Farm Business Transition

By John Berry, Penn State Extension Educator, Lehigh County

Many of the farmers I work for have a tough time with the process of getting their business into the hands of the next owner/manager. The reasons for this are many; no time, unwilling to think about mortality, not aware of what should happen, and uncertainty about losing control are some of the primary reasons often heard. Because of the intimate relationship between most farms and the families that work and live there; the unknowns around a broad family conversation on business transition can be a bit scary.

 

When is the best time to start the discussion?

 

If succession planning has been on your mind remember there are just six weeks left in 2016 and some holiday celebrations coming up. This could be a great time for a discussion with family regarding farm transition and succession planning. It's great that you're thinking about succession planning, but remember, conversations about farm succession are conducted from a business standpoint. Do you really want to turn your Thanksgiving table into a business conference table?  Do you want to take your time around the Christmas tree and turn it into a water cooler discussion on strategic planning?

 

While it may be tempting to start these discussions while family is home and together, make sure you're keeping family time for family and setting aside a special time for holding a family business meeting. If it needs to be connected to a holiday to have family present, think about sending out a formal invitation and agenda to the meeting ahead of the holiday, with a set time and date for the meeting later in the holiday weekend.

 

When should I start planning?

 

You may have heard the old Chinese proverb. “The best time to plant a tree was 20 years ago, the second bet time is now.” That same principal can be applied to succession planning.  It really is NEVER too early to start planning for the future, but it can become too late to start!  Almost everyone knows a family torn apart by disagreements following the passing of a loved one. This often happens because they never found the time to put their plans down on paper.

 

You can never tell what tomorrow will bring. Starting your succession plan early in your agriculture career can help you save money and can make sure your business continues as you see fit in the case of retirement, death or disability.  If you create a plan early in your career, it does not mean you are done.  A good succession plan is reviewed and improved often to make sure it still fits with the wants and needs of everyone involved in the operation.

 

Emerging Food Trends--Peruvian Items Are On The Rise

If you're involved in the ethnic foods industry (whether that's growing, selling, education, or just plain consuming), I suggest joining the Ethnic Greens and Herbs Workshop Facebook group.  This group was formed to disseminate helpful research information and news regarding the ethnic produce industry to growers, wholesalers, retailers, Extension personnel, researchers, and association representatives.  


Fellow blogger Kathy Kelley recently posted a link to the article "From Aji peppers, amaranth and pichuberries to purple corn and quinoa, Peruvian cuisine is hot, says Packaged Facts".  In the article, results from the 'What's Hot in 2014' survey of American Culinary Federation chefs shows that 57% of respondents "voted Peruvian cuisine the top trend in the ethnic cuisines and flavors category".  The article also reports that "the UN declared 2013 the 'International Year of Quinoa' (a Peruvian staple) and the Culinary Institute of America has declared 2014 to be the year of Peruvian cuisine".

So what kind of foods are popular with Peruvians?

• Purple corn- most commonly used to make chicha morada (a drink) and mazamorra (a pudding). 

  

  Purple corn being sold at a farm market. Photo taken by Kathy Kelley on a 2013 trip to South America.

• Aji peppers- a species of chili pepper.  Aji Amarillo, Aji Panca, Aji Rocoto, Aji Mirasol, and Aji Limo are the most commonly used varieties of Aji peppers in Peruvian cooking.

  

  Aji panca pepper.  Photo from TheHotPepper.com.

• Amaranth- a grain with a high nutrition value; the seeds are consumed whole toasted or milled into flour. 

  

  Amaranth harvest.  Photo from NationalGeographic.com.

• Pichuberry- a polyphenol-rich fruit.

  

  Pichuberry. Photo from LAMag.com.

• Pisco- a grape brandy produced in Peru and Chile.

  

  Two different brands of Pisco.  Photo from wikipedia.com.

Why is this trend important to you, the food producer?  Hispanic and Latino populations in the United States are seeing dramatic increases.  According to the 2010 Census, 16% of the US population were of Hispanic or Latino origin.  (The US Census Bureau defines "Hispanic or Latino" as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.)  The Census also shows that between 2000 and 2010, the Hispanic population grew by 43%, which was four times the growth in the total population.  

