Better Decisions: Does your farm business need an injection of creativity?

Monday, March 2, 2009

Harnessing your creativity and doing the proper planning are essential to developing the value-added ideas your farm business may need

by DORENE COLLINS

This winter, up to 20 workshops on "Growing Your Opportunities – Quest for New Farm Value" will be offered across the province.

A major component of the workshop is to help producers identify a value-added idea which will assist them in building a profitable business. Ideas come from our own creativity and, as Gary Morton of Morton Horticultural Associates, the workshop author, explains, creativity comes from such basic human forces as listed in Figure 1.

Does your farm business require an injection of creativity to move forward? Can you identify from Figure 1 what areas may lead you to put on your "creative" hat? Farmers are very creative people and have adapted to monetary, environmental and market pressures since the pioneers of this province began clearing land approximately 175 years ago.   

How do you as a farmer approach an idea to ensure it will be successful? First and foremost, the idea has to be market-driven. If there is no market for your new product or service, it will remain just an idea. The steps required to take your idea to the marketplace are not easy and planning is the key ingredient for success. It is a lot harder to force a product onto the market place if no planning has taken place. 

Planning to move your product or service idea to the market should start with the homework component. True, nobody is happy about paper work, but it is vital before you invest your money or time. Your homework will include writing out a basic business plan that contains the following components:

Marketing Plan. Who is going to be your target market, what do you know about them and what market research needs to be done to find out more about them? How are you going to let your target market know about your product or service? What type of advertising are you going to engage in?

Financial Plan. Think of all the expenses that will be incurred in developing the new product or service and compare that to potential revenue. How will you price your product or service? What sort of profit projections are you looking to achieve in five years?  Human Resources Plan. Who are you planning to involve in the business – employees, family members, volunteers? How will you recruit, manage and encourage your staff to ensure your product or service is presented and delivered in the best possible way with great people?

Production Plan. What inputs are needed to develop your new product or service idea? Do you have the capital, land and labour to meet your production projections?

As author Gary Morton states in his workshop manual, a business plan empowers you and your business because:
• It forces you to create options and contingencies for when things don't go as you hoped.
• It is a blueprint for monitoring your success, an instrument for measuring how well you are doing.
• Mistakes on paper are much less costly than mistakes made in real life.
• Planning facilitates opportunities for new partnerships, alliances and investments in your business.
• It increases your likelihood of succeeding in a new business venture.

To participate in a "Growing Your Opportunities – Quest for New Farm Value" workshop in your area visit: http://www.omafra.gov.on.ca/english/busdev/conference/gyo/index.html

Other helpful resources include the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) – Business Management Unit website at: http://www.omafra.gov.on.ca/english/busdev/agbusdev.html and our OMAFRA Agricultural Business
Update Newsletter, available at: http://www.omafra.gov.on.ca/english/
busdev/news/index.html#agbus  BF

Dorene Collins is Marketing and Customer Service Program Lead with the Ontario Ministry of Agriculture, Food and Rural Affairs. Email:dorene.collins@ontario.ca