Potato growing business plan: detailed financial calculations + 7 basic steps for a successful business.
► Capital investment: RUB 90,200
► Payback period: 4-5 months (from sowing to harvest).
Is growing potatoes a business?
This question was asked by many who have ever grown potatoes with their own hands.
We confidently answer that yes, and very promising.
The main thing is to take the first steps correctly.
There is no need to talk about the popularity of potatoes once again, for more than a hundred years it can be called a real master of the table.
The Indians of Latin America discovered its secret 7,000 years ago.
Then the Spanish conquistadors took him to Europe, and then, thanks to the efforts of Peter I, he ended up on our tables.
Given the popularity of the vegetable, it can be assumed that the cultivation of potatoes is still a business and promising.
However, you should know that, as in any other type of business, success requires effort, careful thought and action based on a business plan.
Of course, like all business ventures, this will require some costs.
Their size depends on what volumes you are going to “download”.
Where does a business plan for growing potatoes begin?
Like any project, it starts with a business plan for growing potatoes.
this is carefully crafted from what you have:
- sown area under cultivation;
- financial business opportunities;
- choice of technology for growing potatoes;
- capital investments (required initially;
- daily or current expenses;
- the expected result of the company.
So, having decided for yourself that growing potatoes is the business to which you decided to devote your time and energy, you need to carefully conduct analytical work.
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The business analysis looks like this:
- Find out the average seed price.
- Determine and clearly understand what equipment you need and how much it costs.
- Which planting technology is best for your climate zone.
- Average yield and how to breed it in your area.
- Average price for fertilizers and fuels and lubricants.
- Average wholesale and/or retail price of the harvested crop.
- Legal aspect and nuances of taxation.
Incorporating a Legal Question into a Potato Business Plan
Since we are talking about entrepreneurial activity, it is necessary to include in the business plan for growing potatoes such an element as the legal registration of their relations with the state.
If you decide to limit yourself to the scale of your household plot, then in good conscience you can sell crops on the market without registration, in accordance with the legally valid concept of “personal subsidiary plots” (PSP).
But if the planned production volume is higher, issue an IP (indicating the OKVED code A.01.13.21).
In this case, the system of taxation of the Unified Agricultural Tax will be the most beneficial for you, deductions for which should also be included in the list of future expenses.
Potato growing business plan: necessary equipment and fixtures
This is one of the most expensive elements of your business plan, but sooner or later you will have to go back and make a decision.
To be successful in this type of business, you need complete autonomy from the beginning to the end of the potato growing process.
Of course, when we are talking about a subsidiary farm with a land area of 6 to 10 acres, although it is not easy, it is quite possible to cope with the muscular strength of family members and a primitive shovel.
What if you go out into the open spaces of the site, say, 30 acres?
Of course, mechanization is needed here.
There are two ways: buy a mini tractor or rent it.
As for rent, you should know: the average price of the service in the country is 400-500 rubles / weave.
The price of your “horse” is about 30-60 thousand rubles.
Here, the amounts vary depending on the type, power and capabilities of the unit.
If your farm has a horse and an old peasant plow with a cart, then this is also a good option for early mechanization of work:
|Total:||55000 – 92000 rubles.|
|Garden tractors (purchase)||30,000–60,000|
plow, cutters and earthmoving tools
|Trailer or semi-trailer||15,000–20,000|
What technologies are used to grow potatoes?
Speaking about growing technologies, it must be said that there are many options.
Which one to choose is up to you, based on the information gathered about the suitability of the method for your area and the expected end result.
It should be borne in mind that, like any business, growing potatoes should be based on the most advanced technologies.
In this regard, we will present you a relatively new, but already successfully tested technology for growing potatoes in Southern Patagonia (Argentina).
The climate of this area is similar to the climate of central Russia, and closer to the south – even more severe.
It should be noted that this method is successfully used at all latitudes of the country, up to its subtropical part, and gives a good harvest.
For planting, you need organic pots 60 cm deep (this type of pot is common for tomato seedlings).
They are covered with earth, the top layer of which is mixed with manure and a small amount of sand and water.
Selected potatoes are planted 6 weeks before planting and left in a cool place with natural light.
When preparing planting material, we determine the size of the fruits of the future crop.
If our plans include medium-sized potatoes with lots of fruit, five sprouts will remain.
