Shared Kitchen Incubators - A Great Place to Start Your Business

By Winifred McGee, Penn State Extension Educator, Dauphin County

A new year signals the time to think about new enterprises – exploring how, and where, to begin profiting from a “family favorite” recipe. The 2011 Food Safety Modernization Act, and subsequent FDA rules, have made it a bit more challenging (but not impossible) to start a food business, in that even if state regulations allow a food product to be made in an inspected home kitchen (in Pennsylvania, referred to as a “limited food establishment”), when the food goes regional or national, FDA requires that all products be made in a commercial kitchen.

For the start-up food venture, a shared kitchen offers an affordable, safe, legal place to launch. Instead of investing a large amount of money in designing and equipping your kitchen, a modest fee allows access an established commercial kitchen on a timeslot basis.

Loading the food dehydrator at Field to Fork Ag Incubator
Photo by Katie Kinka, Southern Alleghenies Planning & Development Commission

As you begin to search, you will learn that not all shared kitchens are created equally – and knowing the type of assistance you need makes a world of difference when searching for the “right place.” For instance, you may just need a shared use kitchen – that is, a place that provides space and equipment to multiple food business owners for the commercial preparation and handling of food that will be sold. This type of kitchen will likely be accessed very affordably, because no other services beside kitchen access will be offered. In a fast-changing environment like food business, you will have to keep up on food code and the current acceptable methods of production, as well as making, marketing and selling your product if you select a shared use kitchen – but many food businesses have gotten their start in just such a place.



The next step up is a shared kitchen incubator – at which you will not only access commercial equipment and facilities, but also benefit from “supportive services,” that apply to food production and business management. There will be an on-site manager who can help you navigate the complex network of regulation, packaging and distribution to have the best opportunity for a profitable enterprise. Because of the increased level of service, the per-hour rate will probably be higher than that of a shared use kitchen – but depending on the complexity of product and marketplace, this can be money well-spent.



You may also determine the need for small-scale co-packing – allowing trained workers who are already familiar with commercial equipment and recipe conversions to make valuable contributions to your venture. One such facility here in Pennsylvania is the “Field to Fork Agricultural Incubator,” which opened its doors at the Greater Johnstown Career and Technology Center in Johnstown Pennsylvania in September 2016. Joining “Field to Fork” not only means accessing the CTC’s commercial kitchen, but allows you to enlist the knowledge and skills of culinary arts students who are working towards their ProStart Certification, and are available to work side by side with kitchen tenants. As with all shared kitchens, “Field to Fork” is focused on specific targeted groups – local value-added producers with smaller crop yields and food entrepreneurs who need a place to start. Products that can be most easily created in this kitchen are non-organic, jarred fruits and vegetables, dried foods, and baked goods. During its pilot phase, use of the kitchen will be available on a first come, first serve basis. Dry storage and cold storage are also available for a monthly fee. 



In short, shared kitchen incubators do provide the environment necessary for food businesses to start, grow and succeed – by offering not only the right equipment and environment but many services that simplify and economically provide just what is needed in today’s food industry.

Should You Consider Producing Flavored Milk?

By Sarah Cornelisse, Sr. Extension Associate, Dept. of Agricultural Economics, Sociology, and Education, Penn State University

Source: http://www.hugheslink.com/blog/?m=201412

As we move into the holiday season, we traditionally see an increase in the purchases of dairy products - cheese, milk, etc.  Eggnog tends to be the popular beverage at this time of year.  However, non-eggnog drinkers may be wishing for a festive alternative.  This is where developing flavored milks may be an alternative for dairy processes to consider.

For lovers of baseball, you may have seen Missouri's Shatto Dairy capializing on the successful playoff run by the Kansas City Royals.  Shatto Dairy produced a special edition french vanilla flavored, blue-colored milk (turned just blue-colored by the time the team made it to the World Series).

Source: http://www.berryondairy.com/Milk.html

Shatto Dairy isn't alone in producing flavored milk.  As consumers turn away from soft drinks and sports drinks, many are returning to milk for its nutritious properties while expressing a desire for more varied flavors beyond the normal flavor and traditional flavors of chocolate and strawberry.  We now see flavors from grape to cotton candy to black cherry to banana and blueberry.

A 2014 Mintel survey showed that 61% of respondents agreed with the statement "Flavored dairy milk is a healthy alternative to soda."  Additionally, 39% of respondents indicated that they were interested in "sophisticated" flavors for milk such as hazelnut, dark chocolate, etc..  This interest was most pronounced with the Millennial generation, with 50% indicating such interest.  As consumer age increases, the interest in flavored milk decreased, with only 12% of those aged 69 and above interested in flavored milk.

Source: http://www.smilinghill.com/Dairy_Store_milk.html

For dairies that already bottle milk, flavored milk is something that they may want to consider as a way of drawing in younger consumers interested in a healthy, but flavorful, drink.

