marketing and economics for small-acreage properties unce, reno, nev. developed by: cinda williams,...

Marketing and Economics for Marketing and Economics for Small-acreage PropertiesSmall-acreage Properties

UNCE, Reno, Nev.

Developed by:Cinda Williams, University of Idaho ExtensionBob Hamblen, Colorado State Cooperative ExtensionKevin Laughlin, University of Idaho ExtensionSusan Donaldson, University of Nevada Cooperative Extension

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n

the Landthe Land04/18/23 2

What we’ll learn todayWhat we’ll learn todayReexamine your property goals

Do you want to make a buck?

Can you make a buck?

Business plans

Marketing methods

Keys to success

Resources

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


So, you want to make a buck?So, you want to make a buck?

http://fruithome.com/pictures/money_t3.jpg

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Reexamine your Reexamine your property goalsproperty 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?”

Well

Marshy

Stream

Weedy

Septic

Gate

Fence

Trees

LegendAcres = 25

Animals = 6 cows, 1 horse, 3 goats

Pastures = 1

Months animals grazed = 9

Soils = sandy clay loam, siltGrasses present = Tall fescue, orchardgrass, clover, bentgrassWeeds present = Canada thistle, pigweed

House

Barn Barn

Property Map

Manure pile

Water trough

Bare ground

Barn

Legend

Acres = 25

Animals = 2 cows, 1 horse, 10 dairy goatsGrasses present = Tall fescue, orchardgrass, clover, bentgrassSoils = sandy clay loam, silt

House

Barn Bar

n

Property Map

Processing shed

GC

GH Greenhouses (high tunnels) --- Wildlife planting area Hot-wire fence

C

GH

GH

GHGH GH

New gravel road for access

Well

Trees

Weedy

Bareground

Pasture

Marshy

Stream

Water trough

Gate

Fence

SepticManure compost area

Cropping area

Ground cover planted

P

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Reexamine your Reexamine your personal goalspersonal 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?

What are you going to sell?What are you going to sell?

www.sustainablepoultry.ncat.org

www.eatapples.com http://blog.americanfeast.com

http://blogs.venturacountystar.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Are your physical resources Are your physical resources adequate for the enterprise?adequate for the enterprise?Irrigation water?Soil?Climate?Length of growing season?Vicinity to buyers or consumers?Equipment?Storage?Property access?

yourproduceman.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


YouYou are a physical resource are a physical resource

USDA NRCS

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Does your family share your Does your family share your enthusiasm for the product enthusiasm for the product

and this venture?and this venture?

Time and moneyTime and money

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


What about external factors?What about external factors?

USDA NRCS

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


So, you still want to make a So, you still want to make a buck?buck?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


How are you going to How are you going to decide?decide?

Guess

Throw dice

Use a dart board

Use a decision-making process

Use a SWOT analysis

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Another approach: Another approach: Develop a business planDevelop a business plan

Mission statementGoals (short-term and long-term)Marketing planProduction and operating plansFinancial planStaffing and labor plansManagement planContingency plan

Why write a business Why write a business plan?plan?

A business plan becomes the A business plan becomes the road map for your enterpriseroad map for your enterprise

www.internest.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


It is specific to each It is specific to each particular businessparticular business

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


It serves as the basis for It serves as the basis for obtaining financing for the obtaining financing for the

proposed enterpriseproposed enterprise

www.communitybank.net

A business plan is most useful if A business plan is most useful if you put it in writing and can refer you put it in writing and can refer

back to it regularlyback to it regularly

www.realhomebusiness.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


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 Why spend so much time on planning?planning?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Start by knowing your productStart by knowing your productCrops Traditional (acres

of a single crop) Multiple crops Specialty

Livestock Traditional Specialty

Value-added products

NCSU

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Do your product homework!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?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Why buy my product?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.

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Understand your marketUnderstand your market

Village Market, Calif.

