1. Marketing and Economics for Small-acreage Properties UNCE, Reno, Nev. Developed by: Cinda Williams, University of Idaho Extension Bob Hamblen, Colorado State Cooperative Extension Kevin Laughlin, University of Idaho Extension Susan Donaldson, University of Nevada Cooperative Extension

2. 6/12/20152 What we’ll learn today Reexamine your property goals Do you want to make a buck? Can you make a buck? Business plans Marketing methods Keys to success Resources

3. 6/12/20153 So, you want to make a buck? http://fruithome.com/pictures/money_t3.jpg

4. 6/12/20154 Reexamine your property goals Look at the map you made in Module 1, Lesson 1 You’ve added, revamped and changed the plans for your property Now comes the time to ask, “Can I make a buck at this?”

5. Well Marshy Stream Weedy Septic Gate Fence Trees Legend Acres = 25 Animals = 6 cows, 1 horse, 3 goats Pastures = 1 Months animals grazed = 9 Soils = sandy clay loam, silt Grasses present = Tall fescue, orchardgrass, clover, bentgrass Weeds present = Canada thistle, pigweed House Barn Property Map Manure pile Water trough Bare ground Barn

6. Legend Acres = 25 Animals = 2 cows, 1 horse, 10 dairy goats Grasses present = Tall fescue, orchardgrass, clover, bentgrass Soils = sandy clay loam, silt House Barn Property Map Processingshed GC GH G reenhouses (high tunnels) --- Wildlife planting area Hot-wire fence C GH New gravel road for access Well Trees Weedy Bare ground Pasture Marshy Stream Water trough Gate Fence Septic Manure compost area Cropping area Ground cover planted P

7. 6/12/20157 Reexamine your personal goals Why do you want to sell a product? Do you have the skills and resources to grow, raise, manage and market a product on your property? Why do you want to do this? Is it going to be FUN?

8. What are you going to sell? www.sustainablepoultry.ncat.org www.eatapples.comhttp://blog.americanfeast.com http://blogs.venturacountystar.com

9. 6/12/20159 Are your physical resources adequate for the enterprise? Irrigation water? Soil? Climate? Length of growing season? Vicinity to buyers or consumers? Equipment? Storage? Property access? yourproduceman.com

10. 6/12/201510 You are a physical resource USDA NRCS

11. 6/12/201511 Does your family share your enthusiasm for the product and this venture?

12. Time and money

13. 6/12/201513 What about external factors? USDA NRCS

14. 6/12/201514 So, you still want to make a buck?

15. 6/12/201515 How are you going to decide? Guess Throw dice Use a dart board Use a decision- making process Use a SWOT analysis

16. 6/12/201516 Another approach: Develop a business plan Mission statement Goals (short-term and long-term) Marketing plan Production and operating plans Financial plan Staffing and labor plans Management plan Contingency plan

17. Why write a business plan?

18. A business plan becomes the road map for your enterprise www.internest.com

19. 6/12/201519 It is specific to each particular business

20. 6/12/201520 It serves as the basis for obtaining financing for the proposed enterprise www.communitybank.net

21. A business plan is most useful if you put it in writing and can refer back to it regularly www.realhomebusiness.com

22. 6/12/201522 www.sheepcrc.org.au 70 to 80 percent of new businesses fail in the first year Failure is often attributed to a lack of adequate planning Why spend so much time on planning?

23. 6/12/201523 Start by knowing your product Crops  Traditional (acres of a single crop)  Multiple crops  Specialty Livestock  Traditional  Specialty Value-added products NCSU

24. 6/12/201524 Do your product homework! Read, research and explore everything you can find about the product Research similar enterprises Talk to your family and get their input Ask yourself: Why might consumers buy my product? What makes it stand out?

25. 6/12/201525 Why buy my product? Take five minutes to develop a plan to “tell your story” as a PRODUCER to explain why someone would want to buy product A, B, C, etc. Then, take five minutes to develop a plan to “tell your story” as a CONSUMER to explain why you would want to buy product A, B, C, etc.

26. 6/12/201526 Understand your market Village Market, Calif.

27. 6/12/201527 An example: niche markets Ethnic vegetables Kid goats for religious holidays Heirloom vegetables or fruits Pesticide-free fruit Free-range chicken eggs Duck or turkey eggs

28. 6/12/201528 Direct-marketing methods Roadside stands U-pick Community-supported agriculture (CSA) Custom livestock Restaurants or grocery stores Institutional customers (schools, prisons, colleges and corporations) Farmers’ markets Value-added processing

