Looking for a hydroponics business plan? You're in the right place.
A hydroponic farm asks for money before it has sold a pound. How much does a greenhouse cost to build and fill? How many months pass between the first transplant and the first cash? Who buys the crop at a price that covers the rent? What happens if sales come in a fifth short? A blank template can't show you what a sensible answer looks like.
In this article we'll walk through a complete sample plan for a tomato and chili farm in Los Angeles, section by section, so you can see how the pieces fit and write your own with confidence. We'll cover the executive summary, the SWOT analysis and, above all, the financials.
Here's what you'll come away with:
- The executive summary: learn to fit the farm, the funding ask and the date of the first harvest onto one page
- The SWOT analysis: see how to admit the real exposures of a crop business, from pests to price pressure, and still sound fundable
- The greenhouse and start-up budget: find out what two greenhouses, a packhouse and a cooler cost, and how large a cash reserve the months before harvest call for
- The crop and price tables: turn square feet of growing area into pounds, and pounds into revenue by sales channel
- The first year, month by month: spot the months that lose money before they arrive, and plan the cash around them
- The five-year profit and loss, cash flow and balance sheet: understand how each hire, loan payment and pay raise shows up in the numbers
- The downside case: have an answer ready for the "what if sales are 20% short?" question, with the steps the founder takes
If you're planning a hydroponic farm, read this before you write your own. The farm is fictional, so keep what fits your crop and city and change the rest.
In this plan
To turn this example into your own hydroponics business plan, use the hydroponics business plan template.
The Farm in Brief
HydroFarm grows specialty tomatoes and exotic chilies in poly-covered hydroponic greenhouses on a leased former nursery lot in Sun Valley, Los Angeles, and raises starter plants for home gardeners and nurseries. Wian West, an agricultural scientist from South Africa, founds and runs it. The harvest goes to Certified Farmers' Markets, to grocers and restaurants, and to a local hot-sauce maker.
The farm needs $1,750,000. Wian invests $250,000. Three agricultural investors put in $560,000 at launch and $400,000 more in month 12, when the second greenhouse goes up, provided the first has picked at 70% or more of its planned pounds. A $400,000 bank term loan covers the first greenhouse and the packhouse, and a $140,000 equipment loan arrives in month 12. A $584,500 reserve carries the farm from the first transplant in March 2027 to the point where sales cover costs.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $311,831 | $1,187,900 | $1,568,400 |
| Net income after start-up costs | ($465,203) | ($111,111) | $88,488 |
| Closing cash | $245,034 | $101,987 | $209,972 |
Year 1 is a build year. Tomato picking starts in June 2027 and chili picking in August, so the farm sells for seven months against twelve months of rent and payroll, and operating profit is negative in every month. Year 2 is the first full year of picking in Greenhouse A and brings Greenhouse B into production in April 2028. Operating profit turns positive at $26,024, but interest and depreciation still leave a loss. Year 3 is the first profitable year, with $88,488 of net income and loan payments covered 2.3 times.
The plan tests itself. If revenue runs 20% below plan and Wian trims marketing, cuts his own pay and drops or delays five hires, the farm stays cash-positive in every year and just breaks even in Year 3.
Fully lit indoor farms have drawn very large sums of capital. Plenty, which had raised nearly $1 billion, filed for Chapter 11 in March 2025. HydroFarm grows under sunlight, with lamps only in the propagation house, so electricity is a modest cost line rather than the largest one.
The Sun Valley Greenhouse
Legal name: HydroFarm, LLC, a California limited liability company. Ownership: Wian West holds 34% of the membership units, three agricultural investors 56%, and a 10% unit pool for staff vests over four years. The pool has no cash effect in the model. Site: a 1.4-acre former wholesale nursery lot in Sun Valley, on a 15-year lease with two five-year options, at $10,500 a month. The lease requires the landlord's consent to the greenhouses, and the City of Los Angeles has to confirm that zoning allows greenhouse growing and on-site packing. Stage: pre-launch. Permit applications are filed in the fourth quarter of 2026 and building starts on January 1, 2027. A Los Angeles hot-sauce maker has written to say it intends to buy 60 pounds of chilies a week, and four farmers' markets have offered stall slots.
Why sand and recirculated water
Wian learned sand-bed growing on farms in South Africa, where water is scarce. HydroFarm uses it for chilies, in sand-and-perlite buckets, and puts tomatoes in coir slabs. Both are fed by drip, and the runoff is collected, filtered and used again. The site works include water treatment and a drainage system.