Hiring the Right Web Developer for Your Business's Website, Part 2

My last post focused on some of the terminology used to describe different types of web developers including website designer, website programmer, graphic designer, and internet marketing consultant.  It is important to know what each of these people does and how they can help you build a great site for your business.  (Hopefully you can find a web developer who has skills in more than one of these job descriptions.)

As I discussed before, the article "How to Choose a Web Designer" by Karyn Greenstreet has some great tips on hiring the right web developer for your agricultural business website.  Below, I've highlighted some of these great pointers.

• Pay attention to how much they ask you about your business. They should want to get to know you and your business intimately. How else can they design a site that reflects you, your brand, and your business, unless they spend time to get to know you?

• Look at sites they've designed to see if you like their style. Is there a certain feel to ALL their sites, or are they flexible in their designs?

• Ask them if they did the actual graphic and layout design of the site, or if they just did the programming. If they don't do the graphic work themselves, can they recommend a graphic artist?

• Ask them what they know about internet marketing and search engine optimization (SEO). Be sure that they're creating a site for you that meets your larger marketing and business goals. (A pretty site is no good to you unless it generates revenue and prospects.)

• Ask the designer for their fees and what is the estimated cost for the site you want. They may not be able to give you a good estimate until you discuss content and features of the site. Expect to pay between $60 - $125 an hour, depending on their skill and their location. A quality website with good graphic design and layout will cost around $2,500 - $5,000 for a simple business website. If you add a blog, newsletter, shopping cart, autoresponders, email address setup, SEO, membership site, or logo design (or if you have many page on your site), expect the price to be higher.

More tips to follow in Part 3!

Building a Website for Your Small Business

Creating a useful website is a very important part of attracting customers. Most people, myself included, would find the task of creating a website themselves quite daunting and would immediately want to hire a web designer. But in doing some research of my own, building your own conventional website (meaning not overly complex or customized) may not be as difficult as it appears.

Person adding content to their website. (photo credit: morguefile.com)

To do it yourself, you can use a website builder, which is a tool that allows a user to create their own website without writing code. (Here is a list of some of the most popular website builders.)

This very useful article from Site Builder Report describes some questions to ask yourself to help determine if you should build it yourself or hire a web designer.

1. What is my budget? If you have a small to mid-size budget (which the author defines as $5,000 or less), then you should use a website builder. A competent website designer will usually cost this much or more. You will also need to pay a monthly fee for your website hosting. (Web hosts provide space on a server for your data and allow it to be available on the internet.) By comparison, a website builder like Squarespace, costs $8-$24 per month, which includes hosting.

2. I have a friend, family member, etc. who quoted me a low price. Shouldn't I use them? "Designing websites is a very complicated and involved thing. A very low quote probably means that this person "does not do web design for a living. And that’s a red flag."

3. What do I need/want in a website? "Think convention for website builder. Think customization for website designer...Use things like photo galleries, forms, paragraphs, basic e-commerce, and text." These will help you build a website that is functional without custom designing each piece.

If you really want 100% customization, then you will need a website designer.

4. Can I do it myself? "Trying to do it yourself will open you up to some of the realities of web design and will give you a sense of the constraints and challenges of web design. This will make you so much better when you try to actually hire a web designer. Plus, you may surprise yourself and realize you can do it yourself."

Hopefully this post has made you realize that hiring a website designer is not your only option; you can try to do it yourself. If you do find that you want/need a web designer, I will discuss some tips on helping you to choose a one in a future post. Happy site building!

Local Food Business is Big Business in Pennsylvania

by Winifred McGee, Extension Educator, Dauphin County

Over the past couple of years, we've seen a dramatic rise in the number of people who come to the Penn State Extension's Food for Profit workshop.  During this one-day, jam-packed session (pun fully intended), we instructors endeavor to provide the basics in what a person would need to learn, and know, to start a food business.  We provide opportunity for the participants to learn about sanitation, regulation, and inspections from the inspectors - be it municipal health officials or sanitarians from the Pennsylvania Department of Agriculture's Bureau of Food Safety.  The ability to meet these individuals - who fast become the "entrepreneur's first and best friend" - advising them what to do, and not do, to get their business started is often worth the class fee alone.  We also provide the opportunity to discuss food safety practices, niche marketing, social media, effective packaging and labeling, and money matters - financing and pricing - throughout the day.

A Food for Profit participant presents a unique marketing idea
for her activity group's assigned product: a barbecue sauce.

Between September 2012 and June 2013, we've had 219 people attend 11 workshops - 10 in Pennsylvania, one in Maryland - who joined the ranks of the previous 443 course graduates to bring the class participants to 661 since November 2010.  These folks are of all ages (20-somethings through senior citizens) from all walks of life - looking at the potential to turn their food idea into a venture for "extra money," or to full-time employment.  The participants of Food for Profit are not alone, or unusual, in their search for self-employment.  In this book, "To Sell is Human," Danial H. Pink asserts that "the last decade has also witnessed a substantial increase in very small enterprises - not only those that offer products, but one- or two- person outfits that sell services, creativity, and expertise."  Pink supports this statement by referencing:

• U.S. Census Bureau estimates of twenty-one million "non-employer" businesses - operations without any paid employees...the majority of businesses in the United States.
• The research firm IDC statistics - 30% of American workers now work on their own and that by 2015, this number will reach 1.3 billion.
• Some analysts' projections that U.S. independent entrepreneurs may grow by sixty-five million and could become a majority of the American workforce by 2020.
• Pink's own "What Do You Do at Work?" survey, which asked "Do you work for yourself or run your own business, even on the side?"  Thirty-eight percent of respondents answered "yes."

