How to attract investment?
Discussion
Hi all, for starters, I am a newbie to the proper world of business, without going into it too much, how exactly do you drum up investment for a green startup. There must be a way for a young(ish) enthusiastic entrepreneur to achieve this privately as well as taking advantage of the myriad of government and NGOs help. I wish there were a dragons den I every town!
Ian
Ian
Roverload said:
Hi all, for starters, I am a newbie to the proper world of business, without going into it too much, how exactly do you drum up investment for a green startup. There must be a way for a young(ish) enthusiastic entrepreneur to achieve this privately as well as taking advantage of the myriad of government and NGOs help. I wish there were a dragons den I every town!
Ian
Hello Ian,Ian
What type of business is it? What’s the future potential? How much are you looking for?
500 Miles said:
Roverload said:
Hi all, for starters, I am a newbie to the proper world of business, without going into it too much, how exactly do you drum up investment for a green startup. There must be a way for a young(ish) enthusiastic entrepreneur to achieve this privately as well as taking advantage of the myriad of government and NGOs help. I wish there were a dragons den I every town!
Ian
Hello Ian,Ian
What type of business is it? What’s the future potential? How much are you looking for?
I came across land let by the council aimed at someone coming in and starting a nursery. As part of the manifesto pledges at the last election boris committed to reforrestation and my local authority are commencing reforresting 2% of the entire county in one new large forest, there is a potential contract to supply some of these trees. Harking back I believe 2% was the figure thrown around by government during the election so i imagine there will be other councils looking to do the same. Countries all over the world are starting projects like this on a scale that is difficult to ignore. We have committed to carbon net zero by 2050 and trees are going to be a big part of that push. I can get the farm but I must demonstrate a viable business plan and tender. Financial backing is something I do not have. I have found large grants from government and woodland trusts etc for exactly this type of thing but I cannot negotiate a contract or apply for this backing until after the agreement to take on the property is done. I need a backer. I was wondering if it's worth pitching to companies to invest to offset their carbon footprint perhaps? I'm in the realms of things I have never experienced.
What do you think? Am I living in cloud cuckoo land?
Ian
Interesting - one of my friends mentioned this to me a few months ago, his angle was that I had a decent amount of land and that the government was now paying grants if you planted trees. He mentioned some numbers (we’d been drinking so excuse my lack of memory) and it sounded like it would be worthwhile if you already had the land and weren’t doing anything with it, however, the numbers didn’t sound appealing if you had to factor in buying or leasing land. I’ll caveat that with the fact it was late in the evening, I can’t remember the numbers and he probably got them wrong 
Are you seeing the opportunity as being :
1) the supply of trees that the council plant. ; or
2) you creating a new forest and then receiving grants from the council?; or
3) you providing land that someone else can use to plant trees?
Understanding the above, as well as the costs and the ‘revenue’ would be useful.
Are you seeing the opportunity as being :
1) the supply of trees that the council plant. ; or
2) you creating a new forest and then receiving grants from the council?; or
3) you providing land that someone else can use to plant trees?
Understanding the above, as well as the costs and the ‘revenue’ would be useful.
Ah, it's good to speak to somebody else who has given it some thought! So I would rent the farm from the council for less than the cost of a 4 bedroom house in cornwall. It is then down to me to create the business. From emails and calls I gather that the council specifically want the tenant to start a tree nursery. It has 5.4 hectares of formally arable farming land. The planned Forrest is local to the farm, from what I gather so far the council are looking to grow some of the trees themselves (next door) and farm the rest of it out. Weather or not they want the 5.4 hectares worth of trees or less is unclear at this time and likely will not be discussed until the lease has been agreed. So theres no deal on the table at this point.
If I’m reading this correctly:
1) you want to lease a farm from the council
2) you need backing to do this
3) if you lease it you think there’s an opportunity to grow/sell trees
4) there’s no contract (yet) for the trees
5) there won’t be discussions until after you’ve committed to the lease
Strikes me that there’s a degree of risk that you could end up with a farm but no immediate outlet for the trees?
Begs the obvious questions;
1) what do you know about growing trees on a large scale?
2) what would you do with the land if no contract for trees was forthcoming?
3) how do the lease terms align with the timescales associated with growing trees?