What is planted where
| Crop | Growing area | Planning yield | Main buyers |
|---|---|---|---|
| Tomatoes (cocktail, vine-ripe slicer and some heirloom) | 27,000 sq ft | 10 lb per sq ft a year at full yield | Farmers' markets, grocers, restaurants |
| Chilies (habanero, jalapeño, a few super-hots) | 5,000 sq ft | 3.5 lb per sq ft a year | Hot-sauce makers, restaurants, markets |
| Starter plants (tomato, chili, herbs) | 4,000 sq ft propagation house | 12,000 plants in 2027, 46,000 by 2029 | Home gardeners, small nurseries |
Greenhouse A, 20,000 square feet under cover, is built in the first three months and planted in March 2027. Greenhouse B, also 20,000 square feet, is built in month 12 and planted in January 2028. Growing area is smaller than floor area because aisles, benches and the headhouse take the rest.
Where the farm should stand by 2029
- First tomato picking in June 2027 and first chili picking in August.
- $1,187,900 of revenue in 2028, the first year with both greenhouses, and a first profit in 2029.
- About 41 grocery and restaurant accounts by the end of 2029, buying about 75 pounds a week each.
- Six farmers' market stall-days a week by 2029, each selling about 300 pounds of produce.
- Bank debt falling every year from 2028, with no owner distributions until the farm has built a cash buffer.
Who Buys Specialty Produce in Los Angeles
How much a pound of tomato is worth
The Bureau of Labor Statistics put the average U.S. retail price of field-grown tomatoes at $2.003 a pound in July 2026. HydroFarm plans to sell at $3.90 a pound wholesale and $6.25 at its own stalls in Year 1. A gap of that size only holds if the fruit tastes better and arrives fresher than a shipped commodity tomato, so the farm picks varieties for flavor, harvests ripe and delivers within a day.
What the alternatives are
| Alternative | What a buyer gets | Why they choose it | Where HydroFarm differs |
|---|---|---|---|
| Large greenhouse and imported tomatoes in supermarkets | Steady supply, low price | Cost and convenience | Ripe-picked specialty varieties from a few miles away |
| Field-grown specialty tomatoes from Southern California farms | Peak-season flavor | The farm story and the season | Supply through more of the year, with the overlap to be confirmed with growers |
| Other local greenhouse and urban growers | Local, fresh | Relationships already in place | A crop mix that adds chilies and starter plants |
| Dried and bottled chilies from commodity suppliers | Cheap, shelf-stable | Price | Fresh chilies and super-hot varieties for makers who want them |
| Nursery-grown starter plants at big retailers | Wide choice, low price | Convenience | Varieties chosen for Los Angeles gardens, sold at the market |
The table describes what each alternative offers and does not rank them. Competitor names and prices are left out because they change often.
Strengths and exposures
| Strengths | Weaknesses |
|---|---|
| A founder with three agricultural degrees who has run a produce business | A new brand in a market full of produce stalls |
| Sunlit greenhouses with a low electric load compared with fully lit indoor farms | Wian is the head grower, the founder and the main seller in Year 1 |
| Starter plants earn in spring, before the first tomatoes are ready | Year 1 loses money and draws on the reserve |
| Openings | Threats |
|---|---|
| Restaurants and grocers asking for local specialty produce | A pest or disease outbreak that wipes out a crop cycle |
| Hot-sauce makers who want a steady supply of fresh chilies | Price pressure from large growers shipping to Southern California |
| Gardeners who buy starter plants each spring | Rising power, water and wage costs |
The Buyers: Stalls, Shelves and Sauce Makers
Market shoppers
People who shop at Certified Farmers' Markets in Los Angeles County are the retail customer. They buy tomatoes by the pound, chilies in small bags and starter plants in spring. Their loyalty is to the stall, so the same two or three people staff it each week.
Grocers and restaurants
Independent grocers and restaurants buy by the case, in 25-pound boxes, on weekly standing orders and 30-day terms. A typical account buys about 75 pounds of tomatoes a week. At Year 3 prices that is about $16,100 a year, enough to justify a wholesale accounts manager from month 12.
Hot-sauce makers
A hot-sauce maker needs steady weekly volumes more than any one variety. The Los Angeles maker that has written to HydroFarm intends to buy 60 pounds a week, which is 3,120 pounds a year, or 25% of the chilies sold to trade buyers in Year 3. The letter is not a contract, and the plan treats it as a lead. Chilies are a small revenue line, 7% of Year 3 sales, and their main job is to set the farm apart at the stall.
Gardeners and small nurseries
Home gardeners buy starter plants from April to June and again in September. Small nurseries buy the same plants wholesale at $3.10 against $5.25 at the stall.
Selling the Harvest
Prices and where the pounds go
| Product | Channel | Year 1 price per lb | Year 3 price per lb |
|---|---|---|---|
| Tomatoes | Farmers' markets and direct | $6.25 | $6.63 |
| Tomatoes | Grocers and restaurants | $3.90 | $4.14 |
| Chilies | Farmers' markets and direct | $10.00 | $10.61 |
| Chilies | Hot-sauce makers and restaurants | $5.80 | $6.15 |
Prices rise 3% a year from Year 2. Starter plants sell at $5.25 retail and $3.10 wholesale in Year 1.