With this tremendous growth, Hispanic and Latino customers are not to be ignored.  Are you looking to expand your product line and/or market to a new target audience?  This might be your answer, but as always, do your research to find out if you should start selling any new product or marketing to a new audience.  

Educating Consumers and Employees on New Meat Names

The National Pork Board and Beef Checkoff Program recently announced new names for some of their meat products in an effort to help customers find and prepare beef and pork.  As you can see by the graphics below, some of the names have changed significantly (for example, pork loin rib chop to ribeye chop and beef chuck eye edge pot roast, boneless to Denver roast).  

Figure 1.  Pork loin name changes. 

Figure 2.  Beef chuck name changes.

Figure 3.  Beef sirloin name changes.

All graphics from USAtoday.com

The new names are meant to help bring clarity to the many different cuts available, but how will this affect you, the business owner?  Both employees and consumers will need to be educated on the new names.  Simply labeling meat with the new name will not be sufficient in identifying these changes.  Graphics (like those above) that show what part of the animal each piece of meat comes from should help as well as listing the old name versus the new.  Employees will also need to be trained in distinguishing the new names and then also passing the knowledge onto the customer.  As an ag business owner, you will probably want your employees to spend more time with customers to identify what kind of meal they want to prepare and what cut would work best.  Read more about the new names at USAtoday.com.

Obviously, this is going to require more work for you, but it may also open up an opportunity to connect with customers.  Talking directly to customers as they enter the meat department is an obvious opportunity, but you can also hold classes, provide samples, and recipes.  

As an ag business owner, how do you feel about these new names?  Do you think customers will embrace the change?  Do you envision an increase or decrease in sales?  How are you planning to educate customers?

As a customer, did you find the old names to be confusing?  Will these new names help you to better chose the most appropriate meat for your recipes?  Do you think you will buy more or less beef and pork because of this?

Real-Time Monitoring of Your Farm Equipment

Farmers rely on their equipment everyday to run their farms.  It's imperative to have good data on how each piece of equipment is used and how much it costs to operate in order to optimize machinery to it's fullest potential (read more about machinery optimization in my past post).  

To collect data in real-time, AgCo has developed AgCommand, a device that collects data about a specific piece of equipment and delivers the information via a cellular modem and GPS in the device to the AgCommand website.  The website gives reports that track engine hours, fuel consumption, operator efficiency, equipment health info, and field-specific machine information. Reports can be used to monitor and control operating costs and for planning, billing, and maintenance scheduling.  This kind of information would be very helpful in making decisions on how to best use your machinery.

Figure 1.  Example map of a farmer's land and an AgCommand report on the working time of a piece of equipment.

Another great feature of the AgCommand system is geofencing.  As Farm Industry News describes it, geofencing "allows the user to build a virtual fence around equipment using GPS coordinates. So when equipment leaves the fenced-in area, the telematics system sends a text message or e-mail alert. This can help avert theft, or simply let you know that your planter, sprayer, or combine has finished work in a field and is moving on to the next. Similarly, telematics curfews can alert you when a machine is started after working hours."  

As a farm business owner, have you ever heard of or used the AgCommand system or something similar?  Are you willing to try this new technology?  Of all of the reports and information generated by the system, what is of greatest importance to you?  Can you think of any other data not mentioned here that you would like a system like this to collect?  Are you ready to embrace this new technology?

US Ag Exports at an All Time High

Last week, the USDA released some wonderful news about agricultural exports.  From fiscal years 2009 to 2012, $478 billion in US ag products were exported, the highest 4 years in history.  Even better, 2013 is expected to break this record.

In a blog post by the USDA, these record-breaking sales were highlighted with a few examples.  2012 was the first year ever for China to reach an agreement with the US to accept shipments of US pears.  In this short time since the agreement was reached, China is expected to become one of the top five importers of US pears in just 2 seasons.  

Ship carrying containers full of US exports overseas.

Also, the Foreign Agricultural Service (FAS), Agricultural Marketing Service (AMS), Food Safety and Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the US Food and Drug Administration (FDA) are collaborating on a certification program for exporting processed eggs and egg products like omelets, frozen egg patties, crepes, hard-boiled eggs, and mayonnaise.  These new market opportunities could reach an estimated $500 million in sales for producers.  

