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PostPosted: Aug 29th, '15, 12:00 
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Ryan wrote:
Everyone else: how much does a "commercial operation" need to make per year to be considered commercial? 50,000? 100,000? 1million? What's the magic number?


I sell $20-$50 worth of watercress a week, does that count ahaha

Sorry I'm hungover and am finding myself funny......





Would you like some basil and Jade Perch with that latte sir?

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PostPosted: Aug 29th, '15, 19:38 
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Yes, yes, it does. You run a business using your AP...commercial. Did you ever get your bull shark?


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PostPosted: Aug 29th, '15, 20:37 
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Bcasey2703 wrote:
Ryan wrote:
Everyone else: how much does a "commercial operation" need to make per year to be considered commercial? 50,000? 100,000? 1million? What's the magic number?


I sell $20-$50 worth of watercress a week, does that count ahaha

Sorry I'm hungover and am finding myself funny......





Would you like some basil and Jade Perch with that latte sir?

Build thread- viewtopic.php?f=18&t=21974&start=75


Never drink and post,but that doesnt count if its just a hangover,so post on mcduff we could do with more humour,now iam back to the bar... :drunken:

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PostPosted: Aug 29th, '15, 21:14 
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It's not about me. This is more a road map or best practices for the guy that has a very large BYA{ system and wants to make a living from it. I will try and get the tread back on track now that i am at a desktop and not the usual phone.

Stuart Chignell wrote:
In Australia insurance is becoming a much better risk management tool than supply contracts.


Pretty solid choice if you could get insurance for your crops but for a one man operation this may not be an option. thanks for opening up the discussion on risk management when it applies to cash flow. I think cash flow is a very important part of operating Ap as a wealth generating tool. the cash flow is what will make or brake you. you have to pay the bills on time and get the right amount of product out at the right time.

Stuart Chignell wrote:
What do you mean by automation?


I mean reducing Labour cost and time on fish to the minimum of loading up with fingerlings and harvesting or closest you can get to that.

Stuart Chignell wrote:
Starting small is one of the most risky strategies to establish a business. Particularly in AQ, HP and AP every where you turn there are economies of scale that are just waiting to stomp on you.

This might not be a problem in Barbados but it seems to be a big problem in the US and here but small scale farmers in addition to all the physical economies of scale have a proportionally massive burden of regulation. The compliance costs for a small operation basically exactly the same as a large operation.


Agreed, starting small is not the best option when the aim is to make money. starting small and learning to feed yourself is acceptable though. I dont have much regulation and compliance to deal with those seams like design factors for the later planning stages. Economies of scale can be fought with high profit margins, widen the profit margin while keep cost low and increase the labour efficiency/automate as much physical task as possible.


Double Decker wrote:
Covering your System would be the other big expense of your System, This You would have to have for a much Better Return in Cropping/bug/disease protection.


A next interesting point about risk mitigation but in the physical aspect of the farm. i think covering a "crossover" system my not be viable for the first couple years or at least till ROI is reached. unless you can cover for dirt cheap. or maybe a temporary covering or just chose crops that don't need cover until you have enough money to cover. Just my hunch about greenhouses but maybe biased because they don't work very well in our climate. temps and RH are 80+ ambient. It's worth looking into WHEN is the best time to cover a crossover system.

Double Decker wrote:
So once my New system is up and Running I am doing a running total of Costs/expenditure and I know I will be able to make some money out of it as well as supplement our food needs...
so when you expand will you stop producing for your family and start to mono crop and use your profits to buy food? i ask because this seams like a one foot in one foot out type of strategy. Can we focus on the two goals and still win? it seems like focusing on one goal will be a better option. will love to hear some more about this from you.

Sleepe wrote:
The reason I have not seriously contributed to this is as I have said before 'I couldn't sell cheap cold beer on a hot day in WA' ie I have not a commercial mindset and don't give a rats ass about profit
Sleepe you have been around awhile i value your opinions just as much as the next guy. i dont think you would purposely give my wrong info. you dont have to be a professional to add to this conversation, this one is for the small guy that just wants to crossover.

