Vegetable growing as a business

Any citizen, having sufficient titles and the corresponding status, has the opportunity to open his own business. The legislation of the Russian Federation provides all the possibilities for this and regulates the procedure and rules for conducting commercial activities. Vegetable growing is one of the most widespread types of small and medium-sized businesses. A business plan drawn up in accordance with all the rules will allow you to successfully start your own business in this area and reach a stable income.

Agricultural business prospects

Agricultural commercial activity, in the Russian Federation, is a business niche that does not have high competition. The modern vegetable market model works on the import principle. Most of the vegetable crops are imported into the state from abroad.

In this regard, locally produced products are considered the most valuable from the point of view of the consumer. This fact suggests that by opening a vegetable business, one can count on a stable high-level demand.

Over the past few years, government programs to support small and medium-sized businesses have been aimed at import substitution. This makes growing and selling vegetables a promising activity.

The opportunity to develop such a business with minimal costs is high. Many vegetable crops are adapted for cultivation without additional maintenance, which reduces the amount of resources and material investments.

Vegetable growing as a business

Growing vegetables as a business is a full-fledged commercial activity. It should be organized taking into account the capabilities of the entrepreneur and the regional level of demand. The following factors need to be assessed first:

• Earth. Is there a sufficient amount of land available for growing a particular crop;
• ways of implementation. In accordance with what technology the cultivation will be carried out. What equipment is needed and what is available;
• sales market. Whether the level of available demand is sufficient for a successful business.

When calculating, it is imperative to analyze the likely risks. They can be associated with the following factors:

• periodicity. Seasonality is the main risk in vegetable growing. Supply and demand depend on this factor;
• material costs. It is necessary to calculate income in terms of the number of investments in order to work in a plus;
• competition. It is worth analyzing data on current and potential competition.

Any business model can be calculated at the stage of preparation. Its profitability can be calculated mathematically in average values.

Choosing the direction of vegetable growing

The first step in starting this activity is to determine what kind of vegetable growing will be. The business plan is drawn up taking into account the choice of direction. There can be two of them:

• growing in greenhouse conditions;
• growing in an open environment.

Based on the direction, development paths will be planned. At this stage, the budget is set. In the first case, the costs, among other things, are related to the purchase of material and work on the construction of greenhouses. In the second case, the main costs will be spent on renting and cultivating the land, as well as on the use of measures for increased plant protection from external influences.

Choosing the direction of development of the vegetable business, it is worth planning the correct selection of methods for carrying out activities. Inconsistency of the production technology with the intended purpose of the case will lead to undesirable consequences.

Evaluation of the direction of production also implies the choice of methods of marketing products. When planning the sale of vegetables on a wholesale scale, you will need to work out options for mass cultivation in large areas. Retail, on the other hand, does not require such a quantity of a product, but it assumes a wide range of opportunities for implementation.

Objectives and structure of a business plan for vegetable growing

A vegetable business plan should have a specific purpose and be drafted in accordance with a clear structure. When developing it, the trends in trading that are relevant for the current moment of time are taken into account.

Having a plan allows you to control the project and adjust the direction of activity in accordance with the calculations. This reduces the risk of diminishing profits and the likelihood of bankruptcy.

In the vegetable business, several crops can be distinguished, the production and sale of which is the leader in the food market. These include:

• cabbage;
• onion;
• potato;
• carrot;
• tomatoes;
• cucumbers.

Other types of vegetables are also in demand but to a lesser extent. More resources are required to grow and sell them.

Planning with the example of growing potatoes

A business plan for growing vegetables can be illustrated with the example of potatoes. This product, for the average consumer, is the main one. The demand for it is constantly increasing, which opens up additional prospects.

In this case, the business plan will look like this:

1. The idea is to grow and sell potato crops.
2. Production methods – greenhouse, open type.
3. Land cultivation methods and crop care technology.
4. Calculation of the available land area and the size of the potential yield.
5. Accounting for the part of the product that will be used for subsequent sowing.
6. Potential consumer – individual entities, large retail chains, bases, etc.
7. Implementation methods – legal issues of cooperation and infrastructure.
8. Advertising and promotion.
9. Additional costs – labor costs, equipment wear, product damage and others.
10. The size of the initial investment and the payback period.
11. Potential risks.

To make the calculations closer to reality, they should be carried out taking into account the real available data: available land area, current technical capabilities, etc.

How much can you earn on growing uniform vegetables and fruits

The amount of profit from the production and sale of vegetables directly depends on the volume of product turnover, seasonality, and regional characteristics of the territory. Net income can reach from 30 to 50% of investments.

By gradually expanding the business, you can reach a stable increase in income. It is the consistent increase in speed that is recommended, as this makes it possible to assess the niche from the point of view of profitability.

How much money is needed to start a business

The plan for growing vegetables involves calculating the amount of primary capital. Practice shows that a medium-sized business requires initial material investments in the range of 10 to 150 thousand rubles. The range of indicators is wide since everything depends on the circumstances of a particular situation.

When opening a commercial business, it is worth considering that it must be registered with the tax office. For this, individual entrepreneurship is opened. The presence of such registration presupposes the regular payment of taxes, pension, and insurance contributions, which is also part of the costs.

What documents are needed to open your own farm

To open your own farm, you must submit a standard set of documents:

• identification;
• certificate of registration as a taxpayer (TIN);
• check for payment of the state fee;
• registration application.

The documentation is submitted to the territorial branch of the Federal Tax Service, located at the place of official registration of the entrepreneur. If the request is sent through a representative, it is necessary to prepare a power of attorney certified by a notary.

During the registration of an individual entrepreneur, the type of future commercial activity is indicated. For this, a special identification code is assigned to certain types of businesses. For the vegetable economy OKVED 2-47.21.

Based on this code, the activity is assessed and the tax base is calculated according to the selected taxation system.

Which taxation system to choose for a private farm

Most often, the choice of entrepreneurs falls on the simplified taxation system (STS). In this case, the founder pays the tax rate, the amount of which is formed based on his monthly income. 6% is deducted from receipts. In the event that a tax calculation system is selected based on the difference between income and expense, 15% is charged. At the same time, payments to the pension and insurance are mandatory regardless of the presence/absence of profit.

Income reporting is submitted to the tax office in the form of a declaration once a quarter. At the beginning of each year, an income statement for the entire previous year is submitted.

Do I need permission

To sell vegetables, you must obtain permission from the sanitary services. Requirements apply not only to product quality, but also to methods and places of sale.

Identification of violations of established standards may lead to a ban on the conduct of this commercial activity. To avoid this, you need to follow all current legal provisions.