A little pickle can be the start to "big business"

To illustrate entrepreneurship, Pink profiles the Brooklyn Brine Company - started by disenchanted chef, Shamus Jones, who turned his "hobby" of pickling seasonal vegetables into a full-time business.  Similar to the Food for Profit graduates with whom I've worked, Jones started down the road to self-employment by experimenting with pickle recipes in a "borrowed" commercial kitchen from 10 p.m. to 8 a.m., honing the recipes that resulted in Brooklyn Brine opening its doors in 2009.  Now selling a range of products from the standard NYC Deli Pickles to the exotic Lavender Asparagus, jars of Brooklyn Brine are found on shelves of high-end food-shops literally around the world.  Also, like most Food for Profit graduates, Jones has ended up wearing many hats - being the "face" of the company - time meeting distributors, telling the company's story and convincing more stores to stock his products.  He also has sales tasks when he gets back to his production floor - influencing his employees so that they are "stoked to come into work."  This is a combination of traditional selling and non-sales selling that Pink calls "moving."  Pink defines this activity (which he asserts that a majority of us do) as "moving other people to part with resources - whether something tangible like cash or intangible like effort or attention - so that we both get what we want."  A subset of all the "moving" is, indeed, accomplished by successful food entrepreneurs.

Local food enterprises are big business - even when the operations are small.  The consumer demand and entrepreneurs' vision result in not only a variety of products on our tables, but a more energized local economy.  It is exciting to me personally to see the would-be food business owners come to Food for Profit.  I know their enterprises will not all experience the type of success that Brooklyn Brine had, but I know that many of them will work just as hard as Jones did, to see vision become a reality.  Penn State Extension provides our support by doing the "scavenger hunt" - collecting the information from various sources about how to launch a legal, marketable, profitable product and packaging it in a one day event - but the energy and enthusiasm has to come from within the entrepreneur, him- or her-self.  This is the essence of the American Dream; building a way to support one's household while having a great deal of fun.  And, hopefully, the food entrepreneurs will spread the fun on to their employees, customers, and communities.

Food Products and UPCs

by Winifred McGee, Extension Educator, Dauphin County

There are so many things for a new business owner to consider as the product moves from a "vision" to reality.  When the food items are created to have shelf life, designing an appropriate package is always part of the process - and whether to include a Universal Product Code (UPC) on that package is always a consideration.  Food products that will be sold exclusively in farmers' markets, specialty stores, or over the Internet (so that they never pass over a scanner) do not require barcodes.  However, if a would-be food entrepreneur envisions the product in a grocery or big box store sometime in the future, having the code on the label will, sooner or later, be a necessity.

UPCs were launched by a 10-pack of Juicy Fruit gum
and a hand-made laser scanner.

Although many of us cannot remember a time when UPCs were not common in the marketplace, the initiation of this system is "relatively" recent.  A UPC produced its first familiar "beep" when a 10-pack of Wrigley's Juicy Fruit gum passed over the prototype scanner at March Supermarket in Troy, Ohio, on June 26, 1974.  The technology is actually 39 years young!

At a 2004 ceremony commemorating the original first scan, Tom Jackson, the president and chief executive of the Ohio Grocers Association, said "(t)he bar code has forever changed the world and the way we do business as an industry."  Although other industries had experimented with barcodes before 1974, the groceries were early adopters of the UPC, since this technology allowed the stores to change from using item-level price tags to shelf tags, and eliminated the keypunch errors at the register.  In an era before the "super store," grocery stores of the 1970s had a finite number of price lookups (PLUs) and the average customer bought a number of items per store visit - this made these retail establishments a "natural" for trying out the concept.  March Supermarket was chosen to be the first to incorporate the technology because of its proximity to Dayton (home of the NCR where the checkout counter was designed).  After a number of years of "trial and error," it was noted that using barcodes resulted in fewer under-rings (reducing revenue loss), and helped keep shelf inventories more efficiently - forever linking UPCs with grocery stores.

Almost 40 years later, food entrepreneurs who visualize their gourmet jams, salsa, or meat rubs on a retail shelf will find that joining the tradition of incorporating a UPC is a must.  For a proactive business owner, including a barcode with the first run of labels may make great sense, so that the product is ready when the demand is right.  Since UPCs depend on company-specific codes, barcodes must be purchased from a vendor.  This is most easily accomplished by going to the non-profit company, GS1 US.  Although barcodes are available at other sources, GS1 US guarantees that each company prefix will be unique, and they provide the tools and training for business owners to get started using UPCs.