Pounds sold
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Tomatoes sold (lb) | 44,968 | 188,432 | 248,400 | 248,400 | 248,400 |
| Chilies sold (lb) | 2,154 | 12,126 | 16,100 | 16,100 | 16,100 |
| Starter plants sold | 12,000 | 32,000 | 46,000 | 52,000 | 55,000 |
| Share of tomato pounds sold at markets and direct | 60% | 44% | 35% | 33% | 32% |
The mix shifts toward wholesale because a stall can only sell so much. At Year 3 volumes, markets take about 87,000 pounds of tomatoes and 3,500 pounds of chilies, or about 300 pounds on each of 300 stall-days, worth roughly $2,000 a day before plant sales. Grocers and restaurants take the other 161,000 pounds of tomatoes.
How a sale is made
A stall sells to the person in front of it. A wholesale account starts with a box of samples, a price sheet and a weekly delivery slot. The wholesale accounts manager follows up each order and handles invoices on 30-day terms. Market sales are paid for on the day.
Getting Known
The first year's budget
Year 1 marketing is $54,000: $24,000 of launch costs paid from start-up capital and $30,000 of running costs. That is 17% of Year 1 revenue, or 10% counting running costs alone, and it falls to 2.2% by Year 3 as repeat orders replace introductions. Counting only the 14 wholesale accounts and 3 chili buyers targeted for the end of Year 1, it comes to about $3,200 per trade account, against about $15,200 a year, at Year 1 prices, from a wholesale account buying 75 pounds a week.
| Item | Year 1 spend | What it is meant to do |
|---|---|---|
| Brand, website and online ordering (launch) | $12,000 | A clear site with a weekly order page and trade price sheet |
| Stall signage and canopy graphics (launch) | $4,000 | A recognizable stall at every market |
| First-season sampling (launch) | $8,000 | Taste tests that justify a price well above supermarket tomatoes |
| Chef and buyer sample boxes and visits | $7,000 | About 60 visits to grocers and restaurants, for about 14 accounts |
| Photography and social media | $6,000 | Harvest and greenhouse content for the people who follow the stall |
| Plant-sale days and spring events | $6,500 | The spring starter-plant season, which carries the stall from April to June |
| Weekly newsletter and pre-order list | $3,500 | Regulars who order ahead and collect at the stall |
| Ongoing market sampling | $4,000 | Samples of new varieties each week |
| Hot-sauce and food festivals | $3,000 | Introductions to makers and chefs who buy chilies |
Dates to hit
- March 2027: Greenhouse A planted.
- April 2027: starter plants on sale at the first two markets.
- June 2027: first tomatoes picked, first grocery and restaurant orders.
- September 2027: the hot-sauce maker's first order, at about 60 pounds a week.
- December 2027: 14 wholesale accounts, and Greenhouse B built.
- January 2028: Greenhouse B planted and the weekly pre-order list at its first 300 names.
Growing and Packing
A year in the greenhouse
Tomato plants climb high wires and are replaced in rotation, so picking runs through the year. A new planting starts to pick about ten weeks after transplanting and reaches full output about three months later. The plan uses a seasonal curve in which August carries about 11% of the year's pounds and January about 5%. Chilies take longer: the first fruit in Greenhouse A arrives in August 2027, five months after planting.
The propagation house runs lamps and heat from February for the spring plant season. Its benches turn over about three times between March and June, with a short autumn run in September.
Power, water and climate
Poly-covered houses are cooled with evaporative pads and fans and heated with gas when winter nights call for it. Utilities are $36,000 in Year 1, $60,000 in Year 2 and $72,000 in Year 3, about $6,000 a month once both greenhouses run. Those are planning figures that depend on local utility rates, and the Los Angeles Department of Water and Power tariffs and a gas quote should replace them. Recirculating the water should hold purchases well below what field growing would use.
From picking to the buyer in a day
Fruit is picked in the morning, sorted and boxed in the packhouse, and held in a walk-in cooler run at a temperature that suits ripe tomatoes. A refrigerated van carries the market stock out before dawn. A second van and a second driver join in months 13 and 16, when Greenhouse B starts to pick and wholesale volume doubles.
Permits and food safety
- A Certified Producer's Certificate from the County Agricultural Commissioner is needed to sell at Certified Farmers' Markets, and every crop sold has to appear on it. The county sets the fee and inspects the growing ground.
- Counties generally require scales used to sell by weight to be registered and sealed. The county weights and measures office confirms the rules.
- The federal Produce Safety Rule is likely to apply once sales pass the small-farm thresholds, and larger grocers often ask suppliers for a third-party audit. The farm plans to operate as a covered farm from the start, with a written food-safety plan, agricultural water testing, worker training and an audit by Year 2, budgeted at $3,000 in Year 1 and $4,500 in Year 2. The California Department of Food and Agriculture's produce safety program can confirm what applies.
