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Blue Print Business Plan.

Work Book.

Introduction.
This booklet shares the case studies of 5 farming families who have added value to the
primary product within the farm gate and/or diversified to increase their business. It also
includes the case study of a farmers market which is an outlet for some of these businesses.
It provides a template for a business plan based on the learnings of these 6 businesses to help
you add value to your primary business.
The purpose of this workbook is to guide you through the decision making process with some
simple questions to help you decide whether to add value to or diversify your primary
business, and then provide a framework for a business plan.
It provides you with the benefits of the lessons learned by the case studies in the Blue Print
Project, the participants of which are shown in the introductory quotes and photos.
There are two main mechanisms for improving value within the farm gate:
1. Value Add increasing the product of the raw material within the farm gate and
selling the more profitable secondary product rather than the primary product.
Example: primary product milk, value added product yoghurt.
2. Diversification improving the profitability of the business by broadening the base
of production, and extending the range that is produced.
Example: Farm also offering bed and breakfast accommodation, i.e. farm
stay.
Whether you are proposing to value add your business or to diversify the production, the
process to develop a business plan is the same. Follow the process, answer the 6 basic
questions and then develop the business plan for your new business development.
This booklet contains the paper copies of documents which are available electronically at
www.southcanterbury.org.nz or contact ADBT at 03 687 2682.

Clearwater Organic Yoghurt

Ad Sintenie and Jackie Clearwater


Dont do it like we did: break it down into steps
Clearwater Organic Yoghurt.

Bryan and Jackie Clearwater bought a grazing block to convert to a dairy farm now
named Peelview. The Clearwaters are both very interested in preserving and
contributing towards the environment so they decided they would also make the farm
organic.
The farm was 110ha not economically viable alone so to add value they decided to
produce organic natural yoghurt believing in its health benefits with its neutral pH,
and longer shelf life than liquid milk.
The product had to be affordable, easy to make and market, be as natural as possible,
have a great taste and be good for you. It is the only pot set yoghurt available.
The Clearwaters did not have the knowledge or skills required so they formed a
partnership with Ad Sintenie, who had a food safety and food production background.
Ad took over the yoghurt process. He came in as a shareholder (50%) with the
Clearwaters so he could take ownership of the product and run the plant.
As they grew the business it allowed Ad to move from being involved at weekends to
working permanently in the yoghurt business.
Planning - There was no formal business plan with financial targets and milestones.
However, Ad developed a three stage plan as a guideline..
Business Structure - Peelview (the dairy farm) owns the facilities and Clearwater
Organic Dairy (COD) leases them. COD purchases milk from Peelview.
Ads contacts in the industry assisted in getting the right equipment for the plant. He
also designed the food safety program and dealt with all the consents.
Financial -The yoghurt business now has production and financial targets.
M arketing has been an issue with limited shelf space meaning limited visibility for
consumers.
The yoghurt business is fulfilling the original goal of making the dairy farm a viable
economic unit.
One thing they would do differently is: Not convert a farm to dairying and to organic
and add on a yoghurt producing business all in one step!!! They should have gone
organic first then diversified.

Havoc Pork

Anything that makes you take a step back from what you are doing is
important Ian and Linda McCallum-Jackson, Havoc Pork.

Since 2001 Havoc Pork has evolved from a small pig farm selling weaners for others to fatten
to a finishing unit which sells all its own meat direct to the consumer, based on the belief
people want real meat
Value Add Proposal - T o be the first free range pork supplied farm to butcher within their
own business. To have quality and consistency and provenance of the meat - have all the
controls to ensure these and must control the growth.
Business Plan; its a red napkin from a restaurant in Dunedin and I framed it; its come to
pass most of it Linda. T hat business plan is a mind map written a napkin.. T he business
plan is a guide to their vision, but is not a detailed document.
T hey decided to prioritise the farm so when they were ready to take product to the market
there would be reliable supply. T his involved improving the farm infrastructure and
increasing the sow numbers.
Once there were fat pigs available they arranged for them to be killed at the abbatoir in
T imaru. Initially they were able to kill and on-sell their own meat, with any extra pigs being
bought by the business that had the abbatoir. Now all pigs are processed and sold within their
business.
Havoc Pork has bought a butcher shop in Waimate, but use a commercial licensed abbatoir.
2010 is the first year that they have enough stock to meet the demand.
Quality processing takes a month to cure a ham due to fewer nitrates etc used and that
means fresher hams produced pre-Christmas for that trade, not produced months in advance.
All about customer service. What does our customer want and how do we get it to them?
Ongoing market awareness and development is essential.
One issue has been the isolation - within own industry, from city to rural community.