5.4 hectares is far from enormous in farming terms. If you’ve not do so already, might be worth checking how it compares in scale to other tree growers (I.e. us it big enough to make a living from?).
1) you want to lease a farm from the council
2) you need backing to do this
3) if you lease it you think there’s an opportunity to grow/sell trees
4) there’s no contract (yet) for the trees
5) there won’t be discussions until after you’ve committed to the lease
Strikes me that there’s a degree of risk that you could end up with a farm but no immediate outlet for the trees?
Begs the obvious questions;
1) what do you know about growing trees on a large scale?
2) what would you do with the land if no contract for trees was forthcoming?
3) how do the lease terms align with the timescales associated with growing trees?
5.4 hectares is far from enormous in farming terms. If you’ve not do so already, might be worth checking how it compares in scale to other tree growers (I.e. us it big enough to make a living from?).
Farmer here! Forests aren’t normally something you grow on productive farm ground! I worked on a large estate 10 years ago who supplied over 100,000 Christmas trees to one of the big diy stores( used to have Eddie Stobart lorries queuing out of the village at their harvest time), and for them to have enough stock to sell they had a 10 year growth span,so for them that meant no income for the first ten years, so that is clearly a huge long term investment for them.
Have you thought about it from that point of view?Most farms operate on a yearly plant, grow, harvest, sell cycle to make their money,how do you plan to do that if you have to wait x amount before your crop is ready to sell or grow enough to make money from carbon whatever it is!?
Have you thought about it from that point of view?Most farms operate on a yearly plant, grow, harvest, sell cycle to make their money,how do you plan to do that if you have to wait x amount before your crop is ready to sell or grow enough to make money from carbon whatever it is!?
Was just about to post exactly the same thing. Trees aren't something you plant at the beginning of the year and harvest at the end of the year on a rinse and repeat cycle. They take years to grow. So what's the business model? Where's your yearly income whilst you are waiting years for the product to be produced?
Roverload said:
I have found large grants from government and woodland trusts etc for exactly this type of thing but I cannot negotiate a contract or apply for this backing until after the agreement to take on the property is done.
As far as I'm aware the grants are for establishing forestry, not tree nurseries?Roverload said:
Hi all, for starters, I am a newbie to the proper world of business, without going into it too much, how exactly do you drum up investment for a green startup. There must be a way for a young(ish) enthusiastic entrepreneur to achieve this privately as well as taking advantage of the myriad of government and NGOs help.
First, congrats for having the drive and desire to make a go of something. We need as much of that as possible. Second, perhaps split the two topics out more clearly. The business plan comes first, then the funding plan. Put the funding questions aside for now.
What does the business look like. What big assets do you need to have available. Do you need staff. Do you need technical consultants. What are your daily running costs. Where do the revenues come from. Who are the customers. Do you need to advertise. Who are the competitors. What could go badly wrong. Can you hedge against that. Will you have sales returns.
Get your head around those kind of details. That'll give you an idea of profitability, and cash flow, and you can work back from that to see what sort of funding you need overall not just for the 'buy a bit of land' starting point.
There's plenty of online basic guides and spreadsheets for free to help you put something together.
You have a gilt-edged opportunity (potentially) with a clearly defined customer and they being a public sector organisation so unlikely to go bust owing huge sums. It seems to me to be a low-risk endeavour in that there's not a great deal that can go wrong that you can't mitigate against.
The one thing you have against you is the time it will take to see any revenue. If it's going to take 10 years to a get a crop to a sellable state, that's ten years of outgoings and no revenue. If you're offering an investor a 20% return that's just 2% a year and unlikely to get many excited. 50% might but then you might loose interest because you're not getting what you might have hoped.
I would look for grants before investors. When governments make commitments such as reforestation, they are normally accompanied with funding support which is generally dispensed via local authorities. So as odd as it sounds, it may well be worth speaking to the economic development team at the local authority you'd be leasing the land from.
The one thing you have against you is the time it will take to see any revenue. If it's going to take 10 years to a get a crop to a sellable state, that's ten years of outgoings and no revenue. If you're offering an investor a 20% return that's just 2% a year and unlikely to get many excited. 50% might but then you might loose interest because you're not getting what you might have hoped.
