Blue Print Bus Plan Work Book.pdf

7/23/2019 Blue Print Bus Plan Work Book.pdf

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Blue Print Business Plan.

Work Book.



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Introduction.

This booklet shares the case studies of 5 farming families who have added value to the

primary product within the farm gate and/or diversified to increase their business. It also

includes the case study of a farmers market which is an outlet for some of these businesses.

It provides a template for a business plan based on the learnings of these 6 businesses to help

you add value to your primary business.

The purpose of this workbook is to guide you through the decision making process with some

simple questions to help you decide whether to add value to or diversify your primary

business, and then provide a framework for a business plan.

It provides you with the benefits of the lessons learned by the case studies in the Blue Print

Project, the participants of which are shown in the introductory quotes and photos.

There are two main mechanisms for improving value within the farm gate:

1. Value Add – increasing the product of the raw material within the farm gate and

selling the more profitable secondary product rather than the primary product.Example: primary product milk, value added product yoghurt.

2. Diversification – improving the profitability of the business by broadening the baseof production, and extending the range that is produced.

Example: Farm also offering bed and breakfast accommodation, i.e. farm

stay.

Whether you are proposing to value add your business or to diversify the production, theprocess to develop a business plan is the same. Follow the process, answer the 6 basic

questions and then develop the business plan for your new business development.

This booklet contains the paper copies of documents which are available electronically at

www.southcanterbury.org.nz or contact ADBT at 03 687 2682.



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Clearwater Organic Yoghurt

Ad Sintenie and Jackie Clearwater“Don’t do it like we did: break it down into steps”

Clearwater Organic Yoghurt.• Bryan and Jackie Clearwater bought a grazing block to convert to a dairy farm – now

named Peelview. The Clearwaters are both very interested in preserving and

contributing towards the environment so they decided they would also make the farm

organic.

• The farm was 110ha – not economically viable alone – so to add value they decided toproduce organic natural yoghurt believing in its health benefits with its neutral pH,

and longer shelf life than liquid milk.• The product had to be affordable, easy to make and market, be as natural as possible,

have a great taste and be good for you. It is the only pot set yoghurt available.

• The Clearwaters did not have the knowledge or skills required so they formed a

partnership with Ad Sintenie, who had a food safety and food production background.

• Ad took over the yoghurt process. He came in as a shareholder (50%) with theClearwaters so he could take ownership of the product and run the plant.

• As they grew the business it allowed Ad to move from being involved at weekends to

working permanently in the yoghurt business.

• Planning - There was no formal business plan with financial targets and milestones.However, Ad developed a three stage plan as a guideline..

•

Business Structure - Peelview (the dairy farm) owns the facilities and Clearwater

Organic Dairy (COD) leases them. COD purchases milk from Peelview.

• Ad’s contacts in the industry assisted in getting the right equipment for the plant. Healso designed the food safety program and dealt with all the consents.

• Financial -The yoghurt business now has production and financial targets.

• Marketing has been an issue with limited shelf space meaning limited visibility forconsumers.

• The yoghurt business is fulfilling the original goal of making the dairy farm a viable

economic unit.

• One thing they would do differently is: Not convert a farm to dairying and to organic

and add on a yoghurt producing business all in one step!!! They should have goneorganic first then diversified.



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Havoc Pork

“Anything that makes you take a step back from what you are doing is

important” Ian and Linda McCallum-Jackson, Havoc Pork.

• Since 2001 Havoc Pork has evolved from a small pig farm selling weaners for others to fatten

to a finishing unit which sells all its own meat direct to the consumer, based on the belief

people want “real meat”

• Value Add Proposal - To be the first free range pork supplied farm to butcher within their

own business. To have quality and consistency and provenance of the meat - have all the

controls to ensure these and must control the growth .• Business P lan; “it’s a red napkin from a restaurant in Dunedin and I framed it; it’s come to

pass m ost of it ” – Linda. That business plan is a mind map written a napkin.. The business

plan is a guide to their vision, but is not a detailed document.

