On May 15th the Vermont Farm and Forest Viability Program organized a meeting of statewide farm business specialists for a training session on farm marketing plans. Participants included service provider organizations,independent consultants and a guest presentation by Myrna Greenfield (Good Egg Marketing). Here is a summary of the conversation when advisers were asked, “How much time should a business owner spend to develop a marketing plan?”
Adviser A: One successful business spent up to two years completing the market research and developing a plan before they began farming. They researched the population demographics and competition in various regions in order to select a location to farm and a strategy to sell their products.They grew a vegetable business to $250,000 in sales in five years.
Adviser B: It depends how much is at stake. Owners that can afford to lose all their investment might take their vision, launch the business and try to develop a plan on-the-fly. This happens more than we realize and most times the business will fail. If you can’t afford to take that risk you need to determine an overall break even level for the entire farm first. Before you start the business you need to complete the market research and confirm you can generate the needed sales to reach break even. A smart manager can then adapt a new plan once you have passed the break-even target.
Adviser C: That all sounds great but many farms are already in operation and they want to launch new enterprises. I advise them to try things out on a small scale. Run a test year to produce and sell the goods. You’ll need to set aside part of the “farming” day to initiate relationships and learn how to sell the product. Identify how much risk you are willing to take and test out the idea at a scale where you can sustain the losses if it fails but also get enough information to understand if it is feasible to continue.
Adviser D: A farm owner needs to calculate cost of production on the farm in order to set accurate prices and production targets. That information is needed to identify the most appropriate buyers (either direct or wholesale) for your products. Cost-based pricing is essential to developing a feasible marketing plan.