If you are an ag entrepreneur and are interested in exploring export opportunities, it's imperative that you DO YOUR RESEARCH as you would with trying any new opportunity for your business.  Some important questions to think about:

1. Is there market demand for my product internationally?  Read about conducting market research in The Guide to Farming.
2. Would I need to alter my product at all before selling it?  For example, think about local tastes, package/portion size, and religious cultural beliefs  (like Halal or Kosher certification) that might deter future customers.
3. What laws do I need to follow in order to get my product exported?  Check with your state for more info about this.  Here is info for Pennsylvania producers.

As an ag business owner, do you currently export any of your products?  If so, to what countries?  Do you have any important observations about exporting?  If you are not currently exporting, have you ever thought about it?  Why or why not?

From Battlefield to Farmland

Once military veterans retire from serving our country, they may find it hard to find a job that fits their skill set.  An organization called The Farmer Veteran Coalition (FVC) is working to help join unemployed veterans with farming, an industry that is in desperate need of new people entering the field (pardon the pun!).  As those in the farming industry know, starting to farm is not easy.  The costs of land, time, equipment, and labor as well as the shortage of land are all barriers to entering the industry.

This matchup of veteran and farmer seems to be a good fit thinks Tia Christopher, the chief of staff of FVC.  She says, "Even in these rough economic times, the agriculture field offers many viable career options. Job opportunities include everything from shipping and managing to vegetable farms and vineyards. Along with the economic opportunities, working with the land and animals has proven to help veterans heal from the trauma of war. I like to think that after living through some pretty traumatic experiences it's cathartic to watch things grow."

FVC is helping veterans to start farming in rural as well as urban farm settings.  Currently, the organization has a network of 600+ veterans in 47 states.  To help veterans establish a farm, the FVC has a grant program that has given over $200,000.

Christopher also says, “The future of FVC is very exciting. This month we launched our used farm equipment exchange and donation program (FEED), which will match unused farm equipment and implements with deserving Farmer Veterans in Iowa and California (our pilot states). We are also working on FVC chapters across the country. Lastly – two of our main focuses going forward are working with women veterans in agriculture and in financial literacy for beginning Farmer Veterans."

To read more about the FVC program, please see the article "The Farmer Veteran Coalition".  

As a farmer, do you think this program will help bring new people to the farming industry?  What kind of information is critical for the FVC to teach veterans before starting a farm?  Would you be interested in being a mentor for this program?

Optimizing Your Farm Machinery Costs

Do you know how much it costs to operate each piece of farm equipment you own?  It's important to know the per acre operating cost of your equipment so you can accurately determine your cost of production.  For example, to grow an acre of corn, you would need to determine the costs associated with seed, fertilizer, water, labor, and machinery and then divide by the number of acres you have.  With this value, you can thus set the sale price of your crops to ensure a profit.  The video below describes why knowing your machinery costs is so important.

Obviously, you want to use your equipment as efficiently as possible.  Using equipment that is old and outdated can be just as cost-prohibitive as using expensive, over-sized equipment that is unnecessary for your acreage.  A tool like a machinery cost calculator (like this Iowa State University "Estimating Farm Machinery Costs" calculator found under the Machinery heading) can help determine your cost per acre.  Calculators like these can help you determine fixed and variable costs, depreciation, and cost benchmarks.

A machinery cost calculator is also helpful in the decision making process of buying equipment.  Is buying new, used, or leasing your best option?  You might also determine that a new machine just isn't in your budget, but it is a necessary tool in your farm operation.  You can use your machinery cost calculator to find out if other options like sharing, renting, or custom work are feasible.


As a farm owner, have you calculated your machinery costs lately?  When buying new equipment, have you used this calculation?  Have you had to re-evaluate how you use certain machines because the cost per acre was higher than you expected?

The Costs of Accepting Credit Cards

Credit cards are a payment staple for many consumers.  Although there are fees associated with processing credit cards, you should consider potential sales losses by not accepting them.  As I always stress, do your research to help you decide if/how you should process credit.  Below are some questions to ask to get you started.

In the U.S. alone, consumers collectively had over 609 million credit cards (Source: "The Survey of Consumer Payment Choice," Federal Reserve Bank of Boston, January 2010).  That's a lot of cards!  One of the main reasons small businesses don't accept credit cards are the fees associated with processing.  You will need to include this fee in your pricing strategy to determine if you will need to raise your prices. 

