Why write a business plan?  Most entrepreneurs will write a business plan in order to seek funding, explore a new business idea, expand an existing business, or plan strategy and direction.  The act of writing a business plan will allow you to articulate your values and goals and connect them with business sense and market research. A business plan is a tool that can help you understand the feasibility of your business idea and can serve as a guide to help you make future business decisions. (It can also be helpful if your are interested in entering a Business Plan competition ;) )

On Monday, January 23, we hosted the first of four classes focused on writing a business plan for local food businesses.  This opportunity was made available with grant funding from the USDA Local Food Promotion Program, and was taught by America's Small Business Development Center director, Janine Clover.  We are excited to say that we had 15 local food businesses contact us to participate in this class... that's a good sign that the local food movement in Southeast Iowa is going to become more robust in our near future!

Where do you start when writing a business plan?  In this class, we are utilizing a book called "Building a Sustainable Business" which has simple worksheets and examples that will help you to develop the various components of your business plan.  The book is available for free download if you are interested in exploring writing a business plan of your own.  And we will also be sharing information from the classes each week in this news feed on EatFreshSEI.org. 

Here's what we covered in our first class:

Identify Values - What's Important to you?  What does success look like to you? Consider your personal, economic, environmental and community values... do you value good health? the environment? animal welfare?  If you understand what your values are, that information can help guide future employees and team members... it makes goal setting easier and helps with conflict resolution situations.  The worksheets and examples for identifying your values are on pages 19-25 in the book.

Farm history- It's important to look back to experiences and decisions in your past that have triggered you to develop your business further.  Reviewing your personal and business history, as well as market and industry trends, will be valuable as you develop your business plan.  Where do you see successes and failures in your history?  Take note of these things and consider them as you continue to plan. Besides helping you to make sound decisions in your business, your farm history and values can also be used as a marketing tool, local food customers want to know who is growing their food, and how it's grown. 

Market Research - What products are you looking to grow and sell?  How much of that product do you need to sell to be successful, and how much of that product can you realistically sell in the markets that you have identified?  There are a number of online resources that can help you to understand the markets for certain crops, Agricultural Marketing Resource Center and Market Maker have great data sets and market research tools.   Another great way to research your markets is by talking with other people who are already buying/selling in those markets. For example, if you are interested in starting a U-pick berry farm, your best market research resource could be someone else who is already doing that type of business.  They should have an understanding of customer demand, risks and hurdles in that type of business. It would also be beneficial to speak with farmers market managers, chefs, and other food buyers in your area about the volume of that product being bought and sold in your area.  Market research will help you to determine if there are customers to support your product/service, provide constructive feedback, and help you to determine what the market needs.  Market research can also help you to understand how your product/service will stand out from others that are already selling in the market and can help you to determine pricing. Worksheets and examples for market research are on page 30-38 in the book.

Operations - Before planning for the future, it's important to take stock on your resources.  What physical resources are available to your farm?  Do you have land, buildings, machinery, livestock?  Do you have any restrictions on those assets, like a long-term lease, easements, etc?  A farm map can be a good tool to use to describe your land resources.  To locate a good map of your land, you can contact your local USDA NRCS office.  Once you have described the physical resources you use in your current operation, the next task is to describe the current production systems in which you use those resources.  This involves describing crop rotations, timing of operations, machinery and inputs needed/used, storage and delivery of product.  Another thing to consider is the human resources needed to be successful - selling food requires more than just harvesting and marketing.  Consider the time it takes to plant, pull weeds, spray for bugs, washing/packaging, delivering and bookkeeping too.  There are some great checklists and worksheets in the book that will help you to understand your resource needs for your business. Operations are covered on page 38-50.

If you work through these ideas you will have a good start on building your business plan.  In the following weeks we will continue to share what we cover in our business planning classes, and share some of the tools that are used.  If you have any questions or need any help in developing your local food business plan, feel free to contact mhoenig@iastate.edu.