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Perfecting Your Sales Pitch

When I started my first business, I knew that I had a great product and I expected everyone to automatically realize this and purchase it. In those initial months, sales were lackluster. I couldn't believe how few people were buying and that buyers were refusing to carry my product. What was wrong with my product? Did they not see how great it was? What was I doing wrong?

During this angst, two successful businessmen, whom I knew and respected, explained that I was not understanding the art of the sale. I wasn't clear about who I was, what I was selling, and why they needed my product. I was expecting my product to speak for and sell itself. When I did engage, my sales pitch wasn't clear, direct, and persuasive. I tended to let the prospective buyer dictate terms because I needed to make the sale. As bills piled up, I began to work on a more refined sales pitch or elevator speech. With work, that speech resulted in sales. Profits increased and business stabilized.

Many years later, I have transitioned from manufacturing a product to growing a product. I have learned to tailor my presentation to the audience. Along the way, I developed a few key rules that I follow when delivering an elevator speech.

1) Who are you? – Identify yourself, your position, and your farm or business clearly. Have a business card and attach it to marketing and sales material.

2) What are you offering? – Clearly identify what you are offering for sale. “I have citrus” is a generic statement that I try not to use. A clearer statement would be, “today I am here to talk to you about our mandarin oranges and Meyer lemons”.

3) What makes you and your product unique or better than your competitors? – Prior to the pitch you need to have done your homework so that you can answer this question. Be clear and succinct. State facts.

4) What can you offer besides the product? – Merchandising materials, demo or sampling programs, listings on your website, product education to staff or customers, brand loyalty and recognition, custom or unique packaging. In essence, anything that will help the buyer (reseller) make the sale to their customer.

5) What is your price and what are your terms? – Again research. What are your costs in growing and delivering the product? What is your standard packaging? What are the wholesale and retail prices for your product? Can you deliver the product? What is the delivery cost for you? When and how do you expect to be paid? Know if you have room to negotiate going in, but don't state that you are negotiable up front. Let the buyer ask.

6) Why do they need you and your product? – This is your closing and the impression that you will leave with your buyer. Summarize clearly and concisely rules 2, 3, and 4. Be positive. I like to close with “I know that our products would be a great addition to your line, and I look forward to working with you”.

Developing an elevator speech takes time, research and commitment. You need to know your product and your business. You need to know your competition. Above all you need to know the customer and marketplace. I cannot emphasis enough the research that is needed to deliver a successful and positive pitch. The elevator speech is your commercial!

Posted on Thursday, May 11, 2017 at 12:46 PM
  • Author: Robert Bonk

Happy Irrigation Season!

Happy irrigation season for those of you who enjoy swimming more than farming. April 15 is the start of irrigation season! It may be raining and wet now but before you know it, you will need irrigation to keep your crops and pastures healthy.

This is the time of the year to check your irrigation system. Does it need repairs, modifications, or improvements? Are there leaks? Does it need to be set up or cleaned out? Is it turned off when it's raining? Do you have the proper frequency and duration for watering your pastures and crops?

Pastures may not need irrigation yet – check to be sure you are not watering unnecessarily. Look at your soil and don't start watering until your soil needs it. Evaluate soil moisture in your crops.

As the season progresses, keep a close eye on your perennial and tree crops. Both drought stress and excess water can cause root damage.

Below are resources to help you set up, evaluate and improve your irrigation system.

BMPs for Water Quality http://ucanr.edu/sites/placernevadasmallfarms/files/170697.pdf

Center for Irrigation Technology http://www.wateright.org/

California Irrigation Management Information System (CIMIS) http://www.tid.org/water/water-management/california-irrigation-management-information-system-cimis

NRCS Estimating Soil Moisture by Appearance and Feel https://nutrientmanagement.tamu.edu/content/tools/estimatingsoilmoisture.pdf

UC Drought Management http://ucmanagedrought.ucdavis.edu/

ATTRA Irrigation Efficiency https://attra.ncat.org/attra-pub/farm_energy/irrigation.html

Resources for pasture irrigation:
Drought Tip: Managing Irrigated Pasture during Drought http://anrcatalog.ucanr.edu/Details.aspx?itemNo=8537

Establishing and Managing Irrigated Pasture for Horses (and other pastured animals) http://anrcatalog.ucanr.edu/Details.aspx?itemNo=8486

Management Options to Reduce Pollutants in Runoff from Irrigated Pastures http://anrcatalog.ucanr.edu/Details.aspx?itemNo=6590D

Posted on Monday, April 24, 2017 at 10:00 AM
  • Author: Aleta Barrett

Start Smarter Part 2: Lessons I Learned Along the Way

In my first Starting Smarter blog post, I talked about hands-on education, business planning, market research, and crop selection (Starting Smarter Part 1). I could write a book on what I didn't know when I started farming. In Part 2, I will summarize key considerations for a successful start-up and things I would do in the first years.

