Backyard Aquaponics
A place to discuss aquaponics

Unfortunately more project failing to meet projection forecast and miss management.


Have a read:
http://www.jsonline.com/business/sweet- ... 86771.html

There was an article about this before. Sweet Water did not have a solid business plan. The numbers would have never added up just on covering the costs for that many employees. Even "integrating vertical grow towers" would not have put enough pots on that property to cover wages for the end number of employees anticipated at term end for the loan. That's not including overhead for electric, equipment maintenance, property costs, product delivery, or any other unanticipated cost.

A fair and generous benchmark is $1/head lettuce margin. Doesn't really matter what they actually grow so long as it gives an equivalent margin to the lettuce.

If every employee made only $10/hr that's 80 units needed to be sold per employee per day just to cover labor. Even if only half of the employees work on a given day that's 22x80 units to cover labor 1760 units per day just to cover the labor cost for a schedule where half of the employees work on a given day. If every employee works a 40 hour week then it's 400 units per employee per week. That's 18k units per week for salaries. How do you push that much product through a system on an old industrial lot in a city? If each restaurant used 100 units per week that's still 180 restaurants willing to pay a premium price for a product rather than just use their normal food service supplier at a lower cost.


Growing 20k units/week in an unproven commercial method that combines two proven disciplines but by doing so precludes the ability to maximize production in either category the way the individual disciplines can. And that figure is just to cover the employee salaries, not to actually generate a profit or be able to fund expansion. Why they ever got public money is a mystery to me.

Because it's a green initiative and as soon as government lenders hear "green" their brains trickle out of their ears and they start throwing money at a project. Look at Solyndra, Suntech and A123 Systems as prime examples.

Being a green initiative has nothing to do with it. They could have used the property for hydroponics instead and the numbers would not add up. They just didn't have the space to do the required units to cover the salaries for employees. Ignore the high overhead for lighting, climate control, equipment maintenance etc. the property simply wasn't big enough.

Wouldn't that mean they needed to have a brain the first place ?


Green is certainly the flavour of the year, along with terrorists.

The issue with "green, sustainable, and permaculture" solutions are they are only viable on a small localized scale. I am not denigrating them in any way or what they can accomplish to transform ones immediate enviroment but they really are not expandable to a true commercial scale to meet market demand at the prices the general public will accept. Even permaculture methodology often uses inputs from outside the immediate enviroment such as supplemental feed for poultry/livestock, solar panels built in an industrial plant made with chemicals from large facilities. Mulch and plant stock still needs imported to the site. "free wood chips" for mulching only works while those wood chips are a waste product to be disposed of but if a demand arises for them then that mulch will be an additional cost that must be factored into overhead.

Biogas digesters work great in a backyard or hobby scale operation where the gas generated can be stored low pressure in an ibc or plastic drum and used on site with usage scaled to production levels. Try scaling a digestor up to handle inputs from a commercial poultry or dairy operation and the equipment required to process, scrub, and compress the volumes being produced increases costs exponentially. Not to mention at that production volume the easiest method of using that energy on site is to generate electricity for the grid which may or may not be viable depending on a particular areas regulations and if the utility is even required to compensate for the excess generation or simply allowed to retain the balance without even compensating the person generating it in a grid tie in. Even if remuneration is required but the cost of producing the electric runs .08/kw and the utility only compensates .05/kw it doesn't make sense to abuse the equipment running excess generation into the grid instead of only running it enough to just power the facility.

Small scale operations composting can find easy sources of food scraps, lawn clippings, etc. because it is a waste product people have to pay to dispose of. If a large societal shift towards sustainability occurs as the green movement would love those free waste products would have value and be a commodity that needs be purchased increasing the price of a food that already has a higher production cost than current commercial agriculture and usually relies on getting a premium price from a niche market to be viable.

And let's be frank, most "green" solutions require an effort or sacrifice on the part of the end user most of society is not willing to endure. A stand alone solar system with battery bank and inverter means that a person need be cognizant about their energy usage. Power from the grid in developed countries may be from unsustainable fossil fuels but they can turn on every light in the house and run every appliance they have 24/7 if they want and won't run out of power.

People love fresh herbs but how many can be bothered with the minimal amount of care window boxes require. For that matter, sit at your local grocery store and just watch how much processed food goes into carts compared to staple items or fresh/frozen fruits and vegetables. If preparing a meal from a recipe is more effort than most people are willing to do on a regular basis are green solutions ever going to be more than a fringe movement except in opinion polls?

Unfortunately fudging the numbers has put this group in the spotlight - a negative one at that. And that is what is frustrating. Its projects and people like this that 'cook the books' and make unrealistic claims that put AP in a bad light. What I cant understand though, as already mentioned,... is how this buisness proposal got through. Green or not, it was bad buisness planning from both sides of the fence and in my eyes both are to blame for its situation now. I just hope it can eventually give something back to the community.

