Economic Aspects
Dr Wilson Lennard


 This talk is built around my personal experiences  I have several years experience with a small scale

aquaponics business  Because aquaponics is in its infancy, examples are few and far between  Hopefully my experiences can translate to your wishes

AQUAPONIC ECONOMICS  Everyone knows the basics of running a business economically  In simple terms: You need to make money You need an acceptable capital outlay You need to be able to pay off the outlay You need acceptable work hours AQUAPONIC SOLUTIONS .

sales from the farm gate and to local business AQUAPONIC SOLUTIONS . directed local marketing. products sold at retail price (no wholesaler). one of the most promising economic areas for aquaponics is niche scale farming (urban?)  Single owner/operator model. service local interests.NICHE AQUAPONIC MODEL  Currently.

ECONOMIC MODELLING  Economic modelling allows us to study the financials of our proposed business without having to actually do it  Modelling may be simple or complex  Modelling involves several factors. but not limited to spread sheet analysis  Spread sheets allow us to study the numbers AQUAPONIC SOLUTIONS . including.

partnerships etc…)  Financial factors (capital required. income required)  Market factors (market availability. local clients etc…) AQUAPONIC SOLUTIONS . niche markets. work hours.ECONOMIC MODELLING  Several factors need to be considered  Personal preferences (single owner/operator. work situation.

 A third requirement (for the niche approach) is that one person can operate the system. ie: the system is a model of a single person. AQUAPONIC SOLUTIONS . The amount of income required.ECONOMIC DESIGN REALITIES  The system has to be sized based upon two main criteria:   The amount of capital available. homebased business.

most of which involve borrowing money  For this reason (being in debt). Friends. Business Partners  Start small if possible (need to borrow less) AQUAPONIC SOLUTIONS . Financial Institutions.CAPITAL REQUIRED  Several choices are available. my approach is to keep my borrowings as low as possible  Sources include Banks.

INCOME REQUIRED  Begin your modelling with your income in mind  No use being in business if you cannot make money!  Work out the income you require vs the effort expended  Required incomes rise when partners become involved AQUAPONIC SOLUTIONS .

which eats into profits AQUAPONIC SOLUTIONS . standard hydroponics  This is because the running costs in hydroponics must come from the sale of plants.THE APPROACH  I reason that. then the plants will produce pure profit  This means that aquaponics is at least comparable with. if the fish production side of the business AT LEAST PAYS for ALL the running costs. and maybe better than.

 Fish sales used to cover the running costs of the system/business AQUAPONIC SOLUTIONS .ECONOMICS OF THE FISH  Sizing of the fish system is based upon the size of the plant system required to meet potential plant revenues  Also sized for single person ease of operation  Fish sales at this scale (< 2 tonne/anum) are NOT economically viable in normal recirc.

ECONOMICS OF FISH SALES  You must know there is an available market in your area  You must have a good idea of what that market wants in terms of species and regularity of supply  This is a niche situation. wholesale fish sales are completely different  It does allow a lot of control on your behalf! AQUAPONIC SOLUTIONS .

ECONOMICS OF PLANTS  You must know there is an available market in your area  You must have a good idea of what that market wants in terms of species and regularity of supply  This is a niche situation. wholesale plant sales can be completely different  It does allow a lot of control on your behalf! AQUAPONIC SOLUTIONS .

one pump design etc…) to lower operating costs AQUAPONIC SOLUTIONS .OVERALL ECONOMICS/APPROACH  Fish sales used to cover running costs  Plant sales therefore approximately equal net profit  Owner/operator – labour cost becomes profit  Employ low energy/sustainable energy principles (eg: solar heating.

before making any other decisions AQUAPONIC SOLUTIONS .RULES FOR MODELLING  Take a simple approach (ie: money spent v money made)  ALWAYS over estimate your system building costs (I use a 20% rule!)  ALWAYS under estimate your sale prices for fish and plants (I use the 20% rule)  ALWAYS model this way first.

RULES FOR MODELLING  Spend a lot of time doing this modelling – GET IT RIGHT!!!!!!!!  Spend a lot of time doing market research  Speak to chefs etc… in the area you want to sell to so you gain knowledge of what they actually want  Remember. it’s QUALITY that counts. with chefs. not quantity AQUAPONIC SOLUTIONS .

pay back periods. but is invaluable!! AQUAPONIC SOLUTIONS .SPREAD SHEET ANALYSIS  Spread sheets allow us to model our business before we actually spend much money  We can model capital requirements. on-going costs. incomes. break even points etc…  Number crunching may be boring.

ASSUMPTIONS  The assumptions we make are critical to the voracity of the model  Be as exacting and comprehensive with assumptions as possible  Get someone else to check your assumptions and make sure they reflect reality!  Research is required AQUAPONIC SOLUTIONS .

more MARKETING!!).  Be realistic about your time. marketing and more marketing.LESSONS LEARNED  Technical feasibility ≠ economic success. AQUAPONIC SOLUTIONS .  Be truthful with customers (liars lose!).  Try to grow what you have already sold (again.  Marketing.  Keep your customers HAPPY.

au Ph: 0409 542 621 AQUAPONIC SOLUTIONS .CONTACT Dr Wilson Lennard Aquaponic Solutions

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