If I had it all to do over again, what would I do differently in my vegetable operation?

Equipment & Infrastructure: I would invest in BCS (walk-behind tractor), used tractor, or make a rental equipment budget part of my start-up plan. My husband put his knees in jeopardy by using a shovel to break ground and farm our first ¼ acre. Rental equipment would have been a game changer in our first couple of years. We benefitted immediately from some key infrastructure investments: a cool room, washing area, high tunnel, germination area, and greenhouse. In our operation, these are important and I would get them as quickly as I could without taking on debt. Before buying, ask other farmers what were game changers for them. Develop a list, put the items in order of priority and buy them as you can. Go with inexpensive versions that get the job done and that you can afford. Debt is not the friend of a beginning farmer.

Land: A few things I would check when choosing land:
• Zoning and restrictions
• Flat/sloped and direction/aspect
• Water source and reliability
• Soil quality
• Drainage – how does the land behave during the dry AND rainy seasons?
• Delivery truck accessibility
• Prior use and potential for organic certification
• Surrounding property use – is there anything around you that may require barriers or cause conflict? (e.g. noise or odor restrictions)
• Is there adequate fencing? If not add that expense into your start up budget.

Farmers' Markets: I would stick with one farmers' market until I was consistently making a profit before expanding to more.

Organic Certification: I would have become Certified Organic sooner. It really was not hard, the certifier was very helpful and guided me through the process. It would have helped me keep better records from the beginning.

Labor: I would estimate my annual labor budget and add in employees only when I had enough cash flow. I would calculate the full cost (loaded labor rate, including taxes and workers compensation insurance) of an employee before hiring. I would consider how much time I could afford to spend as a manager rather than a worker on my farm. I would hire people only for the time I was available to manage them.

Owner Salary: I would pay myself every month, even if it were only $100. Just to get in the mindset that the farm should pay me. Then I would work hard to get that up to a financially sustainable income. The median per capita income in Placer-Nevada is $34,000 year or $2,833 per month. I would attempt to track and limit my time working on the farm. This is a challenge but it's important to enjoy life and not allow the farm to work you to death.

Financing & Savings: I did know a few things in the beginning because I had managed and owned other businesses in the past and benefited from having a savings account and family backing. I knew that the business would not turn a profit for at least three years and I needed enough savings to live off during that time.

There are some things you just have to learn by doing. For me, I'm better at fielding questions from farmers' market customers now. I remember how to harvest, what temperature, and how long to store various types of produce. In the beginning, I had to constantly check a book or go online for this information. There are many things I am still learning and I'm sure there always will be.

Your unique situation will require your own solutions and methods. I hope these tips help you become a profitable farmer more quickly and efficiently. May you have a bountiful and successful farm!

Check out the New Farmers and Resources tabs on our Foothill Farming website: http://ucanr.edu/sites/placernevadasmallfarms/

Posted on Monday, April 17, 2017 at 1:05 PM
  • Author: Aleta Barrett

Start Smarter Part 1: Things I Wish I Knew When I Started Farming

When I started farming, I thought I was going to be a fantastic farmer due to my business background, personal savings, maturity, family support, and work ethic. I did benefit from those things and am farming successfully now. However, I was woefully unprepared for the expense, time, and challenges to my concept of what farm life would be. Those unexpected challenges caused it to take years to turn a profit.

If I had it all to do over again, what would I do differently?

Practice: To start, I would educate myself by doing – work or intern on a profitable farm for at least one season. I can't tell you how many hours I wasted on inefficient harvesting when an experienced farmer could have trained me to do it a better, faster way.

Education: While I was learning how to do the hands-on work, I would take classes – farm business, farm management, farm marketing, etc. Taking classes taught by people with experience in the field gives a new farmer the opportunity to ask questions and have access to more information and resources. Farming is a unique business with its own language and challenges. Farm business classes can help a new farmer develop a realistic and informed business plan.

Business Perspective: I would not start with a homesteader perspective like the one I did. I had too many enterprises from the get go – chickens, goats, and 40+ vegetables. For a farm to be financially successful, it needs to be treated as a business, not a hobby.

Business Plan: I would focus more on marketing and financial goals. I would include the word “profit” in my mission statement. My original business plan focused too specifically on land use and crop production, environmental impact, and social involvement.

