Growing garlic as a business: profitability
Content
How much can you earn from growing garlic
Many aspiring businessmen are skeptical about such an undertaking. They believe that the consumption of garlic, in comparison with other vegetables, is much lower, and you will not earn much from growing it. But only people far from agriculture can reason like this. In fact, garlic is a very valuable food product. It, albeit in small quantities, is regularly consumed by each family, and from the middle of summer, when the period of conservation and procurement begins, the demand for the product increases many times.
Analyzing the profitability of the garlic business, it should be noted that when growing crops in the open field, you can easily do without the use of special equipment, this significantly reduces costs at the development stage. In addition, the ratio of yield and cost of the product is very attractive - the purchase price of the product starts at $ 1.3, and the retail price is two or more times higher. The crop yield on average is 13 tons per hectare, while planting material per hectare will need about 1000 kg or 1 ton.
It is easy to calculate that the profit from the sale is quite high. But it all depends on the volume of products and the method of sale. The highest profit can be obtained from retail sale - the cost of garlic on the market varies between 100-150 rubles per kilogram. If this method is not suitable, the products can be sold to wholesalers or resellers. In this case, the cost of 1 kg will be 60-70 rubles, but the benefit lies in the fact that all the goods are sold at once.
Of course, large-scale commercial cultivation of the crop will bring higher profits. But it should be borne in mind that a farm needs special equipment, storage facilities, hiring personnel, and these are all additional costs.
It is estimated that the profitability of industrial cultivation of winter garlic is 70–80%, while in retail sales it reaches 150%.
As the numbers show, the garlic business can be considered stable and highly profitable.
Garlic business organization
Drawing up a business plan is the initial stage of organizing any business. Careful planning will ensure that your business is run safely and profitably, as well as safeguarding against potential risks and obstacles. But here, too, everything depends on the scale of the enterprise. It is unlikely that a pensioner has a need to draw up a business plan for growing garlic in his summer cottage. However, for a farm, planning is necessary and inevitable, since doing such a business alone will not work.
Calculation of capital for planting and growing
A garlic growing business is especially profitable if you own a land plot, since additional capital will be required to rent the land.If your entrepreneurial activity in this direction is just beginning, then it is better to limit yourself to a small area, no more than 1 hectare - it is problematic to process a large area manually. You will have to hire staff, which will also result in additional expenses.
In addition to the land plot, you also need a set (garlic teeth). The market price for seed is 30-200 rubles per 1 kg. The cost depends on the variety of garlic, so when buying seeds, think carefully about what is more important - to save on cheap varieties and get an average yield, or buy the best seed and get a high yield and big profit.
To grow garlic outdoors, you need fertilizer. Feeding plants three times a day during the season will cost 4–5 thousand rubles. Perhaps one or more temporary workers will be needed during planting and harvesting, whose labor will also need to be paid.
If the retail sale of the crop is planned, it is necessary to take care of the warehouse and storage containers. In this regard, it is more profitable to sell products in bulk and immediately, in order to reduce storage costs.
In general, the total initial capital for this business can be 20-40 thousand rubles. It all depends on whether you will hire assistants, or do it yourself, whether you need to rent a warehouse, and other work moments. For industrial cultivation of crops in the open field, registration of a farm is required, and this is a completely different investment.
You should take into account the costs of such organizational issues:
- registration of entrepreneurship;
- land lease;
- purchase of equipment, inventory;
- seed material;
- mineral additives and fertilizers;
- warehouse rental;
- hiring personnel and remuneration for their labor.
In this case, the size of the initial capital will depend on the scale of outdoor garlic cultivation. An approximate calculation of fertilizers and seed is presented above using the example of an area of 1 hectare, plus the costs of solving organizational issues.
The subtleties of selling garlic
If the volume of production is large, then sales issues must be resolved even before the harvest.
First of all, pay attention to the enterprises and organizations involved in the production of food products. Your potential consumers can be large supermarkets, cafes or restaurants, meat processing enterprises, canneries.
If we manage to establish contact with them, then there will be no sales problems in the coming years. When giving garlic to stores, be aware that they often take goods for sale there. This means that you will receive your income only after all the goods are sold. If this option suits you, then be sure to protect yourself from possible problems by concluding an agreement, which indicates a fixed amount of the transaction.
Selling garlic in bulk is attractive because you shift all the risks associated with the storage and sale of products to dealers, and you yourself get a net profit. Of course, the income is not as great as it could be with retail sales, but there are no more problems with sales.
It is important to understand that profits increase with the expansion of the customer base, so be constantly looking for new distribution channels.
Video "Economics of growing garlic"
Watch a video about the economic component of the garlic business and how it is organized.