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


An example: An example: niche marketsniche markets

Ethnic vegetables

Kid goats for religious holidays

Heirloom vegetables or fruits

Pesticide-free fruit

Free-range chicken eggs

Duck or turkey eggs

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Direct-marketing methodsDirect-marketing methodsRoadside 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

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


On-farm or On-farm or roadside roadside standsstands

Rural Roots

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


U-pickU-pick

Farm-fresh treats and U-pick fun

Travel Oregon

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Community-supported Community-supported agriculture (CSA)agriculture (CSA)

Great Basin Basket CSA

Custom livestockCustom livestock

UNCE, Reno, Nev.

Restaurants or grocery storesRestaurants or grocery storesbonappetitnetworks farm to fork Rural Roots

Institutional customersInstitutional customers

bon appetitnetworks farm to fork

Farmers’ marketsFarmers’ markets

Jonathon Demcak

Value-added processingValue-added processing

Lavenderridgereno.com

AgritourismAgritourism

H. George, UCCE

You’re only limited by your creativity and You’re only limited by your creativity and your ability to successfully market!your ability to successfully market!

gunsncoffethestranger.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


More marketing alternativesMore marketing alternatives

Web-based ordering

Mail ordering

Catalogs

Cooperative partnerships

Cooperative marketing

Etc…

Don’t discount word of mouthDon’t discount word of mouth

UNCE, Reno, Nev.

Collaborate with the Collaborate with the competitioncompetition

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Now you’re finally ready to Now you’re finally ready to develop a business plan!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

What’s What’s your your

mission?mission?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Examples of mission statementsExamples 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.

What are your goals?What are your goals?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Examples of goalsExamples of goalsIncrease 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

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Now you’re ready to write a Now you’re ready to write a mission statement and goals!mission statement and goals!

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Marketing plansMarketing plans

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


What’s missing from your What’s missing from your business plan?business plan?

Production and operating plans

Financial plan

Staffing and labor plans

Management plan

Contingency plan

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Production and Production and operating plansoperating 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

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Basic financial questionsBasic 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?)

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Determining production costs so Determining production costs so you can set a selling priceyou can set a selling price

www.pnwchees.com

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Production costsProduction costs

Supplies

Equipment

Labor

Land

Insurance

Transportation

Taxes

Permits and fees

Advertising and marketing

Wages

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Determining a selling priceDetermining a selling priceWhat 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?

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


What methods of payment will What methods of payment will you accept?you accept?

Cash and carry

Credit/debit cards

Checks

Running a tab (financing)

Barter

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Making a reasonable profitMaking a reasonable profit

How do you figure a profit?

Markup or gross margin?

What is the difference?

What will the market allow?

A marketing exampleA 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)

A marketing exampleA marketing exampleWhat 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

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


FinancialFinancial plans plans

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Financial plans generally Financial plans generally include: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

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Funding your enterpriseFunding your enterprise

www.wannanetwork.com

Personal funds

Debt financing

Equity financing

Traditional lenders

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Funding your enterpriseFunding your enterprise

Small, farm-friendly banks

Small Business Administration

Rural economic development agencies

Grant sources

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Staffing and labor plansStaffing and labor plans

www.ces.ncsu.edu/chatham

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Management plansManagement plans

UNCE, Reno, Nev.

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Contingency plansContingency plans

www.sure-it.co.uk

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Keys to successKeys to success

Do something that you love

Provide quality

Start small and grow incrementally

Keep good records – production, financial and regulatory

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n



Provide what the customer wants

Maintain a loyal, preferably local, customer base

Provide more than just a product – consider the social aspects

Involve others

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n



Stay informed and up-to-date

Plan for the future

Evaluate and adjust continually (practice adaptive management)

Persevere

Obtain adequate capitalization

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


Where can I get help in Where can I get help in developing a business plan?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

Peer resources Peer resources and supportand support

NRCS

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


SummarySummary

Understand your product

Understand your resources

Understand your market

Understand your customers

USDA NRCS

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


SummarySummary

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!

Livin

g

Livin

g n n

the Landthe Land

Livin

g

Livin

g n n


HomeworkHomework

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.

marketing and economics for small-acreage properties unce, reno, nev. developed by: cinda williams,...

Documents

p slide

money slide

particular business

swot analysis slide

property goals

property access

road map

personal goals