The previous article Jarocol referred to is probably this...

http://www.jsonline.com/business/some-s ... 27625.html

That's just one of a string of articles done on the situation. A good commercial venture should not require continual capital investment to become viable. If it can't be profitable from the start one need examine the process to reduce overhead and control process variation. If moving product for them at a hobby scale didn't produce a profit increasing the number of units sold per week at a loss is not going to make the project solvent. Not being realistic about how much throughput is possible In the available space does not help the situation. Even if there was enough space increased bulk supply purchasing would not reduce overhead enough to turn an item not profitable into a profitable one. This becomes especially true when factoring in additional energy consumption, labor requirements, and logistical challenges moving the product to markets further away as the ones in closest proximity become saturated. Over run to allow for quality culling is done on a pct basis so as sales volume increases so does the amount of pots required during each phase of production. An increase of 100 pots per week at harvest will require an absolute minimum of 500 pots added to the system plus propagation expansion to allow for the additional production. Not allocating adequate resources to compensate for what is a minimal growth in production could be catastrophic to any business plan. Disposal of waste produced is also a consideration that has to be accounted for. Even if the waste generated is being reworked into a vendable product or feed stock for a complimentary process the cost of getting that material must be factored into the cost of producing the new product. An example would be root trimmings from harvesting the plants. Yes that is a waste product that would normally have an associated disposal cost attached to the overhead for growing the plant. Even if it becomes feed stock for some type of composting operation to produce a product such as compost or worms to sell the inherent cost of producing that byproduct must be factored into the cost of making the other products. It is only an illusion that your getting a "free" raw material for the subsequent operations. Failure to include a compensatory value for that material inflates the perceived margin of return on those products inhibiting your ability to truly track the cost of making those products. It makes a great sound byte or tag line on an article that a company is turning a waste into something of value but reality is you can't make something from nothing.

You are indeed a man after my own heart Jarocal... I've been saying for some time... that scaling up an unprofitable/failing hobby operation... or module.... just means you end up with a whole lot of unprofitable/failing modules...


And that's another "flaw" in most of the "commercial" AP operations....

Selected a fish species that has no, or low market value... and/or stocking lightly/incorrectly....

Essentially using the premise that even though the fish have no retail value.... "they're providing "free" raw material for the subsequent operations"....

Even if a hobby scale module is profitable that does not correlate to expansion by simply adding modules. How close to saturated the niche in the market is, additional labor costs, and other considerations must be factored in.

Not singling out any particular commercial training I notice several have things in their workshops only mildly related to running a commercial farm included in the syllabus.

"SEO management, why does a farm need a website?"- if it is a pure commercial operation it doesn't. Produce brokers are not on google or bing looking for people to buy from. They are already busy working with their accounts and fielding queries from farms looking for additional distribution outlets. The website is really only "needed" as a cheap means to establish a brand being direct marketed.

"toss the fish some duckweed or lettuce to save on pellets". That's probably working out to be a more costly feed than the pellets. The duckweed is utilizing nutrients and space in a system where both of those things should be reserved for the end product that is gaining you a monetary return. Leftover lettuce would be a feed that you already have had the overhead into and didn't manage to sell.

"how to put together a business plan"- most areas already have small business assistance to do that available for free.

It's just my personal opinion that if I am paying for a commercial aquaponics training that is only a few days long I would much rather have the limited time spent going over actual operations related items and not things that would be more applicable to any random venture I may be interested in starting. People spend years becoming educated in established disciplines such as hydroponics or aquaculture and I am honestly expecting to learn how to successfully combine the two in a course that spans a couple days?

They need a bigger truck

The reality is that the syllabus reflects what the training is really about....

They're not training you in how to run a "commercial" AP farm... most of the trainers either don't even have one, never ever had one.... or have only recently... perhaps a week before... just built one...

What they're really training you in... is believing in the dream... that it's possible...

Sadly... with the model being presented.... the dream is more likely to become a nightmare...

From the bayviewcompass

http://bayviewcompass.com/archives/13377






1. Why would you ever want to grow plants with inadequate lighting when you have to compete with operations who don't have the overhead of relying extensively on grow lights.

2. The pumping from tanks in the ground makes no sense. Elevated tanks only move the water head to the return line instead of the grow bed feed line. In order to maximize use of the space inside the building a pump somewhere is pushing water to that head height.

3. System was designed with a lack of filtration, even added filtration when the system was modified lacked enough. Maybe just reducing the fish density to match filtration would have been a wiser course of action as the tilapia were not profitable to begin with.

So the sweetwater model is
*poor location
*poor system design
*not only growing a species of fish that provided no return (and most likely a loss) but doing so at a density they could not filter adequately.
*little to no market research, kind of a grow it and they will come buy it attitude.
*seek capital investment with stipulations and goals attached which were mathematically impossible to meet.

Maybe if they didn't have access to interest free government money (our money) they might have put in a bit more effort on making sure it was profitable, or not attempted it.