This familiar UPC is a "must" for selling through
groceries and big box stores.

The amount a company pays for barcodes is determined by the number of distinct products the company makes (and the number of different sizes of each variety) since each flavor and quantity will need its own code.  A secondary factor affecting the cost of barcodes is the annual gross revenues realized by the business.  New customers can easily estimate the fees that they will likely pay, using the downloadable Barcode and Fee Estimator, available on the GS1 US website.  The smallest purchase increment available is 100 barcodes, and the smallest revenue level is "less than $250,000" - these two factors resulting in an initial fee of $760 and annual renewal fees of $158.  While this may seem like a lot of money to spend before a wholesale contract is in hand, the costs will most likely be greater if an entrepreneur waits to retro-fit packaging (that is, to include the barcode) until he or she actually has an order from a store.

Being ready to respond to the demands and expectations of the customer is the road to business success.  In a marketplace laden with choices, it is much easier to launch an exciting, professional-looking food product that catches the consumer eye.  Food entrepreneurs who are looking for more information about food packaging may reference Food Labeling, a Penn State Extension fact sheet covering basic label requirements, or visit the Penn State Extension's Packaging and Labeling resource page.  For more comprehensive information about starting and growing a food business, look for a Food for Profit workshop near you this fall - bookmark the site and return in July to see upcoming class dates and locations.

Learning a Little Bit About the PA MarketMaker Partners (part 3)

So far, I've given some background information on 4 of the 9 organizations that have partnered with PA MarketMaker to bring MarketMaker to Pennsylvania and to help their members join the MarketMaker network.  Below, I will describe 2 more of these organizations.

Retail Farm Market Association 
(http://www.pafarm.com/)   

The mission of the Retail Farm Market Association is to benefit members through education, promotion, cooperation, and representation of Pennsylvania Direct to Consumer Agricultural Marketing.

The objectives of the Retail Farm Market Association (PaFarm) are three-fold:

1. Communication.  To facilitate the exchange of ideas and improve communication and linkages among members of the industry in Pennsylvania State and nationally.  To represent and communicate the interests of the industry to government, Cooperative Extension, other agencies and associations, and to the consumer.
2. Education.  Help industry members improve marketing techniques through dissemination of information through industry networks, Cooperative Extension, the Pennsylvania Department of Agriculture and an annual Direct Marketing Conference, and encourage support and direct research and educational programs relating to the direct marketing of farm products.
3. Promotion.  Promote the establishment and expansion of farm direct marketing operations in Pennsylvania.  Encourage and carry out promotional activities to increase consumer awareness of the Pennsylvania farm direct marketing industry.

Membership to PaFarm is free and open to anyone interested in direct-to-consumer farm marketing.  

Fair Food (http://www.fairfoodphilly.org/)  

Fair Food started with the narrow focus of connecting farmers and chefs as a strategy for keeping more farmland in production and now works with a broad range of buyers as well as hundreds of producers, from the small-scale diversified farmer to midsize growers who supply colleges, hospitals, and other institutions.

Over the past ten years, Fair Food has built demand for local food across all sectors of the food system. Along with their partners in the field, their work has created a paradigm shift in the public’s perception about what eating by shining a spotlight on the men and women who grow food.

Fair Food promotes the importance of family farms and creates a year-round marketplace for fresh, local and humane food products in the Greater Philadelphia region. They do so by providing an assortment of programs and services that contribute to a strong and sustainable local food system.

Are you a member of either one of these organizations?  How have they helped you market your products or learn about your industry?

Using PA MarketMaker to Market Your Business (part 5)

In my previous posts, I discussed how helpful PA MarketMaker (PAMarketMaker.com) is for marketing your ag business.  Another way MarketMaker can assist you is by providing you with market research.

In the process of marketing your products, you may want to use online directories to list your products and services.  In doing so, you will also want to perform market research to understand where your customers are and what you can do to meet their needs.

PA MarketMaker is loaded with census data to help producers find the best place to market their products and services.  This data is easily summarized on a map to show concentrations of consumer markets.

To explore Pennsylvania MarketMaker’s market research data:

1.  Visit PAMarketMaker.com and click on the drop-down box under the Market Research heading located in the upper left corner of the page.  You can then choose what data category you want to study: Age, Household Type, Race, Income, Education, Foreign Born, or Food Preferences.

2.  The second drop-down box will show choices within your chosen category.  Click Search when you are ready to view the available data.

3.  Your search will bring up a map filled with a great deal of information.  The key in the upper center of the page can help you see where the largest concentrations of your selected customer type lives.

Another feature of the Market Research section is the ability to explore the locations of a certain type of business as an overlay on the map.  For example, a grocery store manager looking for the closest producer of organic vegetables can query the website to find names and contact information.  To do this, click on the blue Business Search tab in the upper left corner of the page and select the type of business you are looking for.

Take advantage of this opportunity to market your products and services online!  Pennsylvania’s database has over 380 registered businesses and over 46,000 listings.