- California farm labor rules on overtime, heat illness and wage statements apply to the crew. Counsel should confirm the current requirements before hiring.
- General and product liability, property, commercial auto and equipment breakdown cover are budgeted at $28,000 in Year 1 and $48,000 in Year 3, with key-person life and disability cover on Wian.
When something goes wrong
A pest or disease can end a crop cycle. The farm releases beneficial insects as a routine, keeps the two greenhouses on separate air handling and wash lines, and holds a $584,500 reserve at opening. The model does not include a total crop loss. HydroFarm will price crop and property insurance before the bank loan closes and sets a minimum cash balance with the investors.
Wian and the Crew
Wian West, founder and head grower
Wian holds three degrees in agriculture. He managed a commercial greenhouse for a South African cooperative, then ran a produce business that bought from small farms and sold to large supermarkets, and his master's research looked at hydroponically grown produce and the people who eat it. He lives in Los Angeles and works full time in HydroFarm. His $250,000 comes from savings and from selling part of his stake in the South African business.
Gillian Bosch, finance lead
Gillian has 15 years in finance at a wellness grocery chain and supervised close to 30 internships. She works as a contractor, about two days a month, and prepares the monthly numbers for the investors. Her fees sit in professional fees at $38,000 in Year 1, together with the outside accountant, payroll provider and ongoing legal work.
Where the team is thin
Wian has not built a customer base in Los Angeles and has not run a farm under California's labor rules. For the first year he is also the head grower, the main wholesale seller and a regular at the stalls. The wholesale accounts manager in month 12 is the first hire made to take selling off him. No one else can run the greenhouses if Wian is away, so grow technician 1 is trained as deputy head grower from month 3.
Staff ownership
A 10% pool of membership units vests to the crew over four years. The farm hires from the neighborhoods around Sun Valley, and the pool is meant to keep people who have been trained. The $17,000 of legal fees in the start-up budget covers setting it up properly.
Lenders and investors
The three agricultural investors receive quarterly accounts and a seat on a three-person board. Their follow-on investment in month 12 is committed in the operating agreement and released only if Greenhouse A has picked at 70% or more of its planned pounds. The bank holds the equipment as security and a personal guarantee from Wian, and expects quarterly statements.
Five-Year Financials: Greenhouses, Crew and Cash
One five-year model sits behind every table below: monthly for 2027, yearly after that. The figures that drive it come first, so a reader can follow each revenue and cost line back to a yield, a price or a head count. Greenhouses take most of the money, and the crew, power and market costs run through operating expenses.
Greenhouse build and start-up funding
| Use of funds | Amount |
|---|---|
| Greenhouse A: 20,000 sq ft gutter-connected poly house with cooling, heating, benching and fertigation | $380,000 |
| Propagation house: 4,000 sq ft heated, with benches and lamps | $88,000 |
| Packhouse, walk-in cooler, wash line and scales | $78,000 |
| Refrigerated delivery van (used) | $50,000 |
| Market tents, tables, display coolers and card readers | $14,000 |
| Site preparation, electrical service upgrade, water treatment and drainage | $80,000 |
| Second refrigerated delivery van (used, month 13) | $40,000 |
| Greenhouse B: 20,000 sq ft extension (month 12) | $390,000 |
| Business licenses, county grower registration and certified-producer certificate | $4,500 |
| Legal: entity, lease review, shareholder agreement and staff share plan | $17,000 |
| Launch: brand, website, market signage and first-season sampling | $24,000 |
| Cash reserve for the build and the months before the first harvest | $584,500 |
| Total uses | $1,750,000 |
| Source of funds | Amount |
|---|---|
| Wian West's savings and farm-sale proceeds | $250,000 |
| Three agricultural-sector investors (minority shareholders) | $560,000 |
| Bank term loan for Greenhouse A and packhouse | $400,000 |
| Bank equipment loan for Greenhouse B systems and the second van | $140,000 |
| Follow-on equity from the same investors for Greenhouse B | $400,000 |
| Total sources | $1,750,000 |
Wian puts in $250,000 of savings and sale proceeds. Three agricultural investors put in $560,000 at launch and a further $400,000 in month 12, when Greenhouse B is built, so equity is $1,210,000 or 69% of the total. The follow-on is committed in the operating agreement and released only if Greenhouse A has picked at 70% or more of its planned pounds. A $400,000 bank term loan covers Greenhouse A and the packhouse: ten years at 9.75%, interest-only for the first 12 months, then payments of about $5,580 a month, secured on the equipment with a personal guarantee from Wian. A $140,000 equipment loan arrives in month 12 for Greenhouse B's systems and the second van, over seven years at the same rate, interest-only for six months, then about $2,430 a month. The rates are illustrations for this example, not quoted lending rates. The $584,500 reserve is 33% of the total. It pays for the months in which the farm carries rent, power and a crew before the fruit is picked, and it is sized so that the 20% downside case below still ends every year with cash in the bank.
