2Bits: Tips for Selling Wholesale—Production Capacity
Being busy does not always mean real work. The object of all work is production or accomplishment, and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.
Today, our second newsletter on wholesale readiness will focus on planning for increased production capacity. We know farmers like to be in the field—planting, weeding, harvesting, caring for livestock. It’s hard to start your planning “on paper” or on a computer. Do this step! It is important. Write your plan down.
Here are two free resources that will help you do this:
- Visit the Small Business Association. This site offers online tools that walk you through the process of creating a business plan. The SBA has offices in many locations—you can ask for a counselor to help you through the process. The SBA can also connect you to retired business people that will assist and mentor you. There is no charge for these services.
- Visit Agplan.umn.edu. This free and easy-to-use business app was launched in 2007. This app allows you to develop your own business plan, learn what you need to include in your plan with tips and resources, view sample business plans that give you ideas, and gives you the ability to share your plan with reviewers, download it to Microsoft Word and print it out.
Why write a plan?
By writing the details down, you start to think about the next steps you need to take if you want to increase your production capacity. It doesn’t have to be a specific style or a certain number of pages. Everyone’s plan is different. The most important thing is that you realize the effort involved in taking the next steps and you have it written down. It is a good idea to make your increased production capacity work on paper first! It will save you time, money, and energy!
As a Farmer what should I ask potential buyers? As a wholesale Buyer, what should I expect to be asked?
Writing your business plan should include some “off the farm” work! Find and talk to buyer contacts that could be interested in your increased production capacity. Ask them what this relationship would look like. Include in your conversation these points:
- What produce or products can you buy that are locally sourced? Are you looking for standard items or out-of-the ordinary—something different to use for special events?
- How much and how often will you need to purchase items? Can you give me a price range you need to work within?
- What is your receiving process?
- How much liability insurance do you need food providers to have?
- Do your food providers need to be GAP (Good Agriculture Practices) and GHP (Good Handling Practices) certified or do you accept a food safety plan?
- Do you require responsibly-sourced certification also? If so, which third-party organizations do you accept approval from?
- What quality standards do you have for the items I am able to produce or raise for you?
- Do you require contractual agreements?
- Do you conduct onsite visits? If so, how often?
- What is your payment process?
- Do you promote the farmers you locally source from? If so, how?
This information will help you plan and prepare for increased production capacity.
Having a written business plan will do several things for you
First, it will help you identify challenges that larger buyers have that you can satisfy, helping you build a strong relationship with them. Next, it will serve as a benchmark moving forward. Your business plans and needs will change—it is good to know where you started. And, if you need help financing your expanded production capacity, your financial institution will appreciate seeing your business plan.