Collaborate and Stand Out – Differentiating Your Product through Partnerships

Carla Snyder, Penn State Extension Educator – Ag Entrepreneurship and Marketing

When enjoying ice cream made with tree-ripened peaches at a roadside farm market it’s easy to appreciate the local flavor of our community. However, what may not be realized are the unique partnerships and business savvy it took to get that food from seed to delicious first bite.

Producer partnerships to create superb value added products are not a new concept. An easy example is the ice cream cone, delicious, recognized, and hard to be improved upon. Or is it? By adding local ingredients and producing it at a local facility the standard ice cream cone is improved upon and more enticing to the consumer. Creation of a value added product by this model creates greater benefit for both consumers and producers alike.

Consumers determine value based on their benefit from the product and its ability to fulfill their needs and wants for a certain cost. In the ice cream example a fruit based flavor is created through a partnership with a local orchard and ice cream entrepreneur. The most inherent benefit that keeps consumers anticipating this product year after year is the unique taste that comes from the local agricultural ingredients. It is the best selling flavor when it’s available for about 6 weeks out of the year when peaches are ripe.

Partnering with local producers on the creation and marketing of value added items, such as this ice cream, is certainly not new but is enjoying resurgence in many regions. So how do you continue to offer a product that creates sustained benefit to the customer when value added products are now so plentiful in the marketplace? According to the Michigan State University Product Center that studies value added products, innovation in the bundle of product benefits is key to differentiation. As value added products become continually more “commoditized,” meaning there are so many similar products on the market that consumers are reverting to differentiating product based solely on price, pairing with another producer can make you stand out.

Consider a common value added product such as apple cider. If the consumer is not educated on what makes one producer’s cider different from another then in most cases their typical deciding factor comes down to price. However, if that consumer was educated about specific benefits of one cider over another through tasting samples, recognizing a trusted third party certification logo on the label or even just an attractive label itself, they would not be forced to differentiate solely based on price.

Partnership with another producer will allow you to begin your marketing or new product development from the ground up rather than the traditional top down approach. By evaluating the customer base of both yours and your partners you can tailor your new product to fit the specific needs of a consumer group. By fulfilling exact needs through the creation of specific product benefits you will be directly catering to your consumers. Such as in the apple cider example if your product will be sold in an area where consumers value cooking in their homes or entertaining, consider attaching or printing a recipe for mulled cider on your label or partnering with the producer of mulling spices to sell your cider as part of a package. This may be just the push necessary to achieve the sale of your product at the price point you require.

By partnering with other local food producers, many growers are able to provide value added products to their communities. This marketing method not only results in more direct to consumer sales but also builds on existing producer to consumer relationships had by each producer, thereby extending the reach of agricultural products in the region.

In addition there are also inherent economic benefits. In the production of a typical value added product that is processed at an off-farm or even out of state facility the farmer’s share of the consumer dollar is shrinking, according to the Penn State College of Agricultural Sciences. Decreasing from 40% in the 1950s to closer to 20% in the past decade, the producer’s share of per item income is less, however profits overall are increasing in part due to innovative partnerships as described above in the creation of that special once a year peach ice cream.

The development of the partnership to create the ice cream was simple. The ice cream entrepreneur learned about the orchard on a class field trip to the farm with his children. He was in search of a way to differentiate his product from other producers in the area as larger corporations moved in. Based on his knowledge of the community he chose to go local with ingredients, knowing that his customer outreach would be extended by just the inclusion of this popular orchard’s fruit. What resulted was an exclusive once a year product that customers anticipate all season, giving him and the orchard an edge on competition. And by keeping the dollars for not only purchasing the peach ice cream at either partner’s location but the cost for producing it as well, peach ice cream is doing its part to further the agricultural economy in their region.

Of Mice, Men and Ag Entrepreneurs

When I was in elementary school, my eighth grade teacher was a huge John Steinbeck fan. Therefore, I read several of his books and stories during that year. One of these books, "Of Mice and Men" was particularly meaningful to me. The phrase which is the source for the title of the book "The best laid plans of mice and men often go awry" has been particularly useful to me.

As I have worked with farm managers through the years, I have learned that there is a wealth of truth in that idea, that no matter how well we plan, circumstances often change, which puts our plan in a shambles. This problem occurs not only in the day to day plans for a farm business, but can also wreck the overall business plan of an agricultural entrepreneur. For this reason, I have found that contingency planning is one of the most critical components to the planning process.

The entrepreneurs who succeed are not always the ones with the best business plan (ok, I just gave a heart attack to some of my collegues who write in this blog... let's see if I can redeem myself). The entrepreneurs and managers who succeed are the ones who not only have a sound business plan, but have also developed a solid set of contingency plans for any aspect of their business plan that is critical to the overall success of the business. The contingency plan is nothing more than a 'what if' exercise.

What if profits do not perform to the expected level?

What if our source of financing falls through?

What if our interest rates rise?

What if our business grows faster than we expect?

