Lufa Farms Growing an Entrepreneurial Start-up Case Solution

1. How can Lufa Farms achieve its goal to expand to $100 million in revenue in 5 years from current $10 million, expanding to other geographies?

The plan to achieve $100 million in revenue within five years is an ambitious one with growth rates around 40% per annum for it to transition from $10 million to the target. The company is currently operating in Montreal, but expansion into other geographical areas is the only way to achieve the target. Other Canadian metropolitan areas such as Toronto, Vancouver, Ottawa, etc. would offer great opportunities for growth. Once the Canadian market has been covered and established well, the company can target the much larger cross-border market of the United States. The United States offered immense opportunity for growth and given the right marketing and promotion; the company would be able to grow rapidly in the US market and reach its target revenue.

2. What recommendations do you have for Lufa Farms for growth?

Lufa farms should aim at feeding the urban population that is growing at a steady scale. Sustainability should be at the forefront of the growth of marketing and promotional efforts focusing efforts on the same. They should aim at promoting the products based on the fact that they are locally grown, have better quality, are pesticide free and healthier. These marketing strategies coupled with the expansion into newer markets in Canada and eventually the United States should be done through partnerships and alliances with large organizations that promote sustainability and environmentally sound infrastructure. The idea has great potential and will be welcomed by office, residential and commercial building managements. In essence, it is all about marketing to the right target market. 

3. How should they finance for further expansion?

Lufa farms have various modes available to finance the future expansion to meet its revenue targets. Given that it is the world’s first commercial rooftop farm, and with tremendous potential, the company would be able to secure financing with ease. Although Lufa Farms is an established organization, one method used by entrepreneurs that would work for the company would be funding, specifically crowd-funding. Striking deals with other organizations with similar fields of interest such as architecture firms, firms providing greenhouse technology, etc. would be able to fund the expansions. Moreover, pitching the idea to the masses and obtaining crowd funding is another way of securing the finance for the expansion and development of Lufa Farms in new markets.