Growing, pricing and cost figures
- Tomatoes yield 10 pounds per square foot of growing area per year at full output, reached in Year 3, and chilies 3.5 pounds. The crew reaches 70% of full yield in Year 1 and 88% in Year 2. Published greenhouse yields vary widely with design, climate and crop, and heirloom varieties yield less than slicers, so this is a planning figure that a pilot crop and grower quotes should replace.
- Growing area is 27,000 square feet of tomatoes (13,000 in Greenhouse A, 14,000 in B) and 5,000 of chilies (3,000 and 2,000), inside 40,000 square feet of greenhouse under cover. Greenhouse A is planted in month 3 and B in month 13. Tomatoes start to pick about ten weeks after transplanting, in months 6 and 16, and chilies in months 8 and 17. Year 1 therefore has seven months of tomato picking and five of chilies, which is why revenue grows 281% in Year 2.
- Output follows a seasonal curve in which August carries about 11% of the year's pounds and January about 5%. Year 1 revenue shows that curve month by month. Years 2 to 5 spread the annual total evenly, so those years carry no monthly pattern.
- 8% of pounds picked are lost to grading, damage or unsold stock. Tomatoes sold are 44,968 pounds in Year 1, 188,432 in Year 2 and 248,400 from Year 3. Chilies sold are 2,154, 12,126 and 16,100 pounds.
- In Year 1 tomatoes sell at $6.25 a pound at the stall and $3.90 wholesale, and chilies at $10.00 at the stall and $5.80 to hot-sauce makers and restaurants. All prices rise 3% a year from Year 2. The Bureau of Labor Statistics average for field-grown tomatoes was $2.003 a pound in July 2026, so the farm prices as a specialty grower.
- Markets and direct sales take 60% of tomato pounds in Year 1, 44% in Year 2, 35% in Year 3, 33% in Year 4 and 32% in Year 5. For chilies the shares are 30%, 25%, 22%, 20% and 20%. At Year 3 volumes that is about 300 pounds on each of 300 stall-days. The remaining 161,000 pounds of tomatoes go to about 41 grocery and restaurant accounts at roughly 75 pounds a week each. Year 1 has 14 accounts by December.
- Starter plants are 12,000 in Year 1 (selling from April), 32,000 in Year 2, 46,000 in Year 3, 52,000 in Year 4 and 55,000 in Year 5. Wholesale to nurseries is 20% of units in Year 1, 40% in Year 2 and 45% from Year 3, at $3.10 against $5.25 retail. The retail share is counted in the markets line, so the plants line in the revenue table is wholesale only. In Year 3 plants earn about $209,000, 13% of revenue. The 4,000 square foot propagation house holds about 16,000 pots per turn, so 46,000 plants needs three turns of the benches between March and June, plus an autumn run.
- Direct costs run at 12% of market sales, 13% of wholesale tomatoes, 10% of chilies to trade and 24% of wholesale plants, or 12.5% of revenue overall. They cover seed and clones, coir and sand, nutrients, beneficial insects, pots, boxes and bags, and card fees. Customers take 15 days on average to pay: market sales are paid on the day, and grocers and restaurants pay in 30 days. Suppliers are paid in 25 days, and stock on hand is 10% of a year's direct costs.
- Greenhouse A costs $380,000 for 20,000 square feet, $19 a square foot, with cooling, heating, benching and fertigation. Greenhouse B costs $390,000 for 20,000 square feet and the propagation house $88,000 for 4,000. The packhouse and cooler are $78,000, a used refrigerated van $50,000, a second van $40,000 and site works $80,000. These are planning figures for the example and greenhouse supplier quotes would replace them. Greenhouses and site works are depreciated straight-line over 15 years, the packhouse over 10, the vans over seven and market equipment over five, with no residual value.
- Poly film, shade cloth and growing-system replacement is $6,000 in Year 2 and $22,000 in Year 3, rising to $30,000 in Year 5, because film and drip equipment wear out on a cycle that varies by product. Repairs and tools are $6,000 in Year 1 and $19,000 in Year 5. Market stall fees are $12,000 in Year 1 and $22,800 in Year 3, about 300 stall-days at roughly $76 each.
- Rent is $10,500 a month for 1.4 acres in Year 1, about 17 cents a square foot, rising 3% a year, a planning figure to be confirmed by a broker's quote. Utilities are $36,000 in Year 1 and $72,000 in Year 3. Insurance is $28,000 in Year 1 and $48,000 in Year 3, covering general and product liability, property, commercial auto, equipment breakdown and key-person cover. Professional fees are $38,000 in Year 1 and about $36,000 after, covering the contract finance lead, the outside accountant, payroll and legal work.