Would I do it again? Yes. Been such a journey


Would I do anything differently? Probably not. Been such a learning process
Would Recommend: Anything that takes you a step back to look at what you are doing is important.

Heartland Potato Chips

Virtually a fulltime commitment; it was passion that pushed it ahead


Heartland Potato Chips. Raymond and Adrianne Bowan

Raymond and Adrianne Bowan have the 1360ha Fallgate Farm at Orari, producing a
number of crops including potatoes.
Raymond has 40 years experience growing potatoes, growing approximately half the
crop for processing as potato chips and the other half processed as fries.
Until the Bluebird factory at Timaru closed in February 2009 the Bowans were the
main suppliers, so this had a real impact on their business.
The Bowans knew that this was their opportunity in the market to develop their dream
of processing their own produce. Their vision and dream was to take their own
potatoes, process them into chips and sell them as their own brand.
They successfully purchased the ex-Bluebird factory, but when they took over it was
just a shell all of the plant had been removed.
They employed specialist staff to advise, bought a new plant from Holland, and put
emphasis on developing a product and meeting all regulations to launch the new chips
by October 2010.
A brand had to be developed, then registered and advertised for 3 months for
acceptance. Packaging had to be designed and a supplier sourced. This was all
completed by M ay 2010.
Expertise - Pulling together the right people and using their skills to achieve the end
goal.
The bank required a detailed business plan so they employed a consultant from
Christchurch to formulate this. They were sceptical initially but now know the value
of having a documented business plan.
Satisfaction - Being a NZ owned family business and seeing your name and product
on the shelf. Successfully achieving the dream!
Full control of process: Variety choice, growing conditions, harvesting, quality
control, processing, flavouring and then packaging. Fully traceable product.

High Country Salmon.

Have enthusiasm and knowledge High Country Salmon.


Richard and M argaret Logan established the current business on the Wairepo Arm of Lake
Ruataniwha at Twizel 10 years ago, having been in the salmon farming industry in 1992.
The driver for starting this new business was the realisation their goals and drivers were
different to those of their then business partners. Good industry knowledge and knowledge of
Local Government and the Resource M anagement Act were crucial in developing this new
business, and they worked with M eridian Energy to choose the site for the farm.
The value add proposal is two-fold:
1. Retail shop selling fresh fish on the farm premises.
2. Smoking the salmon and selling smoked fish, adding value to the raw product
Planning - There was no formal or written Business Plan.
Development Process. Research - Previous experience in the business has provided
knowledge of environmental/water quality sustainability.
Industry research included trialling the market through sending Salmon to New
Zealand restaurants.
There is on-going research and development in the business, subject to finance.
Site placement - The current site has been chosen for the potential for drive-in
customers, the water flow and the 2C temperature difference on either side of the
Wairepo Arm, necessary to house the fish appropriately. The water quality is superb
with no deterioration in twenty years.
Currently expanding the sales kiosk into a brand new floating factory/sales building.
People - A number of existing staff have shifted to Twizel to work for the business.
M arketing - this business is one of few in the world where such a fresh product can be
sold and eaten within one hour of killing. This is very important to customers and they
get a lot of repeat customers.
Open 7 days a week 90% of sales at the door. A lot of word of mouth and
returning customers from all over the world.

Riverstone.

Fear of failure, loss of everything with all money in the business creates its
own motivation and is a strong driver to succeed Riverstone.
Riverstone is a family business with members of the Smith family jointly or severally owning dairy
and other farms, gift shop and award winning restaurant in North Otago.

T he initial value add proposals were in response to the high interest rates of the 1980s and
the constraints this put on cash flow. Initially value add was to diversify the income base,
and to expand their operations as much as possible through natural growth. T his has resulted
in the following: Dairy farms from one to six farms owned; Dry stock farms four farms
either owned or leased; Retail shop expanded since established in 1984; Farm stay
accommodation established in 1984 and Riverstone Kitchen established in 2006.
Interrelated businesses with the farm business building and owning the kitchen and leasing it
to the restaurant business.
Financial motivation has continued to be the reason for expansion and diversification.
Goals - all aspects of the business have financial goals which are regularly monitored, as well
as other goals and production targets.
T here is no formal business plan for any aspect of this family business. However, all aspects
are discussed, forming a loose plan and strong mental vision. Self-belief is important and
once you get something up and running the reality happens swiftly. There has to be a
passion to drive the success of ones own business, and further, passion is motivated by
success. Being successful requires hard work, effort and being clear about what you want
to achieve.
Riverstone Kitchen has a focus on seasonal food uses product they grow or available in
local district. While this has cost and profit advantages it also showcases other producers, and
is consistent with the international movement to local and fresh produce.
Further Value Add Opportunities are being planned.
All comes back to motivation. Being the boss gives you more motivation, and there is a
different focus. Fear of failure/loss of everything/all money in business creates its own
motivation and is a strong driver to succeed.
T eam work is important, and this is a family business with all participating actively.

