks of using incorrect formulas and missing important expenses. On top of that it requires a significant amount of time to produce the results. Some additional time will also be needed for making the results presentable for decision-makers. Turns out the whole calculation requires a significant amount of resources in the end, in case all of these processes are done internally.
Financial Software for Planning a Commercial Greenhouse
The process of estimating the profitability of a commercial greenhouse project is a critical step in the planning phase. Traditionally, this process has been carried out using pen and paper or spreadsheet software, but these methods have their drawbacks and limitations. They can be time-consuming, prone to errors, and difficult to update as new information becomes available.
The whole sequence of calculation, financial evaluation and presentation is a standard chain of processes that are carried out for any greenhouse project. Fortunately, there is now a more efficient and accurate way to make profitability estimations. Greenhouse Formula is an innovative online software that streamlines the entire process. By asking targeted questions about the greenhouse project, Greenhouse Formula performs all the necessary calculations and provides detailed financial results in a professional report.
One of the key benefits of Greenhouse Formula is its ease of use. It can be accessed on any modern browser on desktop devices, eliminating the need for complex software installations or technical expertise. Additionally, Greenhouse Formula is designed to be user-friendly, with clear instructions and intuitive navigation.
By using Greenhouse Formula, commercial greenhouse planners can save valuable time and resources while gaining a more accurate understanding of the potential profitability of their project. Greenhouse Formula can help seasoned professionals and new people in the industry make informed decisions and start a successful greenhouse business.
Streamlining the Planning Process with Greenhouse Formula
Greenhouse Formula automates the tedious job of complex financial formulas and report generation. The risk of incorrect formulas is eliminated. By going through the required information, no important thing can be missed. Meanwhile, those who are new to horticulture can learn a lot in the process.
The result is a comprehensive analysis of the future greenhouse operations including forecasted financial statements over a 10-year period and project evaluation metrics. Every piece of important information is available in the report to make an informed and data-driven investment decision. On top of that, the scenario analysis tool is a playground for a quick view of the forecasted results if major assumptions deviate from expectations.
New commercial greenhouse projects are being planned every day in different parts of the world and Greenhouse Formula helps them shorten the time from an idea to a decision-making point. Moreover, Greenhouse Formula allows the creation of numerous versions of a project to find the most appropriate and profitable concept.
All in all, Greenhouse Formula is a great learning and investment decision-making tool specifically built for new commercial greenhouse projects. It uses technology to standardize and simplify the complex task of planning a commercial greenhouse project and makes it easier for anyone interested in sustainable agriculture to get started in this important industry.