What if one of our partners decides to leave the business?

etc.

     etc.

          etc.

For each of these 'What if' phrases, develop a contingency, i.e. what you will do, if any of these potential business back breakers were to arise. Then, when (notice I did not say "if") you have a breakdown in one of the key components of your plan, you will have a jump start on getting back on track.

Contingency planning comes easier to some than others. Practice can help. Think through each day what you plan to do, and then immediately think through what you will do if something goes wrong (or excessively right!).

For example, if you plan to make three marketing calls that morning, what will you do if your first customer wants to buy all of your product? What will you do if none of the three are interested?

Others still have trouble thinking through contingencies. Some may be so convinced of the success and infallibility of their plans, that they cannot think of what could possibly go wrong. Others simply have limited experience with their venture. In either case, it could be worthwhile to bring in a third party to examine the plans and actively 'poke holes' into it, identify the areas where problems could arise, or other weaknesses.

As I sit down with farm managers and ag entrepreneurs to discuss their finances, I have observed a consistent trend. Those managers who have a solid plan of where they are heading with their businesses are most often much more successful than those who do not, the ones who let their business just 'happen to them'. Those few individuals whom I have known who not only have a solid plan for their business activities, but also have thought through the contingencies are the rock stars, those who take the punches and keep moving.

Do you have a set of contingency plans for your business?

Find a Mentor!

If you are thinking about becoming an entrepreneur, you likely have family members and/or friends who are supportive of your ideas.  But, do you have someone who will be brutally honest about where your business is headed?  Most family members and friends might not be be able to go there.  You need a mentor!  A mentor is someone who has "been there, done that", can give you advice based on experience, and most importantly, tell you the truth.  

In an article for ReadWriteWeb.com, Janet Crowther and Katie Covington (founders of FortheMakers.com, a website for DIY design and crafts projects) rehash their experience in finding a mentor.  “The only way to find mentors is to be out there, meeting people and asking questions,” Covington says. “We’ve met people at events, through friends, on Twitter and by following blogs. As long as you are respectful of time, mentors are almost always willing to help you and your company evolve. We look for mentors who believe in us, have experiences that are vastly differently from ours, and are always creating.”

Crowther and Covington found a willing mentor in tech entrepreneur Cindy Gallop.   “After talking with Cindy for 10 minutes, she was making parallels between For the Makers and a handful of other people she knew.” The companies don’t have a ton in common, “but both of our companies are about giving people tools to create something for themselves,” Covington says. “Mentors can use their experiences to frame your business in a unique way.”

(Source: http://actasifblog.com)

 When looking for a mentor, Gallop advises, “Don’t just fall in love with someone’s reputation, perceived celebrity or name. Identify someone who could be directly relevant to what you want to do, or who is pursuing a similar vision. And someone who is likely to have the time and the inclination to help you.”

As an ag business owner, do you have a mentor?  Has someone ever asked you to be there mentor?  What great advice has your mentor given you?

As a future ag business owner,  have you tried finding a mentor?  Has it been easy or hard to get someone to help you?

"Entrepreneurship" and "Individualism" Are Not Synonyms

So, what image comes to mind when you hear the word, "entrepreneur?"  For many, it conjures up images of a single person, AKA "the" entrepreneur, struggling against all odds to start a company.  This superhero image is still widely adopted.  Our superhero is able to develop new products, create financial projections to obtain loan or investment funding, navigate the obstacle course that local, state, and Federal laws and regulations bring, manage all finances, and everything else needed to make the business flourish.  It's hard work, but our superhero is up for the challenge.

Without exception, entrepreneurs can not do everything on their own.  The best ones don't even try.  This is true for all types of entrepreneurs: social entrepreneurs, corporate entrepreneurs, intrapreneurs, serial entrepreneurs,... (I'm starting to feel like "Forrest Gump's" Bubba describing types of shrimp.)  Entrepreneurship happens in lots of different contexts and this point is relevant for each....

Entrepreneurship does not equal individualism.

True entrepreneurs use the resources that they control to make something happen.  (This generally means launching a new business or product.  For entrepreneurs that work within another business, even a university, this might mean moving a project along that furthers the organization's mission.)  Resources include money, for sure, but also labor, machinery, equipment, and other people's expertise.  We in Extension have contributed to many entrepreneurial ventures in agriculture and food, for example, by providing expertise on production, policies, business management, etc.  Entrepreneurs often visit Small Business Development Centers or other counselors for input.  They often have a team around them to help them see the things that would be overlooked if they worked on their own.

Even within an organization, including one like Penn State in which I work, we have a lot of leeway to be entrepreneurial.  The only difference is that we have to keep in mind that we do things under the Penn State brand and must operate within its guidelines.  Within that zone, though, we are free to behave as entrepreneurs.  I have zero doubt, though, that I'll not be as effective on my own as I would be as part of a team that is all rowing in the same direction.  At the end of the day, that's the entrepreneur's dilemma (or opportunity); how does one get all of those people rowing in the same direction?  It would be a lot easier if one could do it alone, but the entrepreneur's effectiveness drops precipitously if he or she tries.  Almost all university courses in entrepreneurship recognize and promote this fact by placing students into teams for class projects.