Banking: I did pretty well in this area. The following tips saved me a lot of stress during a financially dry period:
• Start with a separate farm business checking and personal checking account
• Do not take on debt
• Keep track of everything on some version of accounting software.

Market Research: I would do market research on what to grow. I would takes notes on price and what products were in demand at farmers' markets and other outlets where I intended to sell. I would contact produce managers and farmers' market managers and ask them what they wanted. I would watch market customers to see where they shopped. I would note which products sold out by the end of the market. As it was, I started out growing what I liked to eat – and more! If I had done my market research, I could have wasted less time on crops that were not in demand or were too inexpensive for me to be competitive on pricing.

Crop Selection: After learning what was in demand I would select a few (5-10) crops and learn to grow them well. I would practice efficiency in every step of the growing, harvesting, marketing, packaging, washing, processing, pricing, selling, everything to do with those few crops until I could be really efficient and PROFITABLE with each one. I would time every bit of labor that went into every step so I could properly evaluate the crop and choose wisely about what to expand and stop growing. This level of detail may sound tedious but it is worthwhile if it means the difference between making a living and going out of business!

See Starting Smarter Part 2: Lessons I Learned Along the Way next week to read about Land, Equipment, Labor and more.

Check out the New Farmers and Resources tabs on this website information and some useful information:

Foothill Farming: http://ucanr.edu/sites/placernevadasmallfarms/

Posted on Tuesday, March 21, 2017 at 2:07 PM
  • Author: Aleta Barrett

Applying for a Farm Loan

There are many reasons a farm might want to apply for a loan. Capital improvements, cash flow, crop expansion and land acquisition are a few.

The exact loan application process and records required will depend on your lender and your individual situation. Factors affecting the process include the size of the loan, your farm history and personal credit, assets, and liabilities. You will need to research the interest rates, loan fees, payment terms, and loan specifications to find the loan that is the right fit for you.

Described below are some commonly expected requirements for all loans.

When you apply for a loan, you will need to be prepared. The first step is to contact the lender and set up an appointment. At this initial appointment, the loan officer will interview you about your farm and the purpose of the loan. This may be in person or over the phone. Either way, being professional and prepared will start out the process on the right foot.

It is smart to look at your credit report prior to applying for a loan. This allows you to research any negative marks beforehand. The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

Be prepared to answer these questions both during the initial interview and in written form on the loan application.

Purpose of Loan Why are you applying for a loan? How will it be used? How much money do you need?

Farm Business What type of operation do you have? What is the story/history of your farm? Is your farm a sole proprietorship, partnership, or corporation? What are your primary markets? What kind of record keeping system do you have? If you are a new farmer, what are your projections? What are your 5-10 year business goals?

Personal History How long have you been farming? What background and training do you have? What roles/titles do you (and your spouse) have on the farm? What other debts or loans do you have? What is your credit score?

Verification Materials Good record keeping is important when applying for a loan. Start organizing your data now so when you apply you will have all your ducks in a row.
• Three years of tax returns
• Three years financial records
• Three years production records
• Current financial statement and/or balance sheet
• Farm Operations Plan
• Projected cash flow budget reflecting production, income, expenses and loan repayment plan.
• Copies of written leases if you are leasing land or equipment
• Legal description of property owned or to be acquired and, if applicable, and leases, contracts, options and other agreements with regard to the property.
• Insurance coverage
• Registrations & Certifications
• Personal household information such as other income, expense for food, clothing, insurance, taxes, rent, medical costs, etc.
• Verification of non-farm income. Last few paystubs, pension plan or similar documentation
• Any debit or reoccurring payments such as child support, alimony payments, mortgage, credit card, and consumer loans.

If your financial records are not already organized, put them together before the meeting. Start by putting all your income and expenses into an understandable format. It does not need to be fancy. Bring all this information with you.
You can find out more detailed information about what documents are required directly from your lender.

Remember, the loan officer will be looking at you as a whole, not just at the farm. There are all kinds of loans for all kinds of farms. Keep records, be professional and have a business plan and you can be successful in financing your farm goals!

Farm Loan Workshop: http://ucanr.edu/sites/placernevadasmallfarms/?calitem=354096&g=22527
Farm Service Agency Loan Programs https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/index
California FarmLink Financing http://www.californiafarmlink.org/farm-financing
U.S. Small Business Administration https://www.sba.gov/loans-grants

Posted on Tuesday, February 28, 2017 at 1:29 PM
  • Author: Aleta Barrett

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