Questions you should ask:

1.  What fees are charged per transaction?  Do the fees vary?
Most credit card processors charge a per transaction fee plus a percentage of the total purchase price (for example, $0.30 per transaction plus 1.9% of the total purchase price).  Fees can vary depending on whether the customer is in the store and you swipe the card versus typing in a card number or paying online.  Also, the type of credit card may result in a higher fee (for example, an airline miles card usually costs more to process).  

Conversely, you also have the option to use a credit card processor that offers a flat rate like Square, Paypal, or Google Checkout.   

2.  Are there any other fees associated with processing credit cards?
Find out if there are other costs like monthly fees, regulatory fees, statement fees, etc. All potential fees should be spelled out clearly before signing a contract with a processor.

3.  How much will a terminal(s) cost?
A terminal is the actual machine in which you swipe the credit card.  Opt for purchasing rather than renting a terminal because rental fees are often exorbitant.  For example, purchasing a terminal may cost $200-$350 while renting could cost as much as $139 per month.

4.  Is the credit card processing system compatible with your online store?
You will want your processor's software to be able to connect with your online store so that both your brick and mortar sales and your online sales can be processed together.

Other tips:

-If you already have an established processor, give them a call and try to renegotiate your fees.  Processors sometimes charge higher fees for new businesses because of higher risks.  Being a loyal customer may save you some money! 
-Be wary of a processor that wants to charge you a setup fee.  You shouldn't pay a fee for the "privilege" of using their system.

To read more about credit card processing, check out these two great articles on Entrepreneuer.com-- "5 Questions You Must Ask Your Credit Card Processor" and "How to Cut Transaction Costs on Customer Purchases".

As an ag business owner, do you already accept credit cards?  Do you think that the convenience is outweighed by the fees?

If you don't accept credit cards, why not?  How frequently do you lose customers because you don't accept credit?

What's New in Ag Business Education? (part 2)

In last week's post, I talked about 2 of the educational opportunities available for future or current farm and food business owners.  Below you will find 2 more classes we offer in our class catalog. 

Estimating & Bidding for Landscape Installation  
Allentown, PA


Preliminary Day - January 15, 2013 (9:00 a.m. - 3:30 p.m.)
This session is for newer businesses or owner-operators who have not established a confident bidding procedure. Designed to be a preliminary day to cover the very basics including terminology and the different types of estimates. The pitfalls of some common bidding practices will be discussed. Explore production rates in depth, including why you need to know what they are for your business and how to find them. Discuss profit and reasonable returns. There will be opportunity to ask questions and discuss bidding with other contractors.

 Nuts and Bolts - January 16 & 17, 2013 (9:00 a.m. - 3:30 p.m.)
This is a two day intensive workshop to determine the overhead of a business and create a bid. This workshop is for businesses who want to be sure they are including all overhead costs in their calculations and fine-tune their bidding procedure. The first day we will work through an Excel spreadsheet to figure overhead costs. Each participant will receive an electronic copy of this spreadsheet so they can adapt it and use it for their own business. The second day we will create a bid for a small hardscape and plant installation job in detail, using the overhead costs determined in the first day of the class.

For more info or to register, please visit the registration page.

Annie’s Project  
January 15, 2013 from 6:00 PM to 9:00 PM in Gettysburg, PA

This national Cooperative Extension program is an 8 session class that empowers women in farming to manage information systems used in critical decision making, and to build local net-works of like-minded friends.  The sessions focus on all five areas of Risk Management – Production, Market, Financial, Legal, and Human Resources, and combine a short educational presentation by a Penn State Extension educator, class discussion, individual and small group activities, and guest speaker(s) who share the day-to-day application of proven risk management techniques and strategies. Several sessions will be held in a computer lab for participants to gain hands-on skills with software applicable to farm information systems.

By the final session, participants will have begun writing business risk management plans for their farms, and applying action steps that have been discussed in class, to daily operations.

For more info or to register, please visit the registration page. 



More educational opportunities to come in future blog posts!  As always, please check the Ag Entrepreneurship Calendar for all event listings.

What's New in Ag Business Education? (part 1)

Did you know that Penn State Extension regularly holds classes on a multitude of different business topics?  Classes range from beginner (those just starting to think about creating an ag business) to advanced (those who are veteran business owners thinking about succession planning).  Below is a brief description of just a few of the courses Penn State Extension will be offering in early 2013.

