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AQUAPONICS

Economic Aspects
Dr Wilson Lennard

AQUAPONIC SOLUTIONS

INTRODUCTION
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
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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
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NICHE AQUAPONIC MODEL


Currently, one of the most promising economic

areas for aquaponics is niche scale farming (urban?) Single owner/operator model, products sold at retail price (no wholesaler), service local interests, directed local marketing, sales from the farm gate and to local business
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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, including, but not limited to spread sheet analysis Spread sheets allow us to study the numbers
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ECONOMIC MODELLING
Several factors need to be considered Personal preferences (single owner/operator,

work hours, work situation, partnerships etc) Financial factors (capital required, income required) Market factors (market availability, niche markets, local clients etc)
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ECONOMIC DESIGN REALITIES


The system has to be sized based upon two

main criteria:

The amount of capital available. The amount of income required.

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, homebased business.
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CAPITAL REQUIRED
Several choices are available, most of which

involve borrowing money For this reason (being in debt), my approach is to keep my borrowings as low as possible Sources include Banks, Financial Institutions, Friends, Business Partners Start small if possible (need to borrow less)
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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
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THE APPROACH
I reason that, if the fish production side of the

business AT LEAST PAYS for ALL the running costs, then the plants will produce pure profit This means that aquaponics is at least comparable with, and maybe better than, standard hydroponics This is because the running costs in hydroponics must come from the sale of plants, which eats into profits
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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. Fish sales used to cover the running costs of the system/business
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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!
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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!
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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, one pump design etc) to lower operating costs
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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, before making any other decisions
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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, with chefs, its QUALITY that counts, not quantity
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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, pay back periods, break even points etc Number crunching may be boring, but is invaluable!!
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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
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LESSONS LEARNED
Technical feasibility economic success. Marketing, marketing and more marketing. Keep your customers HAPPY. Be truthful with customers (liars lose!). Try to grow what you have already sold (again,

more MARKETING!!). Be realistic about your time.


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CONTACT
Dr Wilson Lennard Aquaponic Solutions willennard@gmail.com www.aquaponic.com.au Ph: 0409 542 621

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