• They decided to priorit ise the farm so when t hey were ready t o t ake product to the marketthere would be reliable supply. This involved improving the farm infrastructure and

increasing the sow numbers.

• Once there were fat pigs available they arranged for them to be killed at the abbatoir in

Timaru. Init ially they were able to kill and on-sell their own meat , with any extra pigs beingbought by t he business that had the abbatoir. Now all pigs are processed and sold within their

business.

•

Havoc Pork has bought a butcher shop in Waimat e, but use a commercial licensed abbatoir.•

2010 is the first year that they have enough stock to meet the demand.

• Quality processing – takes a mont h to cure a ham due to fewer nitrates etc used and thatmeans fresher hams produced pre-Christmas for that trade, not produced months in advance.

• All about customer service. “What does our customer want and how do we get it to them?”Ongoing market awareness and development is essential.

• One issue has been the isolation - within own industry, from city to rural community.

Would I do it again? Yes. Been such a journey”

Would I do anything differently? – “Probably not . Been such a learning process”Would Recommend: “Anything that takes you a step back to look at what you are doing is import ant.



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Heartland Potato Chips

“Virtually a fulltime commitment; it was passion that pushed it ahead”

Heartland Potato Chips. Raymond and Adrianne Bowan

• Raymond and Adrianne Bowan have the 1360ha Fallgate Farm at Orari, producing anumber of crops including potatoes.

• Raymond has 40 years experience growing potatoes, growing approximately half the

crop for processing as potato chips and the other half processed as fries.

•

Until the Bluebird factory at Timaru closed in February 2009 the Bowans were themain suppliers, so this had a real impact on their business.

• The Bowans knew that this was their opp ortunity in the market to develop their dream

of processing their own produce. Their vision and dream was to take their own

potatoes, process them into chips and sell them as their own brand.

• They successfully purchased the ex-Bluebird factory, but when they took over it was

just a shell – all of the plant had been removed.

• They employed specialist staff to advise, bought a new plant from Holland, and putemphasis on developing a product and meeting all regulations to launch the new chips

by October 2010.

•

A brand had to be developed, then registered and advertised for 3 months foracceptance. Packaging had to be designed and a supplier sourced. This was all

completed by May 2010.

• Expertise - Pulling together the “right” people and using their skills to achieve the end

goal.

• The bank required a detailed business plan so they employed a consultant fromChristchurch to formulate this. They were sceptical initially but now know the value

of having a documented business plan.

• Satisfaction - Being a NZ owned family business and seeing your name and product

on the shelf. Successfully achieving the “dream”!

• Full control of process: Variety choice, growing conditions, harvesting, quality

control, processing, flavouring and then packaging. Fully traceable product.



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High Country Salmon.

“Have enthusiasm and knowledge” High Country Salmon.

Richard and Margaret Logan established the current business on the Wairepo Arm of LakeRuataniwha at Twizel 10 years ago, having been in the salmon farming industry in 1992.

The driver for starting this new business was the realisation their goals and drivers were

different to those of their then business partners. Good industry knowledge and knowledge of

Local Government and the Resource M anagement Act were crucial in developing this new

business, and they worked with Meridian Energy to choose the site for the farm.

•

The value add proposal is two-fold:1. Retail shop selling fresh fish on the farm p remises.

2. Smoking the salmon and selling smoked fish, adding value to the raw product

• Planning - There was no formal or written Business Plan.

• Development Process. Research - Previous experience in the business has provided

knowledge of environmental/water quality sustainability .

• Industry research included trialling the market through sending Salmon to NewZealand restaurants.

• There is on-going research and development in the business, subject to finance.

• Site placement - The current site has been chosen for the potential for drive-in

customers, the water flow and the 2°C temperature difference on either side of theWairepo Arm, necessary to house the fish appropriately. The water quality is superb

with no deterioration in twenty years.