If our plans are to get very large tubers (with a smaller number), we leave 3 sprouts.
Growing potatoes in this way requires fertile, well-drained soil, rich in organic matter (prepared before sowing), with a hole about 60 centimeters deep (for pots).
Pits (landing wells) in the ground are made at a distance of 40 cm from each other.
Potatoes are planted directly in pots.
Two weeks before harvesting, the ground part of the plant is cut off just above the root, leaving 5-10 cm above the ground.
After 2 weeks of removing the plants, you can harvest.
The yield and quality of potatoes using this method is fantastic.
Potatoes are resistant to decay and can be stored for a long time, retaining their original appearance.
To this it should be added that the described technology is more expensive and troublesome, but gives a minimum yield of 450-500 kg per hundred square meters, which is twice the average yield in Russia (250-300 kg).
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What kind of staff is needed to mark potato growing in a business plan?
This question is not as simple as it seems at first glance, and depends on several factors.
Typically, potato growing is a family business that is 90% mechanized even on a small scale.
In addition, if a person undertook the implementation of a business idea for growing potatoes, having the necessary skills.
That is, he knows the technology of cultivation, has the skills of a mechanic, automator of the process of sowing, processing and harvesting acreage.
So it will not be difficult for him to cope with the landing areas and hectares.
But during the harvesting process, you will still need helpers for harvesting potatoes after the tractor (up to 20% of the crop remains on the field, or even more), sorting, packing, and so on.
Experienced farmers hire several workers.
As a rule, they are taken for several days (it will take 6 days to calculate the collection and sorting), and their number is determined by the sown area and the amount of the crop.
On average in Russia, the payment for a day of field work is 400-600 rubles. / Day and regulated by the employment contract.
|Total:||3||from 2400 rub. / month|
How much money do you need to invest to grow potatoes?
Investments in the potato sector consist of several items: determining the price of seeds, fertilizers, fuels and lubricants, as well as the purchase of equipment.
Starting investment in business
Summarizing everything in the final table, I want to note that in the future the costs will be much lower, because the purchased equipment and devices will last for many years.
|Total costs:||90 200 rub|
|Means of mechanization||40 000|
|Aggregates and trailers||32 000|
|Fertilizers and fuels and lubricants||15,000|
Price for seed
Prices for planting potatoes are different and depend on the variety, region and place where you bought it (station or market).
To understand what are the current prices in Russia, pay attention to the table of average prices for all regions for the main varieties of seeds.
These data should be reflected in the business plan for growing potatoes.
|Wholesale price (rub / kg)||07.00||07.50||11.00||7.50||09.00||06.00||10.00|
Fertilizer and fuel costs
The business plan for growing potatoes includes another significant expense item: pesticides, fertilizers, fuels and lubricants.
In the above calculations, we proceeded from the fact that our sown area is 35 acres.
Based on the average fuel consumption of an average mini tractor, the amount of fertilizers and chemicals for processing one hundred square meters, for such an area the cost of this item will be 15,000 rubles.
The following video provides a list of the features of growing potatoes:
Expected net income from the potato growing business
Today the price of potatoes is low, but a kilogram of the most expensive potato in the world is not so cheap. Variety “La Bonnotte” is grown by hand on the coast of France and costs 500 euros per kilogram. During the gold rush, potato tubers were saved from scurvy, and in mining circles they were valued more than gold.
The most important point for a future entrepreneur, of course, is information about the profitability and profitability of the company:
|Total:||Total yield – 10,500 kg / sowing cycle;|
Gross profit – 262,500 rubles.
|Average return||300 kg|
|Wholesale price per kg:||25 rub / kg|
Based on the data in the table, we obtain the net profit indicator of the business:
262,500 – 90,200 = 172,300 rubles.
For those who are just starting or thinking about starting a potato farming business, there is good news.
Statistics and economic analysis show that, in terms of economic return and profitability, growing potatoes is one of the most efficient types of business of this type.
The full cycle from sowing to harvesting takes an average of 4 months, and the level of profitability, according to modest forecasts, is 150-200%.
As you can see, growing potatoes is a worthwhile activity.
If we take subsequent years, then the net profit can be safely added to the costs of the purchased equipment, minus the funds that will be spent on maintenance and repair (as a rule, this is about 15% of the cost of the equipment).
It turns out a good stable profit, so this business is really worth doing.