- Payroll adds 30% to wages for payroll taxes, health cover, paid sick leave and workers' compensation, which costs more for farm work than for office work (18% for the part-time roles). Grow technicians earn $44,000, the packhouse lead $48,000, the wholesale manager $58,000 and the founder $85,000 in the personnel table. Annual pay raises of 3% are charged as a separate line from Year 2. California rules on overtime and heat illness apply to the crew and counsel should confirm them.
- Income tax is charged at the federal corporate rate of 21% and the California corporate rate of 8.84%, with losses carried forward, and no tax falls due in the five years because Years 1 and 2 lose $576,000 including start-up costs. The California rate may change. An LLC would normally be taxed through its members, which would remove this line, and the $800 annual minimum tax and the LLC fee on gross receipts are small and not modeled. An accountant should confirm both. No owner distributions are paid in any year.
Revenue by crop and channel
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Farmers' markets and direct sales | $225,494 | $668,800 | $755,000 | $759,100 | $774,100 |
| Wholesale tomatoes to grocers and restaurants | $70,151 | $423,900 | $668,000 | $709,300 | $741,400 |
| Chilies to hot-sauce makers and restaurants | $8,746 | $54,300 | $77,300 | $81,600 | $84,100 |
| Starter plants sold to nurseries | $7,440 | $40,900 | $68,100 | $79,300 | $86,400 |
| Total revenue | $311,831 | $1,187,900 | $1,568,400 | $1,629,300 | $1,686,000 |
| Growth on prior year | – | 281% | 32% | 4% | 3% |
Markets and direct sales are 72% of Year 1 revenue and 48% of Year 3, because the stall is where the farm starts and wholesale is where it grows. Wholesale tomatoes are 22% of Year 1 and 43% of Year 3. Chilies to trade buyers are 3% of Year 1 and 5% of Year 3, and wholesale starter plants are 2% and 4%. Revenue grows 281% in Year 2 because Year 1 has only seven months of picking and Greenhouse B starts to pick in April 2028. It then grows 32%, 4% and 3% as volumes level off, and later growth comes from price rises and more plants alone.
Month by month in 2027
| Month | Farmers' markets and direct sales | Wholesale tomatoes to grocers and restaurants | Chilies to hot-sauce makers and restaurants | Starter plants sold to nurseries | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($49,857) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | ($49,857) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | ($49,857) |
| Apr 2027 | $20,160 | $0 | $0 | $2,976 | $23,136 | ($29,602) |
| May 2027 | $17,640 | $0 | $0 | $2,604 | $20,244 | ($32,134) |
| Jun 2027 | $18,983 | $4,752 | $0 | $1,116 | $24,851 | ($28,101) |
| Jul 2027 | $22,225 | $9,246 | $0 | $0 | $31,471 | ($22,306) |
| Aug 2027 | $34,768 | $14,127 | $1,094 | $0 | $49,989 | ($6,094) |
| Sep 2027 | $38,653 | $14,224 | $1,944 | $446 | $55,267 | ($1,473) |
| Oct 2027 | $35,008 | $12,931 | $2,582 | $298 | $50,819 | ($5,367) |
| Nov 2027 | $23,165 | $9,052 | $1,903 | $0 | $34,120 | ($19,987) |
| Dec 2027 | $14,892 | $5,819 | $1,223 | $0 | $21,934 | ($30,655) |
Starter plants bring the first cash in April. Tomato picking begins in June and chilies in August, and monthly revenue peaks at $55,267 in September 2027. Operating profit before interest, depreciation and tax (EBITDA) is negative in every month, narrowing to a loss of $1,473 in September. Month-end cash is lowest in Nov, at about $127,000, after allowing for the 15 days customers take to pay. Greenhouse B is paid for in December, and the follow-on equity and equipment loan arrive the same month.
Crew plan
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder, CEO and head grower | $85,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Grow technician 1 | $44,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Grow technician 2 | $44,000 | Month 5 | 1 | 1 | 1 | 1 | 1 |
| Packhouse and delivery lead | $48,000 | Month 6 | 1 | 1 | 1 | 1 | 1 |
| Nursery technician (seasonal, February to June) | $44,000 | Month 2 | – | – | – | – | – |
| Market seller 1 (part time, weekends) | $21,000 | Month 6 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Office and billing administrator (part time) | $25,000 | Month 7 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Wholesale accounts manager | $58,000 | Month 12 | 1 | 1 | 1 | 1 | 1 |
| Grow technician 3 (Greenhouse B) | $44,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Grow technician 4 (Greenhouse B) | $44,000 | Month 16 | – | 1 | 1 | 1 | 1 |
| Market seller 2 (part time, weekends) | $21,000 | Month 9 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Market seller 3 (part time, weekdays and weekends) | $21,000 | Month 19 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Market seller 4 (part time, weekdays and weekends) | $21,000 | Month 26 | – | – | 0.5 | 0.5 | 0.5 |
| Second delivery driver | $46,000 | Month 16 | – | 1 | 1 | 1 | 1 |
| Total payroll incl. on-costs | $300,282 | $622,933 | $687,288 | $689,353 | $689,353 |
Wian is on payroll from month 1 at $85,000. Grow technician 1 starts in month 3 as Greenhouse A is planted and technician 2 in month 5. The packhouse and delivery lead and the first market seller start in month 6, as picking begins, and an office administrator follows in month 7. A second seller joins in month 9 and the wholesale accounts manager in month 12. A seasonal nursery technician works February to June each year and is shown at an annual-equivalent rate. Technician 3 joins in month 13, and technician 4 and a second driver in month 16 as Greenhouse B starts to pick. A third market seller joins in month 19 and a fourth in month 26. The part-time figures are part-time salaries of about 20 hours a week. Wian's $85,000 is already in the costs, so every profit line is struck after he has been paid.