• Currently expanding the sales kiosk into a brand new floating factory/sales building.

• People - A number of existing staff have shifted to Twizel to work for the business.

• Marketing - this business is one of few in the world where such a fresh p roduct can be

sold and eaten within one hour of killing. This is very important to customers and they

get a lot of repeat customers.

• Open 7 days a week – 90% of sales at the door. A lot of “word of mouth” and

returning customers from all over the world.



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Riverstone.

“Fear of failure, loss of everything with all money in the business creates its

own motivation and is a strong driver to succeed” Riverstone.

Riverstone is a family business with members of the Smith family joint ly or severally owning dairyand other farms, gift shop and award winning restaurant in North Otago.

• The initial value add proposals were in response to the high interest rates of the 1980’s andthe constraints this put on cash flow. Initially value add was to diversify the income base,

and t o expand their operations as much as possible t hrough nat ural growth. T his has resultedin the following: Dairy farms – from one to six farms owned; Dry stock farms – four farms

either owned or leased; Retail shop – expanded since established in 1984; Farm stay

accommodation –established in 1984 and Riverstone Kitchen – established in 2006.

• Interrelated businesses with the farm business building and owning the kitchen and leasing it

to the restaurant business.

• Financial motivation has continued to be the reason for expansion and diversification.

• Goals - all aspect s of the business have financial goals which are regularly monitored, as wellas other goals and production targets.

• There is no formal business plan for any aspect of this family business. However, all aspect s

are discussed, forming a “loose plan” and strong mental vision. Self-belief is important and“once you get something up and running the reality happens swiftly”. “There has to be a

passion to drive the success of one’s own business, and further, passion is motivated bysuccess. “ “Being successful requires hard work, effort and being clear about what you want

to achieve”.

• Riverstone Kitchen has a focus on seasonal food – uses product they grow or available inlocal district . While this has cost and profit advantages it also showcases other producers, and

is consistent with t he international movement to local and fresh produce.

• Further Value Add Opport unities are being planned.

• “ All comes back to motivation”. “ Being the boss gives you more m otivation, and there is adifferent focus”. Fear of failure/loss of “everything”/all money in business creates its own

motivation and is a strong driver to succeed.

•

Team work is important, and this is a family business with all participating actively.



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Timaru Farmers Market.

“Have a passion for what you do” Timaru Farmers Market.

The South Canterbury Farmers Market differs from the other case studies as it is not a primary

industry. However, it is the means allowing a number of small primary producers to add value to theirbusinesses and so is relevant to this project.

• Transition T imaru: Series of committees including food committee which ident ified need fora Farmers Market ; called a public meeting in 2009 – at tendance of 50-60 people. Initial driver

getting committee operational.• Market started on the 8

th of November 2009. First market had 19 stalls; following week

another 6 stalls – 25 stalls. T he first market had huge support , stalls sold out .

• Now has 12-15 stalls on a regular basis, but fluctuates and early summer is the highest with

berries, asparagus – seasonal produce.

• Big driver was seasonal produce.

• Value Add P roposal - to provide a weekly market of fresh produce by the local growers; toprovide a market direct t o consumers with low overheads for the growers; for local buyers t o

be able to purchase fresh foods directly from the producers and able to talk to the growers and

learn more about the produce.

• Business Plan - no formal business plan. The Committee had a vision and worked towards

opening the market but did not document a business plan.

•

Business Rules:-

Must be own product – grown/made etc.

Live within 100km – not limited to South Canterbury. Primary emphasis is food but can have some related product. Food/drink/plants

initially. Crafted primary produce now included – beeswax, wool and weaving. The committee believe it is very important that the Market reflects its own

environment.

Also have awareness raising stalls – the social conscience and fundraising stall – runby community organisations, allowed one per year, can be food from a non-

commercial kitchen, only product can be food.

• Recommendations – Monitoring, marketing knowledge, range of expert ise, enjoy it, have a

passion for what you do, allow planning time.