Social Media Boot Camp for Ag Businesses 

During this 2-day boot camp, we'll discuss the basics of several tools such as Twitter and Facebook and get you thinking about their strategic use.

The first day of the workshop will be spent in a computer lab where you will begin developing your Facebook, Twitter, foursquare, and Yelp pages.

On the second day you will develop social media goals and objectives, a strategy for achieving those, and be introduced to tools for measuring and analyzing your social media impact.  You’ll also hear from a farmer on their use of social media tools.

For more info, please visit the program page.

Your Future in Focus 
Sessions will be held on Mondays between January 14 and March 11, from 6:30 to 9:30 p.m. in York, PA

This 8 session class empowers farming and food entrepreneurs to build a business plan for their venture – whether a start-up or a long-established business.

As a member of the Your Future in Focus class, you will consider appropriate business structure, actively pursue goal-setting, build a strategy for marketing your products/services, and gain skill in the development/analysis of financial documents – all steps that lead toward writing a complete business plan. As the weeks progress, experienced instructors will guide you through the process of business and risk management planning, providing feedback throughout the course. Most important, you will receive training and support needed to produce a draft written business plan – the key business risk management tool that can be used both for daily management decision making, and as well as serve as a proposal for start-up or expansion funding.


For more info and to register, please visit the registration page. 


I'll be talking more about our other class offerings next week.  You can also view entire the Penn State Extension Ag Entrepreneurship Team's calendar now on our website. 

If you see a class you want to attend but not in a location near you, don't fret!  Let us know on our Facebook page and we will try to schedule a class near you.

Hot Sauce is Hot in 2013! How Demographics Help Mold Food Trends

Fellow blogger Sarah Cornelisse recently tweeted a link to an Entrepreneur.com article on the biggest trends in business in 2013.  One of the trends included the popularity of hot sauces.  Hot sauce production is one of the 10 fastest-growing industries in the US reports IBISWorld, an industry analysis firm.

Why is the hot sauce industry expanding so much?  Both Dave DeWitt (producer of the National Fiery Foods & Barbeque Show) and IBISWorld point to the increasing popularity of international foods.  In the Entrepreneur.com article, they illustrate the increased sales of hot sauces.  "Research firm Mintel reports that sales of sauces and marinades--including hot sauces--jumped 20 percent between 2005 and 2010 and are expected to increase another 19 percent by 2015."

An article on PreparedFoods.com also discusses the popularity of spicy flavors.  In 2011,  the “Packaged Facts Food Shopper Insights Survey” showed that 53% of U.S. grocery shoppers “somewhat” or “strongly” agree they “like hot and spicy foods" with a percentage rise to 58% among Gen Y (born 1977-1994)  adults.  The article also says that, "The same survey revealed that a majority of adult shoppers seeking global foods purchase Mexican and Chinese/Japanese flavored items. However, a larger percentage of Gen Y adults than adult shoppers in general seek out Indian/South Central Asian and Middle Eastern flavors. This indicates a broad interest in global flavors of all kinds."

By knowing your target audience, you can develop the best marketing plan for your product.  For example, the  “Packaged Facts Food Shopper Insights Survey” showed  that 58 % of Gen Y respondents "like hot and spicy foods".  By looking at demographic information on PAMarketMaker.com, you could find where the highest concentration of Gen Y adults are in Pennsylvania (see Figure 1).  Thus, you can target the release of your product in areas where your audience is most highly concentrated.  

Figure 1.  Population concentration of 19 to 24 year olds in Pennsylvania.

Check out the Resources tab on PAMarketMaker.com for more information on using demographics in developing your marketing plan as well as relevant industry information.

Using PA MarketMaker to Market Your Business (part 4)

Continuing on with this series on marketing with PA MarketMaker, another great feature of MarketMaker is the Buy & Sell Forum.  Do you have extra corn that needs to be sold by the end of the week?  Do you own a restaurant and need steak for this week’s menu?  The Buy & Sell Forum allows you to create ads for products or services you are looking to buy or sell.

Creating a listing in the Buy & Sell Forum

1. Once you receive your username and password, click on the “Login” button located in the upper right corner of the Pennsylvania MarketMaker homepage (PAMarketMaker.com).