Profit and loss by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $311,831 | $1,187,900 | $1,568,400 | $1,629,300 | $1,686,000 |
| Growing inputs, packaging and card fees | ($38,839) | ($147,955) | ($195,347) | ($202,932) | ($209,994) |
| Gross profit | $272,992 | $1,039,945 | $1,373,053 | $1,426,368 | $1,476,006 |
| Payroll incl. on-costs | ($300,282) | ($622,933) | ($687,288) | ($689,353) | ($689,353) |
| Rent | ($126,000) | ($129,800) | ($133,700) | ($137,700) | ($141,800) |
| Utilities | ($36,000) | ($60,000) | ($72,000) | ($74,000) | ($76,000) |
| Marketing | ($30,000) | ($36,000) | ($34,000) | ($32,000) | ($32,000) |
| Insurance | ($28,000) | ($42,000) | ($48,000) | ($50,000) | ($52,000) |
| Professional fees | ($38,000) | ($36,000) | ($36,500) | ($37,000) | ($37,500) |
| Software subscriptions | ($5,000) | ($6,500) | ($7,500) | ($8,000) | ($8,500) |
| Farmers' market stall fees | ($12,000) | ($18,000) | ($22,800) | ($24,000) | ($25,000) |
| Poly film, shade cloth and growing-system replacement | $0 | ($6,000) | ($22,000) | ($26,000) | ($30,000) |
| Van fuel, maintenance and registration | ($9,000) | ($13,000) | ($15,000) | ($16,000) | ($17,000) |
| Repairs, tools and equipment replacement | ($6,000) | ($12,000) | ($15,000) | ($17,000) | ($19,000) |
| Water testing, food-safety training and certifications | ($3,000) | ($4,500) | ($5,000) | ($5,200) | ($5,400) |
| Phones, supplies and uniforms | ($3,500) | ($4,500) | ($5,200) | ($5,600) | ($5,900) |
| Bad debt allowance | ($1,500) | ($4,000) | ($6,000) | ($6,500) | ($7,000) |
| Annual pay raises (3% a year) | $0 | ($18,688) | ($41,856) | ($63,922) | ($86,520) |
| EBITDA | ($325,290) | $26,024 | $221,209 | $234,092 | $243,032 |
| Depreciation | ($54,276) | ($85,990) | ($85,990) | ($85,990) | ($85,990) |
| Interest | ($40,137) | ($51,144) | ($46,730) | ($41,696) | ($36,149) |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($419,703) | ($111,111) | $88,488 | $106,405 | $120,893 |
| Start-up costs expensed at opening (legal, licensing, launch marketing) | ($45,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($465,203) | ($111,111) | $88,488 | $106,405 | $120,893 |
Year 1 loses $419,703 before start-up costs and $465,203 after them. Payroll is 96% of Year 1 revenue because the crew is in place before the fruit is. Year 2 has EBITDA of $26,024, which interest of $51,144 and depreciation of $85,990 turn into a net loss of $111,111. Year 3 is the first profitable year, with net income of $88,488 and an EBITDA margin of 14.1%. Net income is $106,405 in Year 4 and $120,893 in Year 5. Income tax is zero throughout because the early losses are carried forward. Net margin is 5.6% in Year 3 and 7.2% in Year 5, which is thin for a business exposed to weather and pests. Year 4 profit grows by $17,917 because volumes are flat while the pay-raise line grows by $22,066, to $63,922, and rent and insurance rise too.
Cash through the build and the ramp
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($424,966) | ($64,561) | $157,348 | $189,654 | $204,331 |
| Greenhouses and equipment | ($1,080,000) | ($40,000) | $0 | $0 | $0 |
| Funding received | $1,750,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($38,486) | ($49,363) | ($54,397) | ($59,944) |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $245,034 | ($143,047) | $107,985 | $135,257 | $144,386 |
| Closing cash | $245,034 | $101,987 | $209,972 | $345,229 | $489,615 |
Closing cash is positive in every year. The lowest year-end balance is $101,987 at the end of Year 2, after Greenhouse B is built and the second year of losses is absorbed, and it then rises to $489,615 by the end of Year 5. No distributions are paid, so the cash builds as a buffer against a lost crop cycle. Bank debt falls from $540,000 at the end of Year 1 to $337,809 at the end of Year 5, with principal payments starting in Year 2.
