Business Planning: How to Organize Ideas and Follow Dreams

1. Business Planning: How to Organize Ideas and Follow Dreams Lani Meyer April 27, 2005

2. Resource Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses Developed by: The Minnesota Institute for Sustainable Agriculture, Saint Paul, MN www.misa.umn.edu Co-published by: The Sustainable Agriculture Network, Beltsville, MD www.sare.org Published 2003

3. Introduction “Why develop a business plan?” • Make Decisions • Pursue Goals • Communication “Who should be involved?” • Business “stakeholders”

4. Task 1: Identify Values “What’s Important to You?” • Values: “reflects your view on life or a judgment about what you find important.” • Identify Your Own Values • Personal • Economic • Environmental • Community • Identify Common Values

5. Task 2: Farm History and Current Situation “What Have You Got?” • A Brief History of Your Business • Assess Your Current Situation • Marketing • Operations • Human Resources • Finances • SWOT: Strengths and Weakness, Opportunities and Threats. • Whole Farm SWOT Analysis

6. Manhattan Farmer’s Market • Began in late 1970’s (~1977) • First Site: Downtown on 4th • Moved to present site : 5th and Humboldt, Sat. 8am-1pm • Mid 1990’s added Wed in Cico Park 4pm-7pm • Board meets in Mar. and Nov.: Regulations • Products must involve gardening/locally produced • Membership fee: year $10/ weekly $4.50-$5 • Difficulties: variety all season long and gaps • Takes time to establish a name and product

7. Task 3: Vision, Mission, and Goals “Where Do You Want to Go?” • Dream a Future Vision • 5, 10, 25 years? • Develop a Mission Statement • “Statement of Purpose” • Set and Prioritize Goals • Short term, intermediate, long-term

8. My Future Dreams!!! Mission: Nature’s Flavor Farm’s mission is to provide the local community fresh, flavorful herbs and other high-quality products with creative and environmentally conscious management. Goals: • Land Purchase and Cultivation Practices • Market identification • Pricing and Packaging • Naturopathic Degree • Community Involvement

9. Task 4: Strategic Planning and Evaluation “What Routes Can You Take to Get Where You Want to Go?” • Develop a Business Strategy • Evaluate Strategic Alternatives • Choose the Best Whole Farm Strategy • Develop Contingency Plans

10. “Business Strategies are realistic actions that communicate how you plan to reach your goals.” • Human Resources Strategy • Labor Needs • Labor Gaps • Compensation • Management and Communications Marketing Strategy • Markets • Product • Competition • Distribution and Packaging • Pricing • Promotion • Inventory and Storage Management • Operations Strategy • Production Management • Regulations and Policy • Resource Needs • Resource Gaps • Size and Capacity • Financial Strategy • Risk • Organizational Structure • Finance

11. Target: Manhattan Community Direct: Farmer’s Market Restaurants Bluestem Bistro and Radina’s: Yes Gold Fork: Friday Specials, $$ Little Apple Brewery: Occasionally, $$ Retail People’s Grocery Mercado Westside/Eastside Market Markets • Other • Restaurants • CSA • Commercial • Segregation • Restaurants • Community members • Sales Potential • Number of customer • Potential volume of sales

12. Product • Evaluate each product: • value and uniqueness • Herbs • Local, organic, fresh • Unique varieties • Order in specific amounts • Why do customers want your product?

13. Competition • How do they market and price? • Other Local Growers • Farmer’s Market and Retail • Grocery Stores • Dillions, Wal-Mart • Commercial Suppliers • Sysco, F&E, C&C • What share can I realistically capture?

14. Distribution and Packaging • Scope • Local and Selective • Packaging • Restaurants: Imitate Commercial • Keep Freshness: Plastic • Labeling • Reusable Packaging? • Easy Delivery • Movement/Delivery Schedule • Weekly orders and by need • Dependable and Consistent • Fresh • By bunch

15. Pricing • Research other local farmers • Compare to competitors • Internet • USDA • Production Costs • Mistakes • Pricing too high to customers’ perception • Failure to adjust prices from one area to another • Attempting to compete on price alone • Failure to test different price levels on customers in differ areas.

16. Promotion • Image and Product=total approach • Promotion Alternatives • Mailing list deals • Recipes • Fact sheets • Publicity • Reusable Packaging Rebates • Message • Tools and delivery • Business cards • Brochures, information sheet • Mailings • Signs at markets • Timing and Frequency • Regular communication • One representative

17. Task 5: Present, Implement and Monitor Your Business Plan • Organize and Write Your Business Plan • Internal or External Use • Communicates with selected audience • Organize in way most useful for yourself • Implementation and Monitoring • Develop Implementation “To-do” List • Establish Monitoring Checkpoints • Maintain Records • Review Progress