2. Click on the “My Buy & Sell Ads” from the top menu bar.

3. On the next page, click “New Ad.”

4. From the dropdown menu, select from “Looking to Buy,” “Looking to Sell,” “Service and Equipment,” “Transportation,” or “Other.”

5. The Manage Ad page allows you to create an ad title, a complete description of what you are advertising, and length of time the ad should be posted. After you complete this, click “Continue.”

6. On the next page, you are able to upload up to five images about your ad. If you do not want to upload an image, simply click “Continue.”

7. The final page allows you to review your ad. If you find any mistakes, click the “Edit” button and make your changes. If you are satisfied, click “Continue.”

8. If you want to edit your ad, simply return to the Members Area and click on the “My Buy & Sell Ads” link.

Congratulations! You have just created a listing in the Buy & Sell Forum. The Pennsylvania MarketMaker website is full of other helpful information and tools.  In my next post, I'll discuss how to use MarketMaker for market research.

Using PA MarketMaker to Market Your Business (part 3)

Continuing on in the MarketMaker series, today I'm going to talk about using PA MarketMaker to search for a business or product. This is an important feature for both consumers and food business owners. For example, a consumer can find a pumpkin patch in their area and a cattle rancher could find a processor for his beef.

1. To search for a product or business, click on a business type from the dropdown box under the Farmers, Fisheries, and Businesses section of the Pennsylvania MarketMaker homepage, located in the center of the page. Then, choose a search distance of “PA” or a mileage range from a specific zip code. Click “Search” to continue.

2. On the Results page, you will see businesses matching your criteria on the right and can view their location on the map in the center of the page. If you are looking for more advanced search results, you can narrow your search by clicking on the available options in the “Select By,” “Select a Category,”and “Select a Subcategory” tabs.

3. To view the profiles of the businesses in your search, either click on the business name in the Results section or the orange and blue dots on the map.

4. To start a new business search, simply click on the “Begin New Business Search” button located in the upper middle of the page.

That's it! Now you can perform a search for a business or product anytime you need. In the my next post, I'll write about how to use the Buy & Sell Forum.

Using PA MarketMaker to Market Your Business (part 2)

In my last post, I wrote an overview on the ways you can use PA MarketMaker to market your food business. If you are interested in signing up, below is a easy "how to" guide for setting up your profile.

Creating a profile on Pennsylvania MarketMaker

1. Go to PAMarketMaker.com and click on the “Register” button in the upper right of the page.

2. Select a business type. If you have more than one type of business (for example, you have a corn maze and therefore are Agritourism and you also have a café which would be an Eating & Drinking Place) you may add other business types later in the profile creation process.

3. Once you choose a business type, you will be given a page full of different checkboxes that may or may not apply to your business (for example, Agritourism has options like air conditioning, group discounts, picnic areas, wedding parties, etc). Choose all that apply to you. Don't forget to explore the tabs above the checkboxes. They will lead you to more options. Also, if you see a small diamond shape next to a selection (like this ◊), that indicates that there are further choices in that category (for example, once you check the box for "Milk", you have the options to select "Goat", "Cow", or "Sheep").

4. As mentioned in Step 2, you may select the “Save & Add Another Profile” at the bottom of the page if you have multiple business ventures. If not, click “Continue”.

5. On the Upload Image page, you are welcome to upload an image of your business or your product/service, but it is not a necessary step in the registration process. Don’t have a photo yet? You can always update your profile at any time! Click “Continue” to proceed.

6. The next page is for general business information. MarketMaker website users will be able to view this information and use it for contacting you. Don’t forget to add your Twitter and Facebook information if you have it!

7. After clicking “Continue”, you will be directed to the Contact Information page. Please list contact information for the person in charge of handling customer calls. Multiple contacts may be added by selecting the “Save & Add Another Contact” button. To proceed, click “Continue”.

8. Are you affiliated with any Pennsylvania food or farm agencies or associations? The Affiliations page allows you to choose the agencies or associations you are affiliated with and their badge will appear on your profile. Click “Continue” after you have selected all of your affiliations.

9. The last page of registration allows you to preview your profile before submission. If you need to make a change, click on the “Edit” button next to that mistake. If you are satisfied, click “Submit”.

10. A password will be emailed to you. Use it to update your profile at any time.

Congratulations! Your business is now listed on Pennsylvania MarketMaker. In my next post, I'll talk about using MarketMaker to search for a product or business.

