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“Any new greenhouse project should be properly designed in terms of financial profitability”

A greenhouse business always starts with calculations, says Vahan Hovsepyan with Greenhouse Formula. "More and more people are looking to invest in commercial greenhouses because of their advantages. However, building a profitable commercial greenhouse is challenging, especially in the current situation of rising inflation and energy prices. Every greenhouse business needs a professional business plan with a profitability estimation." He developed Greenhouse Formula, a tool that helps to estimate the ROI (return on investment) and other metrics of the greenhouse, based on which everyone can make informed and sound investment decisions. "We want to help horticulture participants make data-driven investment decisions."

Transform a project idea into a greenhouse business plan
"The success of a greenhouse depends on many factors, which start from the very beginning; smart design choices of the configuration and equipment, the crop, and the market where the crop will be sold. All of these factors and design options should be summarized from a financial standpoint. To make an investment decision, a potential investor should transform his project idea into a greenhouse business plan with financial numbers and metrics", Vahan says.

Greenhouse Formula helps to do just that. The tool is created specifically for commercial greenhouse projects and is designed for a broad range of users, including entrepreneurs, growers, agronomic consultants, and greenhouse manufacturers. 

The software is best used on a desktop and has a user-friendly and visualized interface.

Online project
After creating a new project online and entering project data, a professional financial report can be generated instantly, including financial statements and profitability metrics. Vahan shows how the report includes analysis, financial projections, and project evaluation metrics. Also, capital expenditures are analyzed, as well as the key aspects of the greenhouse operations, such as production, sales, and expenses.

It is also possible to project the loan repayment schedule if the project is financed with a loan. Then, there's a 10-year projection with pro-forma financial statements, profitability, and operational indicators. Also, the inputs and assumptions made for the project are shown, and there is also a possibility of building different scenarios to see how the profitability will change if some variables are changed.

Profitability report
The software produces a comprehensive profitability report in a second, in compliance with International Financial Reporting Standards (IFRS). It also takes into account taxes in the country of the project, and it works with any size and type of greenhouse, any crop, and in any country.

"And the most important thing is that it provides all the profitability metrics (ROI, NPV, payback period, etc.), which are very useful for the decision-making process," says Vahan.

The software is updated continuously with improvements and the introduction of new features. "Automatic data input into the questionnaire based on the chosen country and crop is one of the upcoming features that will assist users during their project," Vahan says. Other helpful features are also expected to be rolled out soon.

Positive responses
Since his start, Vahan has gotten many positive responses on Greenhouse Formula, for example, from manufacturers, consulting companies in horticulture, and existing growers. "Hiring a financial consultant or asking the financial department to create a business plan for a greenhouse project is too costly and usually requires at least a month. If someone wants to evaluate a greenhouse project by himself, he should have financial knowledge combined with financial modeling skills to be able to do that. It will also take a lot of time and involves many risks related to wrong formulas, missing important expenses, inaccurate assumptions, etc. All of these can negatively impact the project's viability and lead to incorrect decision making."

The software is for everyone who wants to plan a commercial greenhouse. "Growers use this software to estimate and make sure their future businesses will bring them enough profits based on comparing different versions of the projects, consultants help their clients build profitable businesses, and greenhouse manufacturers provide more value and increase trust with their clients by estimating the profitability of the future business that they are going to build for them." And then there are investors, he says. "Greenhouse Formula helps to estimate the profitability of any greenhouse project quickly, precisely, and in a professional way."

"By the way, the paid version of the software will be ready soon. Before that, anyone interested is welcome to try it for free. There is also a short tutorial video explaining how it works." says Vahan.

Book a free demo:

For more information:
Mr. Vahan Hovsepyan, Director
Greenhouse Formula Ltd
Email: [email protected]