Timaru Farmers Market.

Have a passion for what you do Timaru Farmers Market.


T he South Canterbury Farmers Market differs from the other case studies as it is not a primary
industry. However, it is the means allowing a number of small primary producers to add value to their
businesses and so is relevant to this project.
T ransition T imaru: Series of committees including food committee which identified need for
a Farmers Market; called a public meeting in 2009 attendance of 50-60 people. Initial driver
getting committee operational.
Market started on the 8 th of November 2009. First market had 19 stalls; following week
another 6 stalls 25 stalls. T he first market had huge support, stalls sold out.
Now has 12-15 stalls on a regular basis, but fluctuates and early summer is the highest with
berries, asparagus seasonal produce.
Big driver was seasonal produce.
Value Add Proposal - to provide a weekly market of fresh produce by the local growers; to
provide a market direct to consumers with low overheads for the growers; for local buyers to
be able to purchase fresh foods directly from the producers and able to talk to the growers and
learn more about the produce.
Business Plan - no formal business plan. T he Committee had a vision and worked towards
opening the market but did not document a business plan.
Business Rules: Must be own product grown/made etc.
 Live within 100km not limited to South Canterbury.
 Primary emphasis is food but can have some related product. Food/drink/plants
initially. Crafted primary produce now included beeswax, wool and weaving.
 T he committee believe it is very important that the Market reflects its own
environment.
 Also have awareness raising stalls the social conscience and fundraising stall run
by community organisations, allowed one per year, can be food from a noncommercial kitchen, only product can be food.
Recommendations Monitoring, marketing knowledge, range of expertise, enjoy it, have a
passion for what you do, allow planning time.

Process
The business plan which is included as a template contains must have information.
However, depending on the type and scale of the business you are proposing it may not all be
required immediately.
The business plan attached is prepared as a cohesive document, but break it down into the
sections you may need to develop your business in a staged process. i.e. single person
business will not require the management summary or human resource plan.

Consideration
While a business plan is important and necessary there is a prior step to be considered. From
the case studies the participants have identified how important it is to have passion, vision,
and be prepared for the hard work required. From this has been developed a simple test for
those considering such a proposal, simply answering the following questions:
1. How will this complement my existing business?
2. Do I have the expertise, or how will I source the expertise necessary for this business
opportunity?
3. Will pursuing this opportunity be detrimental to my primary business? (i.e. time;
focus; finance; resources etc.)
4. How much does this matter to me?
5. What am I prepared to give up to make this happen?
6. What will happen if I dont pursue this opportunity?
Answering these simple questions will determine if there is enough drive and passion to
commit to the new proposal. If that is the case then the answers will also be necessary for the
business plan. If there is not the necessary commitment or resources to make the proposal a
success then finding out at this stage may prevent a costly mistake.
Each of the above points has been included in the following business plan summary which
provides a template for any one considering a new value add business developing their
primary produce.
Answer each of these questions to decide whether this business proposal will be
complementary, within the available expertise and resources, and you have the passion
necessary to commit.

Self-Help Tutorial
Work through the attached business plan summary.
The headings are shown followed by the summary of information you need to provide.

Business Plan Summary Template


1. Executive Summary
a) Why are you doing this?
b) How long is the plan for?
c) What are you doing?
d) How are you doing this?
e) What if?

Why you decided to add value to your business.


Annual plan for the next how many years.
What is the proposal that is the basis to this plan?
How this business is to operate and to complement the
existing business.
What if contingency plans.

2. Vision Statement
What do you intend to achieve, by when?
(Note: A successful vision statement is brief and catchy, able to be used as a mantra to
success)
3. M ission Statement
How you will achieve the vision and develop the business?
4. Key to Success
2 or 3 reasons why you believe you will be successful in this proposal to add value to your
core business
5. Expertise
What expertise, skills and experience are necessary for this business proposal?
Do I have these skills, or employ staff with this expertise, or how I will source the necessary
expertise?
6. Complementarity
How pursuing this opportunity will be advantageous to the existing business and its vision
and goals. Time, focus, finance and resources all need to be included.
Any potential areas of conflict need to be considered.
Ensure there are no areas that will be detrimental to the existing business.
7. Goals
Up to 5 goals to focus you on where you want to go.
For each goal there will need to be a number of sub objectives that will allow the
achievement of the goal.
8. Company Analysis
a) How does this proposal fit within the existing business?
b) Will it have its own structure (company and/or trust structure recommended, but may
be sole trader or partnership)? Consult your accountant and/or lawyer and gain
advice.
c) Company Summary Who are you current type of business, who are your
customer(s)?
d) Company Ownership Registered where (E.g. NZ) and owned by whom
e) Company History
A bit about where you have come from and why

9. Company Locations and Facilities


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What facilities and equipment does the business own at present?