Best Practices for Farm Market Vendors

This week, our colleague Heather Mikulas will share some important tips for farm market vendors.  Heather is a Community Based Ag Development Associate at Penn State and works closely with farm markets in Pittsburgh, PA.  Thanks for your post, Heather!


Selling directly to consumers at farm markets is an option to take advantage of above market price points for first quality produce and farm products. Farm markets are a much-beloved part of many communities. People tend to put shopping at a market more on their want-to-do list and less on their to-do list. The interest of being involved in a market at a deeper, more meaningful level draws a large proportion of customers.

Consumer trends speak to the fact that more and more consumers are taking an interest in one or more of the following: where their food comes from, seasonality, food safety, economic development /town revitalization, recreational and social aspects of markets, nutrition, freshness, and so on. The USDA has shown national growth of farm markets to be almost 7% annually between 2002 and 2008. This illustrates the fact that purchasing food from local farmers and value-added producers speaks to consumers at many levels, and is much more than a trend. Farm markets are the perfect place to tap into a group of customers hungry for high quality and locally grown foods.

Another consideration for producers is that Pennsylvania is home to many small businesses that take a raw product and process it into something delicious. Those of us in the biz call this ‘value-added’. These types of products span the food spectrum and include baked goods, cheese and other dairy products, sauces, jellies and jams, and alcoholic beverages like beer, wine, and vodka. Home-based businesses like these account for many of our state’s small businesses. Farm markets can offer a safe place to test the waters as an agricultural entrepreneur starts and grows a business. Being aware of local, state, and federal regulations, as well as carrying proper liability insurance are all essential to ensure protection of your business and assets.

Having an attractive table at the market is a little bit of art and a little bit science. Stand back and look at your table as if you were the customer. Pretend it is a store. Why would someone want to come into your store and spend their money when there are other tables offering similar items? What do you see? Here are some tips:

• Produce should be clean and top quality, as well as arranged attractively.  Use vertical and horizontal space.
• Signs identifying the produce and price should be easy to read from 10-15 feet away.
• Think of flow--that is, can customers enter your store on the left, select items, and pay on the right?  This can maximize the number of potential transactions.
• Have a logo, theme color, mascot, etc.  Bookmark your farm in the customers' minds by giving yourself a standard visual identity across signage, bags, business cards, t-shirts, tablecloths, etc.  One successful grower simply used the color red to make their table stand out.
• If you have samples, make sure you comply with PA Act 106 and local health department regulations.
• Consider creating a newsletter or recipe of the week, sharing news from the farm, and/or ways to prepare seasonal veggies.
• Most of all, have fun and make friends!  YOU are as interesting as your product and how it was produced.  Make the customers feel like they are part of your success story.  A happy customer can be a walking advertisement, and a repeat customer.

Thanks again to Heather for these great farm market tips.  If you have further questions, please contact her at hem12@psu.edu.

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?

Preparing to Do Business With "The Big Guys"

As a small agricultural business owner, your client-base is probably mainly made up of other small businesses and individual consumers. But what if you have your sights set on a larger client? I recently read an article on TheGlobeAndMail.com that discusses this topic. Below are some tips.

1. Believe in your business. Don't be intimidated by a large company. If they want your products, then they need you just as much as you need them.
2. Do a trial run of the ordering and delivery process. In doing so, the client can see how efficiently your business runs and help alleviate any concerns the larger company may have with using you as a supplier.
3. Look professional. Evaluate your website, business cards, information package, etc. Are they older or out-of-date looking? Jazz them up with new, professional looking materials. It's also important to test your communication devices. Do you take orders via phone? You may need an extra phone line to handle the extra call volume.































Look at the above 2 informational folder examples.  The one on the left just has a sticker slapped on a plain envelope (leaves much to be desired).  On the right, this folder looks skillfully designed and conveys a professional message.

4. The devil is in the details. Are your invoices coordinated with your bank account?  Are all of your insurance policies up-to-date? Are you willing to show past financial statements to the client?

As an ag business owner, have you successfully landed a big client? What tips do you have for other ag entrepreneurs? How is working with a big client different from other clients?

When Using Social Media to Advertise Deals, Don't Disappoint

As you have read in many past articles on this blog, reaching out to customers via social media can be a great way to build relationships. One way to build your social network is to offer deals. When posting these deals, though, it is important not to disappoint or else you might see a backlash.