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Process

The business plan which is included as a template contains “must have” information.However, depending on the type and scale of the business y ou are proposing it may not all be

required immediately.

The business plan attached is prepared as a cohesive document, but break it down into thesections you may need to develop your business in a staged process. i.e. single personbusiness will not require the management summary or human resource p lan.

Consideration

While a business plan is important and necessary there is a prior step to be considered. From

the case studies the participants have identified how important it is to have passion, vision,and be prepared for the hard work required. From this has been developed a simple test for

those considering such a proposal, simply answering the following questions:

1.

How will this complement my existing business?

2. Do I have the expertise, or how will I source the expertise necessary for this businessopportunity?

3. Will pursuing this opportunity be detrimental to my primary business? (i.e. time;

focus; finance; resources etc.)

4. How much does this matter to me?

5. What am I p repared to give up to make this happen?6. What will happen if I don’t pursue this opp ortunity?

Answering these simple questions will determine if there is enough drive and passion to

commit to the new proposal. If that is the case then the answers will also be necessary for thebusiness plan. If there is not the necessary commitment or resources to make the proposal asuccess then finding out at this stage may prevent a costly mistake.

Each of the above points has been included in the following business plan summary which

provides a template for any one considering a new value add business developing their

primary produce.

Answer each of these questions to decide whether this business proposal will be

complementary, within the available expertise and resources, and you have the passion

necessary to commit.

Self-Help Tutorial

Work through the attached business plan summary.

The headings are shown followed by the summary of information you need to provide.



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Business Plan Summary Template

1. Executive Summarya) Why are you doing this? Why you decided to add value to your business.

b) How long is the plan for? Annual plan for the next how many years.

c) What are you doing? What is the proposal that is the basis to this plan?

d)

How are you doing this? How this business is to operate and to complement theexisting business.

e) What if? ‘What if’ contingency plans.

2. Vision Statement

What do you intend to achieve, by when?

(Note: A successful vision statement is brief and catchy, able to be used as a mantra tosuccess)

3. Mission Statement

How you will achieve the vision and develop the business?

4. Key to Success

2 or 3 reasons why you believe you will be successful in this proposal to add value to your

core business

5. ExpertiseWhat expertise, skills and experience are necessary for this business proposal?

Do I have these skills, or employ staff with this expertise, or how I will source the necessary

expertise?

6.

ComplementarityHow pursuing this opportunity will be advantageous to the existing business and its vision

and goals. Time, focus, finance and resources all need to be included.

Any potential areas of conflict need to be considered.

Ensure there are no areas that will be detrimental to the existing business.

7. Goals

Up to 5 goals to focus you on where you want to go.

For each goal there will need to be a number of sub objectives that will allow the

achievement of the goal.

8.

Company Analysisa) How does this proposal fit within the existing business?

b) Will it have its own structure (company and/or trust structure recommended, but may

be sole trader or partnership)? Consult your accountant and/or lawyer and gainadvice.

c) Company Summary Who are you – current ty pe of business, who are your

customer(s)?

d) Company Ownership Registered where (E.g. NZ) and owned by whom

e) Company History A bit about where you have come from and why

9. Company Locations and Facilities



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What facilities and equipment does the business own at present?What facilities and equipment are required for the value add proposal?

What facilities or equipment need to be sourced for this new business p roposal, and how will

you manage this?

10. Financial Performance

Attach financial balance sheets for the existing business to show its viability and the basis for

this new proposal.Include budgets for the development proposal, including all capital requirements.Include cash flows for the combined business (if to be operated as one entity) or for both the

existing and value add business; for both the start up time period and for the proposed status

quo.

11. Product/ Service

What is it that you are intending selling?

12. Product Description

a) Current p roduction, i.e. milk or meat

b) Complementary products or services, the value add or diversification proposed.

c)

Potential further new products or services possible in the future.