What facilities and equipment are required for the value add proposal?
What facilities or equipment need to be sourced for this new business proposal, and how will
you manage this?
10. Financial Performance
Attach financial balance sheets for the existing business to show its viability and the basis for
this new proposal.
Include budgets for the development proposal, including all capital requirements.
Include cash flows for the combined business (if to be operated as one entity) or for both the
existing and value add business; for both the start up time period and for the proposed status
quo.
11. Product/ Service
What is it that you are intending selling?
12. Product Description
a) Current production, i.e. milk or meat
b) Complementary products or services, the value add or diversification proposed.
c) Potential further new products or services possible in the future.
13. Competitive Analysis
a) Are there current producers of this product, who is doing the same sort of thing?
b) Why are you different to them, what is your point of difference?
c) How will you be better than any competitors?
d) If your proposal is unique, then why?
14. Compliance Requirements
What consents are necessary for district and regional councils, Government agencies,
professional bodies?
What time frames and costs are required to gain all necessary approvals? Who will manage
this process?
15. Technology
What technology is imperative to you, why, and what edge/ advantage does it give you?
16. Business Contingency Planning
What are the risks inherent in this business proposal? i.e. time, finance, resourcing, expertise,
unforeseen events, weather events etc.
How will these risks be managed?
17. M arket Analysis Summary
a) Who is your target market?
b) What does this markets need?
c) How big is the market now; potentially; seasonally?
d) What are the market trends?
e) What opportunities does this market offer?
f) What do you need to do to profit from the market? (research; plant and capital;
licences and consents; time frames etc.)
g) How will you develop the business to meet the market?
h) How will you develop the market to meet your businesses potential?
i) Attach any sales literature that you might have created?
j) Brand development how will the core and value add business be branded and what
association will there be between the brands?
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18. Industry Analysis


a) Complete an industry analysis for both the core business and the value add proposal
b) Where is the industry at present?
c) Industry Patterns - Industry figures, who is selling to whom, volume figures etc
d) Competition and buying patterns - What is critical, product, price, volume etc?
e) Who are your main competitors? Their name, strengths, weakness.
19. Competitive Edge
What is your edge over your competitors as a whole?
20. Strategy
a) Product Strategy

Where are you positioned, who do you want to purchase your


products and services and why?
b) Positioning Strategy Where are you aiming yourself in the future and why?
c) Pricing Strategy
What are your immediate pricing plans?
d) Promotion Strategy How do you intend on marketing the business?
e) M arketing Strategy What is your most important marketing programme, who is in
charge, what is the budget, when do you plan to start the
programme?
f) Sales Strategy
What are you focused on, and how long do you intend this
strategy to last?

21. Sales Forecast


a) What are you basing your Sales Forecast on, both in regards to costs and sales?
b) Attach three years forecast sales and costs figures
c) What are the essential components to achieving these forecasts?
22. M anagement Summary
a) Who will be in charge of the operational management?
b) What are the necessary roles ie operational, financial, human resources, marketing etc
and who will fill these? What are they responsible for, and who reports to whom?
c) What is your M anagement style, how do you intend to lead your company?
d) The Governance management split who are the Directors and what are they
responsible for, who reports to them?
e) M anagement gaps, do you outsource any professional services, use consultants?

23. Human Resources Plan


a) How many staff required and what roles?
b) Salary structure i.e. in line with current market, or slightly higher to source the
necessary expertise?
c) Staffing trends i.e. increase or decrease over the life of the plan

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NOTES :
1. All statements above should be brief, and clearly thought out.
2. Keep your statements concise and clear so that they are easily referable and memorable.
3. A business plan is a living document and only relevant if continually referenced and
updated.

YOUR BUS INES S MUS T HAVE:


1. All necessary consents to operate.
2. Employment agreements and job descriptions for all staff.

YOUR BUS INES S S HOULD ALS O HAVE:


1. All necessary insurances for operating including public liability, business continuation
etc. Consult your professional.
2. Financial support including capital, seasonal finance approvals as necessary.
3. Health and Safety M anual.

AS YOUR BUS INES S GROWS YOU S HOULD CONS IDER DEVELOPING:


1. An Organisational Chart.
2. A Confidentiality Agreement.
3. Human Resources M anual.

This workbook has been developed from the Blueprint Research Project undertaken by
Heather Lawson, Living Land Consultants, and financed by New Zealand Trade and
Enterprise and Aoraki Development Business and Tourism.
The 6 case study participants are thanked for their invaluable involvement.

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