Ryan wrote:
You need to focus on high end restaurants, hotels, etc not the neighborhood. Change your strategy... Produce something impeccable and better than everyone else... And charge more.


Not really my experience... what i find happens is the accountant has the final say. Price point is my best bet at maintaining long term sales.


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PostPosted: Aug 29th, '15, 21:57 
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Be very careful in letting accountants tell you how to run your business. I've seen that as a recipe for disaster.

I would agree with Ryan's business model. Growing the best...charging the most. You can never compete with large farms on price. A small, niche where you have customers clamoring to find out when your next crop will be ready for sale is your best bet.

More profits and a customer that isn't liking to "shop" around for something $.10 cheaper is always a good thing...in any business.


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PostPosted: Aug 30th, '15, 01:53 
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in a crossover system most likely labour is one person. the question becomes if you can grow enough food and market it and turn aprofit at the same time.thats a lot to do in 40 hrs a week.


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PostPosted: Aug 30th, '15, 02:49 
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I hesitate to contribute to this thread again. I get the feeling that the lights are on but nobody is home.
When good people knock on your door with good advice I am puzzled when they are ignored.
However I am English. Type cast forever by Hollywood as the bad guy.
I attended a presentation yesterday. A senior partner in a consultancy firm who advise World wide on the viability of AP/Hp project.
To paraphrase; Up to 1000 sq mtrs Mom and Pop operation sell to niche markets. 8000 sq mtr plus wholesale ,direct to supermarket etc.
In between the,’Black Hole’
He quoted a company in the UK who grow tomatoes. 64 Hectares under glass. They work on a GP of £0.01 per kilo.
Maybe the, ‘Black hole’ is the chasm you refer to.
I would suggest you need to do well on one side before you cross to the dark side

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PostPosted: Aug 30th, '15, 04:08 
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Damian wrote:
Stuart Chignell wrote:
What do you mean by automation?


I mean reducing Labour cost and time on fish to the minimum of loading up with fingerlings and harvesting or closest you can get to that.

Oh you mean like the RAS industry is already doing. Automated feeding, Biomass data collection, grading and the like. They still employ people to go and look at the fish whether in person or via video link with a couple of guys watching a dozen monitors like at a security station.

What scale are we talking about in this thread, small or ginormous? Automation doesn't come cheap and doesn't do as good a good as good employees (generally)*.

Damian wrote:
Agreed, starting small is not the best option when the aim is to make money. starting small and learning to feed yourself is acceptable though.

That is not a small commercial system that is an education expense. It is the system beyond that one that may or may not be commercial.

Damian wrote:
I dont have much regulation and compliance to deal with those seams like design factors for the later planning stages. Economies of scale can be fought with high profit margins, widen the profit margin while keep cost low and increase the labour efficiency/automate as much physical task as possible.

I'm not sure if this statement was made in a hurry because its a tautological or whether it indicates you don't understand the terms you have used. You don't increase margins WHILE keeping costs low you increase margins BY either getting higher prices, having lower costs or both. You may think I'm being picky with language but if you don't understand the terms and how they are used you can be led astray. You might fully understand these terms and I'm just picking on your sentence structure but so many other things you talk about show you still have so much to learn so I would not be surprised if you haven't got a full grasp on accounting (I know I don't yet, double entry accounting still causes me headaches) and business terminology.

Damian wrote:
increase the labour efficiency/automate as much physical task as possible.

Automation exposes you to a massive economy of scale. For example automated feeding technology is seriously expensive and is one of the most dangerous additions you can make to a fish farm.

How are you going to keep the costs low when you have such adverse economies of scale unless of course you are not factoring depreciation in your cost of production.

* Automated biomass collection is the exception. It does a much better job because the fish are not stressed out by handling.