13. Competitive Analysis

a) Are there current producers of this product, who is doing the same sort of thing?

b) Why are you different to them, what is your point of difference?

c) How will you be better than any competitors?d) If your proposal is unique, then why?

14. Compliance RequirementsWhat consents are necessary for district and regional councils, Government agencies,

professional bodies?

What time frames and costs are required to gain all necessary approvals? Who will manage

this process?

15. Technology

What technology is imperative to you, why, and what edge/ advantage does it give you?

16. Business Contingency Planning

What are the risks inherent in this business proposal? i.e. time, finance, resourcing, expertise,

unforeseen events, weather events etc.

How will these risks be managed?

17.

Market Analysis Summarya) Who is your target market?

b) What does this markets need?c) How big is the market – now; potentially; seasonally?

d) What are the market trends?

e) What opportunities does this market offer?

f) What do you need to do to profit from the market? (research; plant and capital;licences and consents; time frames etc.)

g) How will you develop the business to meet the market?

h) How will you develop the market to meet your businesses potential?

i) Attach any sales literature that you might have created?

j)

Brand development – how will the core and value add business be branded and whatassociation will there be between the brands?



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18. Industry Analysis

a) Complete an industry analysis for both the core business and the value add proposal

b) Where is the industry at present?

c) Industry Patterns - Industry figures, who is selling to whom, volume figures etc

d) Competition and buying patterns - What is critical, product, price, volume etc?e) Who are your main competitors? Their name, strengths, weakness.

19. Competitive Edge

What is your edge over your competitors as a whole?

20. Strategy

a) Product Strategy Where are you positioned, who do you want to purchase your

products and services and why?

b) Positioning Strategy Where are you aiming yourself in the future and why?

c) Pricing Strategy What are your immediate pricing plans?d) Promotion Strategy How do you intend on marketing the business?

e) Marketing Strategy What is your most important marketing programme, who is in

charge, what is the budget, when do you plan to start theprogramme?

f) Sales Strategy What are you focused on, and how long do you intend thisstrategy to last?

21. Sales Forecast

a) What are you basing your Sales Forecast on, both in regards to costs and sales?

b) Attach three years forecast sales and costs figuresc) What are the essential components to achieving these forecasts?

22. Management Summary

a)

Who will be in charge of the operational management?b) What are the necessary roles ie operational, financial, human resources, marketing etc

and who will fill these? What are they responsible for, and who reports to whom?

c) What is your Management style, how do you intend to lead your company?

d) The Governance management split – who are the Directors and what are they

responsible for, who reports to them?

e) Management gaps, do you outsource any professional services, use consultants?

23. Human Resources Plan

a) How many staff required and what roles?

b)

Salary structure i.e. in line with current market, or slightly higher to source thenecessary expertise?

c) Staffing t rends i.e. increase or decrease over the life of the plan



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NOTES:

1. All statements above should be brief, and clearly thought out.

2. Keep your statements concise and clear so that they are easily referable and memorable.

3.

A business plan is a living document and only relevant if continually referenced andupdated.

YOUR BUSINESS MUST HAVE:

1. All necessary consents to operate.

2. Employment agreements and job descript ions for all staff.

YOUR BUSINESS SHOULD ALSO HAVE:

1. All necessary insurances for operating including public liability, business continuationetc. Consult your professional.

2. Financial sup port including capital, seasonal finance approvals as necessary.

3. Health and Safety Manual.

AS YOUR BUSINESS GROWS YOU SHOULD CONS IDER DEVELOPING:

1. An Organisational Chart.

2. A Confidentiality Agreement.

3. Human Resources Manual.

This workbook has been developed from the Blueprint Research Project undertaken by

Heather Lawson, Living Land Consultants, and financed by New Zealand Trade and

Enterprise and Aoraki Development Business and Tourism.The 6 case study participants are thanked for their invaluable involvement.

Blue Print Bus Plan Work Book.pdf

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