Truth be told, entrepreneurship works best when the individual puts "I" and "me" aside and turns it into "we" and "us."  The best entrepreneurs (remember, this refers to all types) connect with others to make their ideas better and to make their dreams a reality.  This mythical superhero just doesn't exist!  Myth... busted!

New USDA BioPreferred Label Launched

On March 31, 2011, the USDA launched the BioPreferred label program. According to the 2002 Farm Bill, “biobased products are commercial or industrial products (other than food or feed) that are composed in whole, or in significant part, of biological products, renewable agricultural materials (including plant, animal, and marine materials), or forestry materials…and biobased intermediate ingredients or feedstocks.”




This broad definition may bring about images of “eco-friendly” products, but is that really the case? A product only needs to contain 25% biobased content to qualify for this label. The label also doesn’t distinguish if the product was created with sustainable agricultural practices.


As an ag entrepreneur that produces these kinds of products, do you think the BioPreferred label helps or hurts your business? Do you think it helps or hurts your industry? As a consumer, do you think this label brings about clarity or confusion about these types of products? Will you be looking to purchase products with this label?

Leading the Way

Sometimes being an entrepreneur means having to tackle the challenges that come with being the first to do something a particular way.  As in the story shared below, this meant taking the time and effort to work with state regulators to demonstrate that a particular processing method, while not in large-scale use, is safe and effective.  Not only did this farmer's efforts help him achieve his goals, but it allowed others to follow his path.

GA dairy farmer helps pave the way for other small-scale operators

Surveys of mid-Atlantic consumers conducted by Penn State researchers part 1

Over the past 2 years, researchers at Penn State University have surveyed mid-Atlantic consumers to determine consumer attitudes and behaviors towards food purchases. Baltimore, New York City, Philadelphia, Richmond, and Washington, D.C. were chosen based on the diverse demographics of consumers who reside in each area.

Survey questions were developed to investigate factors influencing consumer purchasing decisions regarding fresh produce and value-added, processed products. Researchers were interested in the role and impact of increasing food prices, rising energy costs, and other economic factors. Survey respondents were also asked about food safety, quality, availability, variety, and affordability. The surveys were conducted quarterly to investigate changes over time to better forecast consumer responses to situations, such as further increases in energy costs and reoccurring food safety issues.

For the next few weeks, I will be blogging about these survey results and how they can help entrepreneurs make decisions about their businesses. The first set of results I will discuss involves questions regarding on what types of food products
survey respondents purchased, where they purchased these products, and what variables may have affected their purchasing behaviors. One particular question asked participants to indicate what types of produce/produce-based food items they purchased for their household during an average week.

90.6% of survey participants chose fresh fruits and vegetables as items bought for their household during an average week. The next most popular item was potato/corn/vegetable chips, selected by 71.2% of participants. Other popular food items included frozen fruits and vegetables, selected by 64.3%, jams/jellies/marmalades (59%), fruit/vegetable juice or nectar (57.4%), vegetable-based soups (56.6%), and canned/bottled fruits and vegetables (54%).

To read more about the survey, please visit www.midatlanticspecialtycrops.com and click the "Newsroom" tab.

As an ag entrepreneur, do you sell any of the above products? If you sell a variety of these product types, are your sales similar to this data (meaning is fresh produce a better seller than fruit/vegetable juices or canned fruit/vegetables)? If you are thinking about becoming an ag entrepreneur or you are an ag entrepreneur looking to expand your product line, does this data influence your decisions on what you will sell?

Using Facebook as an online storefront

Do you use Facebook in your business? If so, you are probably seeing the benefits of this quick and easy way of communicating with your customers. Some businesses are taking their Facebook presence to another level. Retailers are now using Facebook as an online storefront. Customers can make purchases without ever leaving Facebook.

According to the article "Retailers working to turn Facebook into marketplace before holiday shopping season" by Maria Halkias, this phenomenon is referred to as "social retailing". How does it work? "Best Buy is an example of a large retailer with a "shop" tab on its Facebook page. Its entire inventory is on Facebook, and users are encouraged to share items they're considering with their friends and read what others think about a product."


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As an ag entrepreneur, how has your Facebook presence helped you reach customers? Would you consider selling your products on Facebook? Why or why not?

Tailgating- a new merchandising opportunity?

On the eve of a Penn State football game, I have been thinking about the monetary impact tailgating has on State College, PA (and other towns with a large football following). I believe that many retailers are missing out on profits by not merchandising for tailgating season.

A tailgating study conducted by the Weber grilling company reports that over the past 12 months, 1 in 8 Americans has tailgated 3.4 times. Tailgaters also reported their main tailgating purchases. "The ‘basics’ tailgaters rank their top four foods: hamburgers (70%), brats (45%), chicken (42%) and hot dogs (42%) to the tune of $106 per tailgate or $441 in groceries per year for this activity. Another group, the ‘gourmet’ tailgaters, prefer chicken (43%), ribs (39%), brats (37%) and steak (33%) to the tune of $165 per event or $1,001 per year."

