Vertical Farming Cost Model: My Budget

I ran a vertical hydroponics farm for a year and I want to share exactly what I bought and how much it cost. In this post I want to:

  • Summarize my vertical farming journey
  • Show you exactly what I spent my money on
  • Give you a model to estimate costs for your farm

how much does vertical farming cost how much does a vertical farm cost

My Vertical Farming Conclusions

My farm, Rosemont, began when I converted a 128 sq foot garage into a hydroponic farm selling nursery starter plugs (tomatoes, herbs, peppers), basil, and lettuce mixes for restaurants. I started building the farm in September 2016 and made my last sale in June of 2017. My goal was to create a MVP (minimum viable product) version of a vertical farm in order to:

  1. See if vertical hydroponic farming could make money
  2. See if running a vertical farm was something I wanted to do long term
  3. Test the sustainability of veritcal farming long term
  4. Gain experience starting my own business

So what’s the verdict!?

Running this experiment showed me that vertical farming could indeed make money. However, it does not make enough money without scaling to a level that compromises sustainability for my personal financial goals.

I could write a lot about the sustainability bit, and I did, but I’m going to leave that out of this piece and instead focus strictly on the budget. I’ll save my thoughts for another post.

What does this mean for me long term? My next step is to build a passive solar greenhouse onto my home, embrace a vertical farming layout, and grow rare plants. I’m still in the planning stages there but more to come as this gains steam.

So, onto the good stuff!

Greens Debut Restaurant Week 800x533

How Much I Spent

I bucketed my expenses into 3 main categories: operation, equipment, and marketing. Everything else fell into my ‘other’ category.

Operational expenses are expenses that I needed to keep going – buying more seeds or fertilizer for example.

Equipment are pieces of infrastructure like lights or shelves I needed to have a functioning farm. I included the construction cost of the garage conversion (before and after) here as well.

While I didn’t do any strict advertising, marketing for me was essentially networking, with a small amount put towards branding spends like designing my logo. Networking was important for me for referral generation. For example if another grower had a client make a request they couldn’t fill, they passed it to me.

Overall, my costs for each category can be seen in the chart below.

vertical farming budget categories

I also broke down the buckets down further into individual budget items. Below is a percentage chart that you can use to see how much a particular item might take up of your whole budget.

vertical farming budget items

And now for the nitty gritty. Before I started farming, I began teaching myself the basics of small business bookkeeping, mostly based out of this great workbook an accountant recommended me. While I was farming I kept a register of every expense I had. Below is the link to a Google Docs version of the table. I will note that I took gas out of this. It was a huge cost for me as my commute was about an hour long and commute time/cost should absolutely factor into your budgeting.

Link

Besides the individual items, you can see how much my costs dropped over time as I didn’t have to keep buying equipment. The different spikes in the first few months correspond to different project installations.

vertical farming costs over time

Conclusion And Model

So how can you make use of this information?

First, you can get a good idea of the different things you’d have to spend your money on as your planning. It’s the little things that people tend to forget about! The ~$200 I spent on plumbing parts and paint for example was not something I would have thought to write down initially.

But, dialing in even more: I spent about $9000 to run this business for almost a year. To apply this data to your farm, a good back-of-the-napkin start would be to take my flat sq. footage (128 sq. feet) and my strict startup cost (~$7600) and apply the ratio to your own project. The math works out to about $59/sq ft.  For example, if you were thinking of building a 200 sq foot farm, you could imagine the costs to be somewhere around $11,800. You’d be able to further infer from my data your operational costs. Of course, this is not hard and true and factors like site-selection, hydroponic methods, and number of levels will be huge variables. But it’s good to ground your thoughts in real numbers – you have to start making estimates somewhere.

I hope this data is helpful to you, and I’m sure you can improve on my methods and costs in your own projects. Let me know below what you’re working on and thank you for reading!

4 thoughts on “Vertical Farming Cost Model: My Budget

  1. Pingback: Vertical Farming Cost Model: My Budget | The Urban Vertical Farming Project – WORLD ORGANIC NEWS

  2. Hello Evan,

    Sorry to be a little direct… may I please know how much is the expected average ROI for a $59/sqft investment based on the actual 1-year “run” you did with your $9k?

    Thanks.

    -Nancy-

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