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PostPosted: Aug 30th, '15, 04:53 
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Titus wrote:
I hesitate to contribute to this thread again. I get the feeling that the lights are on but nobody is home.

I'm glad its not just me getting this impression, or rather I'm not glad because I think Damian is heading for some tough lessons if he doesn't adjust his thinking.


Titus wrote:
I attended a presentation yesterday. A senior partner in a consultancy firm who advise World wide on the viability of AP/Hp project.
To paraphrase; Up to 1000 sq mtrs Mom and Pop operation sell to niche markets. 8000 sq mtr plus wholesale ,direct to supermarket etc. In between the,’Black Hole’

I know a farming couple that are selling their pork for $25 per kg or higher. They only have a small farm and their pigs are free range. They are making a decent living because they are commanding such high prices. Farm gate price for meat is normally less than $3/kg. Supermarket price for dressed meat is ~$10 to 15/kg. They are new to farming and doing a great job but no matter how good their farming skills are the reason they are making money is because they are excellent marketers. In their CSA program their basic option is $75/month which gets you 3kg of random cuts per month, ie not necessarily prime cuts.

Titus wrote:
He quoted a company in the UK who grow tomatoes. 64 Hectares under glass. They work on a GP of £0.01 per kilo.
Maybe the, ‘Black hole’ is the chasm you refer to.

I find that figure hard to believe. How much to tomatoes sell for in the UK? A modern high tech greenhouse costs millions, who would invest millions to make such a low gross profit the ROI would be rubbish. Unless its built with borrowed money but then the risks would be huge. A 1/4 percent change in the interest rate would sink you.


Titus wrote:
I would suggest you need to do well on one side before you cross to the dark side

Actually probably doesn't make much difference. The skills required to do well on the other side are completely different. Which is another reason why I tried to start big. Believe it or not it is the less risky strategy.

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PostPosted: Aug 30th, '15, 05:59 
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Titus- Sounds like Wilson! He told me he would be out your way :)

Stuart- Eurofresh in the US (google them) had a similar small margin of a few cents to work with. If the numbers went their way they made mega profits but in the end Mexico under priced them and that combined with disease issues put them out of buisness. I think they did 1/2 million lbs per day!

Damion-best advise is do more market research. Aquaponics is even harder to make profitable if you're trying to sell for the lowest price around. Why? It makes no sense unless you're producing crap. AP produce is not crap. I pay my brother more than that as a part time worker as he attends college and make a good living though I admit working a bit more than 40hrs a week but I'm building a buisness, not running one at steady state.

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PostPosted: Aug 30th, '15, 06:04 
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And a quick example...
30 min down the road A head of Bibb sells for $1.50.
15 away they go for $2 ea
In town I sell at $4 ea
In Orlando (45min away)I sell at $5 ea
To a nice restaurant marketing the fact that they use a local producer and using my farm name to bring customers in the door can fetch $6/ head

I've got customers in Dallas selling regularly at $6-7 per head



The point is prices change and the labor is the same... You have to go where the money is, not stay out in $1.50 land and hope.

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PostPosted: Aug 30th, '15, 06:14 
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Ryan wrote:
Stuart- Eurofresh in the US (google them) had a similar small margin of a few cents to work with. If the numbers went their way they made mega profits but in the end Mexico under priced them and that combined with disease issues put them out of buisness. I think they did 1/2 million lbs per day!


So if we are talking margins rather than profit what are they selling their produce for versus cost of production.
I've been told by people in the tomato industry that it takes about 10 years for Dutch companies to get their money back from a new greenhouse in the Netherlands, versus 4 years hear in Australia.

How could they get their money back in 10 years if they have such a small gross profit. There are only two ways I can think of. One is if their COP is also very low but the depreciation of a large high tech greenhouse would work against that. The other is that when they say "get their money back" they don't mean the total cost of the setup just the bit they paid for. Ie they must be seriously leveraged. Like I said running margins that low is hardly sustainable (in economic terms) because their wouldn't be enough fat to weather any problems. Which I guess is what happened.

