Value-Added Agricultural Business...First you need a business model Instead of writing a long...

Value-Added Agricultural BusinessCreating Opportunities in a Changing Environment

Great Opportunities

• Consumer purchasing of food & beverage is changing rapidly

• Preference for local, farm-fresh products with a good story “know your farmer”

• Many resources available to help to grow a farm-based business you will hear about today including grants such as VAPG, investment, and supporting programs

First you need a business model

Instead of writing a long business plan, first you should develop a simple, flexible model that provides an overview of the various components of your proposed business.

Starting with a based business model will make your grant writing, customer discussions, and other aspects of your idea move along at a faster and more organized pace

The Business Model Canvas

To construct a basic business model we use a tool called a Business Model Canvas

Customer Segments

• Mass

• Niche

• Segmented

• Diversified

• Multi-Sided

• For whom are we creating value?

• Who are our most important customers?

Value Proposition

• Why customers chose your company over others

• Solves problem or satisfies a need

• Caters specifically to the customer segment

• What value do we deliver to the customer?

• Which problem are we solving?

• Which needs are we satisfying?

• What are we offering?

Channels

• Which channels do our customers want to be reached on?

• Which channels work best?

• Which ones cost less?

• How are they integrated into customer routines?

• Direct vs Indirect

• Partner vs Own

Channel Phases• Awareness

– How do we raise awareness about our company?

• Evaluation– How do we help customers evaluate our organization’s Value

Proposition?

• Purchase– How do we allow customers to purchase specific products and

services?

• Delivery– How do we deliver a Value Proposition to customers?

• After Sales– How do we provide post-purchase support?

Customer Relationships

• For Customer Acquisition

• For Customer Retention

• Boosting Sales

• What type of relation is established and maintained?

• How costly are they?

• How do they integrate with Business Model?

Revenue Streams

• For what value is each customer segment truly willing to pay?

• What do they currently pay?

• How are they paying?

• What would they prefer?

• Transaction vs Recurring

• Fixed vs Dynamic

Key Resources

• What Key Resources do our Value Propositions require?

• Our Distribution Channels?

• Customer Relationships?

• Revenue Streams?

Key Activities

• What Key Activities do our Value Propositions require?

• Distribution Channels? Relationships?

• Revenue Streams?

• Dell is supply chain management

• McKinsey is problem solving

Key Partnerships

• Strategic Alliances between Non-Competitors

• Coopetition: Alliances between Competitors

• Joint ventures to develop new business

• Buyer-supplier relationships to assure reliablity

• Who are our Key Partners?

• Who are our Key Suppliers?

• Which Key Resources are we acquiring?

• Which Key Activities do others perform?

Cost Structure

• Important costs incurred by while operating

• What are the important costs inherent to our business model?

• Which Key Resources are most expensive?

• Which Key Activities are most expensive?

• Taking the time to work through this simple exercise will go a long way toward bringing clarity to your thinking and rigor to your asks of potential funding and other resource providers.