Balance sheet at year end
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $245,034 | $101,987 | $209,972 | $345,229 | $489,615 |
| Accounts receivable | $12,815 | $48,818 | $64,455 | $66,958 | $69,288 |
| Seed, nutrient and packaging stock | $3,884 | $14,796 | $19,535 | $20,293 | $20,999 |
| Greenhouses and equipment (net) | $1,025,724 | $979,733 | $893,743 | $807,752 | $721,762 |
| Total assets | $1,287,457 | $1,145,334 | $1,187,705 | $1,240,232 | $1,301,664 |
| Supplier payables | $2,660 | $10,134 | $13,380 | $13,899 | $14,383 |
| Bank loans | $540,000 | $501,514 | $452,151 | $397,754 | $337,809 |
| Paid-in capital | $1,210,000 | $1,210,000 | $1,210,000 | $1,210,000 | $1,210,000 |
| Retained earnings | ($465,203) | ($576,314) | ($487,826) | ($381,421) | ($260,528) |
| Total liabilities and equity | $1,287,457 | $1,145,334 | $1,187,705 | $1,240,232 | $1,301,664 |
Margins, loan cover and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -104.3% | 2.2% | 14.1% | 14.4% | 14.4% |
| Net margin (before start-up costs) | -134.6% | -9.4% | 5.6% | 6.5% | 7.2% |
| Payroll incl. pay raises as share of revenue | 96% | 54% | 46% | 46% | 46% |
| Revenue per full-time equivalent at year end | $47,974 | $118,790 | $149,371 | $155,171 | $160,571 |
| Average monthly revenue | $25,986 | $98,992 | $130,700 | $135,775 | $140,500 |
| Monthly revenue needed to cover operating costs | $56,950 | $96,514 | $109,643 | $113,492 | $117,366 |
| Debt service cover (EBITDA / interest + principal) | -8.1x | 0.3x | 2.3x | 2.4x | 2.5x |
Compare average monthly revenue with the needed figure in the last two rows of the ratios table; the needed figure covers operating costs but not depreciation or interest. Year 1 averages $25,986 a month against $56,950 needed. Year 2 averages $98,992 against $96,514, a narrow pass that interest and depreciation turn into a loss. Year 3 averages $130,700 against $109,643. Debt service cover is negative in Year 1 and 0.3x in Year 2, so loan payments in those years come out of the reserve. It is 2.3x in Year 3 and 2.5x in Year 5.
If sales fall 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $249,465 | $950,320 | $1,254,720 | $1,303,440 | $1,348,800 |
| Net income before start-up costs | ($441,702) | ($149,535) | $1,147 | $15,908 | $26,340 |
| Net income after start-up costs | ($487,202) | ($149,535) | $1,147 | $15,908 | $26,340 |
| Closing cash | $225,843 | $52,261 | $76,331 | $121,639 | $171,982 |
This case cuts every revenue line by 20% in every year. The response: marketing is cut 20%, Wian takes a 20% pay cut, every hire from month 13 starts six months later, the fourth technician, fourth market seller and second driver are not hired because 20% less volume needs fewer hands, and stall fees, van fuel and bad debt fall with sales. Power, insurance and film replacement stay where they are, because a yield or price shortfall does not reduce them. No distributions are paid. On those terms the farm loses money in Years 1 and 2, earns $1,147 in Year 3 and a little more after, and ends every year with cash in the bank, at no less than $52,261. Equity ends Year 1 at $722,798. Year 2 is the tight year, and the investors would be asked to hold the follow-on terms. Postponing Greenhouse B by a year was tested and left cash negative, because the rest of the cost base stayed in place while the new picking revenue arrived later, so the build date stays. A case in which one greenhouse loses a whole crop cycle is not modeled.
Sources
- TechCrunch, Vertical farming company Plenty files for bankruptcy after raising nearly $1B, March 24, 2025. The article reports the filing and the amount raised.
- Bureau of Labor Statistics via FRED, Average price: tomatoes, field grown (cost per pound): $2.003 in July 2026.
- California Department of Food and Agriculture, Certified Farmers' Markets: growers contact the County Agricultural Commissioner's office in the county where they produce to become Certified Producers.
- California Tax Service Center, C corporations: 8.84% of net income or $800, whichever is greater; the rate may change.
- Greenhouse yields, construction costs, rents, utility costs and wages are the plan's own figures. Supplier, broker and utility quotes should replace them before any commitment.
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