29. 6/12/201529 On-farm or roadside stands Rural Roots

30. 6/12/201530 U-pick Farm-fresh treats and U-pick fun Travel Oregon

31. 6/12/201531 Community-supported agriculture (CSA) Great Basin Basket CSA

32. Custom livestock UNCE, Reno, Nev.

33. Restaurants or grocery stores bonappetitnetworks farm to forkRural Roots

34. Institutional customers bon appetitnetworks farm to fork

35. Farmers’ markets Jonathon Demcak

36. Value-added processing Lavenderridgereno.com

37. Agritourism H. George, UCCE

38. You’re only limited by your creativity and your ability to successfully market! gunsncoffethestranger.com

39. 6/12/201539 More marketing alternatives Web-based ordering Mail ordering Catalogs Cooperative partnerships Cooperative marketing Etc…

40. Don’t discount word of mouth UNCE, Reno, Nev.

41. Collaborate with the competition

44. 6/12/201544 Now you’re finally ready to develop a business plan! Remember, the parts of a business plan are: Mission statement Short-term and long-term goals Marketing plan Production and operating plans Financial plan Staffing and labor plans Management and contingency plans

45. What’s your mission?

46. 6/12/201546 Examples of mission statements Our mission is to bring additional net income into our enterprise by providing the highest-quality product. Our mission is to provide vegetables for local consumption, which increases the financial security of the operation.

47. What are your goals?

48. 6/12/201548 Examples of goals Increase the sales of apples by 5 percent for the next fiscal year Increase the overall return on investment by 10 percent for the next fiscal year Increase the sales volume by 5 percent in a selected region by next fiscal year

49. 6/12/201549 Now you’re ready to write a mission statement and goals!

50. 6/12/201550 Marketing plans

51. 6/12/201551 What’s missing from your business plan? Production and operating plans Financial plan Staffing and labor plans Management plan Contingency plan

52. 6/12/201552 Production and operating plans To complete a production and operating plan, you need to collect information about: The cost to grow or produce your product The average yield for your area The going rate, or average sales price

53. 6/12/201553 Basic financial questions How much do you want to make? (A gazillion dollars?) How much will it cost to produce? What can you sell it for? What do you need to sell it for? (What’s the net profit?)

54. 6/12/201554 Determining production costs so you can set a selling price www.pnwchees.com

55. 6/12/201555 Production costs Supplies Equipment Labor Land Insurance Transportation Taxes Permits and fees Advertising and marketing Wages

56. 6/12/201556 Determining a selling price What does it cost to produce? What is a reasonable profit? Remember, making a profit is not a crime. Your time has value! What will the market bear?  What is the price of similar products?  What allows you to charge more for your product?

57. 6/12/201557 What methods of payment will you accept? Cash and carry Credit/debit cards Checks Running a tab (financing) Barter

58. 6/12/201558 Making a reasonable profit How do you figure a profit? Markup or gross margin? What is the difference? What will the market allow?

59. A marketing example If you want to sell a bushel of carrots that cost $50 to produce, what is the selling price if the markup is 50 percent? Cost ($50) + 50% Markup ($25) = Selling Price ($75)

60. A marketing example What is the selling price if the gross margin is 50 percent? Selling Price ($100) = Cost ($50) + Profit (50% of selling price, or $50) Markup profit is $25 Gross margin profit is $50

61. 6/12/201561 Financial plans

62. 6/12/201562 Financial plans generally include: Balance sheet – What you own versus what you owe Income statement – A snapshot of your income Cash flow statement (really important!) – Income and expenses for a specific time period

63. 6/12/201563 Funding your enterprise www.wannanetwork.com Personal funds Debt financing Equity financing Traditional lenders

64. 6/12/201564 Funding your enterprise Small, farm-friendly banks Small Business Administration Rural economic development agencies Grant sources

65. 6/12/201565 Staffing and labor plans www.ces.ncsu.edu/chatham

66. 6/12/201566 Management plans UNCE, Reno, Nev.

67. 6/12/201567 Contingency plans www.sure-it.co.uk

68. 6/12/201568 Keys to success Do something that you love Provide quality Start small and grow incrementally Keep good records – production, financial and regulatory

69. 6/12/201569 Keys to success Provide what the customer wants Maintain a loyal, preferably local, customer base Provide more than just a product – consider the social aspects Involve others

70. 6/12/201570 Keys to success Stay informed and up-to-date Plan for the future Evaluate and adjust continually (practice adaptive management) Persevere Obtain adequate capitalization

71. 6/12/201571 Where can I get help in developing a business plan? Small Business Administration Small Business Development Centers Chamber of Commerce State Departments of Agriculture, Marketing Divisions State Economic Development Agencies USDA Sustainable Agriculture Research and Education (SARE) Colleges and universities Libraries

72. Peer resources and support NRCS

73. 6/12/201573Summary Understand your product Understand your resources Understand your market Understand your customers USDA NRCS

74. 6/12/201574Summary Create and use a business plan, and adjust it as needed Be flexible and open to new opportunities Check out free resources available to you Network!

75. 6/12/201575 Homework Select three “new” enterprises that you are interested in exploring for your property. Fill out the Proposed Enterprise Development Activity Sheet for the three proposed enterprises for your property. Evaluate each enterprise based upon the site plan you developed for your property.