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From idea to implementation

Agriculture.com Staff 07/07/2010 @ 9:09am

This guide provides a brief overview of some of the steps you need to take in forming a new value-added agriculture business. Starting a new value-added agriculture business requires a tremendous amount of work, and the group of producers involved in the project needs to be able to carry through a project to the end. All of the stages of the process - from putting the steering committee together and choosing the right value-added business idea to evaluating the business idea and creating and implementing the business plan - are critical.

This guide is not a comprehensive list of every step you will need to take. Rather, we hope that the listing below can help you understand the basic steps you will need to take in forming a new value-added agriculture business and creating an action plan at the beginning of your start-up efforts to ensure that you can successfully move idea to implementation.

This guide provides a brief overview of some of the steps you need to take in forming a new value-added agriculture business. Starting a new value-added agriculture business requires a tremendous amount of work, and the group of producers involved in the project needs to be able to carry through a project to the end. All of the stages of the process - from putting the steering committee together and choosing the right value-added business idea to evaluating the business idea and creating and implementing the business plan - are critical.

This phase sets the stage for your new value-added venture. You need to surround yourself with a hard-working set of producers and a knowledgeable set of resource-providers. Also, you must make sure that everyone involved has the same vision. If you cannot agree to a common purpose and vision upfront, developing the business plan and recruiting potential producer-investors will be very difficult. The following are some of the steps you should take during the Exploration and Assessment Phase.

Conduct initial market research and analysis to narrow down your options for potential business ideas. You will need to make an initial determination based upon your market research whether your business idea has the potential to bring value back to your group of producers. The feasibility study step can be very costly, so your initial market research and analysis is critical in ultimately obtaining a high-quality, focused market feasibility study.

Review your legal organization, and determine what regulatory requirements, taxes, insurance, and intellectual property issues need to be addressed. Your attorney will assist you in designing an organization that meets the needs of your own group of producers. You will formalize the initial board of directors at this time, so you will need to identify board members with board officers. The steering committee should answer several simple questions before meeting with your attorney to develop your organizational documents:

Meet with lenders to share your business plan and discuss potential debt financing options. As stated above, most lenders will require that you must contribute at least 40% of the total project cost upfront before they will provide any debt financing. Lenders will want to see a complete business plan with all of potential risk factors identified.

Make sure you communicate regularly with your members. Effective member relations is critical. Your producer-members own your new business and they will want to be updated regularly on the status of the business.

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