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Starting an orchard begins with a solid business plan
 
By CINDY LADAGE
Illinois Correspondent

SPRINGFIELD, Ill. — Deborah Cavanaugh-Grant, an extension educator for Local Food Systems and Small Farms, opened a session last week on the “Basics of Orchard Establishment/ Tree Fruit Production,” advising beginning orchard and fruit tree entrepreneurs tips on how to get started.

The information Cavanaugh-Grant provided at this pre-conference workshop for the Illinois Specialist Crops, Agritourism and Organic Conference could be plugged in for almost any new business. “The first step is developing a business and marketing plan,” she explained.

While many business owners have a plan, “they don’t put it in writing in a formal business plan. The business plan is like a road map for your business, and planning is critical for success.”
Cavanaugh-Grant said a business plan helps the owner plan ahead: “This process will allow you to sell yourself and your business, attract key people – whether employees or members of your management team – and it will help verify financial feasibility.”
A business plan with basic terms is a must to obtain financing, as well. “Some lenders are not familiar with other initiatives (besides corn and soybeans) and they need convincing,” she said. “No bank will loan you money without a business plan.”

Such a plan also helps keep business on track. Greg Reynolds of Riverbend Farm said, “Even though a seat-of-the-pants approach to farming might work ... you can waste years doing the wrong thing when you could have been doing the right thing.”

Only the owner can determine what is right when developing the business plan; to do this they need to evaluate their situation and set goals that meet the needs of their business, while remembering to incorporate those things that are important to them and ensure that all partners are on board. Those “I can’t do withouts” must be included in a plan for a business to thrive.

“What do you value? You must integrate that. What is your vision? Where do you want to go?” Cavanaugh-Grant challenged her audience (which was overflowing into the hall outside the conference room door).

After adding in a market analysis and strategy and gathering the financial information, she said the owner must determine what skills they bring to the business. “Ask, what do I need, to be up to speed?”

Record-keeping is really important, as well, along with ensuring a producer has adequate insurance coverage. “What insurance coverage will be needed? This is really important to consider especially if you are into agritourism or at a farm market,” she pointed out.

 “My take-home message is, No one else can develop the business plan for you,” Cavanaugh-Grant emphasized.

The development of a marketing plan goes hand-in-hand with this. Her presentation covered only a 30-minute period, but she said the information for this session comes from a year-long course. She said there are many resources available through extension for small business owners.

Like the business plan, the marketing plan begins with a series of questions: “Ask questions about your product(s),” she said. “Who is likely to buy my product/service? Where does that customer live? Is there an income level associated with the person likely to buy my product? Is there an age pattern associated with the person likely to buy my product? Is there an ethnic or religious affiliation with the person likely to buy my product?”

Cavanaugh-Grant directed audience members to the Illinois MarketMaker online at www.marketmaker.uiuc.edu which is a national partnership of land grant institutions and state departments of agriculture dedicated to the development of a comprehensive interactive database of food industry marketing and business data. This Web-based tool offers a platform that seeks to foster business relationships between producers and consumers of food industry products and services.

One way she suggests doing marketing research is to give out samples and ask for constructive feedback.

She said to be sure to follow local health regulations. Choosing a unique niche where there is little or no competition is another way to be successful in the fruit market.

Planning ahead and knowing where to turn to for information is the road to success. Questions for Cavanaugh-Grant can be directed to 217-792-4817 or cvnghgrn@illinois.edu
1/16/2013