Sounds like a strategy that appeals to the finance sector where they are making money off the commissions and the management fees from finance rather than really establishing a business to produce stuff and make money.

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PostPosted: Aug 30th, '15, 06:19 
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Ryan wrote:
And a quick example...
30 min down the road A head of Bibb sells for $1.50.
15 away they go for $2 ea
In town I sell at $4 ea
In Orlando (45min away)I sell at $5 ea
To a nice restaurant marketing the fact that they use a local producer and using my farm name to bring customers in the door can fetch $6/ head

I've got customers in Dallas selling regularly at $6-7 per head


The point is prices change and the labor is the same... You have to go where the money is, not stay out in $1.50 land and hope.


Which illustrates why Ryan is going so well. He isn't just good at system design and producing stuff, he can market it too.

Did you have to convince them to take those prices or just connect with them? I mean were they looking for high quality produce from a local producer and the two of you just had to get together?

If all the Aquaponics shysters put the same effort into marketing their produce that they put into marketing their systems maybe they would be actually making some money.

I'm in a really good area to be able to market our produce but by no means is marketing my strong point.

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PostPosted: Aug 30th, '15, 07:05 
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Hi Ryan
No, that was not Wilson. I did however have the pleasure of meeting and talking to him. We sat on the steps and chatted in the Devon sunshine.
Well. He did most of the chatting. My contribution was listening.
I wish all my education could have been so much fun.
Max Goulden of MacAlister Elliott & Partners gave the business presentation.
He spoke of an installation in The Maldives. (islands) and I was reminded of the similar situation and opportunity that Damien has.
The presentation that really blew me away however was by Vincent Walsh PhD of the Biospheric Foundation. bioshericstudio.com.
To complete his PhD he needed to raise £900,000 in fourteen months.
What he is doing with fungi production is stunning.
In AP/HP whole walls in supermarkets for veg production.
His vision of a closer connection between bio and tech -nology was breathtaking.
Stuart. Our tax structure is possibly different . Big write downs for investment in certain fields and geographical areas in the UK

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PostPosted: Aug 30th, '15, 07:18 
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Stuart Chignell wrote:
Ryan wrote:
And a quick example...
30 min down the road A head of Bibb sells for $1.50.
15 away they go for $2 ea
In town I sell at $4 ea
In Orlando (45min away)I sell at $5 ea
To a nice restaurant marketing the fact that they use a local producer and using my farm name to bring customers in the door can fetch $6/ head

I've got customers in Dallas selling regularly at $6-7 per head


The point is prices change and the labor is the same... You have to go where the money is, not stay out in $1.50 land and hope.


Which illustrates why Ryan is going so well. He isn't just good at system design and producing stuff, he can market it too.

Did you have to convince them to take those prices or just connect with them? I mean were they looking for high quality produce from a local producer and the two of you just had to get together?

If all the Aquaponics shysters put the same effort into marketing their produce that they put into marketing their systems maybe they would be actually making some money.

I'm in a really good area to be able to market our produce but by no means is marketing my strong point.


Thanks Stuart. The short answer is yes, I do have to "sell" the product to achieve those prices. But here's the thing... If you're local, pesticide free and your product is impeccable, you can set the price. You want to be the one setting the price, not having someone setting it for you.

And again, you need to make your farm popular through advertisements, community events, social media etc to make your name worth something. When you have achieved that, the products cost more because you are there "advertising". You're bringing people in the door.

Example: I hand out flyers for 2 of my restaurants at a weekly farmers market. My customers are health conscious and so are my restaurants. I help the people out by telling them about the restaurants and I help the restaurants by telling the people that they serve our produce. The restaurants get more out of it than just our vegetables and have no problems paying our prices.

I could talk for days on produce marketing but have to go eat!

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