Creating a business plan - advice

Discussion in 'Homesteading Questions' started by AndreaNZ, Aug 28, 2004.

  1. AndreaNZ

    AndreaNZ Well-Known Member

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    Hi, all -- I've been surfing and reading in circles for months now, and still no closer to anything concrete.... so, does anyone have any suggestions, advice, tools, etc for creating a business plan designed to attract investors?

    We're trying to set up a goat dairy, never having run one before (except to milk and make cheese products for ourselves), and get some financial support from investors, as we think a niche dairy geared for our domestic market here in NZ is very viable, based on our initial investigations in the upscale markets and health food markets in the area. Nearly all goat milk is exported, and the domestic demand isn't being met. We've got a couple places dying to get their hands on milk and cheese, and who bring in what little they have to offer from the other end of the country... they'd love to be able to buy it locally. The nearest commercial goat dairy to us is about 300kms away. We've got the goats, know how to raise them, care for them (and do so nearly chemical-free, through not strictly organic, which is also a big plus for the local demand), and make some really good fresh cheeses, and some good experimentations with hard/aged cheeses. How to attract investors to such a small but potentially lucrative enterprise? We have very little $ to put into it, but lots of time and energy, knowledge and drive.....

    Cheers
    Andrea NZ
     
  2. BCR

    BCR Well-Known Member

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    In the USA there are some great free resources. I do not know about NZ.

    Still, online go to the Small Business Admin. from the USA. There is a link about creating formal business plans that is intense. What you are looking for is something that will be rather lengthy as it includes a great deal to convince a lending institution or significant investor.

    First, complete an accurate personal net worth statement, all you owe versus all you own. This is part of the financial section. Also, figure your personal yearly budget. Use old ATM slips, credit card statements, loan statements, utility rec'ts., etc. to make it detailed and accurate. It is often suggested that a person have enough money saved to cover 12-24 months worth of personal expenses. Either way, these two items, net worth and budget, will let you and the banks/investors know the level of risk you are taking.

    What kind of investors are you considering? As soon as you 'owe' someone you become beholden to them. Have you considered running a CSA (Community Supported Agriculture)?

    What is it that you need the money for? Does it need to be a lump sum? Do you have good credit?
     

  3. moopups

    moopups In Remembrance

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    Go ahead and establish your own brand name of cheese for retail purposes, the shelf life for cheese is large, cater to speciality markets, build your volume to a point that your brand is recgonizable, then you will have to beat off the investors with a stick, just to close the door. I do not know how strict the health codes are there, here you need an act of congress and the Popes personnal blessing or just shy of it to proceede.

    Hopefully somewhere in there you will realize that you are makeing enought money that you do not need investors. Please seek that time, so you do not owe anybody anything. Debt is the enemy of all ventures, and it will not ever go away by itsself. Don't over complicate anything by haveing others haveing too much control over what you do. Unless you are comfortable with someone 'owning' you, I am not.
     
  4. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    You apparently have the goats, the land, the barn, and you have found a market.

    What are the investors to invest in?

    A bulk tank, perhaps, or the bottling equipment? What do your laws call for? Is the problem that you do not have enough goats to meet the minimum needed to sell at the market? Your living expenses until your business builds up to the point where it can support your family?


    OK, OK, I am not experienced enough to help you write a business plan, I am just being NOSEY! :eek: But, it IS usefull information!
     
  5. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Andrea,

    The first thing you need to do is document the numbers...both revenue and expenses. The first year should show month by month and the second year at least quarterly. You should go out at least 5 years with your projections. Be very clear as to what are expenses and what are capital investments. When I do business plans I usually do it in the form of planned, high (exceeds expectations) and low (fails to meet goals by x %).

    For the revenue side you will need to have a marketing and sales plan that supports the numbers you are presenting.

    The next question you need to answer is what's in it for the investor. Things like rate of return, exit strategy (buyout). The bottom line is... why would this investment be attractive to them?

    As BCR asked, what will the money be used for? How much money are you talking and how many investors are you looking for? What sort of business structure are you planning? Is it favorable to the investors or unfavorable? Are there assets that can secure their investment? How much risk are they taking?

    Just a few thoughts.

    Mike
     
  6. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    Andrea it would also be wise to consider the down side of angel investors.. to whit, you can lose control of your company. I've seen it happen here more often than I'd wish... small value added farm product company, on the verge of making it, needs one more chunk of cash. In exchange for that chunk of cash they sign over controling interest to their "silent partner" who, very quicky, takes control of the company and boots them out. In your case it isn't likely you'd lose the farm or your goats, but you could use your carefully built up brand name. Be extremely cautious about diluting your share of the company... you should strive, at almost all costs, to keep 51% ownership for yourself.
     
  7. Ross

    Ross Moderator Staff Member Supporter

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    Andrea I have an Email address for a couple who are doing what you're thinking of only using sheep instead of goats. They are in NZ too. I can imagine most of the domestic production ends up as an export, NZ agriculture would seem to be second to none in that department! I'll pm it to you if you want.
     
  8. DreamingBig

    DreamingBig Well-Known Member

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  9. Ken Scharabok

    Ken Scharabok In Remembrance

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    Withoug much detail provided, I suspect you mostly just want to accelerate your goals. You may want to reconsider and build up your operation a bit at a time as your firm market develops. This greatly reduces the chance of outright failure.

    One adage I have noticed applies to a great many situations is 80% of results come from the first 20% of effort. You may find it fairly easy to satisfy a goodly portion of your market. However, trying to wring every last cent out of possible sales becomes increasingly more costly.

    Start small and build based on your own resources.

    You might also subscribe to such publications as Dairy Goat Guide.

    Ken Scharabok
     
  10. Don Armstrong

    Don Armstrong In Remembrance

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    I'd go to the NZ Government web site, then make sure I'd searched EVERYTHING there. They are likely similar to Australia, and will have not just Department of Agriculture (although never ignore them - they'll be a source of endless help). They WILL have something that equates to a Small Business Administration, whether it has a separate department or not. In Australia (provided you've got the time in - I'm not sure whether you have yet or not) you can get finance that amounts to a pension or unemployment insurance while you're getting a small business off the ground. Look GOOD at what you can get from the government in terms of information, assistance, and money. Also look carefully at whether there are any costs to it as well - sometimes bureaucrats do things that seem sensibe to them, but would cripple a business. Not saying it's bad - just look carefully at any attached strings.