Meat is not the only merchandise tailgaters need. Other items may include veggies for grilling, wine, beer, snacks, condiments, ice, sauces, desserts, drinks, serveware, etc. Why not set up a tailgate merchandise area in your retail space? Tailgaters will appreciate the convenience of a "one-stop-shop" and you may see your sales increase because of this. Use your creativity to design a space centered around your local team and advertise, advertise, advertise!

Tailgating article

As an ag entrepreneur, have you done any merchandising for tailgating? Have you seen any increase in sales for certain products during football season?

Honing your negotiating skills

As an entrepreneur, you will need to negotiate with suppliers and clients. Many people hate negotiating because they feel it leads to tense situations and unhappiness (for possibly both parties). In an article on The Customer Collective (a forum for sales and marketing executives), author and CEO of Top Sales Associates, Johnathan Farrington, gives tips on making negotiating as painless as possible.

1. Manage your emotional state- Build rapport by matching the other person’s style, pace, and approach until you have achieved a ‘connection’. Personalize the negotiation by using “I” rather than your organization’s name. This demonstrates your belief in your proposal and highlights your credibility.

2. Look for quick mutual wins to build the belief “we can agree”- Seek to address the easy/quickest areas of agreement first to reinforce the process of agreement is simple and straightforward. If you discover an area where agreement may not be reached quickly, then agree to leave it until later.

3. Use active listening skills and ask questions to give you a greater understanding of the other person’s viewpoint- The goal of active listening is for you to hear and understand other people – their words, thoughts, and feelings, and to let them know you’ve heard and understood them. Acknowledge their motivations, feelings, and point of view, even when you don’t agree with what they are saying. Your goal is to understand the message, not judge the validity of what they say.

4. Build trust by negotiating fairly- Act with integrity and hold a healthy respect for the intentions of the individual you are negotiating with. There is always a reason why a point of negotiation is important to the buyer and if we can appreciate more about their underlying reasons, this knowledge can be used and acted upon.

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As an ag entrepreneur, how often do you negotiate? How do you feel about negotiating? Do you find these tips to be helpful? Do you have any other tips to make negotiating less stressful?

What does "local" mean?

No legal authority (including the USDA) has declared a definition for "local", so how do you define it? Maybe the best way is to use the definition most popularly used by consumers. In a recent study conducted by the Mid-Atlantic Specialty Crop Research Initiative at Penn State, 1,710 participants from the metropolitan areas of New York City, Philadelphia, Baltimore, Washington, D.C., and Richmond were surveyed on this very topic.

The participants were surveyed on what types of food products they purchased, where they purchased these products, and what factors may have affected their purchasing behaviors. They were asked to indicate their definitions of “locally grown,” in terms of miles from their residence and in relative terms of distance from their residence. The majority of participants (78%) defined “locally grown” as 100 miles or less from their residence, as well as 84% defined “locally grown” as within their state of residence.



Are these findings enough to develop a definition of "local" or does the government need to get involved? Vermont and Maryland have developed or are in the process of developing their own definitions. In 2008, the state of Vermont developed a definition for "local"; foods could be considered local if they were grown within 30 miles of the point-of-purchase or within the state of Vermont. The state of Maryland is in the process of creating an industry advisory group of growers, retailers, processors and consumers to come up with guidelines to define "local".

As an ag entrepreneur, how do you define "local"? Are you marketing any of your products as "local"? Does the government (national or state) need to create a definition? Do you think different state definitions will help or hurt marketing?

Wine consumption on the rise in the U.S.

In the midst of our country's economic recession, consumers have cut back on spending, but wine does not seem to be one of those cut backs. "The 2010 Wine Handbook" (which delivers analysis on wine consumption, consumer drinking preferences, and economic/demographic data) reports that overall wine consumption in the U.S. rose 0.8% to 297.0 million 9-liter cases.

The increase is obviously not a large amount, but in an economy where many industries are just trying to stay afloat, ANY increase is eye-catching. 2009 is not the only year that wine sales have increased in the U.S.; last year was the 16th consecutive year of growing wine sales. "The 2010 Wine Handbook" also reports that domestic wines are outselling imported wines. Domestic wine sales are up 1.8% to 222.7 million cases while imports dropped 2.2% to 74.3 million cases.

Eric Schmidt, Manager of Information Services for the Beverage Information Group (the publishers of "The 2010 Wine Handbook") predicts, "As the country recovers from the recessionary environment, the wine industry continues to look positive. We expect to see wine consumption increase to 310.7 million cases by 2014."




As a winery owner, how has the recession affected your business? Have your sales increased as "The 2010 Wine Handbook" reports? As an ag entrepreneur, has this article sparked your interest in adding wine to your product offerings (for example, a cheesemaker may partner with a winery to sell wine and cheese pairings)?