I would look for grants before investors. When governments make commitments such as reforestation, they are normally accompanied with funding support which is generally dispensed via local authorities. So as odd as it sounds, it may well be worth speaking to the economic development team at the local authority you'd be leasing the land from.
StevieBee said:
If it's going to take 10 years to a get a crop to a sellable state, that's ten years of outgoings and no revenue. If you're offering an investor a 20% return that's just 2% a year and unlikely to get many excited. 50% might but then you might loose interest because you're not getting what you might have hoped.
Tree whips are sold at 12 months growth plus.That's the sort of planting that attracts grants, not semi mature trees.
The Woodland Trust give grants, Defra run country stewardship, there were planting grants associated with HS2 to offset the carbon but they were generous and went quickly. I'm not aware of any schemes at Local Authority level.
Hi all. Thank you so much to everyone for your input and advice also thanks for helping me realise questions that I had not even thought of. I'm not sure I can reply to everybody but I shall address some important points raised first.
1. There would be 3 income sources related to specifically the trees. Selling saplings while they're still very small, these are the trees that are propagated in the poly tunnels for field and sales. Selling more established trees that are around 12 months old and finally selling the carbon stored in the trees for that year to the government to trade. Fun fact, young trees can produce 3 times more oxygen than a fully established tree.
2. Back up plan. In addition to income from the trees themselves a basic bread and butter income can be made from a small container storage operation. The farm is located in a popular area for industry that requires lorries to trunk up and down the country as it's the furthest down you can get to and from Birmingham without going over driving hours so I believe there would be a reliable b2b income that will cover the running costs, rent etc... there is also a possibility that I could let one of the barns to local business, space is a premium down here, both permanant sheds are relatively new and in very nice order. This would need to be included in the business plan before getting a decision on the farm.
3. Staff and equipment. I can see a need for a cheap tractor, 2 farm trailers and a mobile water tank. You could get away with a land rover and a couple of trailers I suppose but a tractor is purpose built and my preference for an older unit would enable me to repair it myself. I have a good horticulturist friend who is familiar with day to day practices and has agreed to act as a consultant. Year round you would have myself working on the farm daily, my better half who is an experienced office angel running the office and books and organising the tagging of trees in line with legislation to do with traceability. I can see a need for substantial temporary labour around planting and harvesting time.
I will have a re-read later and come back again with more. Thanks everybody! Much appreciated!
Ian
1. There would be 3 income sources related to specifically the trees. Selling saplings while they're still very small, these are the trees that are propagated in the poly tunnels for field and sales. Selling more established trees that are around 12 months old and finally selling the carbon stored in the trees for that year to the government to trade. Fun fact, young trees can produce 3 times more oxygen than a fully established tree.
2. Back up plan. In addition to income from the trees themselves a basic bread and butter income can be made from a small container storage operation. The farm is located in a popular area for industry that requires lorries to trunk up and down the country as it's the furthest down you can get to and from Birmingham without going over driving hours so I believe there would be a reliable b2b income that will cover the running costs, rent etc... there is also a possibility that I could let one of the barns to local business, space is a premium down here, both permanant sheds are relatively new and in very nice order. This would need to be included in the business plan before getting a decision on the farm.
3. Staff and equipment. I can see a need for a cheap tractor, 2 farm trailers and a mobile water tank. You could get away with a land rover and a couple of trailers I suppose but a tractor is purpose built and my preference for an older unit would enable me to repair it myself. I have a good horticulturist friend who is familiar with day to day practices and has agreed to act as a consultant. Year round you would have myself working on the farm daily, my better half who is an experienced office angel running the office and books and organising the tagging of trees in line with legislation to do with traceability. I can see a need for substantial temporary labour around planting and harvesting time.
I will have a re-read later and come back again with more. Thanks everybody! Much appreciated!
Ian
StevieBee said:
I would look for grants before investors. When governments make commitments such as reforestation, they are normally accompanied with funding support which is generally dispensed via local authorities. So as odd as it sounds, it may well be worth speaking to the economic development team at the local authority you'd be leasing the land from.
Would I not need to get Grant's in place after I have the farm? I take it I cannot apply for them now with nothing. Is it likely I could obtain a grant "in principle" whilst going through the process of obtaining the farm with the council? I will get in touch with the economic development team at CCC at once. Thank you! Gassing Station | Business | Top of Page | What's New | My Stuff