As you are developing your social media strategy, you might decide to add "deal alerts" to the list of items you want to promote via your social media presence. In the Supermarket Guru article "On social media, deals need to be deep", a recent social media deal alert was discussed. A Hy-vee grocery store in Iowa posted on Facebook about a mystery sale with "prices are so astonishing, we can’t print them.”

In all, there were 6 items featured in this sale with some good prices ($0.77 for a dozen eggs) to some not-so-good prices ($2.77 for a tenderloin sandwich that retails for $2.99). Some shoppers expressed their disappointment in the "secret sale" on the Hy-vee Facebook page.

The eggs are likely a loss leader to get people in the door, but what about the sandwich? Why advertise "prices are so astonishing, we can’t print them" on a discount of $0.22? Trying to trick people into thinking something is a great discount when it really isn't may discourage customers from shopping at your business. You don't need to offer ridiculously low prices, but be sure to show value.

The promotion was also only "while supplies last" with a start time of 4pm. When thinking about posting a sale start time, think about when people are available to shop. At 4pm, many people are still at work. If they don't get to the store until 6 or 7pm, they might have missed the sale items and would be disappointed. Marketing a sale for a time when most people can't get there and thus leaving you with disappointed customers is not a good marketing tactic! When thinking about timing a sale, consider what time of day the products may be used. For example, a bakery who is offering a limited hours sale (25% off a dozen bagels) may make most sense during breakfast hours rather than dinnertime.

As you craft your social media (and all advertising) messages, be sure to really think about what audience you want to reach and convey how your sale is of value to them. Developing (and maintaining) a social media strategy is always a good idea!

(Photo from Microsoft Word ClipArt)

As an agricultural business owner, have you advertised sales via social media? What kind of responses have you gotten? Do you have any tips for other ag business owners who may just be getting started with social media?

Don't Become an Entrepreneurial Burnout

Let's face it, being an entrepreneur is HARD. You need drive, dedication, and perseverance-- not only when you first start developing your business, but throughout your business's life. These are daunting tasks and unfortunately lead to some entrepreneurs burning out.

(photo from Microsoft Word Clipart)

It's much easier to prepare yourself now with some tips for avoiding burnout as compared to trying to bounce back after burnout has occurred. Forbes.com recently posted a great article about avoiding burnout. Below are just a few of the Forbes.com tips:

-Entrepreneurship is a marathon, not a sprint. Pace yourself, respect your limits, and keep the whole “race” in mind.
-Good things take time. Establish fair expectations when you do forecasting, project planning, and goal setting.
-Avoid "always working". Set clear boundaries—no one else can do this for you. Off means off. On means on.
-Plan to take some legitimate time off. An escape from your enterprise allows you to get out and gain perspective on the business—even if you don’t explicitly think about work. Taking time off also forces you to put systems in place so the business can continuing running in your absence—a critical component of a successful and sustainable business.

Always remember-- YOU are in charge. It is up to you to set these "burnout free" goals and adhere to them!

As an ag entrepreneur, what do you do to prevent burnout? Do you know of other ag entrepreneurs who have experienced burnout? Did their business ever recover?

How has the pink slime backlash affected the beef industry?

A few weeks ago, I wrote a post about one of agriculture's hottest topics-- pink slime. The stir from consumers over pink slime (also known as lean, finely textured beef or LFTB) created quite a backlash in the retail and foodservice industry to the point that many are racing to eliminate it from their ground beef. Large chains like Safeway, Kroger, and ShopRite are advertising "pink slime-free beef" to attract customers who have showed concern about the filler.

After such a controversy, where does the ground beef industry go from here? The Lempert Report discusses some of the things we may be seeing in the near future. Most certainly, it will mean higher prices because there isn't a filler. Also, we may see a rise in food borne illnesses because LFTB is treated with ammonia gas to kill pathogens. On a positive note, butchers may make a return to the supermarket or neighborhood shop. While a butcher grinding meat on demand for customers is not pathogen-free, it may help customers regain faith in ground beef.


Photo from about.com

As an ag business owner, how has this pink slime backlash affected you? Are your customers asking for pink slime-free beef? How much extra will it cost to produce pink slime-free beef?