How to Start a Seed Business

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Are you passionate about gardening and plants in general? Consider turning your passion into a full-time business. For example, you could sell seeds online, by mail order or in a physical store. What matters most is to have a well-thought-out seed business plan and a thorough understanding of the market.

TL;DR (Too Long; Didn't Read)

Before drafting a seed business plan, determine how you want to sell your products and who your target audience is. Depending on your budget and goals, you can either grow seeds at home or in your garden or purchase them from suppliers.

Research the Seed Industry

The global seed market was valued at $69.8 billion in 2019, and it's expected to reach $86 billion by 2023. Currently, there are about 24,642 nursery and gardening stores in the U.S. alone. This industry is booming, offering unprecedented opportunities for entrepreneurs. Consumer demand for natural seed oils and health products, as well as the significant shift in farming practices, are fueling the market.

According to IMARC, a market research company, the seed industry is forecast to have a 6.6 compound annual growth rate between 2019 and 2024. DuPont, Monsanto, Advanta Limited, Syngenta AG, DFL Seeds and other big-name companies hold the largest market share. Some specialize in fruit or vegetable seeds, while others offer oil and grain seeds. The demand for these products may increase over the next few years due to urbanization and rapid population growth, among other factors.

Before you draft a seed business plan, research the different types of seeds and how your customers could use them. Hybrid seeds, for example, are more resilient to diseases and offer better yields. Decide whether you will sell seeds only or offer a variety of products, such as gardening supplies, tools and soil. Consider your target audience and its needs; homeowners typically use the seeds to grow their own gardens, while corporate customers use them in the production of health foods, skincare products, cooking oils and other products.

Draft a Seed Business Plan

The next step is to make a plan for your seed business. Consider the types of seeds you want to sell, where you'll get them, and whether you need external funding. Also, it's important to choose a business model. Depending on your budget and goals, you may sell from home, open a small local store, or use distributors.

If you have a piece of land, you can plant the seeds yourself. Some varieties such as basil, tomato and marigold, can grow indoors too. You can also partner with suppliers, order seeds in bulk, and distribute them to farmers, food manufacturers or gardening enthusiasts. If you choose to grow seeds at home or in your garden, it's recommended to choose those that have a high germination rate and produce large yields.

Another option is to sell a limited variety of seeds that are typically hard to find. Organic seeds, for example, are more vulnerable to pests and diseases, but they're in demand and can yield higher profits. A seed business plan should also include your mission statement and goals, market research, competitive analysis, financial projections, cost estimates and marketing strategies. Cover the legal aspects too, including business registration and licensing, permits and tax requirements: Seed farmers and distributors who operate in Florida, for example, are required to obtain a seed dealer license from the state's Department of Agriculture and Consumer Services.

Estimate Your Expenses

A small-scale seed business involves lower costs than other ventures, especially if you have your own land. However, you still need to purchase adequate equipment, pay for business licenses and permits, set up a website, and buy or rent a warehouse. The costs are higher if you decide to open a store and hire employees. You need the following equipment and supplies for all but the smallest operations:

  • Harvester
  • Thresher
  • Tractor
  • Vans
  • Seed cleaners
  • Seed drills

The average price for a new compact tractor with no accessories is around $10,000. High-end models cost as much as $150,000. These powerful machines require special accessories, such as air compressors, backhoe attachments and loader attachments. If you cannot cover the costs, you have three options:

  1. Reach out to investors.

  2. Get a business loan. 

  3. Apply for grants aimed at small farmers. SARE grants, for example, are available for projects involving sustainable agricultural practices.

Make sure you set a realistic marketing budget. Think about what will be unique about your seeds and use that as a selling point. Consider the different types of marketing channels, such as newspaper advertising, social networks and online forums for gardening enthusiasts and farmers. Create a website, list your products and reach out to potential clients. Leverage the power of email marketing to connect with prospective buyers and make them an offer they can't refuse. Also, attend local farming and agricultural events to build connections and promote your small business.