Aug 20, 2009

Business Files Help Growers Find a Niche

You own some land in North Carolina. You’re trying to figure out what to do with it. You’ve considered growing some sort of crop, but what should you grow? And will anyone buy it?

If this is you, North Carolina State University (NCSU) can offer you a step-by-step guide to help make those decisions. It’s called the Business Development Files, and it’s aimed at small to mid-sized growers, or aspiring growers, who want to develop and maintain their own agricultural enterprises.

The files, available through North Carolina Cooperative Extension personnel, are divided into the seven basic steps a grower needs to take when starting or transitioning a farm business. The steps are:

-evaluating a new business idea;
-estimating income and cost;
-identifying your customers;
-evaluating the competition;
-estimating market potential;
-checking legal, regulatory and insurance issues; and
-mastering product, price, place and promotion.

The Business Development Files were put together by S. Gary Bullen, an NCSU Extension associate, and Karen Mundy of Virginia Tech, who’s now retired.

Extension agents have been getting a lot of questions from farmers lately about how to make money and find a market for their products. Many agents are knowledgeable about crop and production matters, but lack business backgrounds – and training opportunities are sparse. Bullen and Mundy sought to fill that knowledge gap and create a practical, methodical approach the agents could use to help growers.

“My degrees are in horticulture and floriculture,” said Amy-Lynn Albertson, commercial horticulture agent for Davidson County, N.C. “I had no experience writing business plans.”

It took a couple years to develop the final version of the files, which just recently became available, Bullen said. He’s working on another version strictly for growers.

A lot of beginning farmers tend to be a little too optimistic about their new endeavor, according to Bullen. They don’t think through the potential costs and risks as much as they should. They’ll underestimate the cost of equipment or labor, for example, or – maybe the biggest mistake – they won’t make sure they have a market for their product before they start growing it.

The files can help growers prepare for all of that, he said.

Albertson, the Davidson County horticulture agent, learned about the files during one of Bullen’s training sessions for Extension agents. She uses the files to develop business plans for individual growers; she also uses them as part of an entrepreneurship course she developed with a county business center.

New and transitioning farmers consistently struggle to find a market niche. Albertson has helped more than a dozen farms in her county find markets for their product, with assistance from the files. It’s a slow process, involving a lot of one-on-one time, but it helps growers learns their strengths and weaknesses, the opportunities and threats out there and what they need to do to survive, she said.

The files put a lot of emphasis on marketing, a subject most growers struggle with.

“Just because you grow it doesn’t necessarily mean someone’s going to buy it,” Albertson said.

She’s been fielding more questions lately from non-growers who are thinking about getting into farming. Many have land and don’t know what to do with it. Albertson starts by asking each person where he or she wants to be in 15 years, then tries to figure out the best way for him or her to get there.

“I help them narrow down their interests,” Albertson said. “What do they have time and passion for?”

Many of the transitioning growers she helps are looking for alternatives to tobacco, North Carolina’s traditional staple crop. They find replacements in wine grapes, greenhouse tomatoes, strawberries, blueberries and other specialty crops, she said.

“We do our best to get the right tools in the hands of our growers, so they can make good decisions.”

The files have already helped several farmers in Davidson County, including Brenda Garner of SandyCreek Farm.

Brenda and her husband had about 15 acres of land on an old farm in Tyro, N.C., and wanted to know what they could do with it. They weren’t farmers at the time, but both had farming backgrounds. They needed some direction, so they contacted Albertson.

The Garners learned that there needed to be a market for whatever crops they decided to grow, and after doing some research, they discovered the potential of shiitake mushrooms and blueberries. They now have more than 700 logs on which they grow mushrooms, and 150 blueberry bushes. They’re expecting a full blueberry harvest next year, Brenda said.

They sell to local restaurants and at a local farmers’ market, and recently opened an on-farm store. They use crops like peppers and Muscadine grapes in homemade jellies and sauces.

“The files helped tremendously in getting us started,” Brenda said. “I can’t praise the program enough.”

The files were funded by a grant from the N.C. Tobacco Trust Fund Commission and the Southern Region Risk Management Education Center, according to NCSU. For more information, visit www.ncvalueadded.org.