Small Farm Business Planning Templates And Instrucitons Page 7
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503. Market analysis
a. Assess what is currently taking place in the market. Questions to investigate include:
What are the established markets? What is being sold currently at what prices and
through what marketing segments? What is there a demand for that is not being met?
b. As a farmer looking for a marketing outlet, where should I focus first? You may know that
you ultimately want to have a market base that is 1/3 farmers’ market, 1/3 wholesale,
and 1/3 CSA, but you might not be able to develop those three market channels
simultaneously in your first year.
c. Is there a marketing niche that can be occupied?
d. Identify the regions and segments where you might market your products
i. A region – a contiguous geographical area, e.g., Central Coast of California
ii. A segment – a specific marketing outlet such as direct retail, value-added, or wholesale
4. Marketing plan
a. How am I going to build my market(s) in my chosen region(s) and segment(s)?
i. Consider both what you like and what you think is most likely to work
· Work with your strengths – If you don’t like talking to the public you won’t do well
at a farmers’ market. (Consider hiring others for this work.)
· You may not want to drive an extra two hours to get to the more lucrative farmers’
market, but doing so may be the only realistic way to get the restaurants in that
area to consider buying directly from you
b. Establish a niche
i. The more specifically adapted to a particular market you become, the more likely you
are to survive financially
ii. Ideally your business is so specifically adapted to a certain market that you become a
necessary part of the local economy
c. Diversify
i. Attempt to develop another niche or two just in case there are changes in the market
5. Financial analysis
a. Capital needs analysis – Define how much equipment you truly need. List it out and get prices
on both new and used equipment.
b. Start-up cash flow analysis – Define accurately when will you have to purchase supplies
and equipment.This should correspond exactly to your farm plan. Price supplies from
different sources.
c. Phase-one cash flow analysis – Define when you will start to generate revenue, and what
your selling costs and ongoing operational costs will be
d. Revenue estimates will depend on your preliminary marketing plan as well as your
estimates of yields and prices. Selling costs include transportation, selling supplies such
as bags and boxes, and possibly sales help.
6. Farming plan
a. The farming plan is essentially the crop plan and defines what crops will be grown,
how much of each crop, and at what times of the year
b. The farming plan must serve the marketing plan, which is based on the market
analysis
i. Determine what will sell first, then decide what to grow
c. The farming plan is constrained by the financial plan
i. Example: If you are not in a financial position to establish an orchard it doesn’t matter
if there is a great market for apples
Unit 2.0 | 7
Lecture 1 Outline
Small Farm Business Planning
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