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How to Start a Hydroponic Farm Business? Step by Step Guide

start a hydroponic farm business

Agriculture is the primary source of earning in most parts of the world.

It is one of the oldest professions, but due to dependence on traditional methods of agriculture and the use of inadequate equipment the condition of the agriculture sector has become worse.

The farmers are not encouraged to do agriculture as a family business.

Depending on the type of farm, it can be really beneficial and will eventually invite long-term returns. One must take a close look at the costs involved with starting a farm as well as the goals, equipment, and land type associated specific type of farm.

Recently a new technology of agriculture is born i.e. hydroponics. It is a technology that enables farmers to grow crops in a sterile environment by using water.

This has led to a drastic change in the agriculture sector. Many engineers, businesses, and graduates are moving towards agriculture.

For being a hydroponic farmer you must have land of a minimum half-acre, access to road, sufficient funds, access to electricity and water, and a hydroponic supplier.

One must also decide that they want to specialize in which variant of the plant. Nowadays leafy green vegetables and herbs are mostly trending.

Hydroponic farmers are gaining immense success and growth and earning greater revenues.

The success of hydroponic farms mainly depends on the quality of equipment used and choosing the right vendor.

The main twist of this business is that the plants are grown with the help of water and not soil. They are usually indoors and work in greenhouses.

This business also grows various flowers that enhance the beauty of nature. The various steps to start a hydroponic farm business are as follows.


1.- Plan your Business Well

To have a successful business, you should have a proper business plan. Your business plan must specify:


What will be the cost involved in starting a hydroponic farm?

For your business, you need a space where you can grow plants and crops. Hydroponic farms usually require greenhouses that can be rented, purchased, or built.

You must plan the cost involved in it. The cost will depend on the size of the greenhouse.

In addition to that, you will be requiring some seeds, electricity, a proper climate system, UV filtrations, water solvent, etc. Plan about the cost involved in all such things.

Your hydroponic farm business will also require an office, high-speed internet, computers, chairs, other furniture, and vehicles for transportation.


What will be the operating expenses involved in your business?

Your business will be requiring various equipment, seeds, vehicle, and furniture to enhance growth. These are called operating costs.


Who will be your target audience?

You must know what will be your target market. You may target the local community, supermarkets, or restaurants. You may also target the public directly.


How your hydroponic farm business will earn revenue?

Your business will earn money by selling crops and plants to your target market.


What will be the name of your business?

You must select a proper name for your business. The name of the business should be registered as early as possible. It provides legitimacy to your business.


2.- Form a Legal Business

You must form a legal entity as it will help you to not be personally liable if in case your hydroponic business shuts down. You can choose from any one of the business structures-

  • LLC
  • Corporations
  • DBA’s

You must take help from a registered agent to ensure your privacy and protection.


3.- Don’t Forget to get your Business Registered for Taxes.

Before starting your business, you must get yourself registered for taxes. It is necessary to apply for an EIN for getting registered for taxes.


4.- Open a Business Account and Obtain a Credit Card

To properly implement your farm business plan it is necessary to open a bank account for personal asset protection.

If you will not have a separate bank account for your business, then your personal and business account can become confusing which will create risk for your business.

  • Get a bank business account

Getting a business bank account will help you to secure your business assets and reduce the risk. It will make it easier to file taxes and accounting.


  • Get a credit card

It helps you to raise investment for your business and build up your company’s credit history. It will also separate your expenses from your business expenses.


hydroponic farm startup


5.- Set up your Business Accounting

It is very essential to record all the business transactions, income, and expenses of your business to understand the financial position of your farm business plan.

Keeping a detailed record of your business transactions will ensure proper annual tax filing.


6.- Obtain Essential Licenses and Permissions

It is very essential to obtain all the necessary licenses and permissions to ensure that your business does not shut down.

  • Federal licensing required

There are various federal licensing requirements for what can be sold or what cannot be sold and what can be processed. These licenses are required for your farm business plan.


  • State and local licensing required

To operate a hydroponic farm it is necessary to have state and local licensing. You must obtain information about local licensing from the local clerk’s office.


  • Obtain the Certificate of occupancy

A hydroponic farm is operated indoors and hence it requires a certificate of occupancy, which ensures that all the laws, rules and regulations, and zoning laws are complied with.

If you are planning to rent a location- The certificate is occupancy is obtained by the landlord. You must ensure that the landlord has obtained the certificate of occupancy, which applies to the hydroponic farming business before leasing the location.

If you are planning to purchase or build a location- You are responsible to obtain the certificate of occupancy from the government. Ensure that all the zoning requirements and building codes are followed to start a hydroponic farm business.


  • Food regulations

You will require a license from the local health department to sell food, flowers, or plants. All the food which you are selling must pass through the health inspection department.


7.- Get the Insurance for your Business

You must get insurance for your business to ensure safety. In the case of hiring employees, it is necessary to get workmen’s compensation insurance.


8.- You must Define your Brand

You must get a unique Identity for your products. Getting a unique brand will help you to stand out from your competitors. It will help you to gain brand loyalty and awareness from your customers.


  • How to promote your brand or business?

There is great competition in the market. So, only the traditional way of marketing is not sufficient to promote your business. In addition to traditional marketing, you must attend food-related conferences and establish a relationship with the local business owners who will be requiring food, flowers, plants, etc.


  • How to retain your customers?

The price of your products must be competitive such that it should be affordable as well as should enable you to gain profit. The quality of your products must also be better than your competitors.


9.- Build your Website

By building a website your customers will know more about your products and services and will also enable you to gain new customers.

Through social media presence, new customers will be attracted to your business which is a great way to ensure growth and success.


hydroponic farm planning


Skills Required to Establish a Successful Hydroponic Farm Business?

You must obtain enough knowledge about horticulture and obtain information about various hydroponic farms operating.

If you will provide quality food to your customers that are healthy and produce them in a manner that does not harm the environment then you will surely succeed.

Use proper equipment and you must have proper knowledge about how to operate the equipment. You can also perform research about various other farming methods and adopt the most efficient one.

You can also visit other hydroponic farms to get some experience with the farmers. It will help you to operate your farm in a better way.


Growth Expectations of the Hydroponic Farm Business Nowadays?

The hydroponic farm business is quite popular nowadays and there is a huge demand for hydroponic farms. It is growing on a large scale and has emerged as a great way to produce different food, plants, and flowers as it is an eco-friendly way to produce.

Producing high-quality food, keeping the prices competitive, and maintaining relations with the local business and community will ensure the success of your business.

You can start your business by taking a greenhouse on the lease and if you make money then you can expand your business by building other greenhouses in the area or near towns.

If you have an interest in any type of food and have care about the environment and would like to grow them in an eco-friendly manner then, a hydroponic farm business is best for you.

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